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ndaq-20210930
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 2021
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from ________ to ________
Commission file number: 001-38855
___________________________________
Nasdaq, Inc.
(Exact name of registrant as specified in its charter)
Delaware52-1165937
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
151 W. 42nd Street,New York,New York10036
(Address of Principal Executive Offices)(Zip Code)
Registrant’s telephone number, including area code: +1 212 401 8700
No Changes
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareNDAQThe Nasdaq Stock Market
0.900% Senior Notes due 2033NDAQ33The Nasdaq Stock Market
0.875% Senior Notes due 2030NDAQ30The Nasdaq Stock Market
1.75% Senior Notes due 2029NDAQ29The Nasdaq Stock Market
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 the 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   ☒ 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at October 26, 2021
Common Stock, $0.01 par value per share167,222,005 shares




Nasdaq, Inc.
  
Page  
Part I. FINANCIAL INFORMATION
 
   
Item 1.
   
Item 2.
Item 3.
Item 4.
Part II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
   
Item 3.
   
Item 4.
Item 5.
Item 6.
  



i

About this Form 10-Q
Throughout this Form 10-Q, unless otherwise specified:
•“Nasdaq,” “we,” “us” and “our” refer to Nasdaq, Inc.
•“Nasdaq Baltic” refers to collectively, Nasdaq Tallinn AS, Nasdaq Riga, AS, and AB Nasdaq Vilnius.
•“Nasdaq BX” refers to the cash equity exchange operated by Nasdaq BX, Inc.
•“Nasdaq BX Options” refers to the options exchange operated by Nasdaq BX, Inc.
•“Nasdaq Clearing” refers to the clearing operations conducted by Nasdaq Clearing AB.
•“Nasdaq CXC” and “Nasdaq CX2” refer to the Canadian cash equity trading books operated by Nasdaq CXC Limited.
•“Nasdaq First North” refers to our alternative marketplaces for smaller companies and growth companies in the Nordic and Baltic regions.
•“Nasdaq GEMX” refers to the options exchange operated by Nasdaq GEMX, LLC.
•“Nasdaq ISE” refers to the options exchange operated by Nasdaq ISE, LLC. 
•“Nasdaq MRX” refers to the options exchange operated by Nasdaq MRX, LLC. 
•“Nasdaq Nordic” refers to collectively, Nasdaq Clearing AB, Nasdaq Stockholm AB, Nasdaq Copenhagen A/S, Nasdaq Helsinki Ltd, and Nasdaq Iceland hf.
•“Nasdaq PHLX” refers to the options exchange operated by Nasdaq PHLX LLC.
•“Nasdaq PSX” refers to the cash equity exchange operated by Nasdaq PHLX LLC.
•“The Nasdaq Options Market” refers to the options exchange operated by The Nasdaq Stock Market LLC.
•“The Nasdaq Stock Market” refers to the cash equity exchange and listing venue operated by The Nasdaq Stock Market LLC.
Nasdaq also provides as a tool for the reader the following list of abbreviations and acronyms that are used throughout this Quarterly Report on Form 10-Q.
401(k) Plan: Voluntary Defined Contribution Savings Plan
2020 Credit Facility: $1.25 billion senior unsecured revolving credit facility, which matures on December 22, 2025
2022 Notes: $600 million aggregate principal amount of 0.445% senior unsecured notes due December 21, 2022
2023 Notes: €600 million aggregate principal amount of 1.75% senior unsecured notes due May 19, 2023, repaid in full and terminated in August 2021
2024 Notes: $500 million aggregate principal amount of 4.25% senior unsecured notes due June 1, 2024
2026 Notes: $500 million aggregate principal amount of 3.85% senior unsecured notes due June 30, 2026
2029 Notes: €600 million aggregate principal amount of 1.75% senior unsecured notes due March 28, 2029
2030 Notes: €600 million aggregate principal amount of 0.875% senior unsecured notes due February 13, 2030
2031 Notes: $650 million aggregate principal amount of 1.650% senior unsecured notes due January 15, 2031
2033 Notes: €615 million aggregate principal amount of 0.900% senior unsecured notes due July 30, 2033
2040 Notes: $650 million aggregate principal amount of 2.500% senior unsecured notes due December 21, 2040
2050 Notes: $500 million aggregate principal amount of 3.25% senior unsecured notes due April 28, 2050
ASU: Accounting Standards Update
ASU 2016-13: Measurement of Credit Losses on Financial Instruments
ASR: Accelerated Share Repurchase
AUM: Assets Under Management
CCP: Central Counterparty
EMIR: European Market Infrastructure Regulation
Equity Plan: Nasdaq Equity Incentive Plan
ESG: Environmental, Social and Governance
ESPP: Nasdaq Employee Stock Purchase Plan
ETF: Exchange Traded Fund
ETP: Exchange Traded Product
Exchange Act: Securities Exchange Act of 1934, as amended
FICC: Fixed Income and Commodities Trading and Clearing
FINRA: Financial Industry Regulatory Authority
IPO: Initial Public Offering
LIBOR: London Interbank Offered Rate
NFF: Nasdaq Financial Framework; Nasdaq's end-to-end technology solutions for market infrastructure operators, buy-side firms, sell-side firms and other non-financial markets
NPM: The NASDAQ Private Market, LLC
NSCC: National Securities Clearing Corporation
OCC: The Options Clearing Corporation
OTC: Over-the-Counter
PSU: Performance Share Unit
SaaS: Software as a Service
SEC: U.S. Securities and Exchange Commission
ii

SERP: Supplemental Executive Retirement Plan
SFSA: Swedish Financial Supervisory Authority
S&P: Standard & Poor’s
S&P 500: S&P 500 Stock Index
SPAC: Special Purpose Acquisition Company
TSR: Total Shareholder Return
U.S. GAAP: U.S. Generally Accepted Accounting Principles
NASDAQ, the NASDAQ logos, and other brand, service or product names or marks referred to in this report are trademarks or service marks, registered or otherwise, of Nasdaq, Inc. and/or its subsidiaries. FINRA and Trade Reporting Facility are registered trademarks of FINRA.










































This Quarterly Report on Form 10-Q includes market share and industry data that we obtained from industry publications and surveys, reports of governmental agencies and internal company surveys. Industry publications and surveys generally state that the information they contain has been obtained from sources believed to be reliable, but we cannot assure you that this information is accurate or complete. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on the most currently available market data. For market comparison purposes, The Nasdaq Stock Market data in this Quarterly Report on Form 10-Q for IPOs is based on data generated internally by us; therefore, the data may not be comparable to other publicly-available IPO data. Data in this Quarterly Report on Form 10-Q for new listings of equity securities on The Nasdaq Stock Market is based on data generated internally by us, which includes issuers that switched from other listing venues, closed-end funds and ETPs. Data in this Quarterly Report on Form 10-Q for IPOs and new listings of equity securities on the Nasdaq Nordic and Nasdaq Baltic exchanges and Nasdaq First North also is based on data generated internally by us. IPOs and new listings data is presented as of period end. While we are not aware of any misstatements regarding industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors. We refer you to the “Risk Factors” section in our Form 10-K for the fiscal year ended December 31, 2020 that was filed with the SEC on February 23, 2021. 
Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations.
iii

Forward-Looking Statements
The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains these types of statements. Words such as “may,” “will,” “could,” “should,” “anticipates,” “envisions,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words or terms of similar substance used in connection with any discussion of future expectations as to industry and regulatory developments or business initiatives and strategies, future operating results or financial performance, and other future developments are intended to identify forward-looking statements. These include, among others, statements relating to:
•our strategic direction;
•the integration of acquired businesses, including accounting decisions relating thereto;
•the scope, nature or impact of acquisitions, divestitures, investments, joint ventures or other transactional activities;
•the effective dates for, and expected benefits of, ongoing initiatives, including transactional activities and other strategic, restructuring, technology, de-leveraging and capital return initiatives;
•our products and services;
•the impact of pricing changes;
•tax matters;
•the cost and availability of liquidity and capital;
•any litigation, or any regulatory or government investigation or action, to which we are or could become a party or which may affect us; and
•the potential impact of the COVID-19 pandemic and the response of governments and other third parties on our business, operations, results of operations, financial condition, workforce or the operations or decisions of our customers, suppliers or business partners.
Forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following:
•our operating results may be lower than expected;
•our ability to successfully integrate acquired businesses or divest sold businesses or assets, including the fact that any integration or transition may be more difficult, time consuming or costly than expected, and we may be unable to realize synergies from business combinations, acquisitions, divestitures or other transactional activities;
•loss of significant trading and clearing volumes or values, fees, market share, listed companies, market data customers or other customers;
•our ability to develop and grow our non-trading businesses, including our technology and analytics offerings;
•our ability to keep up with rapid technological advances and adequately address cybersecurity risks;
•economic, political and market conditions and fluctuations, including interest rate and foreign currency risk, inherent in U.S. and international operations;
•the performance and reliability of our technology and technology of third parties on which we rely;
•any significant error in our operational processes;
•our ability to continue to generate cash and manage our indebtedness; and
•adverse changes that may occur in the litigation or regulatory areas, or in the securities markets generally, or increased regulatory oversight domestically or internationally.
Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the uncertainty and any risk related to forward-looking statements that we make. These risk factors are more fully described in the “Risk Factors” section in our Form 10-K that was filed with the SEC on February 23, 2021. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. You should carefully read this entire Quarterly Report on Form 10-Q, including “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and the related notes. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statement, release publicly any revisions to any forward-looking statements or report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
1

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Nasdaq, Inc.
Condensed Consolidated Balance Sheets
(in millions, except share and par value amounts)
September 30, 2021December 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents$303 $2,745 
Restricted cash and cash equivalents29 37 
Financial investments185 195 
Receivables, net552 566 
Default funds and margin deposits4,202 3,942 
Other current assets225 175 
Total current assets5,496 7,660 
Property and equipment, net495 475 
Goodwill8,510 6,850 
Intangible assets, net2,885 2,255 
Operating lease assets383 381 
Other non-current assets628 358 
Total assets$18,397 $17,979 
Liabilities
Current liabilities:
Accounts payable and accrued expenses$166 $175 
Section 31 fees payable to SEC14 224 
Accrued personnel costs221 227 
Deferred revenue380 235 
Other current liabilities132 121 
Default funds and margin deposits4,202 3,942 
Short-term debt480 — 
Total current liabilities5,595 4,924 
Long-term debt5,447 5,541 
Deferred tax liabilities, net395 502 
Operating lease liabilities398 389 
Other non-current liabilities207 187 
Total liabilities12,042 11,543 
Commitments and contingencies
Equity
Nasdaq stockholders’ equity:
Common stock, $0.01 par value, 300,000,000 shares authorized, shares issued: 173,886,216 at September 30, 2021 and 171,278,761 at December 31, 2020; shares outstanding: 167,206,649 at September 30, 2021 and 164,933,678 at December 31, 2020
2 2 
Additional paid-in capital1,983 2,547 
Common stock in treasury, at cost: 6,679,567 shares at September 30, 2021 and 6,345,083 shares at December 31, 2020
(425)(376)
Accumulated other comprehensive loss(1,511)(1,368)
Retained earnings6,296 5,628 
Total Nasdaq stockholders’ equity6,345 6,433 
Noncontrolling interests10 3 
Total equity6,355 6,436 
Total liabilities and equity$18,397 $17,979 
                                            
See accompanying notes to condensed consolidated financial statements.
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Nasdaq, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(in millions, except per share amounts)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenues:   
Market Technology$114 $86 $332 $251 
Investment Intelligence272 236 787 654 
Corporate Platforms155 131 451 382 
Market Services814 954 2,823 2,855 
Other revenues2 6 26 21 
Total revenues1,357 1,413 4,419 4,163 
Transaction-based expenses:    
Transaction rebates(472)(517)(1,642)(1,525)
Brokerage, clearance and exchange fees(47)(181)(243)(523)
Revenues less transaction-based expenses838 715 2,534 2,115 
Operating expenses:    
Compensation and benefits230 198 700 582 
Professional and contract services36 38 101 96 
Computer operations and data communications47 39 137 109 
Occupancy27 29 81 80 
General, administrative and other42 13 66 99 
Marketing and advertising12 7 32 20 
Depreciation and amortization67 51 197 149 
Regulatory8 2 22 16 
Merger and strategic initiatives13 1 70 12 
Restructuring charges— 11 31 36 
Total operating expenses482 389 1,437 1,199 
Operating income356 326 1,097 916 
Interest income— — 1 4 
Interest expense(33)(24)(95)(77)
Net gain on divestiture of business— — 84 — 
Other income42 1 43 5 
Net income from unconsolidated investees6 54 90 97 
Income before income taxes371 357 1,220 945 
Income tax provision83 93 292 237 
Net income attributable to Nasdaq$288 $264 $928 $708 
Per share information:    
Basic earnings per share$1.72 $1.61 $5.61 $4.31 
Diluted earnings per share$1.69 $1.58 $5.53 $4.25 
Cash dividends declared per common share$0.54 $0.49 $1.57 $1.45 



See accompanying notes to condensed consolidated financial statements.
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Nasdaq, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(in millions)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net income$288 $264 $928 $708 
Other comprehensive income (loss):   
Foreign currency translation gains (losses)(45)60 (112)29 
Income tax benefit (expense)(1)
(14)23 (31)25 
Foreign currency translation, net(59)83 (143)54 
Comprehensive income attributable to Nasdaq$229 $347 $785 $762 
____________
(1)    Primarily relates to the tax effect of unrealized gains and losses on Euro denominated notes.



See accompanying notes to condensed consolidated financial statements.

4

Nasdaq, Inc. 
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
(in millions)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Shares$Shares$Shares$Shares$
Common stock169 2 164 2 165 2 165 2 
Additional paid-in capital
Beginning balance2,435 2,533 2,547 2,632 
Share repurchase program— — — (34)(3)(410)(2)(186)
ASR agreement(1)
(2)(475)—— (2)(475)— — 
Share-based compensation—23 —24 1 66 1 64 
Stock option exercises, net—— —1 —1 —2 
Other issuances of common stock, net(2)
—— —— 6254 —12 
Ending balance1,983 2,524 1,983 2,524 
Common stock in treasury, at cost
Beginning balance(423)(367)(376)(336)
Other employee stock activity— (2)— — —(49)—(31)
Ending balance(425)(367)(425)(367)
Accumulated other comprehensive loss
Beginning balance(1,452)(1,715)(1,368)(1,686)
Other comprehensive income (loss)(59)83 (143)54 
Ending balance(1,511)(1,632)(1,511)(1,632)
Retained earnings
Beginning balance6,098 5,301 5,628 5,027 
Impact of adoption of ASU 2016-13
— — — (12)
Net income288 264 928 708 
Cash dividends declared per common share
(90)(81)(260)(239)
Ending balance6,296 5,484 6,296 5,484 
Total Nasdaq stockholders’ equity6,345 6,011 6,345 6,011 
Noncontrolling interests
Beginning balance11 3 3 — 
Net activity related to noncontrolling interests
(1)— 7 3 
Ending balance10 3 10 3 
Total Equity167 $6,355 164 $6,014 167 $6,355 164 $6,014 
____________
(1)    See “ASR Agreement,” of Note 11, “Nasdaq Stockholders’ Equity,” for further discussion.
(2)    For the nine months ended September 30, 2021 primarily relates to the tax impact of shares accelerated and issued upon the sale of our U.S. Fixed Income business. See “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion.





See accompanying notes to condensed consolidated financial statements.
5

Nasdaq, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in millions)
Nine Months Ended September 30,
20212020
Cash flows from operating activities:
Net income$928 $708 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization197 149 
Share-based compensation66 64 
Deferred income taxes94 19 
Extinguishment of debt33 36 
Net gain on divestiture of business(84)— 
Net income from unconsolidated investees(90)(97)
Other reconciling items included in net income9 26 
Net change in operating assets and liabilities, net of effects of acquisitions:
Receivables, net32 (109)
Other assets(142)43 
Accounts payable and accrued expenses(4)(18)
Section 31 fees payable to SEC(210)(69)
Accrued personnel costs(5)(6)
Deferred revenue138 70 
Other liabilities(1)
(263)1 
Net cash provided by operating activities699 817 
Cash flows from investing activities:
Purchases of securities(269)(252)
Proceeds from sales and redemptions of securities266 372 
Proceeds from divestiture of business, net of cash divested190 — 
Acquisition of businesses, net of cash and cash equivalents acquired(2,430)(157)
Purchases of property and equipment(113)(128)
Other investing activities(84)8 
Net cash used in investing activities(2,440)(157)
Cash flows from financing activities:
Proceeds from (repayments of) commercial paper, net480 (391)
Repayments of borrowings under our credit commitment and debt obligations(804)(1,470)
Payment of debt extinguishment cost(33)(36)
Proceeds from issuances of long-term debt, net of issuance costs and utilization of credit commitment826 1,928 
Repurchases of common stock(410)(186)
ASR agreement(475)— 
Dividends paid(260)(239)
Proceeds received from employee stock activity and other issuances17 14 
Payments related to employee shares withheld for taxes(49)(31)
Other financing activities7 3 
Net cash used in financing activities(701)(408)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents(8)3 
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents(2,450)255 
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period2,782 362 
Cash and cash equivalents and restricted cash and cash equivalents at end of period$332 $617 
Supplemental Disclosure Cash Flow Information
Cash paid for:
Interest$79 $69 
Income taxes, net of refund(1)
$425 $218 
____________
(1)    Includes payment of an acquired tax liability in the second quarter of 2021 related to the Verafin acquisition. See “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture,” for further discussion.

See accompanying notes to condensed consolidated financial statements.
6

Nasdaq, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. ORGANIZATION AND NATURE OF OPERATIONS
Nasdaq is a global technology company serving the capital markets and other industries. Our diverse offerings of data, analytics, software and services enables clients to optimize and execute their business vision with confidence.
We manage, operate and provide our products and services in four business segments: Market Technology, Investment Intelligence, Corporate Platforms, and Market Services.
Market Technology
Our Market Technology segment is a leading global technology solutions provider and partner to exchanges, clearing organizations, central securities depositories, regulators, banks, brokers, buy-side firms and corporate businesses. Our solutions are utilized by leading markets in the U.S., Europe and Asia as well as emerging markets in the Middle East, Latin America, and Africa. The Market Technology segment includes our Anti Financial Crime Technology business and our Marketplace Infrastructure Technology business.
Our Anti Financial Crime Technology business includes Nasdaq Trade Surveillance, a technology solution designed for brokers and other market participants to assist them in complying with market rules, regulations and internal market surveillance policies. The Nasdaq Automated Investigator is our cloud-deployed anti-money laundering offering with an automated investigator tool for retail banks. Additionally, in February 2021 we completed the acquisition of Verafin, a SaaS technology provider of anti-financial crime management solutions that offers a cloud-based platform to help detect, investigate, and report money laundering and financial fraud. See “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture,” for further discussion.
Our Marketplace Infrastructure Technology business powers over 130 market infrastructure operators and new market clients in more than 55 countries and handles a wide array of assets, including but not limited to cash equities, equity derivatives, currencies, various interest-bearing securities, commodities, energy products and digital currencies. Our solutions can also be used in the creation of new asset classes, and non-capital markets customers, including those in insurance liabilities securitization, cryptocurrencies and sports wagering.
Investment Intelligence
Our Investment Intelligence segment includes our Market Data, Index and Analytics businesses.



Our Market Data business sells and distributes real-time and historical market data to the sell-side, the institutional investing community, retail online brokers, proprietary trading shops, other venues, internet portals and data distributors. Our market data products enhance transparency of market activity within our exchanges and provide critical information to professional and non-professional investors globally. Additionally, our Nasdaq Cloud Data Service provided on our Data Link data dissemination platform provides a flexible and efficient method of delivery for real- time exchange data and other financial information.
Our Index business develops and licenses Nasdaq-branded indexes and financial products. We also license cash-settled options, futures and options on futures on our indexes. As of September 30, 2021, 347 ETPs listed in over 30 countries and exchanges tracked a Nasdaq index and accounted for $361 billion in AUM.
Our Analytics business provides asset managers, investment consultants and institutional asset owners with investment insights and workflow solutions. The eVestment platform provides asset owners and allocators with analytics to make data-driven investment decisions, enables asset managers to position institutional products worldwide and provides liquidity solutions for private funds. Together with Solovis, a cloud-based multi-asset portfolio management and risk solution, we provide a suite of cloud-based solutions that help institutional investors and consultants conduct pre-investment due diligence, and monitor their portfolios post-investment.
Corporate Platforms
Our Corporate Platforms segment includes our Listing Services and IR & ESG Services businesses. These businesses deliver critical capital market and ESG solutions across the lifecycle of public and private companies.
Our Listing Services business includes our U.S. and European Listing Services businesses. We operate a variety of listing platforms around the world to provide multiple global capital raising solutions for public companies. Our main listing markets are The Nasdaq Stock Market and the Nasdaq Nordic and Nasdaq Baltic exchanges. Through Nasdaq First North, our Nordic and Baltic operations also offer alternative marketplaces for smaller companies and growth companies. In July 2021 we contributed our NPM business, which was included in our Listing Services business, to a standalone, independent company, of which we own the largest minority interest, together with a consortium of third party financial institutions. The NPM business provides liquidity solutions for private companies to enable employees, investors, and companies to execute transactions.

7

We continue to grow our U.S. Corporate Bond exchange for the listing of corporate bonds. This exchange operates pursuant to The Nasdaq Stock Market exchange license and is powered by the NFF. As of September 30, 2021, 105 corporate bonds were listed on the Corporate Bond exchange. We also continue to develop the Nasdaq Sustainable Bond Network, a platform for increased transparency in the global sustainable bond markets.
As of September 30, 2021, there were 3,990 total listings on The Nasdaq Stock Market, including 430 ETPs. The combined market capitalization was approximately $25.9 trillion. In Europe, the Nasdaq Nordic and Nasdaq Baltic exchanges, together with Nasdaq First North, were home to 1,172 listed companies with a combined market capitalization of approximately $2.4 trillion.
Our IR & ESG Services business includes our Investor Relations Intelligence and Governance Solutions businesses, which serve both public and private companies and organizations. Our public company clients can be companies listed on our exchanges or other U.S. and global exchanges. Our private company clients include a diverse group of organizations ranging from family owned companies, government organizations, law firms, privately held entities, various non-profit organizations to hospitals and health care systems. We help organizations enhance their ability to understand and expand their global shareholder base, improve corporate governance, and navigate the evolving ESG landscape through our suite of advanced technology, analytics, reporting and consultative services.
Market Services
Our Market Services segment includes our Equity Derivative Trading and Clearing, Cash Equity Trading, FICC and Trade Management Services businesses. We operate multiple exchanges and other marketplace facilities across several asset classes, including derivatives, commodities, cash equity, debt, structured products and ETPs. In addition, in certain countries where we operate exchanges, we also provide broker services, clearing, settlement and central depository services. In January 2020, we commenced an orderly wind-down of our Nordic broker services operations business. We expect this wind-down to continue through the second quarter of 2022. Also, in June 2021, we sold our U.S. Fixed Income business which included an electronic platform for trading of U.S. Treasuries. See “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion.
Our transaction-based platforms provide market participants with the ability to access, process, display and integrate orders and quotes. The platforms allow the routing and execution of buy and sell orders as well as the reporting of transactions, providing fee-based revenues.


In the U.S., we operate six options exchanges and three cash equity exchanges. The Nasdaq Stock Market, the largest of our cash equities exchanges, is the largest single venue of liquidity for trading U.S.-listed cash equities. We also operate a Canadian exchange for the trading of certain Canadian-listed securities.
In Europe, we operate exchanges in Stockholm (Sweden), Copenhagen (Denmark), Helsinki (Finland), and Reykjavik (Iceland), as well as the clearing operations of Nasdaq Clearing, as Nasdaq Nordic. We also operate exchanges in Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania) as Nasdaq Baltic. Collectively, Nasdaq Nordic and Nasdaq Baltic offer trading in cash equities, depository receipts, warrants, convertibles, rights, fund units and ETFs, as well as trading and clearing of derivatives and clearing of resale and repurchase agreements. Additionally, in June 2021, we completed the acquisition of a majority stake in Puro.earth, a Finnish-based leading marketplace for carbon removal.
The European portion of Nasdaq Fixed Income provides a wide range of products and services, such as trading and clearing, for fixed income products in Sweden, Denmark, Finland, Iceland, Estonia, Lithuania and Latvia.
Nasdaq Commodities is the brand name for Nasdaq’s European commodity-related products and services. Nasdaq Commodities’ offerings include derivatives in power, natural gas and carbon emission markets, seafood, electricity certificates and clearing services. These products are listed on Nasdaq Oslo ASA, except for seafood, which is listed on Fishpool, a third party platform.
Through our Trade Management Services business, we provide market participants with a wide variety of alternatives for connecting to and accessing our markets. Our marketplaces may be accessed via a number of different protocols used for quoting, order entry, trade reporting, and connectivity to various data feeds. We also offer the Nasdaq Workstation, a browser-based, front-end interface that allows market participants to view data and enter orders, quotes and trade reports. In addition, we offer a variety of add-on compliance tools to help firms comply with regulatory requirements.
We provide colocation services to market participants, whereby we offer firms cabinet space and power to house their own equipment and servers within our data centers. Additionally, we offer a number of wireless connectivity offerings between select data centers using millimeter wave and microwave technology.
Our broker services operations business primarily offers technology and customized securities administration solutions to financial participants in the Nordic market. As noted above, we have commenced an orderly wind-down of our Nordic broker services operations business.
8

2. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of Nasdaq, its wholly-owned subsidiaries and other entities in which Nasdaq has a controlling financial interest. When we do not have a controlling interest in an entity, but exercise significant influence over the entity’s operating and financial policies, such investment is accounted for under the equity method of accounting. We recognize our share of earnings or losses of an equity method investee based on our ownership percentage. See “Equity Method Investments,” of Note 6, “Investments,” for further discussion of our equity method investments.
The accompanying condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results. These adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.
As permitted under U.S. GAAP, certain footnotes or other financial information can be condensed or omitted in the interim condensed consolidated financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in Nasdaq’s Form 10-K. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP.
Certain prior year amounts have been reclassified to conform
to the current year presentation.
Accounting Estimates
In preparing our condensed consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities in our condensed consolidated balance sheets. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary.
Nasdaq has considered the impact of COVID-19 on the assumptions and estimates used in evaluating our assets and liabilities, including but not limited to our goodwill, intangible assets, equity method investments, equity securities and allowance for losses on accounts receivable. We determined that there were no material adverse impacts on our financial position and results of operations as of or for the three and nine months ended September 30, 2021 and 2020. In addition, there were no material impairment charges recorded for the three and nine months ended September 30, 2021 and 2020. These estimates may change as new events occur and additional information is obtained. Actual results could differ from these estimates under different assumptions or conditions.


Subsequent Events
There have been no subsequent events through the issuance date of this Quarterly Report on Form 10-Q that would require disclosure in, or adjustment to, the condensed consolidated financial statements.
3. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following tables summarize the disaggregation of revenue by major product and service and by segment for the three months ended September 30, 2021 and 2020:
Three Months Ended September 30,
 20212020
 (in millions)
Market Technology
Anti Financial Crime Technology$66 $32 
Marketplace Infrastructure Technology48 54 
Investment Intelligence
Market data102 105 
Index119 86 
Analytics51 45 
Corporate Platforms
Listing services99 78 
IR & ESG Services56 53 
Market Services
Transaction-based trading and clearing, net214 181 
Trade management services81 75 
Other revenues2 6 
Revenues less transaction-based expenses$838 $715 
Substantially all revenues from the Market Technology, Investment Intelligence and Corporate Platforms segments were recognized over time for the three months ended September 30, 2021 and 2020. For the three months ended September 30, 2021, approximately 69.3% of Market Services revenues were recognized at a point in time and 30.7% were recognized over time. For the three months ended September 30, 2020, approximately 67.2% of Market Services revenues were recognized at a point in time and 32.8% were recognized over time.
9

Nine Months Ended September 30,
 20212020
 (in millions)
Market Technology
Anti Financial Crime Technology$175 $94 
Marketplace Infrastructure Technology157 157 
Investment Intelligence
Market data310 298 
Index328 227 
Analytics149 129 
Corporate Platforms
Listing services282 224 
IR & ESG Services169 158 
Market Services
Transaction-based trading and clearing, net696 589 
Trade management services242 218 
Other revenues26 21 
Revenues less transaction-based expenses$2,534 $2,115 
Substantially all revenues from the Market Technology, Investment Intelligence and Corporate Platforms segments were recognized over time for the nine months ended September 30, 2021 and 2020. For the nine months ended September 30, 2021, approximately 71.2% of Market Services revenues were recognized at a point in time and 28.8% were recognized over time. For the nine months ended September 30, 2020, approximately 69.8% of Market Services revenues were recognized at a point in time and 30.2% were recognized over time.
Contract Balances
Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our Condensed Consolidated Balance Sheets as receivables, which are net of allowance for doubtful accounts of $18 million as of September 30, 2021 and $21 million as of December 31, 2020. The changes in the balance between periods were immaterial. We do not have obligations for warranties, returns or refunds to customers.
For the majority of our contracts with customers, except for our market technology and listings services contracts, our performance obligations are short-term in nature and there is no significant variable consideration.





We do not have a material amount of revenue recognized from performance obligations that were satisfied in prior periods. We do not provide disclosures about transaction price allocated to unsatisfied performance obligations if contract durations are less than one year. Excluding our market technology contracts, for contract durations that are one-year or greater, materially all of the transaction price allocated to unsatisfied performance obligations is included in deferred revenue. For our market technology contracts, the portion of transaction price allocated to unsatisfied performance obligations is presented in the table below. Deferred revenue primarily represents our contract liabilities related to our fees for Market Technology, Investment Intelligence, annual and initial listings, and IR & ESG Services contracts. Deferred revenue is the only significant contract asset or liability as of September 30, 2021.
See Note 7, “Deferred Revenue,” for our discussion on deferred revenue balances, activity, and expected timing of recognition.
Transaction Price Allocated to Remaining Performance Obligations
As stated above, for contract durations that are one-year or greater, we do not have a material portion of transaction price allocated to unsatisfied performance obligations that are not included in deferred revenue other than for our market technology contracts.
For our market technology contracts, the following table summarizes the amount of the transaction price allocated to performance obligations that are unsatisfied as of September 30, 2021:
(in millions)
Remainder of 2021$95 
2022415 
2023253 
2024131 
202578 
2026+135 
Total$1,107 
Market technology deferred revenue, as discussed in Note 7, “Deferred Revenue,” represents consideration received that is yet to be recognized as revenue for unsatisfied performance obligations.
10

4. ACQUISITIONS AND DIVESTITURE
We completed the following divestiture and acquisitions in 2021 and 2020. Financial results of each transaction are included in our condensed consolidated financial statements from the date of each acquisition.
2021 Divestiture
In June 2021, we sold our U.S. Fixed Income business, which was part of our FICC business within our Market Services segment, to Tradeweb Markets Inc., or Tradeweb. We recognized a pre-tax gain on the sale of $84 million, net of disposal costs. The pre-tax gain is included in net gain on divestiture of business in the Condensed Consolidated Statements of Income.
As part of the purchase price consideration related to this business when it was acquired in 2013, we agreed to future annual issuances of 992,247 shares of Nasdaq common stock, which approximated certain tax benefits associated with the transaction. Such contingent future issuances of Nasdaq common stock were to be issued annually through 2027 if Nasdaq’s total gross revenues equaled or exceeded $25 million in each such year. The contingent future issuances of Nasdaq common stock were subject to anti-dilution protections and acceleration upon certain events.
Upon the consummation of the sale of our U.S. Fixed Income business, the aggregate number of Nasdaq shares remaining under the contingent obligation described above were reduced (pursuant to the discounting adjustment provisions set forth in the original purchase agreement for Nasdaq's acquisition of the business) and accelerated, resulting in an issuance of approximately 6.2 million shares of Nasdaq common stock to an assignee of the entity that sold this business to us in 2013.
Nasdaq intends to use the proceeds from the sale, available tax benefits and working and clearing capital of this business, as well as other sources of cash, to repurchase shares of Nasdaq common stock in order to offset the earnings per share dilution from the sale.
To facilitate these repurchases, the board of directors has authorized an increase to the share repurchase program. See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders' Equity,” for further discussion.










2021 Acquisition
Acquisition of Verafin
In February 2021, we completed the acquisition of Verafin, a SaaS technology provider of anti-financial crime management solutions that provides a cloud-based platform to help detect, investigate, and report money laundering and financial fraud, for an aggregate purchase price of $2.75 billion, subject to certain adjustments. The $2.75 billion purchase price includes a cash payment of $102 million, reflected in cash from operating activities in our Condensed Consolidated Statements of Cash Flows, the release of which is subject to certain employment-related conditions over three years following the closing of the transaction. This payment was recorded as a prepaid expense and is recorded in other current and non-current assets in our Condensed Consolidated Balance Sheets and will be amortized to merger and strategic initiatives expense on a straight-line basis over a three-year period. Verafin is part of our Market Technology segment.
Nasdaq used the net proceeds from our offering of senior notes in December 2020, commercial paper issuances, and cash on hand to fund this acquisition. See “Commercial Paper Program,” and “Senior Unsecured Notes Due 2022, 2031 and 2040,” of Note 8, “Debt Obligations,” for further discussion.
As of September 30, 2021, the allocation of purchase price includes the effect of a $9 million measurement period adjustment recorded during the second quarter. This adjustment resulted in an increase to both total net liabilities acquired and goodwill. Additional adjustments to the provisional values may result before the end of the measurement period, a period not to exceed 12 months from the acquisition date. These adjustments, which may include tax and other estimates will be recorded in the reporting period in which the adjustment amounts are determined. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill.
(in millions)
Goodwill$1,882 
Acquired Intangible Assets815 
Total Net Liabilities Acquired(46)
Purchase Consideration$2,651 

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Intangible Assets
The following table presents the details of acquired intangible assets for Verafin at the date of acquisition. Acquired intangible assets with finite lives are amortized using the straight-line method.
Customer
Relationships
Technology
Trade
Name
Total Acquired Intangible Assets
Intangible asset value (in millions)$532 $246 $37 $815 
Discount rate used7.5 %7.5 %7.5 %
Estimated average useful life22 years7 years20 years
Customer Relationships
Customer relationships represent the non-contractual and contractual relationships with customers.
Methodology
Customer relationships were valued using the income approach, specifically an excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return that is attributable to the intangible asset being valued.
Discount Rate
The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the customer relationships relative to the overall business. In developing a discount rate for the customer relationships, we estimated a weighted-average cost of capital for the overall business and we utilized this rate as an input when discounting the cash flows. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.
For our acquisition of Verafin, a discounted tax amortization benefit was added to the fair value of the assets under the assumption that the customer relationships would be amortized for tax purposes over a period of 20 years.
Estimated Useful Life
We estimate the useful life based on the historical behavior of the customers and a parallel analysis of the customers using the excess earnings method.
Technology
As part of our acquisition of Verafin, we acquired developed technology.






Methodology
The developed technology was valued using the income approach, specifically the relief-from-royalty method, or RFRM. The RFRM is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. The royalty rate is applied to the projected revenue over the expected remaining life of the intangible asset to estimate royalty savings. The net after-tax royalty savings are calculated for each year in the remaining economic life of the technology and discounted to present value.
Discount Rate
The discount rates used reflect the amount of risk associated with the hypothetical cash flows for the developed technology relative to the overall business as discussed above in “Customer Relationships.”
Estimated Useful Life
We have estimated the useful life of the Verafin technology to be 7 years.
Trade Name
As part of our acquisition of Verafin, we acquired a trade name. The trade name is recognized in the industry and carries a reputation for quality. As such, the reputation and positive recognition embodied in the trade name is a valuable asset to Nasdaq.
Methodology
The Verafin trade name was valued using the income approach, specifically the RFRM as discussed above in “Technology.”
Discount Rate
The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the trade name relative to the overall business as discussed above in “Customer Relationships.”
Estimated Useful Life
We have estimated the useful life of the Verafin trade name to be 20 years and our intention is to continue to use it in the branding of products.
2020 Acquisition
Acquisition of Solovis
In March 2020, we acquired Solovis, a provider of multi-asset class portfolio management, analytics and reporting tools across public and private markets. Solovis is part of our Investment Intelligence segment.

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Pro Forma Results and Acquisition-Related Costs
The condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 include the financial results of the above acquisitions from the dates of these acquisitions. Pro forma financial results have not been presented since these acquisitions both individually and in the aggregate were not material to our financial results.
Acquisition-related costs for the transactions described above
were expensed as incurred and are included in merger and strategic initiatives expense in the Condensed Consolidated Statements of Income.
5. GOODWILL AND ACQUIRED INTANGIBLE ASSETS
Goodwill
The following table presents the changes in goodwill by business segment during the nine months ended September 30, 2021:
(in millions)
Market Technology
Balance at December 31, 2020$309 
Goodwill acquired1,873 
Other adjustments(6)
Balance at September 30, 2021$2,176 
Investment Intelligence
Balance at December 31, 2020$2,541 
Divestiture of business(23)
Other adjustments(61)
Balance at September 30, 2021$2,457 
Corporate Platforms
Balance at December 31, 2020$481 
Other adjustments(11)
Balance at September 30, 2021$470 
Market Services
Balance at December 31, 2020$3,519 
Goodwill acquired15 
Divestiture of business(37)
Other adjustments(90)
Balance at September 30, 2021$3,407 
Total
Balance at December 31, 2020$6,850 
Goodwill acquired1,888 
Divestiture of business(60)
Other adjustments(168)
Balance at September 30, 2021$8,510 
In the preceding table:
•Divestiture of business relates to the sale of our U.S. Fixed Income business. See “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion. In addition to revenues earned through Market Services, our U.S. Fixed Income business also earned fees from market data, which are included in our Investment Intelligence segment. Therefore, a portion of the goodwill was allocated to this segment.
•Other adjustments includes foreign currency translation adjustment. For Market Technology, it also includes a measurement period adjustment related to our acquisition of Verafin. See “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture,” for further discussion.
As of September 30, 2021, the amount of goodwill, primarily relating to our acquisition of Verafin, that is expected to be deductible for tax purposes in future periods is $1.8 billion.
Goodwill represents the excess of purchase price over the value assigned to the net assets, including identifiable intangible assets, of a business acquired. Goodwill is allocated to our reporting units based on the assignment of the fair values of each reporting unit of the acquired company. We test goodwill for impairment at the reporting unit level annually, or in interim periods if certain events occur indicating that the carrying amount may be impaired, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. There was no impairment of goodwill for the three and nine months ended September 30, 2021 and 2020; however, events such as prolonged economic weakness or unexpected significant declines in operating results of any of our reporting units or businesses, may result in goodwill impairment charges in the future.


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Acquired Intangible Assets
The following table presents details of our total acquired intangible assets, both finite- and indefinite-lived:
September 30, 2021December 31, 2020
Finite-Lived Intangible Assets(in millions)
Gross Amount
Technology$316 $76 
Customer relationships2,049 1,599 
Trade names and other60 18 
Foreign currency translation adjustment(131)(104)
Total gross amount$2,294 $1,589 
Accumulated Amortization
Technology$(50)$(24)
Customer relationships(683)(648)
Trade names and other(10)(6)
Foreign currency translation adjustment74 58 
Total accumulated amortization$(669)$(620)
Net Amount
Technology$266 $52 
Customer relationships1,366 951 
Trade names and other50 12 
Foreign currency translation adjustment(57)(46)
Total definite-lived intangible assets$1,625 $969 
Indefinite-Lived Intangible Assets
Exchange and clearing registrations$1,257 $1,257 
Trade names121 121 
Licenses52 52 
Foreign currency translation adjustment(170)(144)
Total indefinite-lived intangible assets$1,260 $1,286 
Total intangible assets$2,885 $2,255 
The change in the gross and net amounts for technology, customer relationships and trade names and other finite-lived intangible assets as of September 30, 2021 compared with December 31, 2020 is primarily related to our acquisition of Verafin. The change in the gross and net amounts for customer relationships as of September 30, 2021 compared with December 31, 2020 is also related to the divestiture of our U.S. Fixed Income business. See “2021 Acquisition,” and “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion of these transactions.
The following table presents our amortization expense for acquired finite-lived intangible assets:
Three Months Ended September 30,
20212020
(in millions)
Amortization expense$40 $26 
Nine Months Ended September 30,
20212020
(in millions)
Amortization expense$116 $76 
The increase in amortization expense for the three and nine months ended September 30, 2021 compared with the same periods in 2020 was primarily due to additional amortization expense for acquired intangible assets related to our acquisition of Verafin. These amounts are included in depreciation and amortization expense in the Condensed Consolidated Statements of Income.
The table below presents the estimated future amortization expense (excluding the impact of foreign currency translation adjustments of $57 million as of September 30, 2021) of acquired finite-lived intangible assets as of September 30, 2021:
(in millions)
Remainder of 2021$41 
2022162 
2023159 
2024153 
2025151 
2026+1,016 
Total$1,682 
6. INVESTMENTS
The following table presents the details of our investments:
September 30, 2021December 31, 2020
(in millions)
Financial investments
$185 $195 
Equity method investments$401 $216 
Equity securities$74 $60 
Financial Investments
As of September 30, 2021, financial investments are comprised of trading securities, primarily highly rated European government debt securities, of which $166 million are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing. As of December 31, 2020, financial investments are comprised of trading securities, primarily highly rated European government debt securities, of which $175 million are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing.
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Equity Method Investments
We record our estimated pro-rata share of earnings or losses each reporting period and record any dividends as a reduction in the investment balance. As of September 30, 2021 and 2020, our equity method investments primarily included our 40.0% equity interest in OCC.
The carrying amounts of our equity method investments are included in other non-current assets in the Condensed Consolidated Balance Sheets. No material impairments were recorded for the three and nine months end September 30, 2021 and 2020.
Net income recognized from our equity interest in the earnings and losses of these equity method investments, primarily OCC, was $6 million for the three months ended September 30, 2021, $54 million for the three months ended September 30, 2020, $90 million for the nine months ended September 30, 2021 and $97 million for the nine months ended September 30, 2020. For the three and nine months ended September 30, 2021, lower equity interest in the earnings of OCC is primarily driven by a reduction in clearing fee rates that OCC charges its customers, partially offset by increased volumes.
Equity Securities 
The carrying amounts of our equity securities are included in other non-current assets in the Condensed Consolidated Balance Sheets. We elected the measurement alternative for primarily all of our equity securities as they do not have a readily determinable fair value. No material adjustments were made to the carrying value of our equity securities for the three and nine months ended September 30, 2021 and 2020. As of September 30, 2021 and December 31, 2020, our equity securities represent various strategic investments made through our corporate venture program as well as investments acquired through various acquisitions.
7. DEFERRED REVENUE
Deferred revenue represents consideration received that is yet to be recognized as revenue. The changes in our deferred revenue during the nine months ended September 30, 2021 are reflected in the following table: 
 
Balance at December 31, 2020
AdditionsRevenue RecognizedAdjustments
Balance at September 30, 2021
(in millions)
Market Technology$53 $82 $(45)$(2)$88 
Investment Intelligence97 71 (64)— 104 
Corporate Platforms:
Initial Listing91 80 (33)(2)136 
Annual Listings2 83 (2)(1)82 
IR & ESG Services46 48 (40)— 54 
Other17 12 (7)(2)20 
Total$306 $376 $(191)$(7)$484 
In the table above:
•Additions reflect deferred revenue billed in the current period, net of recognition. Market Technology additions include deferred revenue acquired as part of the acquisition of Verafin.
•Revenue recognized includes revenue recognized during the current period that was included in the beginning balance.
•Adjustments reflect foreign currency translation adjustments.
•Other revenue primarily includes deferred revenue from non-U.S. listing of additional shares fees. Listing of additional shares fees are included in our Listing Services business.
As of September 30, 2021, we estimate that our deferred revenue will be recognized in the following years:
Fiscal year ended:202120222023202420252026+Total
(in millions)
Market Technology $41 $46 $1 $— $— $— $88 
Investment Intelligence47 57 — — — — 104 
Corporate Platforms:
Initial Listings14 44 30 21 14 13 136 
Annual Listings82 — — — — — 82 
IR & ESG Services 29 25 — — — — 54 
Other5 6 5 3 1 — 20 
Total$218 $178 $36 $24 $15 $13 $484 

In the above table, 2021 represents the remaining three months of 2021.
The timing of recognition of our deferred market technology revenues is primarily dependent upon the completion of customization and any significant modifications made pursuant to existing market technology contracts. As such, as it relates to market technology revenues, the timing represents our best estimate.
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8. DEBT OBLIGATIONS
The following table presents the changes in the carrying amount of our debt obligations during the nine months ended September 30, 2021:
December 31, 2020AdditionsPayments, Foreign Currency Translation and AccretionSeptember 30, 2021
(in millions)
Short-term debt - commercial paper$— $3,409 $(2,929)$480 
Long-term debt - senior unsecured notes:
2024 Notes498 — — 498 
2023 Notes730 — (730)— 
2026 Notes497 — 1 498 
2029 Notes726 — (37)689 
2030 Notes726 — (37)689 
2050 Notes485 — 1 486 
2022 Notes597 — 1 598 
2031 Notes643 — — 643 
2040 Notes643 — — 643 
2033 Notes— 726 (19)707 
2020 Credit Facility(4)100 (100)(4)
Total long-term debt5,541 826 (920)5,447 
Total debt obligations$5,541 $4,235 $(3,849)$5,927 
Commercial Paper Program
Our U.S. dollar commercial paper program is supported by our 2020 Credit Facility which provides liquidity support for the repayment of commercial paper issued through this program. See “2020 Credit Facility” below for further discussion. The effective interest rate of commercial paper issuances fluctuates as short term interest rates and demand fluctuate. The fluctuation of these rates may impact our interest expense.
In February 2021, we issued $475 million of commercial paper to partially fund the acquisition of Verafin. For further discussion of the acquisition of Verafin, see “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture.”
In July 2021, we issued commercial paper to partially fund our ASR agreement. See “ASR Agreement,” of Note 11, “Nasdaq Stockholders' Equity."




As of September 30, 2021, commercial paper notes in the table above reflect the aggregate principal amount outstanding, less the unamortized discount which is being accreted through interest expense over the life of the applicable notes. The original maturities of these notes range from 13 days to 101 days and the weighted-average maturity is 35 days. The weighted-average effective interest rate is 0.23% per annum.
Senior Unsecured Notes
Our 2022 and 2040 Notes were issued at par. All of our other outstanding senior unsecured notes were issued at a discount. As a result of the discount, the proceeds received from each issuance were less than the aggregate principal amount. As of September 30, 2021, the amounts in the table above reflect the aggregate principal amount, less the unamortized debt discount and the unamortized debt issuance costs which are being accreted through interest expense over the life of the applicable notes. For our Euro denominated notes, the “Payments, Foreign Currency Translation and Accretion” column also includes the impact of foreign currency translation. Our senior unsecured notes are general unsecured obligations which rank equally with all of our existing and future unsubordinated obligations and are not guaranteed by any of our subsidiaries. The senior unsecured notes were issued under indentures that, among other things, limit our ability to consolidate, merge or sell all or substantially all of our assets, create liens, and enter into sale and leaseback transactions. The senior unsecured notes may be redeemed by Nasdaq at any time, subject to a make-whole amount.
Upon a change of control triggering event (as defined in the various supplemental indentures governing the applicable notes), the terms require us to repurchase all or part of each holder’s notes for cash equal to 101% of the aggregate principal amount purchased plus accrued and unpaid interest, if any.
2024 Notes
In May 2014, Nasdaq issued the 2024 Notes, which pay interest semiannually at a rate of 4.25% per annum until June 1, 2024. Such interest rate may vary with Nasdaq’s debt rating, to the extent Nasdaq is downgraded below investment grade, up to a rate not to exceed 6.25%.
Early Extinguishment of 2023 Notes
Nasdaq issued the 2023 Notes in May 2016, which paid interest annually at a rate of 1.75% per annum. In August 2021, we primarily used the net proceeds from the 2033 Notes to repay in full and terminate our 2023 Notes. For further discussion see “2033 Notes” below. In connection with the early extinguishment of the 2023 Notes, we recorded a pre-tax charge of $33 million, which primarily includes a make-whole redemption price premium. This charge is included in general, administrative and other expense in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2021.
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2026 Notes
In June 2016, Nasdaq issued the 2026 Notes, which pay interest semi-annually at a rate of 3.85% per annum until June 30, 2026. Such interest rate may vary with Nasdaq’s debt rating, to the extent Nasdaq is downgraded below investment grade, up to a rate not to exceed 5.85%.
2029 Notes
In April 2019, Nasdaq issued the 2029 Notes, which pay interest annually at a rate of 1.75% per annum until March 28, 2029. Such interest rate may vary with Nasdaq’s debt rating, to the extent Nasdaq is downgraded below investment grade, up to a rate not to exceed 3.75%.
The 2029 Notes have been designated as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. The decrease in the carrying amount of $37 million noted in the “Payments, Foreign Currency Translation and Accretion” column in the table above primarily reflects the translation of the 2029 Notes into U.S. dollars and is recorded in accumulated other comprehensive loss within stockholders’ equity in the Condensed Consolidated Balance Sheets as of September 30, 2021.
2030 Notes
In February 2020, Nasdaq issued the 2030 Notes. The 2030 Notes pay interest annually in arrears, which began on February 13, 2021.
The 2030 Notes were designated as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. The decrease in the carrying amount of $37 million noted in the “Payments, Foreign Currency Translation and Accretion” column in the table above primarily reflects the translation of the 2030 Notes into U.S. dollars and is recorded in accumulated other comprehensive loss within stockholders’ equity in the Condensed Consolidated Balance Sheets as of September 30, 2021.
2050 Notes
In April 2020, Nasdaq issued the 2050 Notes. The 2050 Notes pay interest semi-annually in arrears, which began on October 28, 2020. The interest rate of 3.25% may vary with Nasdaq's debt rating, to the extent Nasdaq is downgraded below investment grade, up to a rate not to exceed 5.25%.
Senior Unsecured Notes Due 2022, 2031 and 2040
In December 2020, Nasdaq issued the 2022, 2031 and 2040 Notes. The net proceeds were used to partially fund the acquisition of Verafin. For further discussion of the acquisition of Verafin, see “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture.”



2022 Notes
The 2022 Notes pay interest semi-annually in arrears, which began on June 21, 2021. The interest rate of 0.445% may vary with Nasdaq's debt rating, to the extent Nasdaq is downgraded below investment grade, up to a rate not to exceed 2.445%.
2031 Notes
The 2031 Notes pay interest semi-annually in arrears, which began on January 15, 2021. The interest rate of 1.650% may vary with Nasdaq's debt rating, to the extent Nasdaq is downgraded below investment grade, up to a rate not to exceed 3.65%.
2040 Notes
The 2040 Notes pay interest semi-annually in arrears, which began on June 21, 2021. The interest rate of 2.500% may vary with Nasdaq's debt rating, to the extent Nasdaq is downgraded below investment grade, up to a rate not to exceed 4.50%.
2033 Notes
In July 2021, Nasdaq issued €615 million aggregate principal amount of 0.900% senior notes due in 2033, which pay interest annually in arrears, beginning on July 30, 2022. The net proceeds from the 2033 Notes were approximately $726 million after deducting the underwriting discount and expenses of the offering. We primarily used the net proceeds from the 2033 Notes to redeem all of the 2023 Notes. For further discussion of the 2023 Notes, see “Early Extinguishment of 2023 Notes” above.
The 2033 Notes have been designated as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. The decrease in the carrying amount of $19 million noted in the “Payments, Foreign Currency Translation and Accretion” column in the table above primarily reflects the translation of the 2033 Notes into U.S. dollars and is recorded in accumulated other comprehensive loss within stockholders’ equity in the Condensed Consolidated Balance Sheets as of September 30, 2021.
Credit Facilities
2020 Credit Facility
In December 2020, Nasdaq entered into the 2020 Credit Facility, which replaced a former credit facility and consists of a $1.25 billion five-year revolving credit facility (with sublimits for non-dollar borrowings, swingline borrowings and letters of credit). Nasdaq intends to use funds available under the 2020 Credit Facility for general corporate purposes and to provide liquidity support for the repayment of commercial paper issued through the commercial paper program. Nasdaq is permitted to repay borrowings under our 2020 Credit Facility at any time in whole or in part, without penalty.

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As of September 30, 2021, no amounts were outstanding on the 2020 Credit Facility. The $(4) million balance represents unamortized debt issuance costs which are being accreted through interest expense over the life of the credit facility. Of the $1.25 billion that is available for borrowing, $480 million provides liquidity support for the commercial paper program. As such, as of September 30, 2021, the total remaining amount available under the 2020 Credit Facility was $770 million, excluding the amounts that support the commercial paper program. See “Commercial Paper Program” above for further discussion of our commercial paper program.
Under our 2020 Credit Facility, borrowings under the revolving credit facility and swingline borrowings bear interest on the principal amount outstanding at a variable interest rate based on either the LIBOR, the base rate (as defined in the credit agreement), or other applicable rate with respect to non-dollar borrowings, plus an applicable margin that varies with Nasdaq’s debt rating. We are charged commitment fees of 0.125% to 0.350%, depending on our credit rating, whether or not amounts have been borrowed. These commitment fees are included in interest expense and were not material for the three and nine months ended September 30, 2021.
The 2020 Credit Facility contains financial and operating covenants. Financial covenants include a maximum leverage ratio. Operating covenants include, among other things, limitations on Nasdaq’s ability to incur additional indebtedness, grant liens on assets, dispose of assets and make certain restricted payments. The facility also contains customary affirmative covenants, including access to financial statements, notice of defaults and certain other material events, maintenance of properties and insurance, and customary events of default, including cross-defaults to our material indebtedness.
The 2020 Credit Facility includes an option for Nasdaq to increase the available aggregate amount by up to $625 million, subject to the consent of the lenders funding the increase and certain other conditions.
Other Credit Facilities
Certain of our European subsidiaries have several other credit facilities, which are available in multiple currencies, primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line for one subsidiary. These credit facilities, in aggregate, totaled $218 million as of September 30, 2021 and $232 million as of December 31, 2020 in available liquidity, none of which was utilized. Generally, these facilities each have a one year term. The amounts borrowed under these various credit facilities bear interest on the principal amount outstanding at a variable interest rate based on a base rate (as defined in the applicable credit agreement), plus an applicable margin. We are charged commitment fees (as defined in the applicable credit agreement), whether or not amounts have been borrowed. These commitment fees are included in interest expense and were not material for the three and nine months ended September 30, 2021 and 2020.
These facilities include customary affirmative and negative operating covenants and events of default.
Debt Covenants
As of September 30, 2021, we were in compliance with the covenants of all of our debt obligations.
9. RETIREMENT PLANS
Defined Contribution Savings Plan
We sponsor a 401(k) Plan for U.S. employees. Employees are immediately eligible to make contributions to the plan and are also eligible for an employer contribution match at an amount equal to 100.0% of the first 6.0% of eligible employee contributions. Savings plan expense included in compensation and benefits expense in the Condensed Consolidated Statements of Income was $3 million for the three months ended September 30, 2021, $4 million for the three months ended September 30, 2020 and $11 million for both the nine months ended September 30, 2021 and 2020.
Pension and Supplemental Executive Retirement Plans
We maintain non-contributory, defined-benefit pension plans, non-qualified SERPs for certain senior executives and other post-retirement benefit plans for eligible employees in the U.S. Our pension plans and SERPs are frozen. Future service and salary for all participants do not count toward an accrual of benefits under the pension plans and SERPs. Most employees outside the U.S. are covered by local retirement plans or by applicable social laws. Benefits under social laws are generally expensed in the periods in which the costs are incurred. The total expense for these plans is included in compensation and benefits expense in the Condensed Consolidated Statements of Income and was $7 million for the three months ended September 30, 2021, $6 million for the three months ended September 30, 2020, $20 million for the nine months ended September 30, 2021 and $17 million for the nine months ended September 30, 2020.
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10. SHARE-BASED COMPENSATION
We have a share-based compensation program for employees and non-employee directors. Share-based awards granted under this program include restricted stock (consisting of restricted stock units), PSUs and stock options. For accounting purposes, we consider PSUs to be a form of restricted stock.
Summary of Share-Based Compensation Expense
The following table presents the total share-based compensation expense resulting from equity awards and the 15.0% discount for the ESPP for the three and nine months ended September 30, 2021 and 2020, which is included in compensation and benefits expense in the Condensed Consolidated Statements of Income:
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
 (in millions)
Share-based compensation expense before income taxes
$23 $24 $66 $64 
Income tax benefit(6)(7)(18)(17)
Share-based compensation expense after income taxes
$17 $17 $48 $47 
Common Shares Available Under Our Equity Plan
As of September 30, 2021, we had approximately 9.5 million shares of common stock authorized for future issuance under our Equity Plan.
Restricted Stock
We grant restricted stock to most active employees. The grant date fair value of restricted stock awards is based on the closing stock price at the date of grant less the present value of future cash dividends. Restricted stock awards granted to employees below the manager level generally vest 33.3% on the first anniversary of the grant date, 33.3% on the second anniversary of the grant date, and 33.3% on the third anniversary of the grant date. Restricted stock awards granted to employees at or above the manager level generally vest 33.3% on the second anniversary of the grant date, 33.3% on the third anniversary of the grant date, and 33.3% on the fourth anniversary of the grant date.

Summary of Restricted Stock Activity
The following table summarizes our restricted stock activity for the nine months ended September 30, 2021:
Restricted Stock
 Number of AwardsWeighted-Average Grant Date Fair Value
Unvested at January 1, 20211,639,051 $84.21 
Granted469,442 147.68 
Vested(477,127)79.30 
Forfeited(97,951)100.17 
Unvested at September 30, 20211,533,415 $104.15 
As of September 30, 2021, $87 million of total unrecognized compensation cost related to restricted stock is expected to be recognized over a weighted-average period of 1.9 years.
PSUs
PSUs are based on performance measures that impact the amount of shares that each recipient will receive upon vesting. Prior to April 1, 2020, we had two performance-based PSU programs for certain officers, a one-year performance-based program and a three-year cumulative performance-based program that focuses on TSR. Effective April 1, 2020, to better align the equity programs for eligible officers, the one-year performance-based program was eliminated and all eligible officers now participate in the three-year cumulative performance-based program. While the performance periods are complete for all PSUs granted under the one-year performance-based program, some shares underlying these PSUs have not vested.
One-Year PSU Program
The grant date fair value of PSUs under the one-year performance-based program was based on the closing stock price at the date of grant less the present value of future cash dividends. Under this program, an eligible employee received a target grant of PSUs, but could have received from 0.0% to 150.0% of the target amount granted, depending on the achievement of performance measures. These awards vest ratably on an annual basis over a three-year period commencing with the end of the one-year performance period. Compensation cost is recognized over the performance period and the three-year vesting period based on the probability that such performance measures will be achieved, taking into account an estimated forfeiture rate.


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Three-Year PSU Program
Under the three-year performance-based program, each eligible individual receives PSUs, subject to market conditions, with a three-year cumulative performance period that vest at the end of the performance period. Compensation cost is recognized over the three-year performance period, taking into account an estimated forfeiture rate, regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. Performance will be determined by comparing Nasdaq’s TSR to two peer groups, each weighted 50.0%. The first peer group consists of exchange companies, and the second peer group consists of all companies in the S&P 500. Nasdaq’s relative performance ranking against each of these groups will determine the final number of shares delivered to each individual under the program. The award issuance under this program will be between 0.0% and 200.0% of the number of PSUs granted and will be determined by Nasdaq’s overall performance against both peer groups. However, if Nasdaq’s TSR is negative for the three-year performance period, regardless of TSR ranking, the award issuance will not exceed 100.0% of the number of PSUs granted. We estimate the fair value of PSUs granted under the three-year PSU program using the Monte Carlo simulation model, as these awards contain a market condition.
Grants of PSUs that were issued in 2018 with a three-year performance period exceeded the applicable performance parameters. As a result, an additional 150,290 units above the original target were granted in the first quarter of 2021 and were fully vested upon issuance.
The following weighted-average assumptions were used to determine the weighted-average fair values of the PSU awards granted under the three-year PSU program for the nine months ended September 30, 2021 and 2020:
Nine Months Ended September 30,
20212020
Weighted-average risk free interest rate0.31 %0.27 %
Expected volatility30.11 %27.40 %
Weighted-average grant date share price$150.85 $92.34 
Weighted-average fair value at grant date$206.17 $111.50 
In the table above:
•The risk-free interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant; and
•We use historic volatility for PSU awards issued under the three-year PSU program, as implied volatility data could not be obtained for all the companies in the peer groups used for relative performance measurement within the program.
In addition, the annual dividend assumption utilized in the Monte Carlo simulation model is based on Nasdaq’s dividend yield at the date of grant.
Summary of PSU Activity
The following table summarizes our PSU activity for the nine months ended September 30, 2021:
PSUs
One-Year ProgramThree-Year Program
 Number of Awards Weighted-Average Grant Date Fair ValueNumber of AwardsWeighted-Average Grant Date Fair Value
Unvested at January 1, 2021169,548 $83.33 809,989 $108.12 
Granted— — 340,718 166.77 
Vested(17,532)82.45 (392,727)116.86 
Forfeited(18,829)83.31 (12,736)139.59 
Unvested at September 30, 2021133,187 $83.45 745,244 $129.80 
In the table above, the granted amount includes additional awards granted based on overachievement of performance parameters as well as target awards.
As of September 30, 2021, $1 million of total unrecognized compensation cost related to the one-year PSU program is expected to be recognized over a weighted-average period of 1.1 years. For the three-year PSU program, $45 million of total unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.5 years.
Stock Options
A summary of stock option activity for the nine months ended September 30, 2021 is as follows:
 Number of Stock OptionsWeighted-Average Exercise Price
Outstanding at January 1, 2021293,353 $63.22 
Exercised(24,409)25.28 
Forfeited(127)25.28 
Outstanding and exercisable at September 30, 2021268,817 $66.68 
There were no stock options granted, exercised or forfeited for the three months ended September 30, 2021.
The net cash proceeds from the exercise of 24,409 stock options for the nine months ended September 30, 2021 was $1 million. The net cash proceeds from the exercise of 25,113 stock options for the three months ended September 30, 2020 was $1 million. The net cash proceeds from the exercise of 80,378 stock options for the nine months ended September 30, 2020 was $2 million.

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As of September 30, 2021, the aggregate pre-tax intrinsic value of the outstanding and exercisable stock options in the above table was $34 million and represents the difference between our closing stock price on September 30, 2021 of $193.02 and the exercise price, times the number of shares, which would have been received by the option holders had the option holders exercised their stock options on that date. This amount can change based on the fair market value of our common stock. As of September 30, 2021, the weighted-average remaining contractual term of the outstanding and exercisable stock options included in the above table was 5.3 years. As of September 30, 2020, 0.3 million outstanding stock options were exercisable and the weighted-average exercise price was $62.59. 
The total pre-tax intrinsic value of stock options exercised was $2 million for the three months ended September 30, 2020, $3 million for the nine months ended September 30, 2021 and $8 million for the nine months ended September 30, 2020. 
ESPP
We have an ESPP under which approximately 4.3 million shares of our common stock were available for future issuance as of September 30, 2021. Under our ESPP, employees may purchase shares having a value not exceeding 10.0% of their annual compensation, subject to applicable annual Internal Revenue Service limitations. We record compensation expense related to the 15.0% discount that is given to our employees, which totaled $1 million for both the three months ended September 30, 2021 and 2020, $6 million for the nine months ended September 30, 2021 and $4 million for the nine months ended September 30, 2020.
11. NASDAQ STOCKHOLDERS' EQUITY
Common Stock
As of September 30, 2021, 300,000,000 shares of our common stock were authorized, 173,886,216 shares were issued and 167,206,649 shares were outstanding. As of December 31, 2020, 300,000,000 shares of our common stock were authorized, 171,278,761 shares were issued and 164,933,678 shares were outstanding. The holders of common stock are entitled to one vote per share, except that our certificate of incorporation limits the ability of any shareholder to vote in excess of 5.0% of the then-outstanding shares of Nasdaq common stock.








Common Stock in Treasury, at Cost
We account for the purchase of treasury stock under the cost method with the shares of stock repurchased reflected as a reduction to Nasdaq stockholders’ equity and included in common stock in treasury, at cost in the Condensed Consolidated Balance Sheets. Shares repurchased under our share repurchase program are currently retired and canceled and are therefore not included in the common stock in treasury balance. If treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired. We held 6,679,567 shares of common stock in treasury as of September 30, 2021 and 6,345,083 shares as of December 31, 2020, most of which are related to shares of our common stock withheld for the settlement of employee tax withholding obligations arising from the vesting of restricted stock and PSUs.
Share Repurchase Program
As discussed in “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” on June 16, 2021, our board of directors authorized an increase to our share repurchase program to an aggregate authorized amount of $1.5 billion. As of September 30, 2021, the remaining aggregate authorized amount under the existing share repurchase program was $984 million.
These purchases may be made from time to time at prevailing market prices in open market purchases, privately-negotiated transactions, block purchase techniques, an accelerated share repurchase program or otherwise, as determined by our management. The purchases are primarily funded from existing cash balances. The share repurchase program may be suspended, modified or discontinued at any time, and has no defined expiration date.
The following is a summary of our share repurchase activity, excluding the repurchases done through our ASR agreement described below, reported based on settlement date, for the nine months ended September 30, 2021:
Nine Months Ended September 30, 2021
Number of shares of common stock repurchased2,623,551 
Average price paid per share
$156.11 
Total purchase price (in millions)
$410 
In the table above, the number of shares of common stock repurchased excludes an aggregate of 334,484 shares withheld upon the vesting of restricted stock and PSUs for the nine months ended September 30, 2021.
As discussed above in “Common Stock in Treasury, at Cost,” shares repurchased under our share repurchase program are currently retired and cancelled.

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ASR Agreement
In July 2021 we entered into an ASR agreement to repurchase $475 million of common stock and received an initial delivery of 2,039,940 shares of common stock. The ASR agreement was entered into pursuant to our $1.5 billion share repurchase authorization as discussed in "Share Repurchase Program," above. We expect to receive the remaining shares in the fourth quarter of 2021.
Preferred Stock
Our certificate of incorporation authorizes the issuance of 30,000,000 shares of preferred stock, par value $0.01 per share, issuable from time to time in one or more series. As of September 30, 2021 and December 31, 2020, no shares of preferred stock were issued or outstanding.
Cash Dividends on Common Stock
During the first nine months of 2021, our board of directors declared and paid the following cash dividends:
Declaration DateDividend Per
Common Share		Record DateTotal Amount PaidPayment Date
   (in millions) 
January 27, 2021$0.49 March 12, 2021$81 March 26, 2021
April 21, 20210.54 June 11, 202189 June 25, 2021
July 21, 20210.54 September 10, 202190 September 24, 2021
$260 
The total amount paid of $260 million was recorded in retained earnings in the Condensed Consolidated Balance Sheets at September 30, 2021.
In October 2021, the board of directors approved a regular quarterly cash dividend of $0.54 per share on our outstanding common stock. The dividend is payable on December 17, 2021 to shareholders of record at the close of business on December 3, 2021. The estimated amount of this dividend is $90 million. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the board of directors.
The board of directors maintains a dividend policy with the intention to provide stockholders with regular and increasing dividends as earnings and cash flows increase.
12. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
 Three Months Ended September 30,
 20212020
Numerator:(in millions, except share and per share amounts)
Net income attributable to common shareholders$288 $264 
Denominator:  
Weighted-average common shares outstanding for basic earnings per share
167,692,369 164,171,067 
Weighted-average effect of dilutive securities:  
Employee equity awards2,487,642 2,328,540 
Contingent issuance of common stock— 992,247 
Weighted-average common shares outstanding for diluted earnings per share
170,180,011 167,491,854 
Basic and diluted earnings per share:
  
Basic earnings per share$1.72 $1.61 
Diluted earnings per share$1.69 $1.58 

Nine Months Ended September 30,
20212020
Numerator:(in millions, except share and per share amounts)
Net income attributable to common shareholders$928 $708 
Denominator:
Weighted-average common shares outstanding for basic earnings per share
165,506,859 164,377,053 
Weighted-average effect of dilutive securities:
Employee equity awards2,407,484 2,071,848 
Contingent issuance of common stock— 330,749 
Weighted-average common shares outstanding for diluted earnings per share
167,914,343 166,779,650 
Basic and diluted earnings per share:
Basic earnings per share$5.61 $4.31 
Diluted earnings per share$5.53 $4.25 

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In the preceding tables:
•Employee equity awards from our PSU program, which are considered contingently issuable, are included in the computation of dilutive earnings per share on a weighted average basis when management determines that the applicable performance criteria would have been met if the performance period ended as of the date of the relevant computation.
•For the three and nine months ended September 30, 2020, the contingent issuance of common stock was related to a contingent obligation associated with a business we sold in June 2021. See “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion.
Securities that were not included in the computation of diluted earnings per share because their effect was antidilutive were immaterial for the three months ended September 30, 2021 and for both the nine months ended September 30, 2021 and 2020. There were no securities excluded for the three months ended September 30, 2020.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following tables present our financial assets and financial liabilities that were measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020.
 
September 30, 2021
 
Total
Level 1
Level 2
Level 3
(in millions)
European government debt securities
$147 $147 $— $— 
Corporate debt securities
6 — 6 — 
State owned enterprises and municipal securities
11 — 11 — 
Swedish mortgage bonds
21 — 21 — 
Total assets at fair value$185 $147 $38 $— 
December 31, 2020
Total
Level 1
Level 2
Level 3
(in millions)
European government debt securities
$156 $156 $— $— 
Corporate debt securities
2 — 2 — 
State owned enterprises and municipal securities
15 — 15 — 
Swedish mortgage bonds
22 — 22 — 
Total assets at fair value$195 $156 $39 $— 
Financial Instruments Not Measured at Fair Value on a Recurring Basis
Some of our financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. Such financial assets and financial liabilities include: cash and cash equivalents, restricted cash and cash equivalents, receivables, net, certain other current assets, accounts payable and accrued expenses, Section 31 fees payable to SEC, accrued personnel costs, commercial paper and certain other current liabilities.
Our investment in OCC is accounted for under the equity method of accounting. We have elected the measurement alternative for the majority of our equity securities, which primarily represent various strategic investments made through our corporate venture program. See “Equity Method Investments,” and “Equity Securities,” of Note 6, “Investments,” for further discussion.
We also consider our debt obligations to be financial instruments. As of September 30, 2021, the majority of our debt obligations were fixed-rate obligations. We are exposed to changes in interest rates as a result of borrowings under our 2020 Credit Facility, as the interest rates on this facility have a variable rate depending on the maturity of the borrowing and the implied underlying reference rate. As of September 30, 2021, we had no outstanding borrowings under our 2020 Credit Facility. We are also exposed to changes in interest rates as a result of the amounts outstanding from the sale of commercial paper under our commercial paper program. The fair value of our debt obligations utilizing discounted cash flow analyses for our floating rate debt and prevailing market rates for our fixed rate debt was $6.1 billion as of September 30, 2021 and the fair value of our debt obligations utilizing prevailing market rates for our fixed rate debt was $5.9 billion as of December 31, 2020. The discounted cash flow analyses are based on borrowing rates currently available to us for debt with similar terms and maturities. The fair value of our commercial paper as of September 30, 2021 approximated the carrying value since the rates of interest on this short-term debt approximated market rates. Our commercial paper and our fixed rate and floating rate debt are categorized as Level 2 in the fair value hierarchy.
For further discussion of our debt obligations, see Note 8, “Debt Obligations.”

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Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis
Our non-financial assets, which include goodwill, intangible assets, and other long-lived assets, are not required to be carried at fair value on a recurring basis. Fair value measures of non-financial assets are primarily used in the impairment analysis of these assets. Any resulting asset impairment would require that the non-financial asset be recorded at its fair value. Nasdaq uses Level 3 inputs to measure the fair value of the above assets on a non-recurring basis. As of September 30, 2021 and December 31, 2020, there were no non-financial assets measured at fair value on a non-recurring basis.
14. CLEARING OPERATIONS
Nasdaq Clearing
Nasdaq Clearing is authorized and supervised under EMIR as a multi-asset clearinghouse by the SFSA. Such authorization is effective for all member states of the European Union and certain other non-member states that are part of the European Economic Area, including Norway. The clearinghouse acts as the CCP for exchange and OTC trades in equity derivatives, fixed income derivatives, resale and repurchase contracts, power derivatives, emission allowance derivatives, and seafood derivatives. 
Through our clearing operations in the financial markets, which include the resale and repurchase market, the commodities markets, and the seafood market, Nasdaq Clearing is the legal counterparty for, and guarantees the fulfillment of, each contract cleared. These contracts are not used by Nasdaq Clearing for the purpose of trading on its own behalf. As the legal counterparty of each transaction, Nasdaq Clearing bears the counterparty risk between the purchaser and seller in the contract. In its guarantor role, Nasdaq Clearing has precisely equal and offsetting claims to and from clearing members on opposite sides of each contract, standing as the CCP on every contract cleared. In accordance with the rules and regulations of Nasdaq Clearing, default fund and margin collateral requirements are calculated for each clearing member’s positions in accounts with the CCP. See “Default Fund Contributions and Margin Deposits” below for further discussion of Nasdaq Clearing’s default fund and margin requirements.
Nasdaq Clearing maintains three member sponsored default funds: one related to financial markets, one related to commodities markets and one related to the seafood market. Under this structure, Nasdaq Clearing and its clearing members must contribute to the total regulatory capital related to the clearing operations of Nasdaq Clearing. This structure applies an initial separation of default fund contributions for the financial, commodities and seafood markets in order to create a buffer for each market’s counterparty risks. As of September 1, 2021, the mutualized default fund has been eliminated and the default fund structure is fully segregated. See “Default Fund Contributions” below for further discussion of Nasdaq
Clearing’s default fund. A power of assessment and a liability waterfall have also been implemented to further align risk between Nasdaq Clearing and its clearing members. See “Power of Assessment” and “Liability Waterfall” below for further discussion.
Nasdaq Commodities Clearing Default
In September 2018, a member of the Nasdaq Clearing commodities market defaulted due to the inability to post sufficient collateral to cover increased margin requirements for the positions of the relevant member, which had experienced losses due to sharp adverse movements in the Nordic - German power market spread. Nasdaq Clearing followed default procedures and offset the future market risk on the defaulting member’s positions.
Immediately following the event, Nasdaq Clearing launched a comprehensive enhancement program to strengthen the resilience and robustness of the clearinghouse.
In December 2018, we initiated a capital relief program. The capital relief program was a voluntary program open to each commodities default fund participant; each such participant who agreed to the capital relief program received a proportion of the funds made available under the capital relief program as reflected by their proportionate share of the aggregate of the clearing members' default fund replenishments.
Since the member default in 2018, Nasdaq Clearing has been working to maximize the recovery from the defaulted member. All funds recovered are applied towards the default fund participants on a pro rata basis. As of September 30, 2021, the expected recovery together with the capital relief program amounts to approximately 80% of the initial loss, of which the majority has been paid and the remainder is expected to be paid during 2021.
In December 2018, the SFSA initiated a review of Nasdaq Clearing. In January 2021, the SFSA issued a warning combined with an administrative fine of approximately $34 million (SEK 300 million) to Nasdaq Clearing based on their review. Nasdaq Clearing has assessed the SFSA´s decision and has appealed the decision to the Administrative Court. As of September 30, 2021, no accrual has been recorded related to this matter as the outcome cannot be reasonably estimated.
Default Fund Contributions and Margin Deposits
As of September 30, 2021, clearing member default fund contributions and margin deposits were as follows:
 September 30, 2021
 Cash ContributionsNon-Cash ContributionsTotal Contributions
 (in millions)
Default fund contributions
$614 $207 $821 
Margin deposits3,588 7,327 10,915 
Total$4,202 $7,534 $11,736 
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Of the total default fund contributions of $821 million, Nasdaq Clearing can utilize $739 million as capital resources in the event of a counterparty default. The remaining balance of $82 million pertains to member posted surplus balances.
Our clearinghouse holds material amounts of clearing member cash deposits which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks. While we seek to achieve a reasonable rate of return, we are primarily concerned with preservation of capital and managing the risks associated with these deposits.
Clearing member cash contributions are maintained in demand deposits held at central banks and large, highly rated financial institutions or secured through direct investments, primarily central bank certificates and highly rated European government debt securities with original maturities primarily 1 year or less, reverse repurchase agreements and multilateral development bank debt securities. Investments in reverse repurchase agreements range in maturity from 1 day to 13 days and are secured with highly rated government securities. The carrying value of these securities approximates their fair value due to the short-term nature of the instruments and reverse repurchase agreements.
Nasdaq Clearing has invested the total cash contributions of $4,202 million as of September 30, 2021 and $3,942 million as of December 31, 2020, in accordance with its investment policy as follows:
 September 30, 2021December 31, 2020
 (in millions)
Demand deposits$2,731 $2,086 
Central bank certificates685 1,111 
European government debt securities
353 470 
Reverse repurchase agreements
188 180 
Multilateral development bank debt securities245 95 
Total
$4,202 $3,942 
In the investment activity related to default fund and margin contributions, we are exposed to counterparty risk related to reverse repurchase agreement transactions, which reflect the risk that the counterparty might become insolvent and, thus, fail to meet its obligations to Nasdaq Clearing. We mitigate this risk by only engaging in transactions with high credit quality reverse repurchase agreement counterparties and by limiting the acceptable collateral under the reverse repurchase agreement to high quality issuers, primarily government securities and other securities explicitly guaranteed by a government. The value of the underlying security is monitored during the lifetime of the contract, and in the event the market value of the underlying security falls below the reverse repurchase amount, our clearinghouse may require additional collateral or a reset of the contract.
Default Fund Contributions
Required contributions to the default funds are proportional to the exposures of each clearing member. When a clearing member is active in more than one market, contributions must be made to all markets’ default funds in which the member is active. Clearing members’ eligible contributions may include cash and non-cash contributions. Cash contributions received are maintained in demand deposits held at central banks and large, highly rated financial institutions or invested by Nasdaq Clearing, in accordance with its investment policy, either in central bank certificates, highly rated government debt securities, reverse repurchase agreements with highly rated government debt securities as collateral, or multilateral development bank debt securities. Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing. Clearing members’ cash contributions are included in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Non-cash contributions include highly rated government debt securities that must meet specific criteria approved by Nasdaq Clearing. Non-cash contributions are pledged assets that are not recorded in the Condensed Consolidated Balance Sheets as Nasdaq Clearing does not take legal ownership of these assets and the risks and rewards remain with the clearing members. These balances may fluctuate over time due to changes in the amount of deposits required and whether members choose to provide cash or non-cash contributions. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default. In addition to clearing members’ required contributions to the liability waterfall, Nasdaq Clearing is also required to contribute capital to the liability waterfall and overall regulatory capital as specified under its clearinghouse rules. As of September 30, 2021, Nasdaq Clearing committed capital totaling $137 million to the liability waterfall and overall regulatory capital, in the form of government debt securities, which are recorded as financial investments in the Condensed Consolidated Balance Sheets. The combined regulatory capital of the clearing members and Nasdaq Clearing is intended to secure the obligations of a clearing member exceeding such member’s own margin and default fund deposits and may be used to cover losses sustained by a clearing member in the event of a default.
Margin Deposits
Nasdaq Clearing requires all clearing members to provide collateral, which may consist of cash and non-cash contributions, to guarantee performance on the clearing members’ open positions, or initial margin. In addition, clearing members must also provide collateral to cover the daily margin call if needed. See “Default Fund Contributions” above for further discussion of cash and non-cash contributions.
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Similar to default fund contributions, Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing and are recorded in revenues. These cash deposits are recorded in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Pledged margin collateral is not recorded in our Condensed Consolidated Balance Sheets as all risks and rewards of collateral ownership, including interest, belong to the counterparty. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default.
Nasdaq Clearing marks to market all outstanding contracts and requires payment from clearing members whose positions have lost value. The mark-to-market process helps identify any clearing members that may not be able to satisfy their financial obligations in a timely manner allowing Nasdaq Clearing the ability to mitigate the risk of a clearing member defaulting due to exceptionally large losses. In the event of a default, Nasdaq Clearing can access the defaulting member’s margin and default fund deposits to cover the defaulting member’s losses.
Regulatory Capital and Risk Management Calculations
Nasdaq Clearing manages risk through a comprehensive counterparty risk management framework, which is comprised of policies, procedures, standards and financial resources. The level of regulatory capital is determined in accordance with Nasdaq Clearing’s regulatory capital and default fund policy, as approved by the SFSA. Regulatory capital calculations are continuously updated through a proprietary capital-at-risk calculation model that establishes the appropriate level of capital.
As mentioned above, Nasdaq Clearing is the legal counterparty for each contract cleared and thereby guarantees the fulfillment of each contract. Nasdaq Clearing accounts for this guarantee as a performance guarantee. We determine the fair value of the performance guarantee by considering daily settlement of contracts and other margining and default fund requirements, the risk management program, historical evidence of default payments, and the estimated probability of potential default payouts. The calculation is determined using proprietary risk management software that simulates gains and losses based on historical market prices, extreme but plausible market scenarios, volatility and other factors present at that point in time for those particular unsettled contracts. Based on this analysis, excluding any liability related to the Nasdaq commodities clearing default (see discussion above), the estimated liability was nominal and no liability was recorded as of September 30, 2021.



Power of Assessment 
To further strengthen the contingent financial resources of the clearinghouse, Nasdaq Clearing has power of assessment that provides the ability to collect additional funds from its clearing members to cover a defaulting member’s remaining obligations up to the limits established under the terms of the clearinghouse rules. The power of assessment corresponds to 230.0% of the clearing member’s aggregate contribution to the financial, commodities and seafood markets’ default funds.
Liability Waterfall
The liability waterfall is the priority order in which the capital resources would be utilized in the event of a default where the defaulting clearing member’s collateral would not be sufficient to cover the cost to settle its portfolio. If a default occurs and the defaulting clearing member’s collateral, including cash deposits and pledged assets, is depleted, then capital is utilized in the following amount and order:
•junior capital contributed by Nasdaq Clearing, which totaled $44 million as of September 30, 2021;
•a loss-sharing pool related only to the financial market that is contributed to by clearing members and only applies if the defaulting member’s portfolio includes interest rate swap products;
•specific market default fund where the loss occurred (i.e., the financial, commodities, or seafood market), which includes capital contributions of the clearing members on a pro-rata basis; and
•fully segregated senior capital for each specific market contributed by Nasdaq Clearing, calculated in accordance with clearinghouse rules, which totaled $24 million as of September 30, 2021.
If additional funds are needed after utilization of the liability waterfall, or if part of the waterfall has been utilized and needs to be replenished, then Nasdaq Clearing will utilize its power of assessment and additional capital contributions will be required by non-defaulting members up to the limits established under the terms of the clearinghouse rules.
In addition to the capital held to withstand counterparty defaults described above, Nasdaq Clearing also has committed capital of $69 million to ensure that it can handle an orderly wind-down of its operation, and that it is adequately protected against investment, operational, legal, and business risks.

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Market Value of Derivative Contracts Outstanding
The following table presents the market value of derivative contracts outstanding prior to netting:
 September 30, 2021
 (in millions)
Commodity and seafood options, futures and forwards$217 
Fixed-income options and futures291 
Stock options and futures223 
Index options and futures100 
Total$831 
In the table above:
•We determined the fair value of our option contracts using standard valuation models that were based on market-based observable inputs including implied volatility, interest rates and the spot price of the underlying instrument.
•We determined the fair value of our futures contracts based upon quoted market prices and average quoted market yields.
•We determined the fair value of our forward contracts using standard valuation models that were based on market-based observable inputs including benchmark rates and the spot price of the underlying instrument.
Derivative Contracts Cleared
The following table presents the total number of derivative contracts cleared through Nasdaq Clearing for the nine months ended September 30, 2021 and 2020:
 September 30, 2021September 30, 2020
Commodity and seafood options, futures and forwards432,188 476,480 
Fixed-income options and futures
17,010,664 16,456,583 
Stock options and futures15,217,832 14,322,903 
Index options and futures27,311,122 41,202,460 
Total59,971,806 72,458,426 
In the table above, the total volume in cleared power related to commodity contracts was 632 Terawatt hours (TWh) for the nine months ended September 30, 2021 and 670 TWh for the nine months ended September 30, 2020.
Resale and Repurchase Agreements Contracts Outstanding and Cleared
The outstanding contract value of resale and repurchase agreements was $3.1 billion as of September 30, 2021 and $2.4 billion as of September 30, 2020. The total number of resale and repurchase agreements contracts cleared was 4,494,952 for the nine months ended September 30, 2021 and was 3,639,384 for the nine months ended September 30, 2020.
15. LEASES
We have operating leases which are primarily real estate leases predominantly for our U.S. and European headquarters and for general office space. The following table provides supplemental balance sheet information related to Nasdaq's operating leases:
Leases Balance Sheet ClassificationSeptember 30, 2021December 31, 2020
(in millions)
Assets:
Operating lease assets
Operating lease assets
$383 $381 
Liabilities:
Current lease liabilities
Other current liabilities
$42 $46 
Non-current lease liabilities
Operating lease liabilities
398 389 
Total lease liabilities$440 $435 
The following table summarizes Nasdaq's lease cost:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions)
Operating lease cost$21 $22 $63 $63 
Variable lease cost7 8 21 20 
Sublease income(1)(1)(3)(3)
Total lease cost$27 $29 $81 $80 
In the table above, operating lease costs include short-term lease cost, which was immaterial.
The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded in our Condensed Consolidated Balance Sheets.
September 30, 2021
(in millions)
Remainder of 2021$10 
202262 
202357 
202452 
202539 
2026+330 
Total lease payments550 
      Less: interest(110)
Present value of lease liabilities$440 
In the table above, interest is calculated using the interest rate for each lease. Present value of lease liabilities include the current portion of $42 million.

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The following table provides information related to Nasdaq's lease term and discount rate:
September 30, 2021
Weighted-average remaining lease term (in years)
11.4
Weighted-average discount rate3.8 %
The following table provides supplemental cash flow information related to Nasdaq's operating leases:
Nine Months End September 30,
20212020
(in millions)
Cash paid for amounts included in the measurement of operating lease liabilities
$57 $57 
Lease assets obtained in exchange for new operating lease liabilities
$47 $94 
16. INCOME TAXES
Income Tax Provision
The following table presents our income tax provision and effective tax rate:
Three Months Ended September 30,
20212020
(in millions)
Income tax provision$83 $93 
Effective tax rate22.4 %26.1 %
Nine Months Ended September 30,
20212020
(in millions)
Income tax provision$292 $237 
Effective tax rate23.9 %25.1 %
The lower effective tax rate for the three and nine months ended September 30, 2021 was primarily due to return-to-provision adjustments and prior period tax benefits. The lower effective tax rate for the nine months ended September 30, 2021 was also due to higher tax benefit from vested share-based awards in the U.S.
The effective tax rate may vary from period to period depending on, among other factors, the geographic and business mix of earnings and losses. These same and other factors, including history of pre-tax earnings and losses, are taken into account in assessing the ability to realize deferred tax assets.
Tax Audits
Nasdaq and its eligible subsidiaries file a consolidated U.S. federal income tax return, applicable state and local income tax returns and non-U.S. income tax returns. We are subject to examination by federal, state and local, and foreign tax authorities. Federal income tax returns for the years 2012 through 2016 are currently under examination by the Internal Revenue Service and we are subject to examination by the Internal Revenue Service for 2017 through 2019. Several
state tax returns are currently under examination by the respective tax authorities for the years 2012 through 2018, while 2019 is subject to examination. Non-U.S. tax returns are subject to examination by the respective tax authorities for the years 2015 through 2020.
We regularly assess the likelihood of additional assessments by each jurisdiction and have established tax reserves that we believe are adequate in relation to the potential for additional assessments. Examination outcomes and the timing of examination settlements are subject to uncertainty. Although the results of such examinations may have an impact on our unrecognized tax benefits, we do not anticipate that such impact will be material to our condensed consolidated financial position or results of operations, but may be material to our operating results for a particular period and the effective tax rate for that period. We do not expect the settlement of any tax audits to be material in the next twelve months.
17. COMMITMENTS, CONTINGENCIES AND GUARANTEES
Guarantees Issued and Credit Facilities Available
In addition to the default fund contributions and margin collateral pledged by clearing members discussed in Note 14, “Clearing Operations,” we have obtained financial guarantees and credit facilities, which are guaranteed by us through counter indemnities, to provide further liquidity related to our clearing businesses. Financial guarantees issued to us totaled $5 million as of September 30, 2021 and December 31, 2020. As discussed in “Other Credit Facilities,” of Note 8, “Debt Obligations,” we also have credit facilities primarily related to our Nasdaq Clearing operations, which are available in multiple currencies, and totaled $218 million as of September 30, 2021 and $232 million as of December 31, 2020 in available liquidity, none of which was utilized.
Other Guarantees
Through our clearing operations in the financial markets, Nasdaq Clearing is the legal counterparty for, and guarantees the performance of, its clearing members. See Note 14, “Clearing Operations,” for further discussion of Nasdaq Clearing performance guarantees.
We have provided a guarantee related to lease obligations for The Nasdaq Entrepreneurial Center, Inc., which is a not-for-profit organization designed to convene, connect and engage aspiring and current entrepreneurs. This entity is not included in the condensed consolidated financial statements of Nasdaq.
We believe that the potential for us to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Condensed Consolidated Balance Sheets for the above guarantees.

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Routing Brokerage Activities
One of our broker-dealer subsidiaries, Nasdaq Execution Services, provides a guarantee to securities clearinghouses and exchanges under its standard membership agreements, which require members to guarantee the performance of other members. If a member becomes unable to satisfy its obligations to a clearinghouse or exchange, other members would be required to meet its shortfalls. To mitigate these performance risks, the exchanges and clearinghouses often require members to post collateral, as well as meet certain minimum financial standards. Nasdaq Execution Services’ maximum potential liability under these arrangements cannot be quantified. However, we believe that the potential for Nasdaq Execution Services to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Condensed Consolidated Balance Sheets for these arrangements.
Legal and Regulatory Matters 
Litigation
As previously disclosed, we are named as one of many defendants in City of Providence v. BATS Global Markets, Inc., et al., 14 Civ. 2811 (S.D.N.Y.), which was filed on April 18, 2014 in the United States District Court for the Southern District of New York. The district court appointed lead counsel, who filed an amended complaint on September 2, 2014. The amended complaint names as defendants seven national exchanges, as well as Barclays PLC, which operated a private alternative trading system. On behalf of a putative class of securities traders, the plaintiffs allege that the defendants engaged in a scheme to manipulate the markets through high-frequency trading; the amended complaint asserts claims against us under Section 10(b) of the Exchange Act and Rule 10b-5, as well as under Section 6(b) of the Exchange Act. The plaintiffs seek injunctive and monetary relief of an unspecified amount. We filed a motion to dismiss the amended complaint on November 3, 2014. In response, the plaintiffs filed a second amended complaint on November 24, 2014, which names the same defendants and alleges essentially the same violations. We then filed a motion to dismiss the second amended complaint on January 23, 2015. On August 26, 2015, the district court entered an order dismissing the second amended complaint in its entirety. The plaintiffs appealed the judgment of dismissal to the United States Court of Appeals for the Second Circuit (although opting not to appeal the dismissal with respect to Barclays PLC or the dismissal of claims under Section 6(b) of the Exchange Act). On December 19, 2017, the Second Circuit issued an opinion vacating the district court’s judgment of dismissal and remanding to the district court for further proceedings. On May 18, 2018, the exchanges filed a motion to dismiss the amended complaint, raising issues not addressed in the proceedings to date. On May 28, 2019, the district court denied the exchanges’ renewed motion to dismiss, leading the parties to commence the discovery process. Discovery, focused on issues of whether the case can be certified as a class action and whether the plaintiffs’
claims are precluded by federal securities regulation, ended on April 26, 2021, and potentially dispositive motions regarding these issues were filed on May 28, 2021. Given the preliminary nature of the proceedings, we are unable to estimate what, if any, liability may result from this litigation. However, we believe that the claims are without merit and will continue to litigate vigorously.
Armenian Stock Exchange Investigation
As disclosed in our prior filings with the SEC, a former non-U.S. subsidiary of Nasdaq, NASDAQ OMX Armenia OJSC, operated the Armenian Stock Exchange and the Central Depository of Armenia, which are regulated by the Central Bank of Armenia under Armenian law. In accordance with the requirements of Armenian law, Mellat Bank SB CJSC, an Armenian entity that is designated under Executive Order 13382, was a market participant on the Armenian Stock Exchange and, as a result, paid participation and transaction fees to the Armenian Stock Exchange during the period from 2012-2014. In 2014, we voluntarily self-disclosed this matter to the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC, and received authorization from OFAC to continue, if necessary, certain activities pertaining to Mellat Bank SB CJSC in Armenia in a limited manner. In 2015, Nasdaq sold a majority of its ownership of Nasdaq OMX Armenia OJSC, with the remaining minority interest sold in 2018.
OFAC has been conducting an inquiry into the Armenian Stock Exchange matter described above and in our prior filings since 2016, and during the first quarter of 2021, we were advised that OFAC is considering a civil monetary penalty in connection with that matter. We are currently in discussions with OFAC.
While we believe our decision to voluntarily self-report this issue and our continued cooperation with OFAC, along with the permit we received from OFAC in connection with our transactions involving the Armenian Stock Exchange, will be mitigating factors with respect to the matter, any monetary fines or restrictions may nonetheless be material to our financial results in the period in which they are imposed. We cannot currently predict when our discussions with OFAC will conclude or the amount of any potential penalties imposed. Accordingly, we are unable to reasonably estimate any potential loss or range of loss and we have not accrued for a loss contingency.

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Nasdaq Commodities Clearing Default
During September 2018, a clearing member of Nasdaq Clearing's commodities market was declared in default. In December 2018, the SFSA initiated a review of Nasdaq Clearing. We have been cooperating fully with the SFSA in their review. In January 2021, the SFSA issued a warning combined with an administrative fine of approximately $34 million (SEK 300 million) to Nasdaq Clearing relating to its review. Nasdaq Clearing has assessed the SFSA's decision and has appealed the decision to the Administrative Court. See “Nasdaq Commodities Clearing Default,” of Note 14, “Clearing Operations,” for further information.
Other Matters
Except as disclosed above and in prior reports filed under the Exchange Act, we are not currently a party to any litigation or proceeding that we believe could have a material adverse effect on our business, condensed consolidated financial condition, or operating results. However, from time to time, we have been threatened with, or named as a defendant in, lawsuits or involved in regulatory proceedings.
In the normal course of business, Nasdaq discusses matters with its regulators raised during regulatory examinations or otherwise subject to their inquiries. Management believes that censures, fines, penalties or other sanctions that could result from any ongoing examinations or inquiries will not have a material impact on its condensed consolidated financial position or results of operations. However, we are unable to predict the outcome or the timing of the ultimate resolution of these matters, or the potential fines, penalties or injunctive or other equitable relief, if any, that may result from these matters.
Tax Audits
We are engaged in ongoing discussions and audits with taxing authorities on various tax matters, the resolutions of which are uncertain. Currently, there are matters that may lead to assessments, some of which may not be resolved for several years. Based on currently available information, we believe we have adequately provided for any assessments that could result from those proceedings where it is more likely than not that we will be assessed. We review our positions on these matters as they progress. See “Tax Audits,” of Note 16, “Income Taxes,” for further discussion.
18. BUSINESS SEGMENTS
We manage, operate and provide our products and services in four business segments: Market Technology, Investment Intelligence, Corporate Platforms and Market Services. See Note 1, “Organization and Nature of Operations,” for further discussion of our reportable segments.



Our management allocates resources, assesses performance and manages these businesses as four separate segments. We evaluate the performance of our segments based on several factors, of which the primary financial measure is operating income. Results of individual businesses are presented based on our management accounting practices and structure. Our chief operating decision maker does not review total assets or statements of income below operating income by segments as key performance metrics; therefore, such information is not presented below.
The following table presents certain information regarding our business segments for the three months ended September 30, 2021 and 2020:
 Three Months Ended September 30,
 20212020
(in millions)
Market Technology
Total revenues$114 $86 
Operating income10 9 
Investment Intelligence
Total revenues272 236 
Operating income177 153 
Corporate Platforms
Total revenues155 131 
Operating income65 51 
Market Services
Total revenues814 954 
Transaction-based expenses(519)(698)
Revenues less transaction-based expenses295 256 
Operating income 187 154 
Corporate Items
Total revenues2 6 
Operating income (loss)(83)(41)
Total
Total revenues$1,357 $1,413 
Transaction-based expenses(519)(698)
Revenues less transaction-based expenses$838 $715 
Operating income$356 $326 
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The following table presents certain information regarding our business segments for the nine months ended September 30, 2021 and 2020:
 Nine Months Ended September 30,
 20212020
(in millions)
Market Technology
Total revenues$332 $251 
Operating income26 32 
Investment Intelligence
Total revenues787 654 
Operating income509 414 
Corporate Platforms
Total revenues451 382 
Operating income187 145 
Market Services
Total revenues2,823 2,855 
Transaction-based expenses(1,885)(2,048)
Revenues less transaction-based expenses938 807 
Operating income614 507 
Corporate Items
Total revenues26 21 
Operating income (loss)(239)(182)
Consolidated
Total revenues$4,419 $4,163 
Transaction-based expenses(1,885)(2,048)
Revenues less transaction-based expenses$2,534 $2,115 
Operating income$1,097 $916 
Certain amounts are allocated to corporate items in our management reports as we believe they do not contribute to a meaningful evaluation of a particular segment's ongoing operating performance. These items, which are presented in the table below, include the following:
•Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the segments, and the relative operating performance of the segments between periods. Management does not consider intangible asset amortization expense for the purpose of evaluating the performance of our segments or their managers or when making decisions to allocate resources. Therefore, we believe performance measures excluding intangible asset amortization expense provide management with a useful
representation of our segments' ongoing activity in each period.
•Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. Management does not consider merger and strategic initiatives expense for the purpose of evaluating the performance of our segments or their managers or when making decisions to allocate resources. Therefore, we believe performance measures excluding merger and strategic initiatives expense provide management with a useful representation of our segments' ongoing activity in each period.
•Restructuring charges: We initiated the transition of certain technology platforms to advance our strategic opportunities as a technology and analytics provider and continue the re-alignment of certain business areas. See Note 19, “Restructuring Charges,” for further discussion of our 2019 restructuring plan. We believe performance measures excluding restructuring charges provide management with a useful representation of our segments' ongoing activity in each period.
•Revenues and expenses - divested/contributed businesses: We have included in corporate items the revenues and expenses of our U.S. Fixed Income business, which was previously included in our Market Services and Investment Intelligence results. See “2021 Divestiture,” of Note 4,“Acquisitions and Divestiture,” for further discussion of this divestiture. Also included are the revenues and expenses associated with the NPM business which we contributed to a standalone, independent company, of which we own the largest minority interest, together with a consortium of third party financial institutions in July 2021. Prior to July these revenues were previously included in our Corporate Platforms results.
•Other significant items: We have included certain other charges or gains in corporate items, to the extent we believe they should be excluded when evaluating the ongoing operating performance of each individual segment. Other significant items include:
◦for the three and nine months ended September 30, 2021 and for the nine months ended September 30, 2020, a charge on extinguishment of debt;
◦for the three and nine months ended September 30, 2020, a provision for notes receivable associated with the funding of technology development for the consolidated audit trail; and

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◦for the nine months ended September 30 2020, charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities.
The above charges are recorded in general, administrative and other expense in our Condensed Consolidated Statements of Income.
The following table summarizes our Corporate Items:
Three Months Ended September 30,
20212020
(in millions)
Revenues - divested/contributed businesses$2 $6 
Expenses:
Amortization expense of acquired intangible assets
$40 $26 
Merger and strategic initiatives expense
13 1 
Restructuring charges— 11 
Provision for notes receivable— 6 
Extinguishment of debt33 — 
Expenses - divested/contributed businesses— 4 
Other(1)(1)
Total expenses85 47 
Operating loss$(83)$(41)
Nine Months Ended September 30,
20212020
(in millions)
Revenues - divested/contributed businesses$26 $21 
Expenses:
Amortization expense of acquired intangible assets
$116 $76 
Merger and strategic initiatives expense
70 12 
Restructuring charges31 36 
Provision for notes receivable— 6 
Extinguishment of debt33 36 
Charitable donations— 17 
Expenses - divested/contributed businesses10 13 
Other5 7 
Total expenses265 203 
Operating loss$(239)$(182)
For further discussion of our segments’ results, see "Segment Operating Results," of “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


19. RESTRUCTURING CHARGES
In September 2019, we initiated the transition of certain technology platforms to advance the company's strategic opportunities as a technology and analytics provider and continue the re-alignment of certain business areas. In connection with these restructuring efforts, we retired certain elements of our marketplace infrastructure and technology product offerings as we implement NFF and other technologies internally and externally. This represented a fundamental shift in our strategy and technology as well as executive re-alignment. In June 2021, we completed our 2019 restructuring plan and recognized total pre-tax charges of $118 million over a two-year period. Total pre-tax charges related primarily to non-cash items such as asset impairments and accelerated depreciation, and third-party consulting costs. Severance and employee-related charges were also incurred.
The following tables present a summary of the 2019 restructuring plan charges in the Condensed Consolidated Statements of Income for the three months ended September 30, 2020 and for the nine months ended September 30, 2021 and 2020 which primarily consisted of consulting services, asset impairment charges primarily related to capitalized software that was retired, and accelerated depreciation expense on certain assets as a result of a decrease in their useful life.
Three Months Ended September 30, 2020
(in millions)
Asset impairment charges and accelerated depreciation expense
$2 
Consulting services6 
Severance and employee-related costs
2 
Other1 
Total restructuring charges$11 
Nine Months Ended September 30,
20212020
(in millions)
Asset impairment charges and accelerated depreciation expense
$4 $10 
Consulting services19 15 
Contract terminations— 3 
Severance and employee-related costs
1 3 
Other7 5 
Total restructuring charges$31 $36 
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results of operations of Nasdaq should be read in conjunction with our condensed consolidated financial statements and related notes included in this Form 10-Q.
OVERVIEW
Nasdaq is a global technology company serving the capital markets and other industries. Our diverse offerings of data, analytics, software and services enables clients to optimize and execute their business vision with confidence.
We manage, operate and provide our products and services in four business segments: Market Technology, Investment Intelligence, Corporate Platforms and Market Services.
Third Quarter 2021 and Recent Developments
Cash Dividend on Common Stock
•    In October 2021, the board of directors approved a regular quarterly cash dividend of $0.54 per share on our outstanding common stock.
•    For the three months ended September 30, 2021, we returned $90 million to shareholders through dividend payments.
Share Repurchase Program
•In July 2021, we entered into an ASR agreement to repurchase $475 million of shares and received an initial delivery of 2,039,940 shares of common stock. We expect to receive the remaining shares in the fourth quarter of 2021 and that additional planned repurchases related to the sale of our U.S. Fixed Income business will resume in 2022.
•As of September 30, 2021, the remaining amount authorized for share repurchases under our share repurchase program was $984 million.













Corporate Highlights
•In July 2021, we contributed our NPM business to a standalone, independent company, of which we own the largest minority interest, together with a consortium of third party financial institutions, with NPM’s existing technology, client relationships and regulatory infrastructure providing a strong foundation to develop a full suite of liquidity solutions for private companies.
•Overall AUM in ETPs benchmarked to our proprietary indexes totaled $361 billion as of September 30, 2021, an increase of 15% compared to September 30, 2020. There were nearly 60 ETPs tracking Nasdaq indexes launched over the 12 months with over $5 billion of AUM accumulated through the third quarter of 2021.
•Nasdaq launched Nasdaq Data Link, a cloud-based technology platform that empowers all segments of the investing public with a comprehensive suite of core financial, fund and alternative data. The platform builds on Nasdaq’s Quandl technology to provide a unified, modern API interface that enables seamless integration across Nasdaq’s portfolio of data products.
•The Nasdaq Stock Market led U.S. exchanges for IPOs during the third quarter of 2021. The Nasdaq Stock Market IPO win rate was 75% in the third quarter of 2021, including 147 IPOs representing $29 billion in capital raised. There were 80 operating company and 67 special purpose acquisition company IPOs during the period.
•Our U.S. options market average daily number of contracts totaled 11.5 million, an increase of 11% year over year, and led all exchanges during the period in total volume traded for U.S. multiply-listed equity options.










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Financial Summary
The following tables summarize our financial performance for the three and nine months ended September 30, 2021 when compared to the same periods in 2020. The comparability of our results of operations between reported periods is impacted by the acquisition of Verafin in February 2021 and the divestiture of our U.S. Fixed Income business, which was part of our FICC business within our Market Services segment to Tradeweb in June 2021. See “2021 Divestiture,” and “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture,” to the condensed consolidated financial statements for further discussion. For a detailed discussion of our results of operations, see “Segment Operating Results” below.
Three Months Ended September 30,Percentage Change
20212020
(in millions, except per share amounts)
Revenues less transaction-based expenses
$838 $715 17.2 %
Operating expenses
482 389 23.9 %
Operating income
356 326 9.2 %
Net income attributable to Nasdaq
$288 $264 9.1 %
Diluted earnings per share
$1.69 $1.58 7.0 %
Cash dividends declared per common share
$0.54 $0.49 10.2 %
 Nine Months End September 30,Percentage Change
 20212020
 (in millions, except per share amounts) 
Revenues less transaction-based expenses
$2,534 $2,115 19.8 %
Operating expenses
1,437 1,199 19.8 %
Operating income
1,097 916 19.8 %
Net income attributable to Nasdaq
$928 $708 31.1 %
Diluted earnings per share
$5.53 $4.25 30.1 %
Cash dividends declared per common share
$1.57 $1.45 8.3 %
In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Impacts on our revenues less transaction-based expenses and operating income associated with fluctuations in foreign currency are discussed in more detail under “Item 3. Quantitative and Qualitative Disclosures about Market Risk.”
NASDAQ'S OPERATING RESULTS
The following chart summarizes our ARR (in millions):
https://cdn.kscope.io/f9c421c6f9c1c5d36443bde2ff0445b6-ndaq-20210930_g1.jpg
ARR for a given period is the annualized revenue derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature, or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.
The ARR chart includes:
•
Active Market Technology support and SaaS subscription contracts.
•
Proprietary market data and index data subscriptions as well as subscription contracts for eVestment, Solovis, DWA tools and services, Nasdaq Fund Network and Quandl. It also includes guaranteed minimum on futures contracts within the Index business.
•
U.S. and Nordic annual listing fees, IR and ESG products, including subscription contracts for IR Insight, board portals and OneReport, as well as IR advisory services.
•
Trade Management Services business, excluding one-time service requests.

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The following chart summarizes our annualized SaaS revenues for our Solutions Segments, which comprised of Market Technology, Investment Intelligence and Corporate Platforms, for the three months ended September 30, 2021 and 2020 (in millions):
https://cdn.kscope.io/f9c421c6f9c1c5d36443bde2ff0445b6-ndaq-20210930_g2.jpg

Segment Operating Results
The following tables present our revenues by segment, transaction-based expenses for our Market Services segment and total revenues less transaction-based expenses:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Market Technology
$114 $86 32.6 %
Investment Intelligence272 236 15.3 %
Corporate Platforms155 131 18.3 %
Market Services814 954 (14.7)%
Other revenues2 6 (66.7)%
Total revenues$1,357 $1,413 (4.0)%
Transaction rebates(472)(517)(8.7)%
Brokerage, clearance and exchange fees(47)(181)(74.0)%
Total revenues less transaction-based expenses
$838 $715 17.2 %
 Nine Months Ended September 30,Percentage Change
 20212020
 (in millions) 
Market Technology
$332 $251 32.3 %
Investment Intelligence787 654 20.3 %
Corporate Platforms451 382 18.1 %
Market Services2,823 2,855 (1.1)%
Other revenues26 21 23.8 %
Total revenues$4,419 $4,163 6.1 %
Transaction rebates(1,642)(1,525)7.7 %
Brokerage, clearance and exchange fees(243)(523)(53.5)%
Total revenues less transaction-based expenses
$2,534 $2,115 19.8 %



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The following charts present our Market Technology, Investment Intelligence, Corporate Platforms and Market Services segments as a percentage of our total revenues, less transaction-based expenses, of $838 million for the three months ended September 30, 2021, $715 million for the three months ended September 30, 2020, $2,534 million for the nine months ended September 30, 2021 and $2,115 million for the nine months ended September 30, 2020.
Percentage of Revenues Less Transaction-based Expenses by Segment for the:
https://cdn.kscope.io/f9c421c6f9c1c5d36443bde2ff0445b6-ndaq-20210930_g3.jpg https://cdn.kscope.io/f9c421c6f9c1c5d36443bde2ff0445b6-ndaq-20210930_g4.jpg
https://cdn.kscope.io/f9c421c6f9c1c5d36443bde2ff0445b6-ndaq-20210930_g5.jpg https://cdn.kscope.io/f9c421c6f9c1c5d36443bde2ff0445b6-ndaq-20210930_g6.jpg

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MARKET TECHNOLOGY
The following tables present revenues and key drivers from our Market Technology segment:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Anti Financial Crime Technology$66 $32 106.3 %
Marketplace Infrastructure Technology48 54 (11.1)%
Total Market Technology$114 $86 32.6 %
 Nine Months Ended September 30,Percentage Change
 20212020
(in millions)
Anti Financial Crime Technology$175 $94 86.2 %
Marketplace Infrastructure Technology157 157 — %
Total Market Technology$332 $251 32.3 %

Three Months Ended September 30,
20212020
Order intake (in millions)$76 $84 
Nine Months Ended September 30,
20212020
(in millions)
Order intake $236 $202 
ARR428 278 
SaaS revenues276 120 
In the tables above, order intake is the total contract value of orders signed during the period, excluding Verafin. ARR and SaaS revenues include Verafin.
Anti Financial Crime Technology Revenues
Anti-financial crime technology revenues increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to the inclusion of revenues from our acquisition of Verafin and continued growth in surveillance solutions.
Marketplace Infrastructure Technology Revenues
Marketplace infrastructure technology revenues decreased in the third quarter of 2021 compared with the same period in 2020 primarily due to the completion of a significant long-term contract, and lower professional services revenue reflecting both elevated prior year comparison period as well as capacity constraints that pandemic-related logistical challenges have imposed on installation and change request projects. Revenues in the first nine months of 2021 remained flat compared with the same period in 2020 as the decreases due to the completion of the above mentioned contract and pandemic-related logistical challenges were offset by an increase in change request revenues, an increase in SaaS revenues and a favorable impact in foreign exchange rates.
INVESTMENT INTELLIGENCE
The following tables present revenues and key drivers from our Investment Intelligence segment:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Market Data$102 $105 (2.9)%
Index119 86 38.4 %
Analytics51 45 13.3 %
Total Investment Intelligence$272 $236 15.3 %
 Nine Months Ended September 30,Percentage Change
 20212020
 (in millions) 
Market Data$310 $298 4.0 %
Index328 227 44.5 %
Analytics149 129 15.5 %
Total Investment Intelligence$787 $654 20.3 %
Nine Months Ended September 30,
20212020
Number of licensed ETPs347 335 
ETP AUM tracking Nasdaq indexes
  (in billions)
$361 $313 
TTM net appreciation/ (depreciation)
  (in billions)
$87 $58 
TTM net inflows in ETP AUM tracking Nasdaq indexes (in billions)$53 $48 
ARR (in millions)$555 $507 
SaaS revenues (in millions)$200 $176 
In the tables above, TTM represents trailing twelve months (net inflows excludes ETP sponsor switches of $92 billion).
Market Data Revenues
Market data revenues decreased in the third quarter of 2021 compared with the same period in 2020 primarily due to lower U.S. tape plan revenues, partially offset by an increase in proprietary data revenues from new sales, including continued expansion geographically. Market data revenues increased in the first nine months of 2021 compared with the same period in 2020 primarily due to an increase in proprietary data revenues from new sales, including continued expansion geographically and a favorable impact in foreign exchange rates, partially offset by lower U.S. shared tape plan revenues.


37

Index Revenues
Index revenues increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to higher licensing revenues from higher average AUM in ETPs linked to Nasdaq indexes and higher licensing revenues from futures trading linked to the Nasdaq-100 Index.
Analytics Revenues
Analytics revenues increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to the growth in our eVestment platform driven by new sales, strong retention, and higher average revenue per client from expanded offerings.
CORPORATE PLATFORMS
The following tables present revenues and key drivers from our Corporate Platforms segment:
 Three Months Ended September 30,Percentage Change
 20212020
 (in millions) 
Listing Services$99 $78 26.9 %
IR & ESG Services56 53 5.7 %
Total Corporate Platforms$155 $131 18.3 %
Nine Months Ended September 30,Percentage Change
20212020
(in millions)
Listing Services$282 $224 25.9 %
IR & ESG Services169 158 7.0 %
Total Corporate Platforms$451 $382 18.1 %
Three Months Ended September 30,
20212020
IPOs
The Nasdaq Stock Market147 105 
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic25 5 
Total new listings
The Nasdaq Stock Market223 144 
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic28 11 
Number of listed companies
The Nasdaq Stock Market3,990 3,249 
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic1,172 1,049 
Nine Months Ended September 30,
20212020
IPOs
The Nasdaq Stock Market557 174 
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic111 21 
Total new listings
The Nasdaq Stock Market734 255 
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic132 33 
Number of listed companies
The Nasdaq Stock Market3,990 3,249 
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic1,172 1,049 
ARR (in millions)$529 $453 
SaaS revenues (in millions)$144 $140 
In the tables above:
•The Nasdaq Stock Market new listings include IPOs, including issuers that switched from other listing venues and separately listed ETPs. For the three months ended September 30, 2021 and 2020, IPOs included 67 and 41 SPACs, respectively. For the nine months ended September 30, 2021 and 2020, IPOs included 310 and 55 SPACs, respectively.
•Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic new listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.
•Number of total listed companies on The Nasdaq Stock Market at period end, including 430 ETPs as of September 30, 2021 and 409 as of September 30, 2020.
•Number of total listed companies on the exchanges that comprise Nasdaq Nordic and Nasdaq Baltic represents companies listed on these exchanges and companies on the alternative markets of Nasdaq First North.
Listing Services Revenues
Listing services revenues increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to an increase in the overall number of listed companies.
IR & ESG Services Revenues
IR & ESG Services revenues increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to an increase in the number of corporate issuer clients as well as higher adoption of our investor relations products and new ESG advisory and reporting offerings.
38

MARKET SERVICES
Equity Derivative Trading and Clearing Revenues
The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers from our Equity Derivative Trading and Clearing business:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Equity Derivative Trading and Clearing Revenues$330 $317 4.1 %
Transaction-based expenses:
Transaction rebates(220)(214)2.8 %
Brokerage, clearance and exchange fees(5)(19)(73.7)%
Equity derivative trading and clearing revenues less transaction-based expenses$105 $84 25.0 %
 Nine Months Ended September 30,Percentage Change
 20212020
 (in millions)
Equity Derivative Trading and Clearing Revenues$1,114 $901 23.6 %
Transaction-based expenses:   
Transaction rebates(770)(585)31.6 %
Brokerage, clearance and exchange fees(31)(55)(43.6)%
Equity derivative trading and clearing revenues less transaction-based expenses$313 $261 19.9 %
In the tables above, brokerage, clearance and exchange fees includes Section 31 fees of $4 million in the third quarter of 2021, $26 million in the first nine months of 2021, $18 million in the third quarter of 2020 and $49 million in the first nine months of 2020. Section 31 fees are recorded as equity derivative trading and clearing revenues with a corresponding amount recorded in transaction-based expenses. 
Three Months Ended September 30,
20212020
U.S. equity options
Total industry average daily volume (in millions)35.5 28.1 
Nasdaq PHLX matched market share12.1 %12.8 %
The Nasdaq Options Market matched market share8.1 %9.6 %
Nasdaq BX Options matched market share1.6 %0.2 %
Nasdaq ISE Options matched market share6.0 %6.9 %
Nasdaq GEMX Options matched market share2.7 %6.3 %
Nasdaq MRX Options matched market share1.8 %0.9 %
Total matched market share executed on Nasdaq’s exchanges32.3 %36.7 %
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options and futures contracts241,653256,478
Nine Months Ended September 30,
 20212020
U.S. equity options 
Total industry average daily volume (in millions)36.7 26.7 
Nasdaq PHLX matched market share12.6 %12.4 %
The Nasdaq Options Market matched market share8.2 %10.2 %
Nasdaq BX Options matched market share1.1 %0.2 %
Nasdaq ISE Options matched market share6.6 %7.8 %
Nasdaq GEMX Options matched market share4.9 %5.3 %
Nasdaq MRX Options matched market share1.5 %0.6 %
Total matched market share executed on Nasdaq’s exchanges34.9 %36.5 %
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options and futures contracts286,794335,043
In the tables above, Nasdaq Nordic and Nasdaq Baltic total average daily volume of options and futures contracts include Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement.

39

Equity derivative trading and clearing revenues and equity derivative trading and clearing revenues less transaction-based expenses increased in the third quarter and first nine months of 2021 compared with the same periods in 2020. The increase in equity derivative trading revenues in the third quarter and first nine months of 2021 was primarily due to higher U.S. industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges, lower Section 31 pass-through fee revenue and a lower gross capture rate. The increase in equity derivative trading and clearing revenues less transaction-based expenses in the third quarter of 2021 was primarily due to higher U.S. industry trading volumes and higher U.S. net capture rates, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges. The increase in equity derivative trading and clearing revenues less transaction-based expenses for the first nine months of 2021 was primarily due to higher U.S. industry trading volumes, partially offset by a lower net capture rate and a lower overall U.S. matched market share executed on Nasdaq's exchanges.
Section 31 fees are recorded as equity derivative trading and clearing revenues with a corresponding amount recorded as transaction-based expenses. In the U.S., we are assessed these fees from the SEC and pass them through to our customers in the form of incremental fees. Pass-through fees can increase or decrease due to rate changes by the SEC, our percentage of the overall industry volumes processed on our systems, and differences in actual dollar value of shares traded. Since the amount recorded in revenues is equal to the amount recorded as transaction-based expenses, there is no impact on our revenues less transaction-based expenses. Section 31 fees decreased in the third quarter and first nine months of 2021 compared with the same periods in 2020 as lower average SEC fee rates was partially offset by higher dollar value traded on Nasdaq's exchanges.
Transaction rebates, in which we credit a portion of the per share execution charge to the market participant, increased in the third quarter and first nine months of 2021 compared with the same periods in 2020. The increase in the third quarter of 2021 was primarily due to higher U.S. industry trading volumes and a higher rebate capture rate, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges. The increase in the first nine months of 2021 was primarily due to higher U.S. industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges and a lower rebate capture rate.
Brokerage, clearance and exchange fees decreased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to lower Section 31 pass-through fees, as discussed above.




Cash Equity Trading Revenues
The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers and other metrics from our Cash Equity Trading business:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Cash Equity Trading Revenues$390 $550 (29.1)%
Transaction-based expenses:
Transaction rebates(252)(303)(16.8)%
Brokerage, clearance and exchange fees(42)(162)(74.1)%
Cash equity trading revenues less transaction-based expenses$96 $85 12.9 %
Nine Months Ended September 30,Percentage Change
20212020
(in millions)
Cash Equity Trading Revenues$1,423 $1,697 (16.1)%
Transaction-based expenses:   
Transaction rebates(872)(940)(7.2)%
Brokerage, clearance and exchange fees(212)(468)(54.7)%
Cash equity trading revenues less transaction-based expenses$339 $289 17.3 %
In the tables above, brokerage, clearance and exchange fees includes Section 31 fees of $35 million in the third quarter of 2021, $187 million in the first nine months of 2021, $154 million in the third quarter of 2020 and $444 million in the first nine months of 2020. Section 31 fees are recorded as cash equity trading revenues with a corresponding amount recorded in transaction-based expenses.
40


Three Months Ended September 30,
20212020
Total U.S.-listed securities
Total industry average daily share volume (in billions)9.8 9.9 
Matched share volume (in billions)106.5 123.7 
The Nasdaq Stock Market matched market share15.9 %18.0 %
Nasdaq BX matched market share0.5 %0.8 %
Nasdaq PSX matched market share0.6 %0.6 %
Total matched market share executed on Nasdaq’s exchanges17.0 %19.4 %
Market share reported to the FINRA/Nasdaq Trade Reporting Facility34.3 %32.0 %
Total market share51.3 %51.4 %
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges989,688819,751
Total average daily value of shares traded (in billions)$5.7 $4.8 
Total market share executed on Nasdaq’s exchanges76.3 %77.5 %
Nine Months Ended September 30,
 20212020
Total U.S.-listed securities
Total industry average daily share volume (in billions)11.6 11.1 
Matched share volume (in billions)373.3 393.2 
The Nasdaq Stock Market matched market share15.8 %17.2 %
Nasdaq BX matched market share0.6 %1.0 %
Nasdaq PSX matched market share0.7 %0.6 %
Total matched market share executed on Nasdaq’s exchanges17.1 %18.8 %
Market share reported to the FINRA/Nasdaq Trade Reporting Facility35.0 %31.2 %
Total market share52.1 %50.0 %
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges1,033,316924,455
Total average daily value of shares traded (in billions)$6.4 $5.6 
Total market share executed on Nasdaq’s exchanges77.4 %77.6 %
In the tables above total market shares includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the FINRA/Nasdaq Trade Reporting Facility.



Cash equity trading revenues decreased in the third quarter and first nine months of 2021 compared with the same periods in 2020. The decrease in cash equity trading revenues in the third quarter was primarily due to lower Section 31 pass-through fee revenue and lower overall U.S. matched market share executed on Nasdaq's exchanges, partially offset by higher European value traded. The decrease in cash equity trading revenues in the first nine months was primarily due to lower Section 31 pass-through fee revenue and lower overall U.S. matched market share executed on Nasdaq's exchanges, partially offset by higher U.S. industry trading volumes, higher U.S. gross capture rates, higher European value traded and a favorable impact from changes in foreign exchange rates.
Cash equity trading revenues less transaction-based expenses increased in the third quarter and first nine months of 2021 compared with the same periods in 2020. The increase in cash equity trading revenues less transaction based expenses in the third quarter was due to higher U.S. net capture rate and higher European value traded, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges. The increase in cash equity trading revenues less transaction based expenses in the first nine months was primarily due to higher U.S. net capture rates, higher U.S. industry trading volumes, higher European value traded and a favorable impact from changes in foreign exchange rates, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges.
Similar to equity derivative trading and clearing, in the U.S. we record Section 31 fees as cash equity trading revenues with a corresponding amount recorded as transaction-based expenses. We are assessed these fees from the SEC and pass them through to our customers in the form of incremental fees. Since the amount recorded as revenues is equal to the amount recorded as transaction-based expenses, there is no impact on our revenues less transaction-based expenses. Section 31 fees decreased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to lower average SEC fee rates.
Transaction rebates decreased in the third quarter and first nine months of 2021 compared with the same periods in 2020. For The Nasdaq Stock Market, Nasdaq PSX and Nasdaq CXC, we credit a portion of the per share execution charge to the market participant that provides the liquidity, and for Nasdaq BX and Nasdaq CX2, we credit a portion of the per share execution charge to the market participant that takes the liquidity. The decrease in the third quarter and first nine months of 2021 was primarily due to lower overall U.S. matched market share executed on Nasdaq's exchanges and a lower rebate capture rate. The decrease in the first nine months was partially offset by higher U.S. industry trading volumes.
Brokerage, clearance and exchange fees decreased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to lower Section 31 pass-through fees, as discussed above.
41

FICC Revenues
The following tables present revenues from our FICC business:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
FICC Revenues$13 $12 8.3 %
Nine Months Ended September 30,Percentage Change
20212020
(in millions)
FICC Revenues$44 $39 12.8 %
FICC revenues increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to higher European products revenues.
Trade Management Services Revenues
The following tables present revenues and key drivers from our Trade Management Services business:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Trade Management Services Revenues$81 $75 8.0 %
Nine Months Ended September 30,Percentage Change
20212020
(in millions)
Trade Management Services Revenues$242 $218 11.0 %
Nine Months Ended September 30,
20212020
(in millions)
ARR$322 $300 
Trade management services revenues increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to higher demand for our connectivity services.
OTHER REVENUES
Other revenues include the revenues associated with our U.S. Fixed Income business, which was sold in June 2021. Prior to the sale date, these revenues were included in our Market Services and Investment Intelligence businesses. See “2021 Divestiture,” of Note 4,“Acquisitions and Divestiture,” to the condensed consolidated financial statements for further discussion of this divestiture. Additionally, other revenues include revenues associated with the NPM business which we contributed to a standalone, independent company, of which we own the largest minority interest, together with a consortium of third party financial institutions in July 2021. Prior to July, these revenues were included in our Corporate Platforms business.
EXPENSES
Operating Expenses
The following tables present our operating expenses:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Compensation and benefits$230 $198 16.2 %
Professional and contract services36 38 (5.3)%
Computer operations and data communications47 39 20.5 %
Occupancy27 29 (6.9)%
General, administrative and other42 13 223.1 %
Marketing and advertising12 7 71.4 %
Depreciation and amortization67 51 31.4 %
Regulatory8 2 300.0 %
Merger and strategic initiatives13 1 1,200.0 %
Restructuring charges— 11 (100.0)%
Total operating expenses
$482 $389 23.9 %
42

 Nine Months Ended September 30,Percentage Change
 20212020
 (in millions) 
Compensation and benefits$700 $582 20.3 %
Professional and contract services101 96 5.2 %
Computer operations and data communications137 109 25.7 %
Occupancy81 80 1.3 %
General, administrative and other66 99 (33.3)%
Marketing and advertising32 20 60.0 %
Depreciation and amortization197 149 32.2 %
Regulatory22 16 37.5 %
Merger and strategic initiatives70 12 483.3 %
Restructuring charges31 36 (13.9)%
Total operating expenses
$1,437 $1,199 19.8 %
The increase in compensation and benefits expense in the third quarter of 2021 compared with the same period in 2020 was primarily driven by an increase in headcount as a result of our acquisition of Verafin, higher performance-linked compensation expense, our continued investment in our employees to drive growth and an unfavorable impact from foreign exchange rates. The increase in compensation and benefits expense in the first nine months of 2021 compared with the same period in 2020 was primarily driven by higher performance-linked compensation expense, our continued investment in our employees to drive growth, an increase in headcount as a result of our acquisition of Verafin and an unfavorable impact from foreign exchange rates.
Headcount increased to 5,764 employees as of September 30, 2021 from 4,776 as of September 30, 2020 primarily due to our recent acquisition of Verafin and strategic initiatives, including growth in our Market Technology business.
Computer operations and data communications expense increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to our acquisition of Verafin and higher software maintenance costs due to higher cloud storage costs.
Occupancy expense remained relatively flat in the third quarter and first nine months of 2021 compared with the same periods in 2020.




General, administrative and other expense increased in the third quarter of 2021 compared with the same period in 2020 primarily due to a pre-tax charge recorded in connection with the early extinguishment of our 2023 notes. The decrease in the first nine months of 2021 was primarily due to charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts and social justice charities in 2020, and lower travel costs.
Marketing and advertising expense increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to an increase in marketing commitments primarily driven by the increase in new listings.
Depreciation and amortization expense increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to additional expense for acquired intangible assets related to our acquisition of Verafin. The increase in the first nine months of 2021 was also due to an unfavorable impact from foreign exchange rates.
Merger and strategic initiatives expense increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to the acquisition of Verafin. We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years, which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above.
See Note 19, “Restructuring Charges,” to the condensed consolidated financial statements for further discussion of our 2019 restructuring plan and charges associated with this plan.
Non-operating Income and Expenses
The following tables present our non-operating income and expenses:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Interest expense$(33)$(24)37.5 %
Net interest expense(33)(24)37.5 %
Other income42 1 4,100.0 %
Net income from unconsolidated investees6 54 (88.9)%
Total non-operating income$15 $31 (51.6)%
43

 Nine Months Ended September 30,Percentage Change
 20212020
 (in millions)
Interest income$1 $4 (75.0)%
Interest expense(95)(77)23.4 %
Net interest expense(94)(73)28.8 %
Net gain on divestiture of business84 — N/M
Other income43 5 760.0 %
Net income from unconsolidated investees90 97 (7.2)%
Total non-operating income$123 $29 324.1 %
____________
N/M    Not meaningful.
Interest Expense
Interest expense increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to new issuances of senior notes in December 2020 and commercial paper issuances in the first quarter of 2021 to fund our acquisition of Verafin. See “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture,” to the condensed consolidated financial statements for further discussion of the acquisition of Verafin. See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion of our debt obligations.
The following tables present our interest expense:
Three Months Ended September 30,Percentage Change
20212020
(in millions)
Interest expense on debt$30 $22 36.4 %
Accretion of debt issuance costs and debt discount2 1 100.0 %
Other fees
1 1 — %
Interest expense$33 $24 37.5 %
 Nine Months Ended September 30,Percentage Change
 20212020
 (in millions) 
Interest expense on debt$87 $71 22.5 %
Accretion of debt issuance costs and debt discount6 4 50.0 %
Other fees
2 2 — %
Interest expense$95 $77 23.4 %
Net Gain on Divestiture of Business
The net gain on divestiture of business in the first nine months of 2021 relates to the sale of our U.S. Fixed Income business, which was part of our FICC business within our Market Services segment. We recognized a pre-tax gain on the sale of $84 million, net of disposal costs. See “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” to the condensed consolidated financial statements for further discussion.
Other Income
Other income increased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to gains from strategic investments entered into through our corporate venture program.
Net Income from Unconsolidated Investees
Net income from unconsolidated investees decreased in the third quarter and first nine months of 2021 compared with the same periods in 2020 primarily due to a decrease in income recognized from our equity method investment in OCC. See “Equity Method Investments,” of Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.
Tax Matters
The following tables present our income tax provision and effective tax rate:
Three Months Ended September 30,Percentage Change
20212020
($ in millions)
Income tax provision
$83 $93 (10.8)%
Effective tax rate
22.4 %26.1 %
Nine Months Ended September 30,Percentage Change
20212020
($ in millions)
Income tax provision
$292 $237 23.2 %
Effective tax rate
23.9 %25.1 %
For further discussion of our tax matters, see Note 16, “Income Taxes,” to the condensed consolidated financial statements.
NON-GAAP FINANCIAL MEASURES
In addition to disclosing results determined in accordance with U.S. GAAP, we also have provided non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of our ongoing operating performance.

44

These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. Investors should not rely on any single financial measure when evaluating our business. This non-GAAP information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the notes thereto. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliation, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone.
We understand that analysts and investors regularly rely on non-GAAP financial measures, such as non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share, to assess operating performance. We use non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance. Non-GAAP net income attributable to Nasdaq for the periods presented below is calculated by adjusting for the following items:
•Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses, the relative operating performance of the businesses between periods, and the earnings power of Nasdaq. Performance measures excluding intangible asset amortization expense therefore provide investors with a useful representation of our businesses’ ongoing activity in each period.
•Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. Accordingly, we exclude these costs for purposes of calculating non-GAAP measures, which provide a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.
•Restructuring charges: We initiated the transition of certain technology platforms to advance our strategic opportunities as a technology and analytics provider and continue the re-alignment of certain business areas. See Note 19, “Restructuring Charges,” to the condensed consolidated financial statements for further discussion of our 2019 restructuring plan, which was completed in June 2021. Charges associated with this plan represented a fundamental shift in our strategy and technology as well as executive re-alignment and were excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq's performance between periods.
•Net income from unconsolidated investee: See “Equity Method Investments,” of Note 6, “Investments,” to the condensed consolidated financial statements for further discussion. Our income on our investment in OCC may vary significantly compared to prior periods due to the changes in OCC's capital management policy. Accordingly, we will exclude this income from current and prior periods for purposes of calculating non-GAAP measures which provide a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.
•Other significant items: We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. We believe the exclusion of such amounts allows management and investors to better understand the ongoing financial results of Nasdaq. Other significant items include:
•for the three and nine months ended September 30, 2021, and for the nine months ended September 30, 2020, a charge on extinguishment of debt which is included in general, administrative and other expense in our Condensed Consolidated Statements of Income;
•for the three and nine months ended September 30, 2021 gains from strategic investments entered into through our corporate venture program included in other income in our Condensed Consolidated Statements of Income;
45

•for the nine months ended September 30, 2021, a net gain on divestiture of business, which represents our pre-tax net gain of $84 million on the sale of our U.S. Fixed Income business;
•for the three and nine months ended September 30, 2020, the reversal of a $6 million regulatory fine issued by the SFSA included in regulatory expense in our Condensed Consolidated Statements of Income;
•for the three and nine months ended September 30, 2020, a provision for notes receivable associated with the funding of technology development for the CAT included in general, administrative and other expense in our Condensed Consolidated Statements of Income; and
•for the first nine months of 2020, charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities included in general, administrative and other expense in our Condensed Consolidated Statements of Income.
•Significant tax items: The non-GAAP adjustment to the income tax provision for the three and nine months ended September 30, 2021 and 2020 includes the tax impact of each non-GAAP adjustment. In addition, for the three and nine months ended September 30, 2021, the non-GAAP adjustment to the income tax provision includes return-to-provision adjustments and prior period tax benefits and for the nine months ended September 30, 2020, a tax benefit on compensation related deductions determined to be allowable and excess tax benefit related to employee share-based compensation to reflect the recognition of the income tax effects of share-based awards when awards vest or are settled. Beginning with the quarter ended March 31, 2021, such excess tax benefits are no longer included as a non-GAAP adjustment as they do not have a material impact on period over period comparison.
The following tables present reconciliations between U.S. GAAP net income attributable to Nasdaq and diluted earnings per share and non-GAAP net income attributable to Nasdaq and diluted earnings per share:
 Three Months End September 30,
20212020
($ in millions, except share and per share amounts)
U.S. GAAP net income attributable to Nasdaq$288 $264 
Non-GAAP adjustments:
Amortization expense of acquired intangible assets40 26 
Merger and strategic initiatives expense13 1 
Restructuring charges— 11 
Net income from unconsolidated investee(6)(55)
Provision for notes receivable— 6 
Extinguishment of debt33 — 
Other(42)(1)
Total non-GAAP adjustments38 (12)
Total non-GAAP tax adjustments(23)4 
Total non-GAAP adjustments, net of tax15 (8)
Non-GAAP net income attributable to Nasdaq$303 $256 
Weighted-average common shares outstanding for diluted earnings per share170.2 167.5 
U.S. GAAP diluted earnings per share$1.69 $1.58 
Total adjustments from non-GAAP net income0.09 (0.05)
Non-GAAP diluted earnings per share$1.78 $1.53 

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 Nine Months End September 30,
20212020
($ in millions, except share and per share amounts)
U.S. GAAP net income attributable to Nasdaq$928 $708 
Non-GAAP adjustments:
Amortization expense of acquired intangible assets116 76 
Merger and strategic initiatives expense70 12 
Restructuring charges31 36 
Net income from unconsolidated investee(88)(97)
Net gain on divestiture of business(84)— 
Provision for notes receivable— 6 
Extinguishment of debt33 36 
Charitable donations— 17 
Other(37)3 
Total non-GAAP adjustments41 89 
Total non-GAAP tax adjustments(24)(34)
Total non-GAAP adjustments, net of tax
17 55 
Non-GAAP net income attributable to Nasdaq$945 $763 
Weighted-average common shares outstanding for diluted earnings per share167.9 166.8 
U.S. GAAP diluted earnings per share$5.53 $4.25 
Total adjustments from non-GAAP net income0.10 0.32 
Non-GAAP diluted earnings per share$5.63 $4.57 
LIQUIDITY AND CAPITAL RESOURCES
Historically, we have funded our operating activities and met our commitments through cash generated by operations, augmented by the periodic issuance of our common stock and debt. Currently, our cost and availability of funding remain healthy.
As of September 30, 2021, our sources and uses of cash were not materially impacted by COVID-19 and we have not identified any material liquidity deficiencies as a result of the COVID-19 pandemic.
We will continue to closely monitor and manage our liquidity and capital resources. In addition, we continue to prudently assess our capital deployment strategy through balancing acquisitions, internal investments, debt repayments, and shareholder return activity, including share repurchases and dividends.

In the near term, we expect that our operations and the availability under our revolving credit facility and commercial paper program will provide sufficient cash to fund our operating expenses, capital expenditures, debt repayments, any share repurchases, and any dividends.
In April 2021, we filed a universal shelf registration statement on Form S-3ASR (Automatic Shelf Registration) with the SEC to have the ability to sell various types of securities including debt securities, common stock, preferred stock, depository receipts, warrants, subscription rights, purchase contracts and purchase units. The specific terms of any securities to be sold would be described in supplemental filings with the SEC. The registration statement will expire in April 2024.
In July 2021, we issued the 2033 Notes and we primarily used the net proceeds from the sale of the 2033 Notes to redeem the 2023 Notes. See “2033 Notes,” and "Early Extinguishment of 2023 Notes," of Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion.
The value of various assets and liabilities, including cash and cash equivalents, receivables, accounts payable and accrued expenses, the current portion of long-term debt, and commercial paper, can fluctuate from month to month. Working capital (calculated as current assets less current liabilities) was $(99) million as of September 30, 2021, compared with $2,736 million as of December 31, 2020, a decrease of $2,835 million. Current asset balance changes decreased working capital by $2,164 million, primarily due to a decrease in cash and cash equivalents, mainly due to the utilization of cash to partially fund the acquisition of Verafin, partially offset by increases in default fund and margin deposits and other current assets. Current liability balance changes decreased working capital by $671 million, as increases in short term debt, default funds and margin deposits and deferred revenue were partially offset by decreases in Section 31 fees payable.
Principal factors that could affect the availability of our internally-generated funds include:
•    deterioration of our revenues in any of our business segments;
•    changes in regulatory and working capital requirements; and
•an increase in our expenses.
Principal factors that could affect our ability to obtain cash from external sources include:
•    operating covenants contained in our credit facilities that limit our total borrowing capacity;
•    credit rating downgrades, which could limit our access to additional debt;
•    a significant decrease in the market price of our common stock;
•    volatility or disruption in the public debt and equity markets; and
•    the impact of the COVID-19 pandemic on our business.
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The following sections discuss the effects of changes in our financial assets, debt obligations, regulatory capital requirements, and cash flows on our liquidity and capital resources.
Financial Assets
The following table summarizes our financial assets:
 September 30, 2021December 31, 2020
 (in millions)
Cash and cash equivalents$303 $2,745 
Restricted cash and cash equivalents29 37 
Financial investments
185 195 
Total financial assets$517 $2,977 
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents
Cash and cash equivalents includes all non-restricted cash in banks and highly liquid investments with original maturities of 90 days or less at the time of purchase. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our investment policy, and alternative investment choices. As of September 30, 2021, our cash and cash equivalents of $303 million were primarily invested in bank deposits and money market funds. In the long-term, we may use both internally generated funds and external sources to satisfy our debt obligations and other long-term liabilities. Cash and cash equivalents as of September 30, 2021 decreased $2,442 million from December 31, 2020, primarily due to:
•cash paid for our acquisition of Verafin, net of cash and cash equivalents acquired;
•repayment of borrowings under our credit commitment and debt obligations;
•the ASR agreement;
•other repurchases of our common stock;
•cash dividends paid on our common stock;
•purchases of property and equipment;
•other investing activities;
•payments related to employee shares withheld for taxes;
•payment of debt extinguishment cost, partially offset by;
•proceeds from issuances of long-term debt, net of issuance costs and utilization of credit commitment;
•net cash provided by operating activities;
•proceeds from commercial paper, net; and
•proceeds from divestiture of business, net of cash divested.
See “Cash Flow Analysis” below for further discussion.


Restricted cash and cash equivalents are restricted from withdrawal due to contractual or regulatory requirements or is not available for general use. Restricted cash and cash equivalents were $29 million as of September 30, 2021 and $37 million as of December 31, 2020, a decrease of $8 million. Restricted cash and cash equivalents are classified as restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.
Repatriation of Cash
Our cash and cash equivalents held outside of the U.S. in various foreign subsidiaries totaled $191 million as of September 30, 2021 and $237 million as of December 31, 2020. The remaining balance held in the U.S. totaled $112 million as of September 30, 2021 and $2,508 million as of December 31, 2020.
Unremitted earnings of certain subsidiaries outside of the U.S. are used to finance our international operations and are considered to be indefinitely reinvested.
Share Repurchase Program
See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program.
ASR Agreement
See “ASR Agreement,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our ASR agreement.
Cash Dividends on Common Stock
The following table presents our quarterly cash dividends paid per common share on our outstanding common stock:
20212020
First quarter$0.49 $0.47 
Second quarter0.54 0.49 
Third quarter0.54 0.49 
Total$1.57 $1.45 
See “Cash Dividends on Common Stock,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of the dividends.
Financial Investments
Our financial investments totaled $185 million as of September 30, 2021 and $195 million as of December 31, 2020. Of these securities, $166 million as of September 30, 2021 and $175 million as of December 31, 2020 are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing. See Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.




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Debt Obligations
The following table summarizes our debt obligations by contractual maturity:
 Maturity DateSeptember 30, 2021December 31, 2020
  (in millions)
Short-term debt - commercial paper
Weighted-average maturity of 35 days$480 $— 
Long-term debt - senior unsecured notes:
2022 NotesDecember 2022598 597 
2023 Notes
May 2023— 730 
2024 Notes
June 2024498 498 
2020 Credit Facility
December 2025(4)(4)
2026 Notes
June 2026498 497 
2029 NotesMarch 2029689 726 
2030 NotesFebruary 2030689 726 
2031 NotesJanuary 2031643 643 
2033 NotesJuly 2033707 — 
2040 NotesDecember 2040643 643 
2050 NotesApril 2050486 485 
Total long-term debt
 $5,447 $5,541 
Total debt obligations
$5,927 $5,541 
In addition to the $1.25 billion revolving credit facility, we also have other credit facilities primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line for one subsidiary. These credit facilities, which are available in multiple currencies, totaled $218 million as of September 30, 2021 and $232 million as of December 31, 2020 in available liquidity, none of which was utilized.
As of September 30, 2021, we were in compliance with the covenants of all of our debt obligations.
See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion of our debt obligations.
Regulatory Capital Requirements
Clearing Operations Regulatory Capital Requirements
We are required to maintain minimum levels of regulatory capital for the clearing operations of Nasdaq Clearing. The level of regulatory capital required to be maintained is dependent upon many factors, including market conditions and creditworthiness of the counterparty. As of September 30, 2021, our required regulatory capital of $137 million was comprised of highly rated European government debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets.
Broker-Dealer Net Capital Requirements
Our broker-dealer subsidiaries, Nasdaq Execution Services, NFSTX, LLC, and Nasdaq Capital Markets Advisory, are subject to regulatory requirements intended to ensure their general financial soundness and liquidity. These requirements obligate these subsidiaries to comply with minimum net capital requirements. As of September 30, 2021, the combined required minimum net capital totaled $1 million and the combined excess capital totaled $21 million, substantially all of which is held in cash and cash equivalents in the Condensed Consolidated Balance Sheets. The required minimum net capital is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.
Nordic and Baltic Exchange Regulatory Capital Requirements
The entities that operate trading venues in the Nordic and Baltic countries are each subject to local regulations and are required to maintain regulatory capital intended to ensure their general financial soundness and liquidity. As of September 30, 2021, our required regulatory capital of $34 million was primarily invested in European debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets and cash, which is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.
Other Capital Requirements
We operate several other businesses, which are subject to local regulation and are required to maintain certain levels of regulatory capital. As of September 30, 2021, other required regulatory capital was $8 million and was primarily included in restricted cash in the Condensed Consolidated Balance Sheets.
Cash Flow Analysis
The following table summarizes the changes in cash flows:
 Nine Months Ended September 30,
 20212020
Net cash provided by (used in):(in millions)
Operating activities$699 $817 
Investing activities(2,440)(157)
Financing activities(701)(408)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents(8)3 
Net increase (decrease) in cash and cash equivalents and restricted cash
(2,450)255 
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period2,782 362 
Cash and cash equivalents and restricted cash and cash equivalents at end of period$332 $617 


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Net Cash Provided by Operating Activities
Net cash provided by operating activities primarily consists of net income adjusted for certain non-cash items such as: depreciation and amortization expense of property and equipment; amortization expense of acquired finite-lived intangible assets; expense associated with share-based compensation; debt extinguishment costs; net gain on divestiture of a business, and net income from unconsolidated investees.
Net cash provided by operating activities is also impacted by the effects of changes in operating assets and liabilities such as: accounts receivable which is impacted by the timing of customer billings and related collections from our customers; accounts payable and accrued expenses due to timing of payments; accrued personnel costs, which are impacted by employee performance targets and the timing of payments related to employee bonus incentives; and Section 31 fees payable to the SEC, which is impacted by the timing of collections from customers and payments to the SEC.
Net cash provided by operating activities decreased $118 million for the nine months ended September 30, 2021 compared with the same period in 2020. The decrease was primarily driven by a cash payment of an acquisition-related tax obligation on behalf of Verafin of $221 million and a cash payment of $102 million, the release of which is subject to certain employment-related conditions over three years following the closing of the acquisition of Verafin, partially offset by higher net income. The remaining change was primarily due to other fluctuations in our working capital.
Net Cash Used in Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2021 primarily related to $2,430 million of cash used for acquisitions, net of cash and cash equivalents acquired of $221 million, which was utilized to satisfy an acquisition-related tax obligation on behalf of Verafin, $113 million of purchases of property and equipment and other investing activities of $84 million, partially offset by proceeds from divestiture of business, net of cash divested $190 million.
Net cash used in investing activities for the nine months ended September 30, 2020 primarily related to $157 million of cash used for acquisitions, net of cash and cash equivalents acquired and $128 million of purchases of property and equipment, partially offset by $120 million of proceeds from the net sales of securities.
Net Cash Used in Financing Activities
Net cash used in financing activities for the nine months ended September 30, 2021 primarily related to repayment of borrowings under our credit commitment and debt obligations of $804 million, $475 million of repurchases pursuant to the ASR agreement, $410 million in repurchases of common stock and $260 million of dividend payments to our shareholders, partially offset by proceeds of $826 million from the issuances of long-term-debt and utilization of credit commitment and $480 million of proceeds from issuances of commercial paper, net.
Net cash used in financing activities for the nine months ended September 30, 2020 primarily related to $1,470 million in repayments of borrowings under our credit commitment and debt obligations, $391 million of net repayments of commercial paper, $239 million of dividend payments to our shareholders, $186 million in repurchases of common stock, and a $36 million payment for debt extinguishment costs, partially offset by $1,928 million of proceeds from issuances of long-term debt and the utilization of our credit commitment.
See Note 4, “Acquisitions and Divestiture,” to the condensed consolidated financial statements for further discussion of our acquisitions and divestiture.
See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion of our debt obligations.
See “ASR Agreement,” “Share Repurchase Program,” and “Cash Dividends on Common Stock,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our ASR agreement, share repurchase program and cash dividends paid on our common stock.
Contractual Obligations and Contingent Commitments
There were no significant changes to our contractual obligations and contingent commitments from those disclosed in “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report Form 10-Q that was filed with the SEC May 5, 2021.
Off-Balance Sheet Arrangements
For discussion of off-balance sheet arrangements see:
•    Note 14, “Clearing Operations,” to the condensed consolidated financial statements for further discussion of our non-cash default fund contributions and margin deposits received for clearing operations; and
•    Note 17, “Commitments, Contingencies and Guarantees,” to the condensed consolidated financial statements for further discussion of:
◦Guarantees issued and credit facilities available;
◦Other guarantees;
◦Routing brokerage activities;
◦Legal and regulatory matters; and
◦Tax audits.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a result of our operating, investing and financing activities, we are exposed to market risks such as interest rate risk and foreign currency exchange rate risk. We are also exposed to credit risk as a result of our normal business activities.
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We have implemented policies and procedures to measure, manage, monitor and report risk exposures, which are reviewed regularly by management and the board of directors. We identify risk exposures and monitor and manage such risks on a daily basis.
We perform sensitivity analyses to determine the effects of market risk exposures. We may use derivative instruments solely to hedge financial risks related to our financial positions or risks that are incurred during the normal course of business. We do not use derivative instruments for speculative purposes.
Interest Rate Risk
We are subject to the risk of fluctuating interest rates in the normal course of business. Our exposure to market risk for changes in interest rates relates primarily to our financial investments and debt obligations, which are discussed below.
Financial Investments
As of September 30, 2021, our investment portfolio was primarily comprised of highly rated European government debt securities, which pay a fixed rate of interest. These securities are subject to interest rate risk and the fair value of these securities will decrease if market interest rates increase. If market interest rates were to increase immediately and uniformly by a hypothetical 100 basis points from levels as of September 30, 2021, the fair value of this portfolio would have declined by $6 million.
Debt Obligations
As of September 30, 2021, the majority of our debt obligations were fixed-rate obligations. Interest rates on certain tranches of notes are subject to adjustment to the extent our debt rating is downgraded below investment grade, as further discussed in Note 8, “Debt Obligations,” to the condensed consolidated financial statements. While changes in interest rates will have no impact on the interest we pay on fixed-rate obligations, we are exposed to changes in interest rates as a result of the amounts outstanding from the sale of commercial paper, which have variable interest rates and any borrowings under our 2020 Credit Facility, as the interest rate on this facility has a variable interest rate. As of September 30, 2021, we had principal amounts outstanding of $480 million of commercial paper and no amounts outstanding under our 2020 Credit Facility. A hypothetical 100 basis points increase in interest rates on our outstanding commercial paper would increase annual interest expense by approximately $5 million based on borrowings as of September 30, 2021.
We may utilize interest rate swap agreements to achieve a desired mix of variable and fixed rate debt.
Foreign Currency Exchange Rate Risk
We are subject to foreign currency exchange rate risk. Our primary transactional exposure to foreign currency denominated revenues less transaction-based expenses and operating income for the three and nine months ended September 30, 2021 is presented in the following tables:
 EuroSwedish KronaOther Foreign CurrenciesU.S. DollarTotal
 (in millions, except currency rate)
Three Months End September 30, 2021
Average foreign currency rate to the U.S. dollar1.1790.116# N/AN/A
Percentage of revenues less transaction-based expenses6.7 %5.9 %4.9 %82.5 %100.0 %
Percentage of operating income3.8 %(1.8)%(8.0)%106.0 %100.0 %
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses$(6)$(5)$(4)$— $(15)
Impact of a 10% adverse currency fluctuation on operating income$(1)$(1)$(3)$— $(5)
EuroSwedish KronaOther Foreign CurrenciesU.S. DollarTotal
(in millions, except currency rate)
Nine Months End September 30, 2021
Average foreign currency rate to the U.S. dollar1.1960.118#N/AN/A
Percentage of revenues less transaction-based expenses6.9 %6.3 %5.0 %81.8 %100.0 %
Percentage of operating income9.2 %(2.4)%(7.6)%100.8 %100.0 %
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses$(17)$(16)$(13)$— $(46)
Impact of a 10% adverse currency fluctuation on operating income$(10)$(3)$(8)$— $(21)
____________
#    Represents multiple foreign currency rates.
N/A    Not applicable.

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Our investments in foreign subsidiaries are exposed to volatility in currency exchange rates through translation of the foreign subsidiaries’ net assets or equity to U.S. dollars. Substantially all of our foreign subsidiaries operate in functional currencies other than the U.S. dollar. The financial statements of these subsidiaries are translated into U.S. dollars for consolidated reporting using a current rate of exchange, with net gains or losses recorded in accumulated other comprehensive loss within stockholders’ equity in the Condensed Consolidated Balance Sheets.
Our primary exposure to net assets in foreign currencies as of September 30, 2021 is presented in the following table:
 Net AssetsImpact of a 10% Adverse Currency Fluctuation
 (in millions)
Swedish Krona$3,410 $341 
British Pound202 20 
Norwegian Krone168 17 
Canadian Dollar155 16 
Australian Dollar114 11 
Euro70 7 
In the table above, Swedish Krona includes goodwill of $2,562 million and intangible assets, net of $613 million.
Credit Risk
Credit risk is the potential loss due to the default or deterioration in credit quality of customers or counterparties. We are exposed to credit risk from third parties, including customers, counterparties and clearing agents. These parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. We limit our exposure to credit risk by evaluating the counterparties with which we make investments and execute agreements. For our investment portfolio, our objective is to invest in securities to preserve principal while maximizing yields, without significantly increasing risk. Credit risk associated with investments is minimized substantially by ensuring that these financial assets are placed with governments which have investment grade ratings, well-capitalized financial institutions and other creditworthy counterparties.
Our subsidiary, Nasdaq Execution Services, may be exposed to credit risk due to the default of trading counterparties in connection with the routing services it provides for our trading customers. System trades in cash equities routed to other market centers for members of our cash equity exchanges are routed by Nasdaq Execution Services for clearing to the NSCC. In this function, Nasdaq Execution Services is to be neutral by the end of the trading day, but may be exposed to intraday risk if a trade extends beyond the trading day and into the next day, thereby leaving Nasdaq Execution Services susceptible to counterparty risk in the period between accepting the trade and routing it to the clearinghouse. In this interim period, Nasdaq Execution Services is not novating like a clearing broker but instead is subject to the short-term risk of counterparty failure before the clearinghouse enters the transaction. Once the
clearinghouse officially accepts the trade for novation, Nasdaq Execution Services is legally removed from trade execution risk. However, Nasdaq has membership obligations to NSCC independent of Nasdaq Execution Services’ arrangements.
Pursuant to the rules of the NSCC and Nasdaq Execution Services’ clearing agreement, Nasdaq Execution Services is liable for any losses incurred due to a counterparty or a clearing agent’s failure to satisfy its contractual obligations, either by making payment or delivering securities. Adverse movements in the prices of securities that are subject to these transactions can increase our credit risk. However, we believe that the risk of material loss is limited, as Nasdaq Execution Services’ customers are not permitted to trade on margin and NSCC rules limit counterparty risk on self-cleared transactions by establishing credit limits and capital deposit requirements for all brokers that clear with NSCC. Historically, Nasdaq Execution Services has never incurred a liability due to a customer’s failure to satisfy its contractual obligations as counterparty to a system trade. Credit difficulties or insolvency, or the perceived possibility of credit difficulties or insolvency, of one or more larger or visible market participants could also result in market-wide credit difficulties or other market disruptions.
We have credit risk related to transaction and subscription-based revenues that are billed to customers on a monthly or quarterly basis, in arrears. Our potential exposure to credit losses on these transactions is represented by the receivable balances in our Condensed Consolidated Balance Sheets. We review and evaluate changes in the status of our counterparties’ creditworthiness. Credit losses such as those described above could adversely affect our condensed consolidated financial position and results of operations.
We also are exposed to credit risk through our clearing operations with Nasdaq Clearing. See Note 15, “Clearing Operations,” to the condensed consolidated financial statements for further discussion. Our clearinghouse holds material amounts of clearing member cash deposits, which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks. While we seek to achieve a reasonable rate of return, we are primarily concerned with preservation of capital and managing the risks associated with these deposits. As the clearinghouse may pass on interest revenues (minus costs) to the members, this could include negative or reduced yield due to market conditions. The following is a summary of the risks associated with these deposits and how these risks are mitigated.
•Credit Risk. When the clearinghouse has the ability to hold cash collateral at a central bank, the clearinghouse utilizes its access to the central bank system to minimize credit risk exposures. When funds are not held at a central bank, we seek to substantially mitigate credit risk by ensuring that investments are primarily placed in large, highly rated financial institutions, highly rated government debt instruments and other creditworthy counterparties.
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•Liquidity Risk. Liquidity risk is the risk a clearinghouse may not be able to meet its payment obligations in the right currency, in the right place and the right time. To mitigate this risk, the clearinghouse monitors liquidity requirements closely and maintains funds and assets in a manner which minimizes the risk of loss or delay in the access by the clearinghouse to such funds and assets. For example, holding funds with a central bank where possible or investing in highly liquid government debt instruments serves to reduce liquidity risks.
•Interest Rate Risk. Interest rate risk is the risk that interest rates rise causing the value of purchased securities to decline. If we were required to sell securities prior to maturity, and interest rates had risen, the sale of the securities might be made at a loss relative to the latest market price. Our clearinghouse seeks to manage this risk by making short term investments of members' cash deposits. In addition, the clearinghouse investment guidelines allow for direct purchases or repurchase agreements with short dated maturities of high quality sovereign debt (for example, European government and U.S. Treasury securities), central bank certificates and multilateral development bank debt instruments.
•Security Issuer Risk. Security issuer risk is the risk that an issuer of a security defaults on its payment when the security matures. This risk is mitigated by limiting allowable investments and collateral under reverse repurchase agreements to high quality sovereign, government agency or multilateral development bank debt instruments.
Item 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures. Nasdaq’s management, with the participation of Nasdaq’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, has evaluated the effectiveness of Nasdaq’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, Nasdaq’s President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, have concluded that, as of the end of such period, Nasdaq’s disclosure controls and procedures are effective.








Changes in internal control over financial reporting. There have been no changes in Nasdaq’s internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, Nasdaq’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
See “Legal and Regulatory Matters - Litigation,” of Note 17, “Commitments, Contingencies and Guarantees,” to the condensed consolidated financial statements, which is incorporated herein by reference.
Item 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed under “Risk Factors” in our most recent Form 10-K. These risks could materially and adversely affect our business, financial condition and results of operations. The risks and uncertainties in our most recent Form 10-K are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.
Item 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
Share Repurchase Program
See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The table below represents repurchases made by or on behalf of us or any “affiliated purchaser” of our common stock during the fiscal quarter ended September 30, 2021:
Period(a) Total Number of Shares Purchased(b) Average Price Paid Per Share(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
July 2021   
Share repurchase program— $— — $1,459 
ASR agreement2,039,940 See below2,039,940 $984 
Employee transactions8,801 $178.37  N/A N/A
August 2021        
Share repurchase program— $— — $984 
Employee transactions455 $207.17  N/A N/A
September 2021      
Share repurchase program— $— — $984 
Employee transactions1,156 $197.94  N/A N/A
Total Quarter Ended September 30, 2021
Share repurchase program— $— — $984 
ASR agreement2,039,940 See below2,039,940 $— 
Employee transactions10,412 $181.80  N/AN/A
In the table above:
•N/A - Not applicable.
•See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program. 
•Employee transactions represents shares surrendered to us to satisfy tax withholding obligations arising from the vesting of restricted stock and PSUs issued to employees.
•In July 2021 we entered into an ASR agreement to repurchase $475 million of common stock, where we received an initial delivery of 2,039,940 shares of common stock. The final settlement under the ASR agreement is expected to be completed in the fourth quarter of 2021.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS
Exhibit Number
101The following materials from the Nasdaq, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020; (ii) Condensed Consolidated Statements of Income for the three and nine months end September 30, 2021 and 2020; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months end September 30, 2021 and 2020; (iv) Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months end September 30, 2021 and 2020; (v) Condensed Consolidated Statements of Cash Flows for the nine months end September 30, 2021 and 2020; and (vi) notes to condensed consolidated financial statements.
104Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.

54

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Nasdaq, Inc.
(Registrant)
By:/s/ Adena T. Friedman
Name:Adena T. Friedman
Title:President and Chief Executive Officer
Date:November 4, 2021
By:/s/ Ann M. Dennison
Name:Ann M. Dennison
Title:Executive Vice President and Chief Financial Officer
Date:November 4, 2021

55
Document

Exhibit 31.1
CERTIFICATION
I, Adena T. Friedman, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Nasdaq, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
    /s/    Adena T. Friedman
  Name:Adena T. Friedman
  Title:President and Chief Executive Officer
 
Date: November 4, 2021

Document

Exhibit 31.2
CERTIFICATION
I, Ann M. Dennison, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Nasdaq, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
  /s/ Ann M. Dennison 
Name:Ann M. Dennison
Title:Executive Vice President and Chief Financial Officer
 
Date: November 4, 2021

Document

Exhibit 32.1
Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Nasdaq, Inc. (the “Company”) for the period ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Adena T. Friedman, as President and Chief Executive Officer of the Company, and Ann M. Dennison, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of her knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Company.
 
 /s/   Adena T. Friedman
Name:Adena T. Friedman
Title:President and Chief Executive Officer
Date:November 4, 2021
 /s/   Ann M. Dennison
Name:Ann M. Dennison
Title:Executive Vice President and Chief Financial Officer
Date:November 4, 2021
 
This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of § 18 of the Securities Exchange Act of 1934, as amended.