Basis of Presentation and Principles of Consolidation

3 Months Ended

Mar. 31, 2022

Basis of Presentation and Principles of Consolidation

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of Nasdaq, its wholly-owned subsidiaries and other entities in which Nasdaq has a controlling financial interest. When we do not have a controlling interest in an entity, but exercise significant influence over the entity’s operating and financial policies, such investment is accounted for under the equity method of accounting. We recognize our share of earnings or losses of an equity method investee based on our ownership percentage. See “Equity Method Investments,” of Note 6, “Investments,” for further discussion of our equity method investments.

The accompanying condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results. These adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

As permitted under U.S. GAAP, certain footnotes or other financial information can be condensed or omitted in the interim condensed consolidated financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in Nasdaq’s Form 10-K. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP.

Certain prior year amounts have been reclassified to conform

to the current year presentation.

During the fourth quarter of 2021, we adjusted the presentation of cash and cash equivalents held within default funds and margin deposits on the condensed consolidated statement of cash flows from operating activities, to present them as restricted cash and cash equivalents with the associated changes being included within cash flows from investing and financing activities. These balances cannot be used to satisfy operating or other liabilities. See Note 14, “Clearing Operations,” for further discussion of the default funds and margin deposits.

Prior period amounts have also been adjusted to conform to current period presentation. This immaterial adjustment had no impact on our previously reported condensed consolidated balance sheets, condensed consolidated statements of income, or condensed consolidated statements of comprehensive income.


	Three Months Ended March 31, 2021
	As Reported		Adjustment		Adjusted
			(in millions)
Net cash provided by operating activities	$	394	$	—	$	394
Net cash used in investing activities	(2,505)		(195)		(2,700)
Net cash provided by financing activities	152		12		164
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents	(11)		(166)		(177)
Net decrease in cash, cash equivalents, restricted cash and cash equivalents	(1,970)		(349)		(2,319)
Cash, cash equivalents, restricted cash and cash equivalents at beginning of period	2,782		3,197		5,979
Cash, cash equivalents, restricted cash and cash equivalents at end of period	$	812	$	2,848	$	3,660

Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
Cash and cash equivalents	$	774	$	—	$	774
Restricted cash and cash equivalents	38		—		38
Restricted cash and cash equivalents (Default funds and margin deposits)	—		2,848		2,848
Total	$	812	$	2,848	$	3,660

Accounting Estimates

In preparing our condensed consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities in our condensed consolidated balance sheets. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary.

Subsequent EventsWe have evaluated subsequent events through the issuance date of this Quarterly Report on Form 10-Q. For discussion of the redemption of the 2024 Notes, see “Early Extinguishment of 2024 Notes,” of Note 8, “Debt Obligations.” For discussion on our proposed 3-for-1 stock split in the form of a stock dividend, see "Proposed Stock Split," of Note 11, “Nasdaq Stockholders' Equity.