Intercontinental Exchange(US:ICE)2024-10-31 12:26markdown [PART I. Financial Statements](index=3&type=section&id=PART%20I.%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements and related disclosures [Item 1. Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements, detailing financial position, performance, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Financial Metric | Sep 30, 2024 (Unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $84,695 million | $84,973 million | | **Total Assets** | $135,201 million | $136,084 million | | **Total Current Liabilities** | $84,562 million | $84,626 million | | **Total Liabilities** | $107,928 million | $110,298 million | | **Total Equity** | $27,273 million | $25,786 million | - As of September 30, 2024, total assets slightly decreased to **$135.2 billion** from **$136.1 billion** at the end of 2023, while total equity increased from **$25.8 billion** to **$27.3 billion** over the same period[4](index=4&type=chunk)[6](index=6&type=chunk) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This section details the company's revenues, expenses, and net income over specific reporting periods | Metric (in millions) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,033 | $2,429 | $8,731 | $7,237 | | **Operating Income** | $1,103 | $845 | $3,232 | $2,769 | | **Net Income Attributable to ICE** | $657 | $541 | $2,056 | $1,995 | | **Diluted EPS** | $1.14 | $0.96 | $3.57 | $3.55 | - For the third quarter of 2024, total revenues grew to **$3.03 billion** from **$2.43 billion** year-over-year, a **24.9% increase**[8](index=8&type=chunk) Net income attributable to ICE rose to **$657 million** from **$541 million**, and diluted EPS increased to **$1.14** from **$0.96**[8](index=8&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in millions) | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $3,103 | $2,573 | | **Net Cash used in Investing Activities** | $(1) | $(9,403) | | **Net Cash used in Financing Activities** | $(2,717) | $(62,711) | - Net cash provided by operating activities increased to **$3.1 billion** for the first nine months of 2024, compared to **$2.6 billion** in the prior year period[19](index=19&type=chunk) Investing activities used significantly less cash, primarily due to the **$10.2 billion** cash paid for acquisitions in 2023 (Black Knight) not recurring in 2024[19](index=19&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations for financial statement figures, accounting policies, and segment performance - The company operates through three reportable business segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology[23](index=23&type=chunk) - On September 5, 2023, the company acquired Black Knight, Inc. for approximately **$11.8 billion**, significantly expanding its Mortgage Technology segment[28](index=28&type=chunk) - As of September 30, 2024, the company's clearing houses had received or been pledged **$178.6 billion** in cash and non-cash collateral in original margin and guaranty fund deposits[90](index=90&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, segment results, operating expenses, and liquidity for the period [Recent Developments](index=37&type=section&id=Recent%20Developments) This section highlights recent global economic conditions, interest rate volatility, and regulatory changes impacting the company - Global economic conditions, including interest rate volatility, have positively impacted trading volumes in interest rate and equity futures but have adversely affected transaction-based revenues in the Mortgage Technology segment due to higher mortgage rates[149](index=149&type=chunk) - The company is monitoring several key regulatory developments, including proposed increased bank capital requirements (Basel III Endgame), European regulations (EMIR 3.0, EUDR), and new SEC rules on equity market structure, which could impact clearing, commodities, and equity trading operations[154](index=154&type=chunk)[155](index=155&type=chunk)[157](index=157&type=chunk) [Segment Results](index=42&type=section&id=Segment%20Results) This section provides a detailed breakdown of financial performance for each of the company's three business segments | Segment Operating Income/(Loss) (in millions) | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | | **Exchanges** | $2,734 | $2,360 | | **Fixed Income and Data Services** | $632 | $611 | | **Mortgage Technology** | $(134) | $(202) | [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's outstanding debt, dividend payments, share repurchases, and capital expenditure plans - As of September 30, 2024, the company had **$21.2 billion** in outstanding debt, consisting of **$19.8 billion** in senior notes and **$1.4 billion** in commercial paper[276](index=276&type=chunk) - The company paid dividends of **$780 million** in the first nine months of 2024, up from **$713 million** in the same period of 2023[265](index=265&type=chunk) Share repurchases remained suspended following the Black Knight acquisition, with **$2.5 billion** remaining in the authorized program[280](index=280&type=chunk) - Capital expenditures and capitalized software development costs are expected to be between **$700 million** and **$740 million** for the full year 2024[284](index=284&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms no material changes to the company's exposure to market risks since the 2023 Form 10-K - There have been no material changes to the Company's exposure to market risks from those disclosed in the 2023 Form 10-K[307](index=307&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[308](index=308&type=chunk) - There were no changes in internal controls over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[309](index=309&type=chunk) [PART II. Other Information](index=70&type=section&id=PART%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, and other material information not included in Part I [Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses ongoing legal matters, including the PennyMac Arbitration, and their potential impact on financial condition - The company does not expect liabilities from ongoing legal and regulatory matters to have a material adverse effect on its consolidated financial condition or results[108](index=108&type=chunk) - In the PennyMac Arbitration case, Black Knight (an ICE subsidiary) received a **$160 million** payment in February 2024 in satisfaction of a final award related to a breach of contract claim[109](index=109&type=chunk) [Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no significant new risk factors have emerged since the company's 2023 Form 10-K filing - No significant new risk factors have emerged since the company's 2023 Form 10-K filing[311](index=311&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no repurchases of common stock were made during the nine months ended September 30, 2024 - No shares of the company's common stock were repurchased during the nine months ended September 30, 2024[312](index=312&type=chunk) [Other Information](index=71&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption and termination of Rule 10b5-1 trading plans by several company officers - Several officers, including President Benjamin R. Jackson and NYSE Group President Lynn C. Martin, adopted Rule 10b5-1 trading plans for the sale of company stock in August and September 2024[315](index=315&type=chunk)