ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the fiscal year ended | ||
OR | ||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the transition period | from ________ to ________ |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
Class | Outstanding at February 13, 2020 | |||
Common Stock, $0.01 par value per share | shares |
Documents Incorporated by Reference: Certain portions of the Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. |
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Item 16. |
• | “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 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 Stock Market” refers to the cash equity exchange and listing venue operated by The Nasdaq Stock Market LLC. |
• | 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, order backlog and services; |
• | the impact of pricing changes; |
• | tax matters; |
• | the cost and availability of liquidity and capital; and |
• | any litigation, or any regulatory or government investigation or action, to which we are or could become a party or which may affect us. |
• | 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. |
• | Increasing Investment in Businesses Where We See the Highest Growth Opportunity. We have increased investment in areas that we believe help solve our clients’ biggest challenges and are likely to generate growth for our stockholders. These areas include: the data analytics business within our Information Services segment; NPM, within our Corporate Services segment; and our Market Technology segment (including our regulatory technology business). |
• | Sustaining Our Foundation. As we strive to grow our business, we also have focused on enhancing our leadership position in the marketplaces in which we operate as we continue to innovate with new functionality and strong market share in our core markets. For example, we expect the migration of Nasdaq BX Options to a new trading platform that leverages the NFF to be completed during the third quarter of this year. This updated technology will drive commonality across our internal derivatives markets. |
• | Optimizing Slower Growth Businesses. We continually review areas that are not critical to our core. In these areas, we expect to continue to target resiliency and efficiency versus growth, and free up resources when possible to redirect toward greater opportunities. We completed several divestitures in 2019. In March 2019, we completed |
Switches from the New York Stock Exchange LLC, or NYSE, NYSE American LLC, or NYSE American, or IEX | 16 | |
IPOs | 188 | |
Upgrades from OTC | 31 | |
ETPs and Other Listings | 78 | |
Total | 313 |
• | Investor Relations Intelligence. We offer a global team of consultative experts that deliver advisory services including Strategic Capital Intelligence, Shareholder Identification and Perception Studies as well as an industry-leading platform, Nasdaq IR Insight®, to investor relations professionals. These solutions allow investor relations officers to better manage their investor relations programs, understand their investor base, target new investors, manage meetings and consume key data elements such as equity research, consensus estimates and news. |
• | Governance Solutions. We provide a global technology offering that streamlines the meeting process for board of directors and executive leadership teams and helps them accelerate decision making and strengthen governance. Our solutions protect sensitive data and facilitate productive collaboration, so board members and teams can work faster and more effectively. |
• | Market Data; |
• | Index; and |
• | Investment Data & Analytics. |
• | Develop efficient and reliable technologies to facilitate capital markets activity; |
• | Manage the complexities and costs of business on a global scale; and |
• | Provide data, tools and insights that drive sound decision making. |
• | Brokers and Traders - Helping brokers and traders to confidently plan, optimize and execute their business vision. |
• | Market Participants - Enabling market participants to monitor and capitalize on real-time market changes. |
• | Investors and Asset Managers - Offering products and services to assist investors and asset managers in optimizing their portfolios and offerings. |
• | Listed Companies - Promoting the capital health of our listed companies. |
• | Private Companies - Working with private companies to meet liquidity needs, manage relationships with long-term institutional investors and oversee their entire equity program. |
• | Market Infrastructure Players - Assisting market infrastructure players (exchanges, regulators, clearinghouses, and central securities depositories) in increasing efficiency, meeting customer needs and growing revenue. |
• | Capital-Markets - Delivering efficiencies through economies of scale (cost, speed, connectivity) to all members of the capital-markets ecosystem. |
• | regulation of our registered national securities exchanges; and |
• | regulation of our U.S. broker-dealer and investment advisor subsidiaries. |
• | agreements with FINRA covering the enforcement of common rules, the majority of which relate to the regulation of common members of our SROs and FINRA; |
• | joint industry agreements with FINRA covering responsibility for enforcement of insider trading rules; |
• | joint industry agreement with FINRA covering enforcement of rules related to cash equity sales practices and certain other non-market related rules; and |
• | joint industry agreement covering enforcement of rules related to options sales practices. |
• | difficulties, costs or complications in combining the companies’ operations, including technology platforms, which could lead to us not achieving the synergies we |
• | incompatibility of systems and operating methods; |
• | reliance on, or provision of, transition services; |
• | inability to use capital assets efficiently to develop the business of the combined company; |
• | difficulties of complying with government-imposed regulations in the U.S. and abroad, which may be conflicting; |
• | resolving possible inconsistencies in standards, controls, procedures and policies, business cultures and compensation structures; |
• | the diversion of management’s attention from ongoing business concerns and other strategic opportunities; |
• | difficulties in operating businesses we have not operated before; |
• | difficulties of integrating multiple acquired businesses simultaneously; |
• | the retention of key employees and management; |
• | the implementation of disclosure controls, internal controls and financial reporting systems at non-U.S. subsidiaries to enable us to comply with U.S. GAAP and U.S. securities laws and regulations, including the Sarbanes Oxley Act of 2002, required as a result of our status as a reporting company under the Exchange Act; |
• | the coordination of geographically separate organizations; |
• | the coordination and consolidation of ongoing and future research and development efforts; |
• | possible tax costs or inefficiencies associated with integrating the operations of a combined company; |
• | pre-tax restructuring and revenue investment costs; |
• | the retention of strategic partners and attracting new strategic partners; and |
• | negative impacts on employee morale and performance as a result of job changes and reassignments. |
• | problems with effective integration of operations; |
• | the inability to maintain key pre-transaction business relationships; |
• | increased operating costs; |
• | the inability to meet our target for return on invested capital; |
• | increased debt obligations, which may adversely affect our targeted debt ratios; |
• | risks to the continued achievement of our strategic direction; |
• | risks associated with divesting employees, customers or vendors when divesting businesses or assets; |
• | declines in the value of investments; |
• | exposure to unanticipated liabilities; |
• | difficulties in realizing projected efficiencies, synergies and cost savings; and |
• | changes in our credit rating and financing costs. |
• | we may incur additional amortization expense over the estimated useful lives of certain of the intangible assets acquired in connection with acquisitions during such estimated useful lives; |
• | we may have additional depreciation expense as a result of recording acquired tangible assets at fair value, in accordance with U.S. GAAP, as compared to book value as recorded; |
• | to the extent the value of goodwill or intangible assets becomes impaired, we may be required to incur material charges relating to the impairment of those assets; |
• | we may incur additional costs from integrating our acquisitions. The success of our acquisitions depends, in part, on our ability to integrate these businesses into our existing operations and realize anticipated cost savings, revenue synergies and growth opportunities; and |
• | we may incur restructuring costs in connection with the reorganization of any of our businesses. |
• | reduce funds available to us for operations and general corporate purposes or for capital expenditures as a result of the dedication of a substantial portion of our consolidated cash flow from operations to the payment of principal and interest on our indebtedness; |
• | increase our exposure to a continued downturn in general economic conditions; |
• | place us at a competitive disadvantage compared with our competitors with less debt; |
• | affect our ability to obtain additional financing in the future for refinancing indebtedness, acquisitions, working capital, capital expenditures or other purposes; and |
• | increase our cost of debt and reduce or eliminate our ability to issue commercial paper. |
• | our ability to maintain the security of our data and systems; |
• | the quality and reliability of our technology platforms and systems; |
• | the ability to fulfill our regulatory obligations; |
• | the ability to execute our business plan, key initiatives or new business ventures and the ability to keep up with changing customer demand; |
• | the representation of our business in the media; |
• | the accuracy of our financial statements and other financial and statistical information; |
• | the accuracy of our financial guidance or other information provided to our investors; |
• | the quality of our corporate governance structure; |
• | the quality of our products, including the reliability of our transaction-based, corporate solutions and market technology products, the accuracy of the quote and trade information provided by our Market Data business and the accuracy of calculations used by our Indexes business for indexes and unit investment trusts; |
• | the quality of our disclosure controls or internal controls over financial reporting, including any failures in supervision; |
• | extreme price volatility on our markets; |
• | any negative publicity surrounding our listed companies; |
• | any negative publicity surrounding the use of our products and/or services by our customers, including in connection with emerging asset classes such as crypto assets; and |
• | any misconduct, fraudulent activity or theft by our employees or other persons formerly or currently associated with us. |
• | economic, political and geopolitical market conditions; |
• | natural disasters, terrorism, pandemics, war or other catastrophes; |
• | broad trends in finance and technology; |
• | changes in price levels and volatility in the stock markets; |
• | the level and volatility of interest rates; |
• | changes in government monetary or tax policy; |
• | the perceived attractiveness of the U.S. or European capital markets; and |
• | inflation. |
• | do not permit stockholders to act by written consent; |
• | require certain advance notice for director nominations and actions to be taken at annual meetings; and |
• | authorize the issuance of undesignated preferred stock, or “blank check” preferred stock, which could be issued by our board of directors without stockholder approval. |
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) | ||||||||||
October 2019 | ||||||||||||||
Share repurchase program | — | $ | — | — | $ | 632 | ||||||||
Employee transactions(1) | 12,578 | $ | 98.24 | N/A | N/A | |||||||||
November 2019 | ||||||||||||||
Share repurchase program | — | $ | — | — | $ | 632 | ||||||||
Employee transactions(1) | 1,110 | $ | 99.23 | N/A | N/A | |||||||||
December 2019 | ||||||||||||||
Share repurchase program | — | $ | — | — | $ | 632 | ||||||||
Employee transactions(1) | 58,749 | $ | 106.72 | N/A | N/A | |||||||||
Total Quarter Ended December 31, 2019 | ||||||||||||||
Share repurchase program | — | $ | — | — | $ | 632 | ||||||||
Employee transactions(1) | 72,437 | $ | 105.13 | N/A | N/A |
(1) | Represents shares surrendered to us to satisfy tax withholding obligations arising from the vesting of restricted stock and PSUs issued to employees. |
2019 Peer Group | |||||
• | ASX Limited | • | Deutsche Börse AG | • | LSE |
• | B3 S.A.1 | • | Euronext N.V.1 | • | Singapore Exchange Limited1 |
• | Bolsas Mexicana de Valores, S.A.B. de C.V.1 | • | Hong Kong Exchanges and Clearing Limited1 | • | TMX Group Limited |
• | Cboe | • | ICE | ||
• | CME Group Inc. | • | Japan Exchange Group, Inc1 |
2018 Peer Group | |||||
• | ASX Limited | • | Deutsche Börse AG | • | TMX Group Limited |
• | Cboe | • | ICE | ||
• | CME Group Inc. | • | LSE |
Fiscal Year Ended December 31, | |||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||
Nasdaq, Inc. | $ | 100 | $ | 123 | $ | 145 | $ | 169 | $ | 183 | $ | 245 | |||||||||||
Nasdaq Composite Index | 100 | 107 | 116 | 151 | 147 | 200 | |||||||||||||||||
S&P 500 | 100 | 101 | 114 | 138 | 132 | 174 | |||||||||||||||||
2019 Peer Group | 100 | 113 | 125 | 168 | 180 | 231 | |||||||||||||||||
2018 Peer Group | 100 | 113 | 130 | 175 | 195 | 252 |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
(in millions, except share and per share amounts) | ||||||||||||||||||||
Statements of Income Data: | ||||||||||||||||||||
Total revenues | $ | 4,262 | $ | 4,277 | $ | 3,948 | $ | 3,704 | $ | 3,403 | ||||||||||
Transaction-based expenses | (1,727 | ) | (1,751 | ) | (1,537 | ) | (1,428 | ) | (1,313 | ) | ||||||||||
Revenues less transaction-based expenses | 2,535 | 2,526 | 2,411 | 2,276 | 2,090 | |||||||||||||||
Total operating expenses | 1,518 | 1,498 | 1,420 | 1,440 | 1,370 | |||||||||||||||
Operating income | 1,017 | 1,028 | 991 | 836 | 720 | |||||||||||||||
Net income attributable to Nasdaq | 774 | 458 | 729 | 106 | 428 | |||||||||||||||
Per share information: | ||||||||||||||||||||
Basic earnings per share | $ | 4.69 | $ | 2.77 | $ | 4.38 | $ | 0.64 | $ | 2.56 | ||||||||||
Diluted earnings per share | $ | 4.63 | $ | 2.73 | $ | 4.30 | $ | 0.63 | $ | 2.50 | ||||||||||
Cash dividends declared per common share | $ | 1.85 | $ | 1.70 | $ | 1.46 | $ | 1.21 | $ | 0.90 | ||||||||||
Weighted-average common shares outstanding for earnings per share: | ||||||||||||||||||||
Basic | 164,931,628 | 165,349,471 | 166,364,299 | 165,182,290 | 167,285,450 | |||||||||||||||
Diluted | 166,970,161 | 167,691,299 | 169,585,031 | 168,800,997 | 171,283,271 |
December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Balance Sheets Data: | ||||||||||||||||||||
Cash and cash equivalents and financial investments | $ | 623 | $ | 813 | $ | 612 | $ | 648 | $ | 502 | ||||||||||
Default funds and margin deposits | 2,996 | 4,742 | 3,988 | 3,301 | 2,228 | |||||||||||||||
Goodwill | 6,366 | 6,363 | 6,586 | 6,027 | 5,395 | |||||||||||||||
Total assets | 13,924 | 15,700 | 15,354 | 13,411 | 11,257 | |||||||||||||||
Long-term debt | 2,996 | 2,956 | 3,727 | 3,603 | 2,364 | |||||||||||||||
Total Nasdaq stockholders' equity | 5,639 | 5,449 | 5,880 | 5,428 | 5,609 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Market Services | ||||||||||||
Equity Derivative Trading and Clearing | ||||||||||||
U.S. equity options | ||||||||||||
Total industry average daily volume (in millions) | 17.5 | 18.2 | 14.7 | |||||||||
Nasdaq PHLX matched market share | 15.9 | % | 15.7 | % | 17.3 | % | ||||||
The Nasdaq Options Market matched market share | 8.8 | % | 9.4 | % | 9.2 | % | ||||||
Nasdaq BX Options matched market share | 0.2 | % | 0.4 | % | 0.7 | % | ||||||
Nasdaq ISE Options matched market share | 9.0 | % | 8.8 | % | 9.1 | % | ||||||
Nasdaq GEMX Options matched market share | 4.2 | % | 4.5 | % | 5.2 | % | ||||||
Nasdaq MRX Options matched market share | 0.2 | % | 0.1 | % | 0.1 | % | ||||||
Total matched market share executed on Nasdaq’s exchanges | 38.3 | % | 38.9 | % | 41.6 | % | ||||||
Nasdaq Nordic and Nasdaq Baltic options and futures | ||||||||||||
Total average daily volume of options and futures contracts(1) | 366,289 | 339,139 | 330,218 | |||||||||
Cash Equity Trading | ||||||||||||
Total U.S.-listed securities | ||||||||||||
Total industry average daily share volume (in billions) | 7.03 | 7.32 | 6.53 | |||||||||
Matched share volume (in billions) | 348.1 | 358.5 | 295.9 | |||||||||
The Nasdaq Stock Market matched market share | 17.2 | % | 15.9 | % | 14.2 | % | ||||||
Nasdaq BX matched market share | 1.7 | % | 2.8 | % | 3.1 | % | ||||||
Nasdaq PSX matched market share | 0.7 | % | 0.8 | % | 0.8 | % | ||||||
Total matched market share executed on Nasdaq’s exchanges | 19.6 | % | 19.5 | % | 18.1 | % | ||||||
Market share reported to the FINRA/Nasdaq Trade Reporting Facility | 29.8 | % | 31.3 | % | 34.5 | % | ||||||
Total market share(2) | 49.4 | % | 50.8 | % | 52.6 | % | ||||||
Nasdaq Nordic and Nasdaq Baltic securities | ||||||||||||
Average daily number of equity trades executed on Nasdaq’s exchanges | 590,705 | 618,579 | 552,104 | |||||||||
Total average daily value of shares traded (in billions) | $ | 4.5 | $ | 5.6 | $ | 5.3 | ||||||
Total market share executed on Nasdaq’s exchanges | 70.9 | % | 67.0 | % | 67.5 | % | ||||||
FICC | ||||||||||||
Fixed Income | ||||||||||||
U.S. fixed income volume ($ billions traded) | $ | 10,465 | $ | 15,983 | $ | 17,800 | ||||||
Total average daily volume of Nasdaq Nordic and Nasdaq Baltic fixed income contracts | 112,738 | 132,475 | 116,357 | |||||||||
Commodities | ||||||||||||
Power contracts cleared (TWh)(3) | 842 | 1,067 | 1,199 | |||||||||
Corporate Services | ||||||||||||
IPOs | ||||||||||||
The Nasdaq Stock Market | 188 | 186 | 136 | |||||||||
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic | 34 | 53 | 88 | |||||||||
Total new listings | ||||||||||||
The Nasdaq Stock Market(4) | 313 | 303 | 268 | |||||||||
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic(5) | 53 | 72 | 108 | |||||||||
Number of listed companies | ||||||||||||
The Nasdaq Stock Market(6) | 3,140 | 3,058 | 2,949 | |||||||||
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic(7) | 1,040 | 1,019 | 984 | |||||||||
Information Services | ||||||||||||
Number of licensed ETPs | 332 | 365 | 324 | |||||||||
ETP AUM tracking Nasdaq indexes (in billions) | $ | 233 | $ | 172 | $ | 167 | ||||||
Market Technology | ||||||||||||
Order intake (in millions)(8) | $ | 366 | $ | 223 | $ | 249 | ||||||
Annualized recurring revenue, or ARR, (in millions)(9) | $ | 260 | $ | 222 | $ | 205 |
(1) | Includes Finnish option contracts traded on Eurex. |
(2) | 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. |
(3) | Transactions executed on Nasdaq Commodities or OTC and reported for clearing to Nasdaq Commodities measured by Terawatt hours (TWh). |
(4) | New listings include IPOs, including those completed on a best efforts basis, issuers that switched from other listing venues, closed-end funds and separately listed ETPs. |
(5) | 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. |
(6) | Number of total listings on The Nasdaq Stock Market at period end, including 412 ETPs as of December 31, 2019, 392 as of December 31, 2018 and 373 as of December 31, 2017. |
(7) | Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North. |
(8) | Total contract value of orders signed during the period. |
(9) | ARR is the annualized fourth quarter revenue of Market Technology support and SaaS subscription contracts. ARR is currently one of our key performance metrics to assess the health and trajectory of our 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 during the reporting period used in calculating ARR may or may not be extended or renewed by our customers. |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||
Revenues less transaction-based expenses | $ | 2,535 | $ | 2,526 | $ | 2,411 | 0.4 | % | 4.8 | % | ||||||||
Operating expenses | 1,518 | 1,498 | 1,420 | 1.3 | % | 5.5 | % | |||||||||||
Operating income | 1,017 | 1,028 | 991 | (1.1 | )% | 3.7 | % | |||||||||||
Interest expense | (124 | ) | (150 | ) | (143 | ) | (17.3 | )% | 4.9 | % | ||||||||
Gain on sale of investment security | — | 118 | — | (100.0 | )% | N/M | ||||||||||||
Net gain on divestiture of businesses | 27 | 33 | — | (18.2 | )% | N/M | ||||||||||||
Net income from unconsolidated investees | 84 | 18 | 15 | 366.7 | % | 20.0 | % | |||||||||||
Income before income taxes | 1,019 | 1,064 | 872 | (4.2 | )% | 22.0 | % | |||||||||||
Income tax provision | 245 | 606 | 143 | (59.6 | )% | 323.8 | % | |||||||||||
Net income attributable to Nasdaq | $ | 774 | $ | 458 | $ | 729 | 69.0 | % | (37.2 | )% | ||||||||
Diluted earnings per share | $ | 4.63 | $ | 2.73 | $ | 4.30 | 69.6 | % | (36.5 | )% | ||||||||
Cash dividends declared per common share | $ | 1.85 | $ | 1.70 | $ | 1.46 | 8.8 | % | 16.4 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Market Services | $ | 2,639 | $ | 2,709 | $ | 2,418 | (2.6 | )% | 12.0 | % | ||||||||
Transaction-based expenses | (1,727 | ) | (1,751 | ) | (1,537 | ) | (1.4 | )% | 13.9 | % | ||||||||
Market Services revenues less transaction-based expenses | 912 | 958 | 881 | (4.8 | )% | 8.7 | % | |||||||||||
Corporate Services | 496 | 487 | 459 | 1.8 | % | 6.1 | % | |||||||||||
Information Services | 779 | 714 | 588 | 9.1 | % | 21.4 | % | |||||||||||
Market Technology | 338 | 270 | 247 | 25.2 | % | 9.3 | % | |||||||||||
Other revenues(1) | 10 | 97 | 236 | (89.7 | )% | (58.9 | )% | |||||||||||
Total revenues less transaction-based expenses | $ | 2,535 | $ | 2,526 | $ | 2,411 | 0.4 | % | 4.8 | % |
(1) | Includes the revenues from the BWise enterprise governance, risk and compliance software platform which was sold in March 2019 and the Public Relations Solutions and Digital Media Services businesses which were sold in April 2018. Prior to the sale dates, these revenues were included in our Corporate Solutions business within our Corporate Services segment. See “2019 Divestitures,” and “2018 Divestiture,” of Note 4, “Acquisitions and Divestitures,” to the consolidated financial statements for further discussion. |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Market Services Revenues: | ||||||||||||||||||
Equity Derivative Trading and Clearing Revenues(1) | $ | 816 | $ | 849 | $ | 752 | (3.9 | )% | 12.9 | % | ||||||||
Transaction-based expenses: | ||||||||||||||||||
Transaction rebates | (477 | ) | (506 | ) | (450 | ) | (5.7 | )% | 12.4 | % | ||||||||
Brokerage, clearance and exchange fees(1) | (47 | ) | (44 | ) | (43 | ) | 6.8 | % | 2.3 | % | ||||||||
Equity derivative trading and clearing revenues less transaction-based expenses | 292 | 299 | 259 | (2.3 | )% | 15.4 | % | |||||||||||
Cash Equity Trading Revenues(2) | 1,462 | 1,476 | 1,279 | (0.9 | )% | 15.4 | % | |||||||||||
Transaction-based expenses: | ||||||||||||||||||
Transaction rebates | (847 | ) | (830 | ) | (692 | ) | 2.0 | % | 19.9 | % | ||||||||
Brokerage, clearance and exchange fees(2) | (352 | ) | (361 | ) | (334 | ) | (2.5 | )% | 8.1 | % | ||||||||
Cash equity trading revenues less transaction-based expenses | 263 | 285 | 253 | (7.7 | )% | 12.6 | % | |||||||||||
FICC Revenues | 70 | 92 | 96 | (23.9 | )% | (4.2 | )% | |||||||||||
Transaction-based expenses: | ||||||||||||||||||
Transaction rebates | (3 | ) | (8 | ) | (16 | ) | (62.5 | )% | (50.0 | )% | ||||||||
Brokerage, clearance and exchange fees | (1 | ) | (2 | ) | (2 | ) | (50.0 | )% | — | % | ||||||||
FICC revenues less transaction-based expenses | 66 | 82 | 78 | (19.5 | )% | 5.1 | % | |||||||||||
Trade Management Services Revenues | 291 | 292 | 291 | (0.3 | )% | 0.3 | % | |||||||||||
Total Market Services revenues less transaction-based expenses | $ | 912 | $ | 958 | $ | 881 | (4.8 | )% | 8.7 | % |
(1) | Includes Section 31 fees of $43 million in 2019, $39 million in 2018, and $40 million in 2017. Section 31 fees are recorded as equity derivative trading and clearing revenues with a corresponding amount recorded in transaction-based expenses. |
(2) | Includes Section 31 fees of $337 million in 2019, $343 million in 2018, and $319 million in 2017. Section 31 fees are recorded as cash equity trading revenues with a corresponding amount recorded in transaction-based expenses. |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Corporate Services: | ||||||||||||||||||
Listing Services | $ | 296 | $ | 290 | $ | 267 | 2.1 | % | 8.6 | % | ||||||||
Corporate Solutions | 200 | 197 | 192 | 1.5 | % | 2.6 | % | |||||||||||
Total Corporate Services | $ | 496 | $ | 487 | $ | 459 | 1.8 | % | 6.1 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Information Services: | ||||||||||||||||||
Market Data | $ | 398 | $ | 390 | $ | 369 | 2.1 | % | 5.7 | % | ||||||||
Index | 223 | 206 | 171 | 8.3 | % | 20.5 | % | |||||||||||
Investment Data & Analytics | 158 | 118 | 48 | 33.9 | % | 145.8 | % | |||||||||||
Total Information Services | $ | 779 | $ | 714 | $ | 588 | 9.1 | % | 21.4 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Market Technology | $ | 338 | $ | 270 | $ | 247 | 25.2 | % | 9.3 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Compensation and benefits | $ | 707 | $ | 712 | $ | 670 | (0.7 | )% | 6.3 | % | ||||||||
Professional and contract services | 127 | 144 | 153 | (11.8 | )% | (5.9 | )% | |||||||||||
Computer operations and data communications | 133 | 127 | 125 | 4.7 | % | 1.6 | % | |||||||||||
Occupancy | 97 | 95 | 94 | 2.1 | % | 1.1 | % | |||||||||||
General, administrative and other | 125 | 120 | 82 | 4.2 | % | 46.3 | % | |||||||||||
Marketing and advertising | 39 | 37 | 31 | 5.4 | % | 19.4 | % | |||||||||||
Depreciation and amortization | 190 | 210 | 188 | (9.5 | )% | 11.7 | % | |||||||||||
Regulatory | 31 | 32 | 33 | (3.1 | )% | (3.0 | )% | |||||||||||
Merger and strategic initiatives | 30 | 21 | 44 | 42.9 | % | (52.3 | )% | |||||||||||
Restructuring charges | 39 | — | — | N/M | — | % | ||||||||||||
Total operating expenses | $ | 1,518 | $ | 1,498 | $ | 1,420 | 1.3 | % | 5.5 | % |
N/M | Not meaningful. |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Interest income | $ | 10 | $ | 10 | $ | 7 | — | % | 42.9 | % | ||||||||
Interest expense | (124 | ) | (150 | ) | (143 | ) | (17.3 | )% | 4.9 | % | ||||||||
Net interest expense | (114 | ) | (140 | ) | (136 | ) | (18.6 | )% | 2.9 | % | ||||||||
Gain on sale of investment security | — | 118 | — | (100.0 | )% | N/M | ||||||||||||
Net gain on divestiture of businesses | 27 | 33 | — | (18.2 | )% | N/M | ||||||||||||
Other income | 5 | 7 | 2 | (28.6 | )% | 250.0 | % | |||||||||||
Net income from unconsolidated investees | 84 | 18 | 15 | 366.7 | % | 20.0 | % | |||||||||||
Total non-operating income (expenses) | $ | 2 | $ | 36 | $ | (119 | ) | (94.4 | )% | (130.3 | )% |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
(in millions) | ||||||||||||||||||
Interest expense on debt | $ | 115 | $ | 140 | $ | 135 | (17.9 | )% | 3.7 | % | ||||||||
Accretion of debt issuance costs and debt discount | 6 | 7 | 6 | (14.3 | )% | 16.7 | % | |||||||||||
Other fees | 3 | 3 | 2 | — | % | 50.0 | % | |||||||||||
Interest expense | $ | 124 | $ | 150 | $ | 143 | (17.3 | )% | 4.9 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
($ in millions) | ||||||||||||||||||
Income tax provision | $ | 245 | $ | 606 | $ | 143 | (59.6 | )% | 323.8 | % | ||||||||
Effective tax rate | 24.0 | % | 57.0 | % | 16.4 | % |
• | a provision for notes receivable associated with the funding of technology development for the CAT which is recorded in general, administrative and other expense in the Consolidated Statements of Income; |
• | a loss on extinguishment of debt which is recorded in general, administrative and other expense in the Consolidated Statements of Income; and |
• | a net gain on divestiture of businesses which primarily represents our pre-tax net gain of $27 million on the sale of BWise; |
• | other items: |
◦ | a tax reserve for certain prior year examinations which is recorded in general, administrative and other expense in the Consolidated Statements of Income; |
◦ | certain litigation costs which are recorded in professional and contract services expense in the Consolidated Statements of Income. |
• | a net gain on divestiture of businesses which represents our pre-tax net gain of $33 million on the sale of the Public Relations Solutions and Digital Media Services businesses; |
• | a gain on the sale of an investment security which represents our pre-tax gain of $118 million on the sale of our 5.0% ownership interest in LCH Group Holdings Limited, or LCH; |
• | other items: |
◦ | charges related to uncertain positions pertaining to sales and use tax and VAT which are recorded in |
◦ | certain litigation costs which are recorded in professional and contract services expense in the Consolidated Statements of Income. |
• | for 2019, a tax benefit of $10 million primarily related to an adjustment to the 2018 federal and state tax returns and a tax benefit of $10 million related to capital distributions from the OCC. See “OCC Capital Plan,” of Note 7, “Investments,” to the consolidated financial statements for further discussion of our OCC investment. |
• | for 2018, a net $7 million increase to tax expense due to a remeasurement of unrecognized tax benefits (excluding the reversal of certain Swedish tax benefits discussed below) and the impact of state tax rate changes. |
• | for 2019 and 2018, excess tax benefits 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. This item is subject to volatility and will vary based on the timing of the vesting of employee share-based compensation arrangements and fluctuation in our stock price. |
• | for 2018: |
◦ | the impact of enacted U.S. tax legislation, which related to the Tax Cuts and Jobs Act that was enacted in December 2017. We recorded an increase to tax expense of $290 million and a reduction to deferred tax assets related to foreign currency translation as a result of the finalization of the provisional estimate related to this act; and |
◦ | a reversal of certain Swedish tax benefits. See Note 18, “Income Taxes,” to the consolidated financial statements for further discussion. |
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||||||||||||||||||
(in millions, except share and per share amounts) | ||||||||||||||||||||||||
Net Income | Diluted Earnings Per Share | Net Income | Diluted Earnings Per Share | Net Income | Diluted Earnings Per Share | |||||||||||||||||||
U.S. GAAP net income attributable to Nasdaq and diluted earnings per share | $ | 774 | $ | 4.63 | $ | 458 | $ | 2.73 | $ | 729 | $ | 4.30 | ||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||
Amortization expense of acquired intangible assets | 101 | 0.60 | 109 | 0.65 | 92 | 0.54 | ||||||||||||||||||
Merger and strategic initiatives expense | 30 | 0.18 | 21 | 0.13 | 44 | 0.26 | ||||||||||||||||||
Restructuring charges | 39 | 0.23 | — | — | — | — | ||||||||||||||||||
Net income from unconsolidated investee | (82 | ) | (0.49 | ) | (16 | ) | (0.10 | ) | (13 | ) | (0.08 | ) | ||||||||||||
Clearing default loss | — | — | 31 | 0.18 | — | — | ||||||||||||||||||
Provision for notes receivable | 20 | 0.12 | — | — | — | — | ||||||||||||||||||
Extinguishment of debt | 11 | 0.07 | — | — | 10 | 0.06 | ||||||||||||||||||
Net gain on divestiture of businesses | (27 | ) | (0.16 | ) | (33 | ) | (0.20 | ) | — | — | ||||||||||||||
Gain on sale of investment security | — | — | (118 | ) | (0.69 | ) | — | — | ||||||||||||||||
Other | 17 | 0.11 | 17 | 0.10 | 3 | 0.02 | ||||||||||||||||||
Total non-GAAP adjustments | 109 | 0.66 | 11 | 0.07 | 136 | 0.80 | ||||||||||||||||||
Adjustment to the income tax provision to reflect non-GAAP adjustments and other tax items | (43 | ) | (0.26 | ) | 6 | 0.03 | (66 | ) | (0.39 | ) | ||||||||||||||
Excess tax benefits related to employee share-based compensation | (5 | ) | (0.03 | ) | (9 | ) | (0.05 | ) | (40 | ) | (0.24 | ) | ||||||||||||
Impact of enacted U.S. tax legislation | — | — | 290 | 1.73 | (89 | ) | (0.52 | ) | ||||||||||||||||
Reversal of certain Swedish tax benefits | — | — | 41 | 0.24 | — | — | ||||||||||||||||||
Total non-GAAP tax adjustments | (48 | ) | (0.29 | ) | 328 | 1.95 | (195 | ) | (1.15 | ) | ||||||||||||||
Total non-GAAP adjustments, net of tax | 61 | 0.37 | 339 | 2.02 | (59 | ) | (0.35 | ) | ||||||||||||||||
Non-GAAP net income attributable to Nasdaq and diluted earnings per share | $ | 835 | $ | 5.00 | $ | 797 | $ | 4.75 | $ | 670 | $ | 3.95 | ||||||||||||
Weighted-average common shares outstanding for diluted earnings per share | 166,970,161 | 167,691,299 | 169,585,031 |
• | deterioration of our revenues in any of our business segments; |
• | changes in regulatory and working capital requirements; and |
• | an increase in our expenses. |
• | operating covenants contained in our credit facilities that limit our total borrowing capacity; |
• | increases in interest rates under our credit facilities; |
• | credit rating downgrades, which could limit our access to additional debt; |
• | a decrease in the market price of our common stock; and |
• | volatility or disruption in the public debt and equity markets. |
December 31, 2019 | December 31, 2018 | |||||||
(in millions) | ||||||||
Cash and cash equivalents | $ | 332 | $ | 545 | ||||
Restricted cash | 30 | 41 | ||||||
Financial investments | 291 | 268 | ||||||
Total financial assets | $ | 653 | $ | 854 |
• | repayments of debt obligations; |
• | cash dividends paid on our common stock; |
• | cash paid for acquisitions, net of cash and cash equivalents acquired; |
• | repurchases of our common stock; and |
• | purchases of property and equipment, partially offset by; |
• | net cash provided by operating activities; |
• | proceeds from issuances of long-term debt, net of issuance costs; |
• | proceeds from the divestiture of a business; and |
• | proceeds from commercial paper, net. |
2019 | 2018 | ||||||
First quarter | $ | 0.44 | $ | 0.38 | |||
Second quarter | 0.47 | 0.44 | |||||
Third quarter | 0.47 | 0.44 | |||||
Fourth quarter | 0.47 | 0.44 | |||||
Total | $ | 1.85 | $ | 1.70 |
Maturity Date | December 31, 2019 | December 31, 2018 | ||||||||
(in millions) | ||||||||||
Short-term debt: | ||||||||||
Commercial paper | Weighted-average maturity of 13 days | $ | 391 | $ | 275 | |||||
Senior unsecured floating rate notes | Repaid March 2019 | — | 500 | |||||||
5.55% senior unsecured notes(1) | Repaid May 2019 | — | 599 | |||||||
$400 million senior unsecured term loan facility | Repaid June 2019 | — | 100 | |||||||
Total short-term debt | 391 | 1,474 | ||||||||
Long-term debt: | ||||||||||
3.875% senior unsecured notes | June 2021 | 671 | 686 | |||||||
$1 billion senior unsecured revolving credit facility | April 2022 | (2 | ) | (4 | ) | |||||
1.75% senior unsecured notes | May 2023 | 668 | 682 | |||||||
4.25% senior unsecured notes | June 2024 | 497 | 497 | |||||||
3.85% senior unsecured notes | June 2026 | 497 | 496 | |||||||
1.75% senior unsecured notes | March 2029 | 665 | — | |||||||
Total long-term debt | 2,996 | 2,357 | ||||||||
Total debt obligations | $ | 3,387 | $ | 3,831 |
(1) | Balance was reclassified to short-term debt as of March 31, 2019. |
Year Ended December 31, | Percentage Change | |||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||
Net cash provided by (used in): | (in millions) | |||||||||||||||||
Operating activities | $ | 963 | $ | 1,028 | $ | 909 | (6.3 | )% | 13.1 | % | ||||||||
Investing activities | (240 | ) | 196 | (890 | ) | (222.4 | )% | (122.0 | )% | |||||||||
Financing activities | (937 | ) | (1,027 | ) | (53 | ) | (8.8 | )% | 1,837.7 | % | ||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (10 | ) | (10 | ) | 15 | — | % | (166.7 | )% | |||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | (224 | ) | 187 | (19 | ) | (219.8 | )% | (1,084.2 | )% | |||||||||
Cash and cash equivalents and restricted cash at beginning of period | 586 | 399 | 418 | 46.9 | % | (4.5 | )% | |||||||||||
Cash and cash equivalents and restricted cash at end of period | $ | 362 | $ | 586 | $ | 399 | (38.2 | )% | 46.9 | % |
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
(in millions) | ||||||||||||||||||||
Debt obligations by contract maturity(1) | $ | 3,847 | $ | 481 | $ | 827 | $ | 1,278 | $ | 1,261 | ||||||||||
Operating lease obligations(2) | 508 | 77 | 113 | 78 | 240 | |||||||||||||||
Real estate obligations(3) | 128 | — | 12 | 27 | 89 | |||||||||||||||
Purchase obligations(4) | 54 | 26 | 28 | — | — | |||||||||||||||
Other obligations(5) | 9 | 9 | — | — | — | |||||||||||||||
Total | $ | 4,546 | $ | 593 | $ | 980 | $ | 1,383 | $ | 1,590 |
(1) | Our debt obligations include both principal and interest obligations. As of December 31, 2019, an interest rate of 2.73% was used to compute the amount of the contractual obligations for interest on the 2017 Credit Facility. All other debt obligations were primarily calculated on a 360-day basis at the contractual fixed rate multiplied by the aggregate principal amount as of December 31, 2019. See Note 10, “Debt Obligations,” to the consolidated financial statements for further discussion. |
(2) | Operating lease obligations represent our undiscounted operating lease liabilities as of December 31, 2019. See Note 17, “Leases,” to the consolidated financial statements for further discussion of our leases. |
(3) | Real estate obligations include legally binding minimum lease payments for leases signed but not yet commenced. |
(4) | Purchase obligations primarily represent minimum outstanding obligations due under software license agreements. |
(5) | Other obligations primarily consist of potential future escrow agreement payments related to prior acquisitions. |
• | Note 16, “Clearing Operations,” to the consolidated financial statements for further discussion of our non-cash default fund contributions and margin deposits received for clearing operations; and |
• | Note 19, “Commitments, Contingencies and Guarantees,” to the consolidated financial statements for further discussion of: |
• | Guarantees issued and credit facilities available; |
• | Other guarantees; |
• | Non-cash contingent consideration; |
• | Escrow agreements; |
• | Routing brokerage activities; |
• | Legal and regulatory matters; and |
• | Tax audits. |
Euro | Swedish Krona | Other Foreign Currencies | U.S. Dollar | Total | ||||||||||||||||
(in millions, except currency rate) | ||||||||||||||||||||
Year Ended December 31, 2019 | ||||||||||||||||||||
Average foreign currency rate to the U.S. dollar | 1.1193 | 0.1057 | # | N/A | N/A | |||||||||||||||
Percentage of revenues less transaction-based expenses | 7.7 | % | 7.6 | % | 5.0 | % | 79.7 | % | 100.0 | % | ||||||||||
Percentage of operating income(1) | 13.9 | % | (4.3 | )% | (5.8 | )% | 96.2 | % | 100.0 | % | ||||||||||
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses | $ | (19 | ) | $ | (19 | ) | $ | (13 | ) | $ | — | $ | (51 | ) | ||||||
Impact of a 10% adverse currency fluctuation on operating income | $ | (14 | ) | $ | (4 | ) | $ | (6 | ) | $ | — | $ | (24 | ) | ||||||
Euro | Swedish Krona | Other Foreign Currencies | U.S. Dollar | Total | ||||||||||||||||
(in millions, except currency rate) | ||||||||||||||||||||
Year Ended December 31, 2018 | ||||||||||||||||||||
Average foreign currency rate to the U.S. dollar | 1.1800 | 0.1150 | # | N/A | N/A | |||||||||||||||
Percentage of revenues less transaction-based expenses | 8.9 | % | 7.3 | % | 5.2 | % | 78.6 | % | 100.0 | % | ||||||||||
Percentage of operating income | 11.3 | % | 0.1 | % | (7.0 | )% | 95.6 | % | 100.0 | % | ||||||||||
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses | $ | (23 | ) | $ | (18 | ) | $ | (13 | ) | $ | — | $ | (54 | ) | ||||||
Impact of a 10% adverse currency fluctuation on operating income | $ | (12 | ) | $ | — | $ | (7 | ) | $ | — | $ | (19 | ) |
(1) | The decrease in 2019 percentage of operating income in Swedish Krona is primarily driven by costs associated with our 2019 restructuring plan. See Note 21, “Restructuring Charges,” to the consolidated financial statements for further discussion of our 2019 restructuring plan. |
# | Represents multiple foreign currency rates. |
N/A | Not applicable. |
Net Assets | Impact of a 10% Adverse Currency Fluctuation | |||||||
(in millions) | ||||||||
Swedish Krona(1) | $ | 3,247 | $ | (325 | ) | |||
Norwegian Krone | 174 | (17 | ) | |||||
Canadian Dollar | 120 | (12 | ) | |||||
British Pound | 222 | (22 | ) | |||||
Euro | 33 | (3 | ) | |||||
Australian Dollar | 105 | (11 | ) |
(1) | Includes goodwill of $2,397 million and intangible assets, net of $600 million. |
• | 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 |
• | 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 or supranational 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 of high quality sovereign debt (for example, European government and U.S. Treasury securities), central bank certificates and supranational debt instruments with short dated maturities. |
• | 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 supranational debt instruments. |
• | The first step compares the estimated fair value of each reporting unit to its corresponding carrying amount, including goodwill. The fair value of each reporting unit is estimated using a combination of discounted cash flow valuation, which incorporates assumptions regarding future growth rates, terminal values, and discount rates, as well as guideline public company valuations, incorporating relevant trading multiples of comparable companies and other factors. The estimates and assumptions used consider historical performance and are consistent with the |
• | If the first step results in the carrying amount exceeding the fair value of the reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded, if any. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for any difference. |
October 1, 2019 | |||
(in millions) | |||
Market Services | $ | 3,292 | |
Corporate Services | 439 | ||
Information Services | 2,238 | ||
Market Technology | 263 | ||
$ | 6,232 |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | |||||||||||||
2019 | 2019 | 2019 | 2019 | |||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
Total revenues | $ | 1,039 | $ | 1,061 | $ | 1,096 | $ | 1,065 | ||||||||
Transaction-based expenses | (405 | ) | (438 | ) | (464 | ) | (419 | ) | ||||||||
Revenues less transaction-based expenses | 634 | 623 | 632 | 646 | ||||||||||||
Total operating expenses | 359 | 367 | 406 | 386 | ||||||||||||
Operating income | 275 | 256 | 226 | 260 | ||||||||||||
Net income attributable to Nasdaq | $ | 247 | $ | 174 | $ | 150 | $ | 202 | ||||||||
Basic earnings per share | $ | 1.49 | $ | 1.05 | $ | 0.91 | $ | 1.23 | ||||||||
Diluted earnings per share | $ | 1.48 | $ | 1.04 | $ | 0.90 | $ | 1.21 | ||||||||
Cash dividends declared per common share | $ | 0.44 | $ | 0.47 | $ | 0.47 | $ | 0.47 | ||||||||
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | |||||||||||||
2018 | 2018 | 2018 | 2018 | |||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
Total revenues | $ | 1,151 | $ | 1,027 | $ | 964 | $ | 1,136 | ||||||||
Transaction-based expenses | (485 | ) | (412 | ) | (364 | ) | (491 | ) | ||||||||
Revenues less transaction-based expenses | 666 | 615 | 600 | 645 | ||||||||||||
Total operating expenses | 393 | 346 | 354 | 404 | ||||||||||||
Operating income | 273 | 269 | 246 | 241 | ||||||||||||
Net income (loss) attributable to Nasdaq | $ | 177 | $ | 162 | $ | 163 | $ | (44 | ) | |||||||
Basic earnings (loss) per share | $ | 1.06 | $ | 0.98 | $ | 0.99 | $ | (0.27 | ) | |||||||
Diluted earnings (loss) per share | $ | 1.05 | $ | 0.97 | $ | 0.97 | $ | (0.27 | ) | |||||||
Cash dividends declared per common share | $ | 0.82 | $ | — | $ | 0.44 | $ | 0.44 |
Plan Category | Number of shares to be issued upon exercise of outstanding options, warrants and rights(a)(1) | Weighted-average exercise price of outstanding options, warrants and rights(b) | Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column(a))(c) | ||||||||
Equity compensation plans approved by stockholders | 379,102 | $ | 54.32 | 12,082,402 | (2) | ||||||
Equity compensation plans not approved by stockholders | — | — | — | ||||||||
Total | 379,102 | $ | 54.32 | 12,082,402 | (2) |
(1) | The amounts in this column include only the number of shares to be issued upon exercise of outstanding options, warrants and rights. As of December 31, 2019, we also had 2,601,458 shares to be issued upon vesting of outstanding restricted stock and PSUs. |
(2) | This amount includes 10,427,582 shares of common stock that may be awarded pursuant to the Equity Plan and 1,654,820 shares of common stock that may be issued pursuant to the ESPP. |
Exhibit Number | ||
Purchase Agreement, dated as of April 1, 2013, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), BGC Partners, Inc., BGC Holdings, L.P., BGC Partners, L.P., and, solely for purposes of certain sections thereof, Cantor Fitzgerald, L.P. (incorporated herein by reference to Exhibit 2.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed on August 8, 2013). | ||
Amended and Restated Certificate of Incorporation of Nasdaq (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on January 28, 2014). | ||
Certificate of Elimination of Nasdaq’s Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1.1 to the Current Report on Form 8-K filed on January 28, 2014). | ||
Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 19, 2014). | ||
Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on September 8, 2015). | ||
Nasdaq’s By-Laws (incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on November 21, 2016). | ||
Form of Common Stock certificate (incorporated herein by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed on November 4, 2015). | ||
Stockholders’ Agreement, dated as of February 27, 2008, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Borse Dubai Limited (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 3, 2008). | ||
First Amendment to Stockholders’ Agreement, dated as of February 19, 2009, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Borse Dubai Limited (incorporated herein by reference to Exhibit 4.10.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009). | ||
Registration Rights Agreement, dated as of February 27, 2008, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Borse Dubai Limited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on March 3, 2008). | ||
First Amendment to Registration Rights Agreement, dated as of February 19, 2009, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Borse Dubai Limited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 4.11.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009). | ||
Stockholders’ Agreement, dated as of December 16, 2010, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Investor AB (incorporated herein by reference to Exhibit 4.12 to the Annual Report on Form 10-K for the year ended December 31, 2010 filed on February 24, 2011). | ||
Indenture, dated as of June 7, 2013, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on June 10, 2013). | ||
First Supplemental Indenture, dated as of June 7, 2013, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Wells Fargo Bank, National Association, as Trustee, Deutsche Bank AG, London Branch, as paying agent, and Deutsche Bank Luxembourg S.A., as registrar and transfer agent (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on June 10, 2013). | ||
Second Supplemental Indenture, dated as of May 29, 2014, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on May 30, 2014). | ||
Third Supplemental Indenture, dated as of May 20, 2016, among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee, and HSBC Bank USA, National Association, as paying agent and as registrar and transfer agent (incorporated herein by reference to the Current Report on Form 8-K filed on May 23, 2016). | ||
Fifth Supplemental Indenture, dated as of September 22, 2017, among Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on September 22, 2017). | ||
Sixth Supplemental Indenture, dated as of April 1, 2019, among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee, and HSBC Bank USA, National Association, as paying agent and as registrar and transfer agent (incorporated by reference to Exhibit 4.2 to the Form 8-A filed on April 1, 2019). | ||
Registration Rights Agreement, dated as of June 28, 2013, by and among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), BGC Partners, Inc., BGC Holdings, L.P. and BGC Partners, L.P. (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 1, 2013). | ||
Description of Securities. | ||
Amended and Restated Board Compensation Policy, effective on April 23, 2019 (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 5, 2019).* | ||
Nasdaq Executive Corporate Incentive Plan, effective as of January 1, 2015 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 11, 2015).* | ||
Nasdaq, Inc. Equity Incentive Plan (as amended and restated as of April 24, 2018) (incorporated herein by reference to Exhibit 10.1 to the Form S-8 filed on May 25, 2018).* | ||
Form of Nasdaq Non-Qualified Stock Option Award Certificate (incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K for the year ended December 31, 2010 filed on February 24, 2011).* | ||
Form of Nasdaq Restricted Stock Unit Award Certificate (employees) (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 5, 2019).* | ||
Form of Nasdaq Restricted Stock Unit Award Certificate (directors) (incorporated herein by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 5, 2019).* | ||
Form of Nasdaq One-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 5, 2019).* | ||
Form of Nasdaq Three-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 5, 2019).* | ||
Form of Nasdaq Continuing Obligations Agreement (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 10, 2017).* | ||
Amended and Restated Supplemental Executive Retirement Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit 10.6 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* | ||
Amendment No. 1 to Amended and Restated Supplemental Executive Retirement Plan, effective as of December 31, 2008 (incorporated herein by reference to Exhibit 10.6.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* | ||
Nasdaq Supplemental Employer Retirement Contribution Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* | ||
Employment Agreement between Nasdaq and Adena Friedman, made and entered into on November 14, 2016 and effective as of January 1, 2017 (incorporated herein by reference to Exhibit 10.10 to the Annual Report on Form 10-K for the year ended December 31, 2016 filed on March 1, 2017).* | ||
Nonqualified Stock Option Award Certificate to Adena T. Friedman from Nasdaq, Inc. in connection with grant made on January 3, 2017 (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed on November 7, 2017).* | ||
Employment Offer Letter, dated as of May 10, 2016, between Nasdaq, Inc. and Michael Ptasznik (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 10, 2017).* | ||
Employment Agreement between Nasdaq and Bradley J. Peterson, dated August 1, 2016 (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed on November 8, 2016).* | ||
Employment Offer Letter, dated as of April 30, 2019, between Nasdaq, Inc. and Lauren B. Dillard (incorporated herein by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 5, 2019).* | ||
Nasdaq Change in Control Severance Plan for Executive Vice Presidents and Senior Vice Presidents, effective November 26, 2013 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 29, 2013).* | ||
Credit Agreement, dated as of April 25, 2017, among Nasdaq, Inc., the various lenders from time to time party thereto, Bank of America, N.A., as administrative agent and an issuing bank, and the other financial institutions party thereto (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 26, 2017). | ||
Form of Commercial Paper Dealer Agreement between Nasdaq, Inc., as Issuer, and the Dealer party thereto (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on April 26, 2017). | ||
Statement regarding computation of per share earnings (incorporated herein by reference from Note 14 to the consolidated financial statements under Part II, Item 8 of this Form 10-K). | ||
List of all subsidiaries. | ||
Consent of Ernst & Young LLP. | ||
Powers of Attorney. | ||
Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). | ||
Certification of Executive Vice President, Corporate Strategy and Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley. | ||
Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley. | ||
101 | The following materials from the Nasdaq, Inc. Annual Report on Form 10-K for the year ended December 31, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2019 and December 31, 2018; (ii) Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017; (iv) Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2019, 2018 and 2017; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017; and (vi) notes to consolidated financial statements. | |
104 | Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101. |
* | Management contract or compensatory plan or arrangement. |
† | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. |
(b) | Exhibits: |
(c) | Financial Statement Schedules: |
Nasdaq, Inc. | ||||
(Registrant) | ||||
By: | /s/ Adena T. Friedman | |||
Name: | Adena T. Friedman | |||
Title: | President and Chief Executive Officer |
Name | Title | |
/s/ Adena T. Friedman | President and Chief Executive Officer and Director | |
Adena T. Friedman | (Principal Executive Officer) | |
/s/ Michael Ptasznik | Executive Vice President, Corporate Strategy and Chief Financial Officer | |
Michael Ptasznik | (Principal Financial Officer) | |
/s/ Ann M. Dennison | Senior Vice President and Controller | |
Ann M. Dennison | (Principal Accounting Officer) | |
* | Chairman of the Board | |
Michael R. Splinter | ||
* | Director | |
Melissa M. Arnoldi | ||
* | Director | |
Charlene T. Begley | ||
* | Director | |
Steven D. Black | ||
* | Director | |
Essa Kazim | ||
* | Director | |
Thomas A. Kloet | ||
* | Director | |
John D. Rainey | ||
* | Director | |
Jacob Wallenberg | ||
* | Director | |
Lars R. Wedenborn | ||
* | Director | |
Alfred W. Zollar | ||
* Pursuant to Power of Attorney | ||
By: | /s/ John A. Zecca | |
John A. Zecca | ||
Attorney-in-Fact |
Market Technology Revenue Recognition | ||
Description of the Matter | As described in Notes 3 and 9 to the consolidated financial statements, the Company enters into long-term market technology contracts with customers to develop customized technology solutions, license the right to use software, and provide support and other services which results in these contracts containing multiple performance obligations. The Company recorded market technology deferred revenue of $66 million as of December 31, 2019 and recognized $338 million in revenue for the year ended December 31, 2019. The Company allocates the contract transaction price to each performance obligation using their best estimate of the standalone selling price of each distinct good or service in the respective market technology contract. In instances where standalone selling price is not directly observable, such as when a product or service is not sold separately, the Company determines the standalone selling price predominantly through an expected cost plus a margin approach. The Company recognizes revenue over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the performance obligation. Auditing the Company’s calculation of the standalone selling price and timing of revenue recognition was complex and involved a high degree of subjective auditor judgment because of the significant management judgment required to develop the estimates. The standalone selling price is based on an estimate of total project costs, ongoing monitoring of completion of performance obligations and establishing margins for goods or services where a standalone selling price is not directly observable. |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's processes with respect to estimates that impact the timing and measurement of revenue recognition. For example, we tested controls over the allocation of contract transaction price to performance obligations, including management’s review of the estimated margin used when applying the cost plus an estimated margin to determine the standalone selling price. We also evaluated the design and tested the operating effectiveness of controls over the completeness and accuracy of the data utilized to measure the estimate and recognize the revenue in the appropriate period. We performed substantive audit procedures that included, among other things, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management’s calculation. Specifically, we inspected certain customer contracts, including contract modifications, and tested management’s determination of the standalone selling price and its allocation to performance obligations in accordance with the cost plus a margin approach, including comparing the margin assumptions to actual margins earned on completed contracts. We also tested the accuracy of the revenue recognized in the current period by inspecting reports relating to the hours recorded on a project. We evaluated the adequacy of the Company’s disclosures in notes 3 and 9 to the consolidated financial statements related to market technology revenue recognition. |
December 31, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash | |||||||
Financial investments | |||||||
Receivables, net | |||||||
Default funds and margin deposits | |||||||
Other current assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Operating lease assets | — | ||||||
Other non-current assets | |||||||
Total assets | $ | $ | |||||
Liabilities | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | $ | |||||
Section 31 fees payable to SEC | |||||||
Accrued personnel costs | |||||||
Deferred revenue | |||||||
Other current liabilities | |||||||
Default funds and margin deposits | |||||||
Short-term debt | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Deferred tax liabilities, net | |||||||
Operating lease liabilities | — | ||||||
Other non-current liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies | |||||||
Equity | |||||||
Nasdaq stockholders’ equity: | |||||||
Common stock, $0.01 par value, 300,000,000 shares authorized, shares issued: 171,075,011 at December 31, 2019 and 170,709,425 at December 31, 2018; shares outstanding: 165,094,440 at December 31, 2019 and 165,165,104 at December 31, 2018 | |||||||
Additional paid-in capital | |||||||
Common stock in treasury, at cost: 5,980,571 shares at December 31, 2019 and 5,544,321 shares at December 31, 2018 | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Retained earnings | |||||||
Total Nasdaq stockholders’ equity | |||||||
Total liabilities and equity | $ | $ |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Revenues: | |||||||||||
Market Services | $ | $ | $ | ||||||||
Corporate Services | |||||||||||
Information Services | |||||||||||
Market Technology | |||||||||||
Other revenues | |||||||||||
Total revenues | |||||||||||
Transaction-based expenses: | |||||||||||
Transaction rebates | ( | ) | ( | ) | ( | ) | |||||
Brokerage, clearance and exchange fees | ( | ) | ( | ) | ( | ) | |||||
Revenues less transaction-based expenses | |||||||||||
Operating expenses: | |||||||||||
Compensation and benefits | |||||||||||
Professional and contract services | |||||||||||
Computer operations and data communications | |||||||||||
Occupancy | |||||||||||
General, administrative and other | |||||||||||
Marketing and advertising | |||||||||||
Depreciation and amortization | |||||||||||
Regulatory | |||||||||||
Merger and strategic initiatives | |||||||||||
Restructuring charges | |||||||||||
Total operating expenses | |||||||||||
Operating income | |||||||||||
Interest income | |||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | |||||
Gain on sale of investment security | |||||||||||
Net gain on divestiture of businesses | |||||||||||
Other income | |||||||||||
Net income from unconsolidated investees | |||||||||||
Income before income taxes | |||||||||||
Income tax provision | |||||||||||
Net income attributable to Nasdaq | $ | $ | $ | ||||||||
Per share information: | |||||||||||
Basic earnings per share | $ | $ | $ | ||||||||
Diluted earnings per share | $ | $ | $ | ||||||||
Cash dividends declared per common share | $ | $ | $ |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net income | $ | $ | $ | ||||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation gains (losses) | ( | ) | ( | ) | |||||||
Income tax expense(1) | ( | ) | ( | ) | ( | ) | |||||
Foreign currency translation, net | ( | ) | ( | ) | |||||||
Employee benefit plan adjustment gains (losses) | ( | ) | ( | ) | |||||||
Employee benefit plan income tax (benefit) expense | ( | ) | |||||||||
Employee benefit plan, net | ( | ) | ( | ) | |||||||
Total other comprehensive income (loss), net of tax(2) | ( | ) | ( | ) | |||||||
Comprehensive income attributable to Nasdaq | $ | $ | $ |
(1) | Primarily relates to the tax effect of unrealized gains on Euro denominated notes. |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Shares | $ | Shares | $ | Shares | $ | |||||||||||||||
Common stock | ||||||||||||||||||||
Additional paid-in capital | ||||||||||||||||||||
Beginning balance | ||||||||||||||||||||
Share repurchase program | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Share-based compensation | ||||||||||||||||||||
Stock option exercises, net | ||||||||||||||||||||
Other issuances of common stock, net | ||||||||||||||||||||
Ending balance | ||||||||||||||||||||
Common stock in Treasury, at Cost | ||||||||||||||||||||
Beginning balance | ( | ) | ( | ) | ( | ) | ||||||||||||||
Other employee stock activity | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Ending balance | ( | ) | ( | ) | ( | ) | ||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||||||||
Beginning balance | ( | ) | ( | ) | ( | ) | ||||||||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||||||
Reclassification impact of Tax Reform | ( | ) | ||||||||||||||||||
Ending balance | ( | ) | ( | ) | ( | ) | ||||||||||||||
Retained Earnings | ||||||||||||||||||||
Beginning balance | ||||||||||||||||||||
Net income | ||||||||||||||||||||
Reclassification impact of Tax Reform | ||||||||||||||||||||
Cash dividends declared per common share | ( | ) | ( | ) | ( | ) | ||||||||||||||
Ending balance | ||||||||||||||||||||
Issuance of Nasdaq common stock related to a prior acquisition | — | — | — | |||||||||||||||||
Total Stockholders' Equity | $ | $ | $ |
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | $ | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Reversal of certain Swedish tax benefits | |||||||||||
Net gain on divestiture of businesses | ( | ) | ( | ) | |||||||
Gain on sale of investment security | ( | ) | |||||||||
Non-cash restructuring charges | |||||||||||
Net income from unconsolidated investees | ( | ) | ( | ) | ( | ) | |||||
Other reconciling items included in net income | |||||||||||
Net change in operating assets and liabilities, net of effects of divestiture and acquisitions: | |||||||||||
Receivables, net | ( | ) | ( | ) | |||||||
Other assets | ( | ) | ( | ) | ( | ) | |||||
Accounts payable and accrued expenses | ( | ) | ( | ) | |||||||
Section 31 fees payable to SEC | ( | ) | |||||||||
Accrued personnel costs | ( | ) | ( | ) | |||||||
Deferred revenue | ( | ) | ( | ) | |||||||
Other liabilities | ( | ) | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of securities | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sales and redemptions of securities | |||||||||||
Proceeds from divestiture of businesses, net | |||||||||||
Proceeds from sale of investment security | |||||||||||
Acquisition of businesses, net of cash and cash equivalents acquired | ( | ) | ( | ) | ( | ) | |||||
Purchases of property and equipment | ( | ) | ( | ) | ( | ) | |||||
Other investing activities | ( | ) | ( | ) | ( | ) | |||||
Net cash provided by (used in) investing activities | ( | ) | ( | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from (repayments of) commercial paper, net | ( | ) | |||||||||
Repayments of debt obligations | ( | ) | ( | ) | ( | ) | |||||
Payment of debt extinguishment cost | ( | ) | ( | ) | |||||||
Proceeds from issuances of long-term debt, net of issuance costs | |||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | |||||
Dividends paid | ( | ) | ( | ) | ( | ) | |||||
Proceeds received from employee stock activity and other issuances | |||||||||||
Payments related to employee shares withheld for taxes | ( | ) | ( | ) | ( | ) | |||||
Net cash used in financing activities | ( | ) | ( | ) | ( | ) | |||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | ( | ) | ( | ) | |||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | ( | ) | ( | ) | |||||||
Cash and cash equivalents and restricted cash at beginning of period | |||||||||||
Cash and cash equivalents and restricted cash at end of period | $ | $ | $ | ||||||||
Supplemental Disclosure Cash Flow Information | |||||||||||
Cash paid for: | |||||||||||
Interest | $ | $ | $ | ||||||||
Income taxes, net of refund | $ | $ | $ |
• | The first step compares the fair value of each reporting unit with its carrying amount, including goodwill. If the reporting unit’s fair value exceeds its carrying amount, goodwill is not impaired. |
• | If the fair value of a reporting unit is less than its carrying amount, the second step of the goodwill test is performed to measure the amount of impairment, if any. An impairment is equal to the excess of the carrying amount of goodwill over its fair value. |
• | We are the administrator for the plan, in addition to being a participant in the plan. In our unique role as administrator, |
• | The operating committee of the plan, which is comprised of representatives from each of the participants, including us solely in our capacity as a plan participant, is responsible for setting the level of fees to be paid by distributors and subscribers and taking action in accordance with the provisions of the plan, subject to SEC approval. |
• | Risk of loss on the revenue is shared equally among plan participants according to the plan. |
• | Level 1-Quoted prices for identical instruments in active markets. |
• | Level 2-Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
• | Level 3-Instruments whose significant value drivers are unobservable. |
• | management commits to a plan to sell; |
• | the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets or disposal groups; |
• | an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; |
• | the sale is probable within one year; |
• | the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and |
• | it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
Accounting Standard | Description | Effective Date | Effect on the Financial Statements or Other Significant Matters |
Income Taxes In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” | This ASU simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. | January 1, 2021, with early adoption permitted in any annual or interim period for which financial statements have not yet been issued or made available for issuance. We early adopted this standard as of October 1, 2019. | There was no impact to the financial statements or our disclosures as a result of the adoption of this standard. |
Goodwill In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” | This ASU simplifies how an entity is required to test goodwill for impairment and removes the second step of the goodwill impairment test, which required a hypothetical purchase price allocation if the fair value of a reporting unit is less than its carrying amount. Goodwill impairment will now be measured using the difference between the carrying amount and the fair value of the reporting unit and the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments in this ASU should be applied on a prospective basis. | January 1, 2020. | We adopted this standard on January 1, 2020. We do not anticipate a material impact on our consolidated financial statements at the time of adoption of this new standard as the carrying amounts of our reporting units have been less than their corresponding fair values in recent years. However, changes in future projections, market conditions and other factors may cause a change in the excess of fair value of our reporting units over their corresponding carrying amounts. |
Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” | This ASU changes the impairment model for certain financial instruments. The new model is a forward looking expected loss model and applies to financial assets subject to credit losses and measured at amortized cost and certain off-balance sheet credit exposures. This includes loans, held-to-maturity debt securities, loan commitments, financial guarantees and trade receivables. For available-for-sale debt securities with unrealized losses, credit losses are measured in a manner similar to previous accounting, except that the losses are recognized as allowances rather than reductions in the amortized cost of the securities. | January 1, 2020. | We adopted this standard on January 1, 2020 using the modified retrospective transition method. We recorded an immaterial non-cash cumulative effect adjustment to retained earnings on our opening consolidated balance sheet as of January 1, 2020. |
Year Ended December 31, 2019 | |||||||||||||||||||||||
Market Services | Corporate Services | Information Services | Market Technology | Other Revenues | Consolidated | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Transaction-based trading and clearing, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Trade management services | |||||||||||||||||||||||
Listing services | |||||||||||||||||||||||
Corporate solutions | |||||||||||||||||||||||
Market data | |||||||||||||||||||||||
Index | |||||||||||||||||||||||
Investment data & analytics | |||||||||||||||||||||||
Market technology | |||||||||||||||||||||||
Other revenues | |||||||||||||||||||||||
Revenues less transaction-based expenses | $ | $ | $ | $ | $ | $ |
Year Ended December 31, 2018 | |||||||||||||||||||||||
Market Services | Corporate Services | Information Services | Market Technology | Other Revenues | Consolidated | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Transaction-based trading and clearing, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Trade management services | |||||||||||||||||||||||
Listing services | |||||||||||||||||||||||
Corporate solutions | |||||||||||||||||||||||
Market data | |||||||||||||||||||||||
Index | |||||||||||||||||||||||
Investment data & analytics | |||||||||||||||||||||||
Market technology | |||||||||||||||||||||||
Other revenues | |||||||||||||||||||||||
Revenues less transaction-based expenses | $ | $ | $ | $ | $ | $ |
Year Ended December 31, 2017 | |||||||||||||||||||||||
Market Services | Corporate Services | Information Services | Market Technology | Other Revenues | Consolidated | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Transaction-based trading and clearing, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Trade management services | |||||||||||||||||||||||
Listing services | |||||||||||||||||||||||
Corporate solutions | |||||||||||||||||||||||
Market data | |||||||||||||||||||||||
Index | |||||||||||||||||||||||
Investment data & analytics | |||||||||||||||||||||||
Market technology | |||||||||||||||||||||||
Other revenues | |||||||||||||||||||||||
Revenues less transaction-based expenses | $ | $ | $ | $ | $ | $ |
(in millions) | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
2025 and thereafter | |||
Total | $ |
Purchase Consideration | Total Net Assets Acquired | Total Net Deferred Tax Liability | Acquired Intangible Assets | Goodwill | |||||||||||||||
(in millions) | |||||||||||||||||||
Cinnober | $ | $ | $ | ( | ) | $ | $ |
Customer relationships (in millions) | $ | ||
Discount rate used | % | ||
Estimated average useful life |
December 31, 2018 | |||
(in millions) | |||
Receivables, net | $ | ||
Property and equipment, net | |||
Goodwill(1) | |||
Intangible assets, net(2) | |||
Other assets | |||
Total assets held for sale(3) | $ | ||
Deferred tax liabilities | $ | ||
Deferred revenue | |||
Other current liabilities | |||
Total liabilities held for sale(4) | $ |
(1) | The assignment of goodwill was based on the relative fair value of the disposal group and the portion of the remaining reporting unit. |
(3) | Included in other current assets in the Consolidated Balance Sheets as of December 31, 2018. |
(4) | Included in other current liabilities in the Consolidated Balance Sheets as of December 31, 2018. |
Market Services | Corporate Services | Information Services | Market Technology | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | ||||||||||||||
Goodwill acquired | |||||||||||||||||||
Measurement period adjustments | |||||||||||||||||||
Sale of business | ( | ) | ( | ) | |||||||||||||||
Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||
Gross Amount | Accumulated Amortization | Net Amount | Gross Amount | Accumulated Amortization | Net Amount | ||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||
Finite-Lived Intangible Assets | |||||||||||||||||||||||
Technology | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||
Customer relationships | ( | ) | ( | ) | |||||||||||||||||||
Other | ( | ) | ( | ) | |||||||||||||||||||
Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Total finite-lived intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||
Indefinite-Lived Intangible Assets | |||||||||||||||||||||||
Exchange and clearing registrations | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||
Trade names | — | — | |||||||||||||||||||||
Licenses | — | — | |||||||||||||||||||||
Foreign currency translation adjustment | ( | ) | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||
Total indefinite-lived intangible assets | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||
(in millions) | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
2025 and thereafter | |||
Total | $ |
December 31, 2019 | December 31, 2018 | ||||||
(in millions) | |||||||
Trading securities | $ | $ | |||||
Available-for-sale investment securities | |||||||
Financial investments | $ | $ | |||||
Equity method investments | $ | $ | |||||
Equity securities | $ | $ |
Year Ended December 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Data processing equipment and software | $ | $ | |||||
Furniture, equipment and leasehold improvements | |||||||
Total property and equipment | |||||||
Less: accumulated depreciation and amortization | ( | ) | ( | ) | |||
Total property and equipment, net | $ | $ |
Initial Listing Revenues | Annual Listings Revenues | Corporate Solutions Revenues | Information Services Revenues | Market Technology Revenues | Other(1) | Total | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Deferred revenue billed in the current period, net of recognition | |||||||||||||||||||||||||||
Revenue recognized that was included in the beginning of the period | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ | $ |
(1) |
Initial Listing Revenues | Annual Listings Revenues | Corporate Solutions Revenues | Information Services Revenues | Market Technology Revenues | Other(1) | Total | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Fiscal year ended: | |||||||||||||||||||||||||||
2020 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
2021 | |||||||||||||||||||||||||||
2022 | |||||||||||||||||||||||||||
2023 | |||||||||||||||||||||||||||
2024 and thereafter | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
(1) | Other primarily includes revenues from U.S. listing of additional shares fees which are included in our Listing Services business. |
December 31, 2018 | Additions | Payments, Accretion and Other | December 31, 2019 | ||||||||||||
Short-term debt: | (in millions) | ||||||||||||||
Commercial paper | $ | $ | $ | ( | ) | $ | |||||||||
Senior unsecured floating rate notes repaid on March 22, 2019 | ( | ) | |||||||||||||
5.55% senior unsecured notes repaid on May 1, 2019(1) | ( | ) | |||||||||||||
$400 million senior unsecured term loan facility repaid on June 28, 2019 (average interest rate of 4.00% for the period January 1, 2019 through June 28, 2019) | ( | ) | |||||||||||||
Total short-term debt | ( | ) | |||||||||||||
Long-term debt: | |||||||||||||||
3.875% senior unsecured notes due June 7, 2021 | ( | ) | |||||||||||||
4.25% senior unsecured notes due June 1, 2024 | |||||||||||||||
1.75% senior unsecured notes due May 19, 2023 | ( | ) | |||||||||||||
3.85% senior unsecured notes due June 30, 2026 | |||||||||||||||
1.75% senior unsecured notes due March 28, 2029 | |||||||||||||||
$1 billion senior unsecured revolving credit facility due April 25, 2022 | ( | ) | ( | ) | ( | ) | |||||||||
Total long-term debt | ( | ) | |||||||||||||
Total debt obligations | $ | $ | $ | ( | ) | $ |
(1) | Balance was reclassified to short-term debt as of March 31, 2019. |
Pension | SERP | Post-retirement | Total | ||||||||||||
Fiscal Year Ended: | (in millions) | ||||||||||||||
2020 | $ | $ | $ | $ | |||||||||||
2021 | |||||||||||||||
2022 | |||||||||||||||
2023 | |||||||||||||||
2024 | |||||||||||||||
2025 through 2029 | |||||||||||||||
$ | $ | $ | $ |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
(in millions) | ||||||||||||
Share-based compensation expense before income taxes | $ | $ | $ | |||||||||
Income tax benefit | ( | ) | ( | ) | ( | ) | ||||||
Share-based compensation expense after income taxes | $ | $ | $ |
Restricted Stock | ||||||
Number of Awards | Weighted-Average Grant Date Fair Value | |||||
Unvested balances at December 31, 2016 | $ | |||||
Granted | $ | |||||
Vested | ( | ) | $ | |||
Forfeited | ( | ) | $ | |||
Unvested balances at December 31, 2017 | $ | |||||
Granted | $ | |||||
Vested | ( | ) | $ | |||
Forfeited | ( | ) | $ | |||
Unvested balances at December 31, 2018 | $ | |||||
Granted | $ | |||||
Vested | ( | ) | $ | |||
Forfeited | ( | ) | $ | |||
Unvested balances at December 31, 2019 | $ |
Year Ended December 31, | ||||||
2019 | 2018 | |||||
Weighted-average risk free interest rate(1) | % | % | ||||
Expected volatility(2) | % | % | ||||
Weighted-average grant date share price | $ | $ | ||||
Weighted-average fair value at grant date | $ | $ |
(1) | 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. |
(2) | 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. |
PSUs | |||||||||||||
One-Year Program | Three-Year Program | ||||||||||||
Number of Awards | Weighted-Average Grant Date Fair Value | Number of Awards | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested balances at December 31, 2016 | $ | $ | |||||||||||
Granted(1) | $ | $ | |||||||||||
Vested | ( | ) | $ | ( | ) | $ | |||||||
Forfeited | ( | ) | $ | ( | ) | $ | |||||||
Unvested balances at December 31, 2017 | $ | $ | |||||||||||
Granted(1) | $ | $ | |||||||||||
Vested | ( | ) | $ | ( | ) | $ | |||||||
Forfeited | ( | ) | $ | ( | ) | $ | |||||||
Unvested balances at December 31, 2018 | $ | $ | |||||||||||
Granted(1) | $ | $ | |||||||||||
Vested | ( | ) | $ | ( | ) | $ | |||||||
Forfeited | ( | ) | $ | ( | ) | $ | |||||||
Unvested balances at December 31, 2019 | $ | $ |
(1) | Includes target awards granted and certain additional awards granted based on overachievement of performance parameters. |
Expected life (in years) | ||
Weighted-average risk free interest rate | % | |
Expected volatility | % | |
Dividend yield | % |
Number of Stock Options | Weighted-Average Exercise Price | |||||
Outstanding at December 31, 2016 | $ | |||||
Granted | ||||||
Exercised | ( | ) | ||||
Forfeited | ( | ) | ||||
Outstanding at December 31, 2017 | $ | |||||
Exercised | ( | ) | ||||
Forfeited | ( | ) | ||||
Outstanding at December 31, 2018 | $ | |||||
Exercised | ( | ) | ||||
Forfeited | ( | ) | ||||
Outstanding at December 31, 2019 | $ | |||||
Exercisable at December 31, 2019 | $ |
Outstanding | Exercisable | |||||||||||||||||||||||||||||||
Range of Exercise Prices | Number of Stock Options | Weighted-Average Remaining Contractual Term (in years) | Weighted-Average Exercise Price | Aggregate Intrinsic Value (in millions) | Number of Stock Options | Weighted-Average Remaining Contractual Term (in years) | Weighted-Average Exercise Price | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||||||
$ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Number of shares purchased | |||||||||||
Weighted-average price of shares purchased | $ | $ | $ | ||||||||
Compensation expense | $ | $ | $ |
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Number of shares of common stock repurchased | ||||||||
Average price paid per share | $ | $ | ||||||
Total purchase price (in millions) | $ | $ |
Declaration Date | Dividend Per Common Share | Record Date | Total Amount Paid | Payment Date | ||||||||
(in millions) | ||||||||||||
January 29, 2019 | $ | March 15, 2019 | $ | March 29, 2019 | ||||||||
April 23, 2019 | June 14, 2019 | June 28, 2019 | ||||||||||
July 23, 2019 | September 13, 2019 | September 27, 2019 | ||||||||||
October 22, 2019 | December 13, 2019 | December 27, 2019 | ||||||||||
$ |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Numerator: | (in millions, except share and per share amounts) | |||||||||||
Net income attributable to common shareholders | $ | $ | $ | |||||||||
Denominator: | ||||||||||||
Weighted-average common shares outstanding for basic earnings per share | ||||||||||||
Weighted-average effect of dilutive securities: | ||||||||||||
Employee equity awards(1) | ||||||||||||
Contingent issuance of common stock(2) | ||||||||||||
Weighted-average common shares outstanding for diluted earnings per share | ||||||||||||
Basic and diluted earnings per share: | ||||||||||||
Basic earnings per share | $ | $ | $ | |||||||||
Diluted earnings per share | $ | $ | $ |
(1) | PSUs, 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. |
(2) | See “Non-Cash Contingent Consideration,” of Note 19, “Commitments, Contingencies and Guarantees,” for further discussion. |
December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||||||||||
Assets at Fair Value | |||||||||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||||
European government | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||
State owned enterprises and municipalities | |||||||||||||||||||||||||||||||
Swedish mortgage bonds | |||||||||||||||||||||||||||||||
Total debt securities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Available-for-sale investment securities: | |||||||||||||||||||||||||||||||
Commercial paper | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Liabilities at Fair Value | |||||||||||||||||||||||||||||||
Other financial instruments | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2019 | |||||||||||
Cash Contributions | Non-Cash Contributions | Total Contributions | |||||||||
(in millions) | |||||||||||
Default fund contributions | $ | $ | $ | ||||||||
Margin deposits | |||||||||||
Total | $ | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||
(in millions) | |||||||
Demand deposits | $ | $ | |||||
Central bank certificates | |||||||
European government debt securities | |||||||
Reverse repurchase agreements | |||||||
Supranationals and state owned enterprise debt securities | |||||||
Total | $ | $ |
• | junior capital contributed by Nasdaq Clearing, which totaled $ |
• | 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; |
• | senior capital contributed to each specific market by Nasdaq Clearing, calculated in accordance with clearinghouse rules, which totaled $ |
• | mutualized default fund, which includes capital contributions of the clearing members on a pro-rata basis. |
December 31, 2019 | |||
(in millions) | |||
Commodity and seafood options, futures and forwards(1)(2)(3) | $ | ||
Fixed-income options and futures(1)(2) | |||
Stock options and futures(1)(2) | |||
Index options and futures(1)(2) | |||
Total | $ |
(1) | 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. |
(2) | We determined the fair value of our futures contracts based upon quoted market prices and average quoted market yields. |
(3) | We determined the fair value of our forward contracts using standard valuation models that were based on market-based observable inputs including LIBOR rates and the spot price of the underlying instrument. |
December 31, 2019 | December 31, 2018 | ||||
Commodity and seafood options, futures and forwards(1)(2) | |||||
Fixed-income options and futures | |||||
Stock options and futures | |||||
Index options and futures | |||||
Total |
(1) | The total volume in cleared power related to commodity contracts was |
(2) | As discussed elsewhere in this Form 10-K, in November 2019, Nasdaq sold the core assets of NFX to a third-party and the freight contracts with open interest are being migrated from NFX to other exchanges. |
Leases | Balance Sheet Classification | December 31, 2019 | ||||
(in millions) | ||||||
Assets: | ||||||
Operating lease assets | Operating lease assets | $ | ||||
Liabilities: | ||||||
Current lease liabilities | Other current liabilities | $ | ||||
Non-current lease liabilities | Operating lease liabilities | |||||
Total lease liabilities | $ |
Year Ended December 31, 2019 | ||||
(in millions) | ||||
Operating lease cost(1) | $ | |||
Variable lease cost | ||||
Sublease income | ( | ) | ||
Total lease cost | $ |
(1) | Includes short-term lease cost, which was immaterial. |
December 31, 2019 | ||||
(in millions) | ||||
2020 | $ | |||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Thereafter | ||||
Total lease payments | ||||
Less: interest(1) | ( | ) | ||
Present value of lease liabilities(2) | $ |
(1) | Calculated using the interest rate for each lease. |
(2) | Includes the current portion of $ |
December 31, 2019 | |||
Weighted-average remaining lease term (in years) | |||
Weighted-average discount rate | % |
Year Ended December 31, 2019 | ||||
(in millions) | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | |||
Lease assets obtained in exchange for new operating lease liabilities | $ |
Year ending December 31: | (in millions) | |||
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
Total minimum lease payments | $ |
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
(in millions) | |||||||||||
Domestic | $ | $ | $ | ||||||||
Foreign | |||||||||||
Income before income tax provision | $ | $ | $ |
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
(in millions) | |||||||||||
Current income taxes provision: | |||||||||||
Federal | $ | $ | $ | ||||||||
State | |||||||||||
Foreign | |||||||||||
Total current income taxes provision | |||||||||||
Deferred income taxes provision (benefit): | |||||||||||
Federal | ( | ) | |||||||||
State | |||||||||||
Foreign | ( | ) | |||||||||
Total deferred income taxes provision | |||||||||||
Total income tax provision | $ | $ | $ |
Year Ended December 31, | ||||||||
2019 | 2018 | 2017 | ||||||
Federal income tax provision at the statutory rate | % | % | % | |||||
State income tax provision, net of federal effect | % | % | % | |||||
Change in deferred taxes due to U.S. tax law changes | % | % | ( | )% | ||||
Excess tax benefits related to employee share-based compensation | ( | )% | ( | )% | ( | )% | ||
Non-U.S. subsidiary earnings | % | % | ( | )% | ||||
Tax credits and deductions | ( | )% | ( | )% | ( | )% | ||
Change in unrecognized tax benefits | ( | )% | % | ( | )% | |||
Other, net | ( | )% | % | % | ||||
Actual income tax provision | % | % | % |
December 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Deferred tax assets: | |||||||
Deferred revenues | $ | $ | |||||
Foreign net operating loss | |||||||
State net operating loss | |||||||
Compensation and benefits | |||||||
Federal benefit of uncertain tax positions | |||||||
Operating lease liabilities | — | ||||||
Other | |||||||
Gross deferred tax assets | |||||||
Less: valuation allowance | ( | ) | |||||
Total deferred tax assets, net of valuation allowance | $ | $ | |||||
Deferred tax liabilities: | |||||||
Amortization of software development costs and depreciation | ( | ) | ( | ) | |||
Amortization of acquired intangible assets | ( | ) | ( | ) | |||
Investments | ( | ) | ( | ) | |||
Unrealized gains | ( | ) | |||||
Operating lease assets | ( | ) | — | ||||
Other | ( | ) | ( | ) | |||
Gross deferred tax liabilities | ( | ) | ( | ) | |||
Net deferred tax liabilities | $ | ( | ) | $ | ( | ) | |
Reported as: | |||||||
Non-current deferred tax assets(1) | $ | $ | |||||
Deferred tax liabilities, net | ( | ) | ( | ) | |||
Net deferred tax liabilities | $ | ( | ) | $ | ( | ) |
Jurisdiction | Amount | Expiration Date | ||
(in millions) | ||||
Foreign NOL | $ | No expiration | ||
State NOL | 2025-2036 |
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
(in millions) | |||||||||||
Beginning balance | $ | $ | $ | ||||||||
Additions as a result of tax positions taken in prior periods | |||||||||||
Additions as a result of tax positions taken in the current period | |||||||||||
Reductions related to settlements with taxing authorities | ( | ) | ( | ) | |||||||
Reductions as a result of lapses of the applicable statute of limitations | ( | ) | ( | ) | ( | ) | |||||
Ending balance | $ | $ | $ |
Market Services | Corporate Services | Information Services | Market Technology | Corporate Items | Consolidated | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Transaction-based expenses | ( | ) | ( | ) | |||||||||||||||||||
Revenues less transaction-based expenses | |||||||||||||||||||||||
Depreciation and amortization | $ | ||||||||||||||||||||||
Operating income (loss) | ( | ) | |||||||||||||||||||||
Purchase of property and equipment | |||||||||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Transaction-based expenses | ( | ) | ( | ) | |||||||||||||||||||
Revenues less transaction-based expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Operating income (loss) | ( | ) | |||||||||||||||||||||
Purchase of property and equipment | |||||||||||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Transaction-based expenses | ( | ) | ( | ) | |||||||||||||||||||
Revenues less transaction-based expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Operating income (loss) | ( | ) | |||||||||||||||||||||
Purchase of property and equipment |
Year Months Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
(in millions) | |||||||||||
Revenues - divested businesses | $ | $ | $ | ||||||||
Expenses: | |||||||||||
Amortization expense of acquired intangible assets | |||||||||||
Merger and strategic initiatives expense | |||||||||||
Restructuring charges | |||||||||||
Clearing default loss | |||||||||||
Provision for notes receivable | |||||||||||
Extinguishment of debt | |||||||||||
Expenses - divested businesses | |||||||||||
Other | |||||||||||
Total expenses | |||||||||||
Operating loss | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Total Revenues | Property and Equipment, Net | ||||||
(in millions) | |||||||
2019: | |||||||
United States | $ | $ | |||||
All other countries | |||||||
Total | $ | $ | |||||
2018: | |||||||
United States | $ | $ | |||||
All other countries | |||||||
Total | $ | $ | |||||
2017: | |||||||
United States | $ | $ | |||||
All other countries | |||||||
Total | $ | $ |
Year Ended December 31, 2019 | |||
(in millions) | |||
Asset impairments | $ | ||
Severance and employee-related costs | |||
Accelerated depreciation | |||
Contract terminations | |||
Consulting services | |||
Other | |||
Total restructuring charges | $ |
(1) | Common Stock, par value $0.01 per share (“Common Stock”); |
(2) | 0.875% Senior Notes due 2030; |
(3) | 1.75% Senior Notes due 2029; |
(4) | 1.750% Senior Notes due 2023; and |
(5) | 3.875% Senior Notes due 2021. |
1. | before the stockholder becomes an interested stockholder, the corporation’s board approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
2. | after the transaction that results in the stockholder becoming an interested stockholder, the interested stockholder owns at least 85% of the corporation’s outstanding voting stock (excluding certain shares); or |
3. | the corporation’s board approves the business combination and the holders of at least two-thirds of the corporation’s outstanding voting stock that the interested stockholder does not own authorize the business combination at a meeting of stockholders. |
• | are senior unsecured obligations of ours; |
• | rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding, commercial paper issuances and indebtedness under our credit facility; |
• | are structurally subordinated in right of payment to all existing and future obligations of our subsidiaries, including claims with respect to trade payables; and |
• | are effectively subordinated in right of payment to all of our existing and future secured indebtedness and other secured obligations to the extent of the value of the collateral securing any such indebtedness and other obligations. |
(1) | we do not pay interest on any of the 2030 Notes within 30 days of its due date; |
(2) | we fail to pay the principal (or premium, if any) of any 2030 Note, when such principal becomes due and payable, at maturity, upon acceleration, upon redemption or otherwise; |
(3) | we fail to comply with certain covenants under the indenture; |
(4) | we remain in breach of a covenant or warranty in respect of the indenture or 2030 Notes (other than a covenant included in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written notice of default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the outstanding 2030 Notes; |
(5) | we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture; |
(6) | we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least $150,000,000, constituting a default either of payment of principal when due and payable or which results in acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full within 60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding 2030 Notes; or |
(7) | one or more final judgments for the payment of money in an aggregate amount in excess of $150,000,000 above available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed. |
• | are senior unsecured obligations; |
• | rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding, commercial paper issuances and indebtedness under our 2017 credit facility; |
• | are structurally subordinated in right of payment to all existing and future obligations of our subsidiaries, including claims with respect to trade payables; and |
• | are effectively subordinated in right of payment to all of our existing and future secured indebtedness and other secured obligations to the extent of the value of the collateral securing any such indebtedness and other obligations. |
(1) | we do not pay interest on any of the Notes within 30 days of its due date; |
(2) | we fail to pay the principal (or premium, if any) of any Note, when such principal becomes due and payable, at maturity, upon acceleration, upon redemption or otherwise; |
(3) | failure by us to comply with the covenants under the indenture; | |
(4) | we remain in breach of a covenant or warranty in respect of the indenture or 2029 Notes (other than a covenant included in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written notice of default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the outstanding 2029 Notes; |
(5) | we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture; |
(6) | we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least $150,000,000, constituting a default either of payment of principal when due and payable or which results in acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full within 60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding 2029 Notes; or |
(7) | one or more final judgments for the payment of money in an aggregate amount in excess of $150,000,000 above available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed. |
• | such holders must give the trustee written notice that an Event of Default has occurred and remains uncured; |
• | holders of at least 25% in principal amount of the 2029 Notes must make a written request that the trustee take action because of the default and must offer the Trustee indemnity satisfactory to the trustee against the cost and other liabilities of taking that action; and |
• | the trustee must have failed to take action for 60 days after receipt of the notice and offer of indemnity. |
• | are senior unsecured obligations of ours; |
• | rank equally with all of our other senior unsecured indebtedness from time to time outstanding, all indebtedness under our senior credit facility and our term loan credit agreement; |
• | are structurally subordinated to all existing and future obligations of our subsidiaries, including claims with respect to trade payables; and |
• | are effectively subordinated in right of payment to all of our existing and future secured indebtedness and other secured obligations to the extent of the collateral securing any such indebtedness and other obligations. |
• | such holders must give the trustee written notice that an Event of Default has occurred and remains uncured; |
• | holders of at least 25% in principal amount of the 2023 Notes must make a written request that the trustee take action because of the default and must offer the trustee indemnity satisfactory to the trustee against the cost and other liabilities of taking that action; and |
• | the trustee must have failed to take action for 60 days after receipt of the notice and offer of indemnity. |
• | are senior unsecured obligations of ours; |
• | will rank equally with all of our other senior unsecured indebtedness from time to time outstanding and all indebtedness under our senior credit facility; |
• | structurally subordinated to all existing and future obligations of our subsidiaries including claims with respect to trade payables; |
• | are effectively subordinated in right of payment to all of our existing and future secured indebtedness to the extent of the collateral securing any such indebtedness. |
• | such holders must give the trustee written notice that an Event of Default has occurred and remains uncured; |
• | holders of at least 25% in principal amount of the 2021 Notes must make a written request that the trustee take action because of the default and must offer the trustee indemnity satisfactory to the trustee against the cost and other liabilities of taking that action; and |
• | the Trustee must have failed to take action for 60 days after receipt of the notice and offer of indemnity. |
1. | A.S.A.P. Advisor Services, Inc (organized in New York) |
2. | BoardVantage, Inc (organized in Delaware) |
3. | Boston Stock Exchange Clearing Corporation (organized in Massachusetts) |
4. | Channel Capital Group Inc. (organized in Delaware) |
5. | Cinnober Americas Inc. (organized in New York) |
6. | Consolidated Securities Source LLC (organized in Delaware) |
7. | Content Services, LLC (organized in Delaware) - |
8. | Curzon Street Acquisition, LLC (organized in Delaware) |
9. | Directors Desk, LLC (organized in Delaware) |
10. | Dorsey, Wright & Associates, LLC (organized in Virginia) |
11. | ETC Acquisition Corp. (organized in Delaware) |
12. | eVestment Alliance Holdings, Inc. (organized in Delaware) |
13. | eVestment Alliance Holdings, LLC (organized in Georgia) |
14. | eVestment Alliance, LLC (organized in Georgia) |
15. | eVestment, Inc. (organized in Delaware) |
16. | ExactEquity, LLC (organized in Delaware) |
17. | Execution Access, LLC (organized in Delaware) |
18. | FinQloud LLC (organized in Delaware) |
19. | FINRA/Nasdaq Trade Reporting Facility LLC (organized in Delaware) |
20. | FTEN, Inc. (organized in Delaware) |
21. | Fundspire, Inc. (organized in Delaware) |
22. | Global Network Content Services, LLC (organized in Florida) |
23. | GlobeNewswire, Inc. (organized in California) |
24. | Granite Redux, Inc. (organized in Delaware) |
25. | GraniteBlock, Inc. (organized in Delaware) |
26. | Inet Futures Exchange, LLC (organized in Delaware) |
27. | International Securities Exchange Holdings, Inc. (organized in Delaware) |
28. | ISE ETF Ventures LLC (organized in Delaware) |
29. | Kleos Managed Services Holdings, LLC (organized in Delaware) |
30. | Kleos Managed Services, L.P. (organized in Delaware) |
31. | Longitude LLC (organized in Delaware) |
32. | Nasdaq BX, Inc. (organized in Delaware) |
33. | Nasdaq Capital Markets Advisory LLC (organized in Delaware) |
34. | Nasdaq Commodities Clearing LLC (organized in Delaware) |
35. | Nasdaq Corporate Services, LLC (organized in Delaware) |
36. | Nasdaq Corporate Solutions, LLC (organized in Delaware) |
37. | NASDAQ Energy Futures, LLC (organized in Delaware) |
38. | Nasdaq Execution Services, LLC (organized in Delaware) |
39. | NASDAQ Futures, Inc. (organized in Delaware) |
40. | Nasdaq GEMX, LLC (organized in Delaware) |
41. | NASDAQ Global, Inc. (organized in Delaware) |
42. | Nasdaq Governance Solutions, Inc. (organized in Delaware) |
43. | Nasdaq Information, LLC (organized in Delaware) |
44. | Nasdaq International Market Initiatives, Inc. (organized in Delaware) |
45. | Nasdaq ISE, LLC (organized in Delaware) |
46. | Nasdaq MRX, LLC (organized in Delaware) |
47. | NASDAQ OMX (San Francisco) Insurance LLC (organized in Delaware) |
48. | NASDAQ OMX BX Equities LLC (organized in Delaware) |
49. | Nasdaq PHLX LLC (organized in Delaware) |
50. | Nasdaq Technology Services, LLC (organized in Delaware) |
51. | Norway Acquisition LLC (organized in Delaware) |
52. | NPM Securities, LLC (organized in Delaware) |
53. | OneReport, Inc, (organized in Vermont) |
54. | Operations & Compliance Network, LLC (organized in Delaware) |
55. | Public Plan IQ Limited Liability Company (organized in New Jersey) |
56. | SecondMarket Labs, LLC (organized in Delaware) |
57. | SecondMarket Solutions, Inc. (organized in Delaware) |
58. | SMTX, LLC (organized in Delaware) |
59. | Strategic Financial Solutions, LLC (organized in Nevada) |
60. | Sybenetix Inc. (organized in Delaware) |
61. | The Center for Board Evaluations, Inc. (organized in North Carolina) |
62. | The Nasdaq Options Market LLC (organized in Delaware) |
63. | The NASDAQ Private Market, LLC (organized in Delaware) |
64. | The Nasdaq Stock Market LLC (organized in Delaware) |
65. | The Stock Clearing Corporation of Philadelphia (organized in Pennsylvania) |
66. | U.S. Exchange Holdings, Inc. (organized in Delaware) |
1. | 2157971 Ontario Ltd. (organized in Canada) |
2. | AB Nasdaq Vilnius (organized in Lithuania) (96.35% owned, directly or indirectly, by Nasdaq, Inc.) |
3. | AS eCSD Expert (organized in Estonia) |
4. | AS Pensionikeskus AS (organized in Estonia) |
5. | BoardVantage (UK) Limited (organized in the United Kingdom) |
6. | Cinetics AB (organized in Sweden) |
7. | Cinnober AB (organized in Sweden) |
8. | Cinnober Financial Technology AB (organized in Sweden) |
9. | Cinnober Financial Technology North AB (organized in Sweden) |
10. | Curzon Street Holdings Limited (organized in the United Kingdom) |
11. | Ensoleillement Inc. (organized in Canada) |
12. | eVestment Alliance (UK) Limited (organized in the United Kingdom) |
13. | eVestment Alliance Australia Pty Ltd (organized in Australia) |
14. | eVestment Alliance Hong Kong Limited (organized in Hong Kong) |
15. | Indxis Ltd (organized in the United Kingdom) |
16. | Irisium AB (organized in Sweden) |
17. | LLC "SYBENETIX UKRAINE" (organized in Ukraine) |
18. | Longitude S.A. (organized in Luxembourg) |
19. | Marketwire China Holding (HK) Ltd. (organized in Hong Kong) |
20. | Minium Financial Technology AB (organized in Sweden) |
21. | Minium Financial Technology Ltd (organized in the United Kingdom) |
22. | Nasdaq (Asia Pacific) Pte. Ltd. (organized in Singapore) |
23. | Nasdaq AB (organized in Sweden) |
24. | Nasdaq Australia Holding Pty Ltd (organized in Australia) |
25. | Nasdaq Broker Services AB (organized in Sweden) |
26. | Nasdaq Canada Inc. (organized in Canada) |
27. | Nasdaq Clearing AB (organized in Sweden) |
28. | Nasdaq Copenhagen A/S (organized in Denmark) |
29. | Nasdaq Corporate Solutions (India) Private Limited (organized in India) |
30. | Nasdaq Corporate Solutions International Limited (organized in the United Kingdom) |
31. | Nasdaq CSD Iceland hf. (organized in Iceland) |
32. | Nasdaq CSD SE (organized in Latvia) |
33. | Nasdaq CXC Limited (organized in Canada) |
34. | Nasdaq Exchange and Clearing Services AB (organized in Sweden) |
35. | Nasdaq France SAS (organized in France) |
36. | Nasdaq Germany GmbH (organized in Germany) |
37. | Nasdaq Helsinki Ltd (organized in Finland) |
38. | Nasdaq Holding AB (organized in Sweden) |
39. | Nasdaq Holding Denmark A/S (organized in Denmark) |
40. | Nasdaq Holding Luxembourg Sárl (organized in Luxembourg) |
41. | Nasdaq Iceland hf. (organized in Iceland) |
42. | Nasdaq International Ltd (organized in the United Kingdom) |
43. | Nasdaq Korea Ltd. (organized in South Korea) |
44. | Nasdaq Ltd (organized in Hong Kong) |
45. | Nasdaq NLX Ltd (organized in the United Kingdom) |
46. | Nasdaq Nordic Ltd (organized in Finland) |
47. | NASDAQ OMX Europe Ltd (organized in the United Kingdom) |
48. | Nasdaq Oslo ASA (organized in Norway) |
49. | Nasdaq Pty Ltd (organized in Australia) |
50. | Nasdaq Riga, AS (organized in Latvia) (92.98% owned, directly or indirectly, by Nasdaq, Inc.) |
51. | Nasdaq Stockholm AB (organized in Sweden) |
52. | Nasdaq Tallinn AS (organized in Estonia) |
53. | Nasdaq Technology (Japan) Ltd (organized in Japan) |
54. | Nasdaq Technology AB (organized in Sweden) |
55. | Nasdaq Technology Canada Inc. (organized in Canada) |
56. | Nasdaq Technology Energy Systems AS (organized in Norway) |
57. | Nasdaq Technology Italy Srl (organized in Italy) |
58. | Nasdaq Teknoloji Servisi Limited Sirketi (organized in Turkey) |
59. | Nasdaq Treasury AB (organized in Sweden) |
60. | Nasdaq Vilnius Services UAB (organized in Lithuania) |
61. | Nasdaq Wizer Solutions AB (organized in Sweden) |
62. | Nasdaq Wizer Vilnius UAB (organized in Lithuania) |
63. | OMX Netherlands B.V. (organized in the Netherlands) |
64. | OMX Netherlands Holding B.V. (organized in the Netherlands) |
65. | OMX Treasury Euro AB (organized in Sweden) (99.9% owned, directly or indirectly, by Nasdaq, Inc.) |
66. | OMX Treasury Euro Holding AB (organized in Sweden) |
67. | PerTrac Financial Solutions Hong Kong Limited (organized in Hong Kong) |
68. | Quandl, Inc.(organized in Canada) |
69. | RF Nordic Express AB (organized in Sweden) (50.1% owned, directly or indirectly, by Nasdaq, Inc.) |
70. | Shareholder.com B.V. (organized in the Netherlands) |
71. | Simplitium Ltd (organized in the United Kingdom) |
72. | SMARTS (Asia) Ltd (organized in China) |
73. | SMARTS Broker Compliance Pty Ltd (organized in Australia) |
74. | SMARTS Market Surveillance Pty Ltd (organized in Australia) |
75. | Sybenetix Limited (organized in the United Kingdom) |
76. | TopQ Software Limited (organized in the United Kingdom) |
77. | Whittaker & Garnier Limited (organized in the United Kingdom) |
(1) | Registration Statement (Form S-3 No. 333-224489) of Nasdaq, Inc., |
(2) | Registration Statement (Form S-8 No. 333-225218) pertaining to Nasdaq, Inc. Equity Incentive Plan, |
(3) | Registration Statement (Form S-8 No. 333-196838) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) Equity Incentive Plan, |
(4) | Registration Statement (Form S-8 No. 333-167724) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) Employee Stock Purchase Plan, |
(5) | Registration Statement (Form S-8 No. 333-167723) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) Equity Incentive Plan, |
(6) | Registration Statement (Form S-8 No. 333-110602) pertaining to The Nasdaq Stock Market, Inc. Equity Incentive Plan, |
(7) | Registration Statement (Form S-8 No. 333-106945) pertaining to the Employment Agreement with Robert Greifeld of The Nasdaq Stock Market, Inc., |
(8) | Registration Statement (Form S-8 No. 333-76064) pertaining to The Nasdaq Stock Market, Inc. 2000 Employee Stock Purchase Plan, |
(9) | Registration Statement (Form S-8 No. 333-72852) pertaining to The Nasdaq Stock Market, Inc. 2000 Employee Stock Purchase Plan, and |
(10) | Registration Statement (Form S-8 No. 333-70992) pertaining to The Nasdaq Stock Market, Inc. Equity Incentive Plan; |
/s/ Adena T. Friedman | |||
Name: | Adena T. Friedman | ||
Title: | President and Chief Executive Officer |
/s/ Michael Ptasznik | |||
Name: | Michael Ptasznik | ||
Title: | Executive Vice President, Corporate Strategy and Chief Financial Officer |
/s/ Adena T. Friedman | |||
Name: | Adena T. Friedman | ||
Title: | President and Chief Executive Officer | ||
Date: | February 25, 2020 | ||
/s/ Michael Ptasznik | |||
Name: | Michael Ptasznik | ||
Title: | Executive Vice President, Corporate Strategy and Chief Financial Officer | ||
Date: | February 25, 2020 |
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