UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q




(Mark One)
þ	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, ~~2016~~2017
Or
¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from to

Commission File Number 001-36198

INTERCONTINENTAL EXCHANGE, INC.

(Exact name of registrant as specified in its charter)



Delaware	46-2286804
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)
5660 New Northside Drive, Atlanta, Georgia	30328 (Zip Code)
(Address of principal executive offices)

(770) 857-4700

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~or a~~ smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~




Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨	Emerging growth company ¨


(Do not check if a smaller company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

As of May ~~2, 2016,~~1, 2017, the number of shares of the registrant’s Common Stock outstanding was ~~119,045,641~~592,066,651 shares.

INTERCONTINENTAL EXCHANGE, INC.

Form 10-Q

Quarterly Period Ended March 31, ~~2016~~2017

TABLE OF CONTENTS





PART I.	Financial Statements
Item 1	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016	2
	Consolidated Statements of Income for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016	4
	Consolidated Statements of Comprehensive Income for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016	5
	Consolidated Statements of Changes in Equity, Accumulated Other Comprehensive Loss and Redeemable Non-Controlling Interest for the three months ended March 31, ~~2016~~2017 and for the year ended December 31, ~~2015~~2016	6
	Consolidated Statements of Cash Flows for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016	7
	Notes to Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2624
Item 3	Quantitative and Qualitative Disclosures About Market Risk	4347
Item 4	Controls and Procedures	4549

PART II.	Other Information
Item 1	Legal Proceedings	4549
Item 1A	Risk Factors	4549
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	4650
Item 3	Defaults Upon Senior Securities	4650
Item 4	Mine Safety Disclosures	4650
Item 5	Other Information	4650
Item 6	Exhibits	4650
SIGNATURES		4752

PART I. Financial Statements

Item 1. Consolidated Financial Statements (Unaudited)

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)


	As of		As of		As of		As of
	March 31, 2016		December 31, 2015		March 31, 2017		December 31, 2016
Assets:
Current assets:
Cash and cash equivalents	$	468	$	627	$	360	$	407
Short-term investments	25		29		21		23
Short-term restricted cash and investments	657		657		743		679
Customer accounts receivable, net of allowance for doubtful accounts of $1 and $2 at March 31, 2016 and December 31, 2015, respectively	941		700
Customer accounts receivable, net of allowance for doubtful accounts of $8 and $7 at March 31, 2017 and December 31, 2016, respectively					999		777
Margin deposits and guaranty funds	52,329		51,169		52,354		55,150
Prepaid expenses and other current assets	134		131		596		97
Total current assets	54,554		53,313		55,073		57,133
Property and equipment, net	1,018		1,037		1,132		1,129
Other non-current assets:
Goodwill	12,104		12,079		12,302		12,291
Other intangible assets, net	10,630		10,758		10,356		10,420
Long-term restricted cash and investments	262		263		264		264
Long-term investments	352		299		—		432
Other non-current assets	240		238		336		334
Total other non-current assets	23,588		23,637		23,258		23,741
Total assets	$	79,160	$	77,987	$	79,463	$	82,003

Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities	$	399	$	398	$	451	$	388
Section 31 fees payable	97		116		90		131
Accrued salaries and benefits	107		215		104		230
Deferred revenue	429		98		440		114
Short-term debt	2,048		2,591		2,376		2,493
Margin deposits and guaranty funds	52,329		51,169		52,354		55,150
Other current liabilities	227		156		191		111
Total current liabilities	55,636		54,743		56,006		58,617
Non-current liabilities:
Non-current deferred tax liability, net	2,893		2,837		2,985		2,958
Long-term debt	4,718		4,717		3,872		3,871
Accrued employee benefits	470		478		415		430
Other non-current liabilities	329		337		361		337
Total non-current liabilities	8,410		8,369		7,633		7,596
Total liabilities	64,046		63,112		63,639		66,213
Commitments and contingencies
Redeemable non-controlling interest	34		35		37		36


Equity:
Intercontinental Exchange, Inc. shareholders’ equity:
Preferred stock, $0.01 par value; 100 shares authorized; no shares issued or outstanding at March 31, 2016 and December 31, 2015	—			—
Common stock, $0.01 par value; 500 shares authorized; 126 shares issued at March 31, 2016 and December 31, 2015, and 119 shares outstanding at March 31, 2016 and December 31, 2015	1			1
Treasury stock, at cost; 7 shares at March 31, 2016 and December 31, 2015	(1,494		)	(1,448		)
Preferred stock, $0.01 par value; 100 shares authorized; no shares issued or outstanding at March 31, 2017 and December 31, 2016							—			—
Common stock, $0.01 par value; 1,500 shares authorized; 599 and 596 shares issued at March 31, 2017 and December 31, 2016, respectively, and 593 and 595 shares outstanding at March 31, 2017 and December 31, 2016, respectively							6			6
Treasury stock, at cost; 6 and 1 shares at March 31, 2017 and December 31, 2016, respectively							(346		)	(40		)
Additional paid-in capital	12,334			12,295			11,351			11,306
Retained earnings	4,415			4,148			5,171			4,789
Accumulated other comprehensive loss	(208		)	(188		)	(427		)	(344		)
Total Intercontinental Exchange, Inc. shareholders’ equity	15,048			14,808			15,755			15,717
Non-controlling interest in consolidated subsidiaries	32			32			32			37
Total equity	15,080			14,840			15,787			15,754
Total liabilities and equity	$	79,160		$	77,987		$	79,463		$	82,003

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2017			2016
Revenues:
Transaction and clearing, net	$	929		$	836		$	798		$	929
Data services	477			200			520			477
Listings	103			101			106			103
Other revenues	45			43			45			45
Total revenues	1,554			1,180			1,469			1,554
Transaction-based expenses:
Section 31 fees	98			92			91			98
Cash liquidity payments, routing and clearing	302			238			214			302
Total revenues, less transaction-based expenses	1,154			850			1,164			1,154
Operating expenses:
Compensation and benefits	236			151			245			236
Professional services							32			32
Acquisition-related transaction and integration costs							14			27
Technology and communication	92			51			98			92
Professional services	32			33
Rent and occupancy	18			16			18			18
Acquisition-related transaction and integration costs	27			19
Selling, general and administrative	22			29			41			22
Depreciation and amortization	143			89			134			143
Total operating expenses	570			388			582			570
Operating income	584			462			582			584
Other income (expense):
Interest expense	(46		)	(23		)	(45		)	(46		)
Other income, net	2			2			186			2
Other expense, net	(44		)	(21		)
Other income (expense), net							141			(44		)
Income before income tax expense	540			441			723			540
Income tax expense	163			118			213			163
Net income	$	377		$	323		$	510		$	377
Net income attributable to non-controlling interest	(8		)	(8		)	(8		)	(8		)
Net income attributable to Intercontinental Exchange, Inc.	$	369		$	315		$	502		$	369
Earnings per share attributable to Intercontinental Exchange, Inc. common shareholders:
Basic	$	3.10		$	2.81		$	0.84		$	0.62
Diluted	$	3.08		$	2.80		$	0.84		$	0.62
Weighted average common shares outstanding:
Basic	119			112			594			595
Diluted	120			112			599			598
Dividend per share	$	0.85		$	0.65		$	0.20		$	0.17

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2017			2016
Net income	$	377		$	323		$	510		$	377
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax (expense) benefit of ($2) and $4 for the three months ended March 31, 2016 and 2015, respectively	(74		)	(37		)
Foreign currency translation adjustments, net of tax expense of $2 for the three months ended March 31, 2016							25			(74		)
Change in fair value of available-for-sale securities	54			(70		)	68			54
Reclassification of realized gain on available-for-sale investment to other income							(176		)	—
Other comprehensive loss	(20		)	(107		)	(83		)	(20		)
Comprehensive income	$	357		$	216		$	427		$	357
Comprehensive income attributable to non-controlling interest	(8		)	(8		)	(8		)	(8		)
Comprehensive income attributable to Intercontinental Exchange, Inc.	$	349		$	208		$	419		$	349

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity, Accumulated Other Comprehensive Loss

and Redeemable Non-Controlling Interest

(In millions)

(Unaudited)


	Intercontinental Exchange, Inc. Shareholders' Equity																Non- Controlling Interest in Consolidated Subsidiaries			Total Equity			Redeemable Non-Controlling Interest			Intercontinental Exchange, Inc. Shareholders' Equity																		Non- Controlling Interest in Consolidated Subsidiaries			Total Equity			Redeemable Non-Controlling Interest
	Common Stock			Treasury Stock					Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss												Common Stock				Treasury Stock					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss
	Shares	Value		Shares		Value			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss												Shares		Value		Shares		Value			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss
Balance, as of December 31, 2014	116	$	1	(3	)	$	(743	)	$	9,938	$	3,210		$	(46	)	$	32		$	12,392		$	165
Balance, as of December 31, 2015																										628		$	6	(34	)	$	(1,448	)	$	12,290		$	4,148		$	(188	)	$	32		$	14,840		$	35
Other comprehensive loss	—	—		—		—			—		—			(142		)	—			(142		)	—			—		—		—		—			—			—			(156		)	—			(156		)	—
Stock consideration issued for acquisitions	9	—		—		—			2,197		—			—			—			2,197			—
Exercise of common stock options																										1		—		—		—			22			—			—			—			22			—
Treasury shares retired in connection with stock split																										(35	)	—		35		1,512			(1,142		)	(370		)	—			—			—			—
Repurchases of common stock																										—		—		(1	)	(50		)	—			—			—			—			(50		)	—
Payments relating to treasury shares																										—		—		(1	)	(54		)	—			—			—			—			(54		)	—
Stock-based compensation																										—		—		—		—			136			—			—			—			136			—
Issuance of restricted stock																										2		—		—		—			—			—			—			—			—			—
Adjustment to redemption value																										—		—		—		—			—			(2		)	—			—			(2		)	1
Distributions of profits																										—		—		—		—			—			—			—			(19		)	(19		)	(3		)
Dividends paid to shareholders																										—		—		—		—			—			(409		)	—			—			(409		)	—
Net income attributable to non-controlling interest																										—		—		—		—			—			(27		)	—			24			(3		)	3
Net income																										—		—		—		—			—			1,449			—			—			1,449			—
Balance, as of December 31, 2016																										596		6		(1	)	(40		)	11,306			4,789			(344		)	37			15,754			36
Other comprehensive loss																										—		—		—		—			—			—			(83		)	—			(83		)	—
Exercise of common stock options	—	—		—		—			19		—			—			—			19			—			—		—		—		—			3			—			—			—			3			—
Repurchases of common stock	—	—		(3	)	(660		)	—		—			—			—			(660		)	—			—		—		(4	)	(229		)	—			—			—			—			(229		)	—
Payments relating to treasury shares	—	—		(1	)	(45		)	—		—			—			—			(45		)	—			—		—		(1	)	(77		)	—			—			—			—			(77		)	—
Stock-based compensation	—	—		—		—			122		—			—			—			122			—			—		—		—		—			42			—			—			—			42			—
Issuance of restricted stock	1	—		—		—			—		—			—			—			—			—			3		—		—		—			—			—			—			—			—			—
Tax benefits from stock option plans	—	—		—		—			19		—			—			—			19			—
Adjustment to redemption value	—	—		—		—			—		(5		)	—			—			(5		)	4
Distributions of profits	—	—		—		—			—		—			—			(16		)	(16		)	(11		)
Dividends paid to shareholders	—	—		—		—			—		(331		)	—			—			(331		)	—
Purchase of subsidiary shares	—	—		—		—			—		—			—			—			—			(128		)
Net income attributable to non-controlling interest	—	—		—		—			—		(21		)	—			16			(5		)	5
Net income	—	—		—		—			—		1,295			—			—			1,295			—
Balance, as of December 31, 2015	126	1		(7	)	(1,448		)	12,295		4,148			(188		)	32			14,840			35
Other comprehensive loss	—	—		—		—			—		—			(20		)	—			(20		)	—
Exercise of common stock options	—	—		—		—			4		—			—			—			4			—
Payments relating to treasury shares	—	—		—		(46		)	—		—			—			—			(46		)	—
Stock-based compensation	—	—		—		—			35		—			—			—			35			—
Distributions of profits	—	—		—		—			—		—			—			(7		)	(7		)	(2		)	—		—		—		—			—			—			—			(12		)	(12		)	—
Dividends paid to shareholders	—	—		—		—			—		(102		)	—			—			(102		)	—			—		—		—		—			—			(120		)	—			—			(120		)	—
Net income attributable to non-controlling interest	—	—		—		—			—		(8		)	—			7			(1		)	1			—		—		—		—			—			(8		)	—			7			(1		)	1
Net income	—	—		—		—			—		377			—			—			377			—			—		—		—		—			—			510			—			—			510			—
Balance, as of March 31, 2016	126	$	1	(7	)	$	(1,494	)	$	12,334	$	4,415		$	(208	)	$	32		$	15,080		$	34
Balance, as of March 31, 2017																										599		$	6	(6	)	$	(346	)	$	11,351		$	5,171		$	(427	)	$	32		$	15,787		$	37


	As of			As of			As of			As of
	March 31, 2016			December 31, 2015			March 31, 2017			December 31, 2016
Accumulated other comprehensive loss was as follows:
Foreign currency translation adjustments	$	(119	)	$	(45	)	$	(320	)	$	(345	)
Fair value of available-for-sale securities	28			(26		)	—			108
Comprehensive income from equity method investment	2			2			2			2
Employee benefit plans adjustments	(119		)	(119		)	(109		)	(109		)
Accumulated other comprehensive loss	$	(208	)	$	(188	)	$	(427	)	$	(344	)

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2017			2016
Operating activities:
Net income	$	377		$	323		$	510		$	377
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	143			89			134			143
Stock-based compensation	29			24			34			29
Deferred taxes	30			(24		)	28			30
Amortization of fair market value premium on NYSE Notes	—			(12		)
Cetip realized investment gain							(176		)	—
Other	3			(15		)	(1		)	3
Changes in assets and liabilities:
Customer accounts receivable	(229		)	(122		)	(240		)	(229		)
Other current and non-current assets	(13		)	(26		)	(3		)	(13		)
Section 31 fees payable	(19		)	(45		)	(40		)	(19		)
Deferred revenue	338			312			328			338
Other current and non-current liabilities	(62		)	(39		)	37			(62		)
Total adjustments	220			142			101			220
Net cash provided by operating activities	597			465			611			597

Investing activities:
Capital expenditures	(31		)	(39		)	(32		)	(31		)
Capitalized software development costs	(25		)	(21		)	(34		)	(25		)
Additional contribution to equity method investment	—			(60		)
Decrease (increase) in restricted cash and investments	(3		)	34
Cash received for divestiture (net of cash paid for acquisition)							22			—
Increase in restricted cash and investments							(64		)	(3		)
Net cash used in investing activities	(59		)	(86		)	(108		)	(59		)

Financing activities:
Proceeds from (repayments of) commercial paper, net	(543		)	35
Repayments of commercial paper, net							(117		)	(543		)
Dividends to shareholders	(102		)	(73		)	(120		)	(102		)
Repurchases of common stock	—			(196		)	(229		)	—
Payments relating to treasury shares received for restricted stock tax payments and stock option exercises	(47		)	(36		)	(77		)	(47		)
Distributions of profits to non-controlling interest	(9		)	(15		)
Other	4			17			(8		)	(5		)
Net cash used in financing activities	(697		)	(268		)	(551		)	(697		)
Effect of exchange rate changes on cash and cash equivalents	—			(11		)	1			—
Net increase (decrease) in cash and cash equivalents	(159		)	100
Net decrease in cash and cash equivalents							(47		)	(159		)
Cash and cash equivalents, beginning of period	627			652			407			627
Cash and cash equivalents, end of period	$	468		$	752		$	360		$	468

Supplemental cash flow disclosure:
Cash paid for income taxes	$	56		$	51		$	65		$	56
Cash paid for interest	$	7		$	2		$	7		$	7

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)


1.	Description of Business

We are a leading global operator of regulated exchanges, clearing houses and listings venues, and a provider of data services for commodity and financial markets. We operate regulated marketplaces for listing, trading and clearing a broad array of derivatives contracts and securities ~~contracts~~ across major asset classes, including energy and agricultural commodities, interest rates, equities, equity derivatives, exchange traded funds, credit derivatives, bonds and currencies. We offer end-to-end market data services to support the trading, investment and risk management needs of customers across virtually all asset classes.

Our exchanges include futures exchanges in the United States, or U.S., United Kingdom, or U.K., Continental Europe, Canada and Singapore, and cash equities, ~~exchanges~~equity options and ~~equity options~~bond exchanges in the U.S. We also operate over-the-counter, or OTC, markets for physical energy and credit default swaps, or CDS, trade execution. To serve global derivatives markets, we operate central counterparty clearing houses in the U.S., U.K., Continental Europe, Canada and Singapore (Note 9). We offer a range of data ~~and connectivity~~ services ~~to customers in~~for global financial and commodity markets, including ~~fixed income~~ pricing and reference data, exchange data, analytics, feeds, desktop and ~~desktop offerings.~~connectivity solutions. Through our ~~trading~~markets, clearing houses, listings and ~~clearing, in addition to our listings and~~market data services, we provide end-to-end solutions for our customers through liquid markets, benchmark products, access to capital markets, ~~information,~~ and ~~a range of~~ related services to support their ~~investing, trading,~~ability to manage risk ~~management~~ and ~~capital raising activities.~~raise capital.


2.	Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared by us in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with our audited consolidated financial statements and related notes thereto for the year ended December 31, ~~2015.~~2016. The accompanying unaudited consolidated financial statements reflect all adjustments that are, in our opinion, necessary for a fair presentation of results for the interim periods presented. These adjustments are of a normal recurring nature.

Preparing financial statements requires us to make certain estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from these estimates. The results of operations for the three months ended March 31, ~~2016~~2017 are not necessarily indicative of the results to be expected for any future period or the full fiscal year.

The accompanying unaudited consolidated financial statements include the accounts of us and our wholly-owned and controlled subsidiaries. All intercompany balances and transactions between us and our wholly-owned and controlled subsidiaries have been eliminated in the consolidation. For those consolidated subsidiaries in which our ownership is less than 100% and for which we have control over the assets and liabilities and the management of the entity, the outside stockholders’ interests are shown as non-controlling interests. In instances where outside ~~stockholders'~~stockholders hold an option to require us to repurchase the outside ~~stockholders'~~stockholders’ interest, these interests are shown as redeemable non-controlling interests.

New and Recently Adopted Accounting Pronouncements

~~In January 2016, the~~The Financial Accounting Standards Board, or FASB, has issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 606. ASU 606 provides guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. This guidance requires us to recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We are required to adopt ASU 606 at the beginning of our first quarter of fiscal 2018. The new guidance requires enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. We are currently evaluating the overall impact this guidance will have on our consolidated financial statements, as well as the method of adoption. Based on our preliminary assessment, we expect that the adoption may accelerate the timing of recognition of original and supplemental listing fees related to our NYSE businesses, which are currently deferred over a pre-defined customer life of five or nine years. We are continuing our assessment, which may identify other impacts of the adoption of ASU 606.

The FASB has issued Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. ASU 2016-01 provides updated

guidance for the recognition, measurement, presentation, and disclosure of certain financial assets and liabilities, including the requirement that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for annual and interim reporting periods beginning after December 15, 2017. OnWith the ~~adoption~~sale of ~~ASU 2016-01,~~our Cetip investment, we no longer have any equity investments that would be required to be measured at fair value with changes in ~~the~~ fair value ~~of our equity investment in Cetip, S.A., or Cetip, will no longer be reflected in accumulated other comprehensive income but will be~~ recognized in net ~~income. As of March 31, 2016, our investment in Cetip included an accumulated unrealized gain of $28 million~~income (Note 10). During the three months ended March 31, 2016, the change in the fair value of the Cetip investment was an increase of $54 million. Once adopted, such fair value changes will be reported as other income (expense) under ASU 2016-01. We are currently evaluating this guidance to determine any additional potential impact on our consolidated financial statements upon adoption.

~~In February 2016, the~~The FASB has issued Accounting Standards Update No. 2016-02, Leases, or ASU 2016-02. ASU 2016-02 requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. In transition, lessees and lessors are required to

recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating this guidance to determine the potential impact on our consolidated financial statements and whether we will adopt this guidance early.

~~In March 2016, the~~The FASB has issued Accounting Standards Update No. ~~2016-09, Stock Compensation~~2016-18, ~~(Topic 718) - Improvements to Employee Share-Based Payment Accounting~~Statement of Cash Flows: Restricted Cash, or ASU ~~2016-09. ASU 2016-09 provides updated guidance for~~2016-18, that will require entities to show the ~~recognition, measurement, presentation,~~changes in the total of cash, cash equivalents, restricted cash and ~~disclosure of certain components of stock compensation. The guidance includes the recognition of all excess tax benefits/deficiencies~~restricted cash equivalents in the statement of ~~income~~cash flows. As a result, entities will no longer present transfers between cash and ~~classification as operating activities within~~cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows ~~as well as~~to the ~~option~~related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to ~~account for forfeitures based on awards expected~~the financial statements. Entities will also have to ~~vest or as they occur.~~disclose the nature of their restricted cash and restricted cash equivalent balances. ASU ~~2016-09 is~~2016-18 becomes effective for ~~annual and interim reporting periods~~us in fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. We ~~decided~~will be required to apply the guidance retrospectively when adopted, and provide the relevant disclosures in the first interim and annual periods in which we adopt the guidance. We will not adopt ASU ~~2016-09~~2016-18 early, ~~for~~but do expect to be impacted by the ~~period ended March 31, 2016 on a prospective basis. As a result, we recorded an $11 million excess tax benefit within~~new presentation and disclosure requirements required by ASU 2016-18 due to our ~~consolidated statement of income for the three months ended March 31, 2016 (Note 8). No other terms of the adopted guidance resulted in any significant impact on our consolidated financial statements.~~

~~Reclassifications~~

Certain prior period amounts have been reclassified to conform to the current period’s financial statement presentation. For the three months ended March 31, 2015, we reclassified $24 million of transaction based expenses in transactionrestricted and ~~clearing revenues, net to transaction based expenses for consistency of how we report our~~unrestricted cash equities markets. The amounts reclassified to transaction based expenses relate to equity options markets. For the three months ended March 31, 2015, we also reclassified $13 million in connectivity fees from other revenues to data services revenues.balances.


3.	Acquisitions and Divestitures

~~Interactive Data~~National Stock Exchange Acquisition

On ~~December 14, 2015,~~January 31, 2017, we acquired 100% of ~~Interactive Data Holdings Corporation, or Interactive Data,~~National Stock Exchange, Inc., now named NYSE National. The acquisition gives the NYSE Group a fourth U.S. exchange license. NYSE National is distinct from NYSE Group’s three listings exchanges because NYSE National will only be a trading venue and will not be a listings market. NYSE Group’s three listings exchanges, NYSE, NYSE MKT and NYSE Arca, have unique market models designed for corporate and ETF issuers. Upon closing the transaction, NYSE National ceased operations on February 1, 2017. We will engage with NYSE National members, buy-side participants and retail brokerage firms before finalizing operational plans for NYSE National’s re-launch, which is expected to occur in a stock and cash transaction. The total purchase price was $5.6 billion comprised of cash consideration of $4.1 billion and 6.5 million shares of our common stock. The cash consideration was funded from $2.5 billion of net proceeds received on November 24, 2015 in connection with the offering of new senior notes and $1.6 billion of borrowing under our commercial paper program (Note 6). Interactive Data is a leading provider of financial market data, analytics and related trading solutions, serving the mutual fund, bank, asset management, hedge fund, securities and financial instrument processing and administration sectors.

The total purchase price was allocated to Interactive Data’s preliminary tangible and identifiable intangible assets and liabilities based on the estimated fair values of those assets as of December 14, 2015, as set forth below. The excess of the purchase price over the preliminary net tangible and identifiable intangible assets was recorded as goodwill. The adjusted preliminary purchase price allocation is as follows (in millions):

Cash and cash equivalents $ 301
Goodwill 3,248
Identifiable intangible assets 2,883
Other assets and liabilities, net 273
Deferred tax liabilities on identifiable intangible assets (1,071 )
Total purchase price $ 5,634

In performing the preliminary purchase price allocation, we considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Interactive Data's business. We have not yet obtained all of the information related to the fair value of the acquired assets and liabilities related to the acquisition to finalize the purchase price allocation. However, during the first quarter of 2016, we adjusted the preliminary purchase price allocation based on updated fair value analyses of the Interactive Data tangible and intangible assets and liabilities. The fair value adjustments reflected in the tables above and below primarily result in an increase in data/databases intangible assets of $33 million, a decrease in trade name and trademarks intangible assets of $21 million, a decrease in customer relationships intangible assets of $17 million, a decrease in other assets and liabilities, net of $23 million, an increase in deferred tax liabilities on identifiable intangible assets of $20 million, and a corresponding increase to goodwill of $48 million. The income statement impact for 2015 relating to these fair value adjustments is not significant and has been recorded in the first quarter of 2016 in accordance with ASU 2015-16, ~~Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments~~.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of the identifiable intangible assets, income taxes (including uncertain tax positions), certain other tangible assets and liabilities and the allocation of

goodwill to the various reporting units. The allocation of the purchase price will be finalized upon the completion of the analysis of the acquired assets and liabilities during the year ended December 31, 2016.

~~The following table sets forth the components of the preliminary intangible assets associated with the acquisition as of March 31, 2016 (in millions, except years):~~

Preliminary Intangible Assets Acquisition-Date Preliminary Fair Value Foreign Currency Translation Accumulated Amortization Net Book Value Useful Life (Years)
Customer relationships $ 2,452
$ (26 ) $ (30 ) $ 2,396
20 to 25
Developed technology 168
(2 ) (7 ) 159
5 to 8
In-process research and development 129
—
—
129
N/A
Data/databases 109
(2 ) (8 ) 99
4
Trade names and trademarks 12
—
(3 ) 9
2
Market data provider relationships 11
—
—
11
20
Non-compete agreements 2
—
—
2
1
Total $ 2,883
$ (30 ) $ (48 ) $ 2,805

2017.

Trayport Acquisition and Potential Divestiture

On December 11, 2015, we acquired 100% of Trayport in a stock transaction. The total purchase price was $620 million, comprised of ~~2.5~~12.6 million shares of our common stock. Trayport is a software company that licenses its technology to serve exchanges, OTC brokers and traders to facilitate electronic and hybrid trade execution primarily in the energy markets. The acquisition enables us to provide new technology and software-related services to our energy customers.

The ~~total purchase~~U.K. Competition and Markets Authority, or the CMA, undertook a review of our acquisition of Trayport under the merger control laws of the U.K. In October 2016, the CMA issued its findings and ordered a divestment of Trayport to remedy what the CMA indicated it believed to be a substantial lessening of competition in the supply of trade execution services and trade clearing services to energy traders in the European Economic Area. In November 2016, we filed an appeal with the Competition Appeal Tribunal, or the CAT, to challenge the CMA’s decision. In March 2017, the CAT upheld the CMA decision that we should divest Trayport. Following careful consideration of the CAT’s judgment, we are seeking to appeal the CAT’s decision at the U.K. Court of Appeals. If we are allowed to appeal to the U.K. Court of Appeals and if our appeal is successful, the matter will be remanded for additional review. If our appeal is not allowed or not successful, we will be obligated to sell Trayport. There is no certainty of the price ~~was allocated~~we could receive if a sale were required. The timing of a final decision is uncertain at this time. Until a final determination is made as to ~~Trayport’s preliminary tangible and identifiable intangible~~whether we are permitted to retain Trayport, we will not integrate Trayport into our existing business operations.

The functional currency of Trayport is the pound sterling, as this is the currency in which Trayport operates. The $620 million in Trayport net assets ~~and liabilities based~~were recorded on ~~the estimated fair values of those assets as of~~our December 11, 2015 ~~as set forth below. The excess~~opening balance sheet at a pound sterling/U.S. dollar exchange rate of 1.5218 (£407 million). Because our consolidated financial statements are presented in U.S. dollars, we must translate the ~~purchase price over~~Trayport net assets into U.S. dollars at the ~~preliminary net tangible and identifiable intangible assets was recorded as goodwill. The preliminary purchase price allocation is as follows (in millions):~~

Goodwill $ 389
Identifiable intangible assets 274
Other assets and liabilities, net 7
Deferred tax liabilities on identifiable intangible assets (50 )
Total purchase price $ 620
exchange rates in effect at the end of each reporting period. Therefore, increases or decreases in the value

In performing the preliminary purchase price allocation, we considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Trayport's business. We have not yet obtained all of the ~~information related to~~U.S. dollar against the ~~fair~~pound sterling will affect the value of the ~~acquired assets and liabilities related to~~Trayport balance sheet, with gains or losses included in the ~~acquisition to finalize the purchase price allocation. The primary areas~~cumulative translation adjustment account, a component of equity. As of the ~~preliminary purchase price allocation that are not yet finalized relate to the valuation~~result of the ~~identifiable intangible assets, income taxes and certain other tangible assets and liabilities. The allocation of~~decrease in the ~~purchase price will be finalized upon the completion of the analysis of the acquired assets and liabilities during the year ended December 31, 2016.~~

~~The following table sets forth the components of the preliminary intangible assets associated with the acquisition~~pounds sterling/U.S. dollar exchange rate to 1.2552 as of March 31, ~~2016 (in millions, except years):~~2017, the portion of our equity attributable to the Trayport net assets in accumulated other comprehensive loss from foreign currency translation was $108 million as of March 31, 2017. If we are required to sell Trayport, we would include the accumulated translation adjustment when computing the gain or loss from the sale.

Preliminary Intangible Assets Acquisition-Date Preliminary Fair Value Foreign Currency Translation Accumulated Amortization Net Book Value Useful Life (Years)
Customer relationships $ 242
$ (14 ) $ (3 ) $ 225
20
Developed technology 14
(1 ) (1 ) 12
3 to 5
Trade names and trademarks 18
(1 ) —
17
Indefinite
Total $ 274
$ (16 ) $ (4 ) $ 254

~~Pro Forma Information~~

~~The financial information in the table below summarizes the combined results of operations of us,~~ Interactive Data ~~and Trayport, on a pro forma basis, as though the companies had been combined as of the beginning of the period presented. The pro forma financial~~Managed Solutions Divestiture

information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented. This pro forma financial information is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information, including, without limitation, purchase accounting adjustments. The pro forma financial information does not reflect any synergies or operating cost reductions that have been and may be achieved from the combined operations. The pro forma financial information combines the historical results for us,On March 31, 2017, we sold Interactive Data Managed Solutions, or IDMS, a unit of Interactive Data, to FactSet. There was no gain or loss recognized on the sale of IDMS. IDMS is a managed solutions and ~~Trayport~~portal provider for the ~~three months ended March 31, 2015 in the following table (in millions, except per share amounts).~~

Total revenues, less transaction-based expenses $ 1,100
Operating income 518
Net income attributable to ICE 333
Earnings per common share:
Basic $ 2.76
Diluted $ 2.74

~~Pending Acquisition~~

In March 2016, we entered into a definitive agreement to acquire Standard & Poor’s Securities Evaluations, Inc., or SPSE, a provider of fixed income evaluated pricing, and Credit Market Analysis Limited, or CMA, a provider of independent data for the OTC markets from McGraw Hill Financial. When completed, the acquisition will enable us to offer customers new data and valuation services. Under the terms of the agreement, we can elect to satisfy our payment of the purchase price upon closing in either cash or shares of our common stock. The completion of the transaction is subject to regulatory approvals.global wealth management industry.


4.	Goodwill and Other Intangible Assets

The following is a summary of the activity in the goodwill balance for the three months ended March 31, ~~2016~~2017 (in millions):


Goodwill balance at December 31, 2015	$	12,079
Goodwill balance at December 31, 2016				$	12,291
Acquisition (divestiture), net				3
Foreign currency translation	(23		)	13
Other activity, net	48			(5		)
Goodwill balance at March 31, 2016	$	12,104
Goodwill balance at March 31, 2017				$	12,302

The following is a summary of the activity in the other intangible assets balance for the three months ended March 31, ~~2016~~2017 (in millions):


Other intangible assets balance at December 31, 2015	$	10,758
Other intangible assets balance at December 31, 2016				$	10,420
Acquisition (divestiture), net				2
Foreign currency translation	(40		)	13
Other activity, net	(6		)	(9		)
Amortization of other intangible assets	(82		)	(70		)
Other intangible assets balance at March 31, 2016	$	10,630
Other intangible assets balance at March 31, 2017				$	10,356

We completed the acquisition of NYSE National and sold IDMS during the three months ended March 31, 2017 (Note 3). The foreign currency translation adjustments in the tables above result from a portion of our goodwill and other intangible assets being held at our U.K., Continental European and Canadian subsidiaries, some of whose functional currencies are not the U.S. dollar. The changes in other activity, net in the tables above primarily relate to adjustments to the fair value of the net tangible and identifiable intangible assets and liabilities relating to the ~~Interactive Data acquisition,~~acquisitions, with a corresponding ~~charge~~adjustment to ~~goodwill (Note 3).~~goodwill. We did not recognize any impairment losses on goodwill or other intangible assets during the three months ended March 31, ~~2016~~2017 and ~~2015.~~2016.


5.	Deferred Revenue

Deferred revenue represents cash received that is yet to be recognized as revenue. Total deferred revenue was ~~$528~~$567 million as of March 31, ~~2016,~~2017, including ~~$429~~$440 million in current deferred revenue and ~~$99~~$127 million in non-current deferred revenue. The changes in

our deferred revenue during the three months ended March 31, ~~2016~~2017 are as follows (in millions):


	Annual Listings Revenue			Original Listings Revenues			Other Listings Revenues			Data Services and Other Revenues			Total			Annual Listings Revenue			Original Listings Revenues			Other Listings Revenues			Data Services and Other Revenues			Total
Deferred revenue balance at December 31, 2015	$	—		$	50		$	59		$	81		$	190
Deferred revenue balance at December 31, 2016																$	—		$	66		$	83		$	88		$	237
Additions	363			6			24			143			536			361			3			24			162			550
Amortization	(91		)	(3		)	(9		)	(95		)	(198		)	(91		)	(3		)	(12		)	(114		)	(220		)
Deferred revenue balance at March 31, 2016	$	272		$	53		$	74		$	129		$	528
Deferred revenue balance at March 31, 2017																$	270		$	66		$	95		$	136		$	567


6.	Debt

Our total debt, including short-term and long-term debt, consisted of the following as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016 (in millions):


	As of March 31, 2016		As of December 31, 2015		As of March 31, 2017		As of December 31, 2016
Debt:
Commercial Paper	$	2,048	$	2,591	$	1,525	$	1,642
NYSE Notes (2.00% senior unsecured notes due October 5, 2017)					851		851
Short-term debt	2,048		2,591		2,376		2,493
NYSE USD Notes (2.00% senior unsecured notes due October 5, 2017)	852		852
2018 Senior Notes (2.50% senior unsecured notes due October 15, 2018)	597		597		598		598
2020 Senior Notes (2.75% senior unsecured notes due December 1, 2020)	1,239		1,239		1,242		1,242
2023 Senior Notes (4.00% senior unsecured notes due October 15, 2023)	789		789		791		790
2025 Senior Notes (3.75% senior unsecured notes due December 1, 2025)	1,241		1,240		1,241		1,241
Long-term debt	4,718		4,717		3,872		3,871
Total debt	$	6,766	$	7,308	$	6,248	$	6,364

Credit Facility

We have entered into a $3.0 billion senior unsecured revolving credit facility, or the Credit Facility, with a maturity date of November 13, 2020. The Credit Facility includes an option for us to propose an increase in the aggregate amount available for borrowing by up to $1.0 billion, subject to the consent of the lenders funding the increase and certain other conditions. OnIn November ~~13,~~ 2015, we utilized this option to increase the amount of the Credit Facility to $3.4 billion. The commitments under the Credit Facility will automatically reduce to ~~$2.95~~$3.2 billion on April 3, 2019. No amounts were outstanding under the Credit Facility as of March 31, ~~2016.~~2017.

Of the $3.4 billion that is currently available for borrowing under the Credit Facility, ~~$2.0~~$1.5 billion is required to back-stop the amount outstanding under our Commercial Paper Program as of March 31, ~~2016.~~2017. The amount required to back-stop the amounts outstanding under the Commercial Paper Program will fluctuate as we increase or decrease our commercial paper borrowings. The remaining ~~$1.4~~$1.9 billion available under the Credit Facility as of March 31, ~~2016~~2017 is available to us to use for working capital and general corporate purposes including, but not limited to, acting as a back-stop to future increases in the amounts outstanding under the Commercial Paper ~~Program.~~

~~364 Day Facility~~

~~On November 13, 2015, we entered into a $500 million 364 day senior unsecured revolving credit facility,~~Program or to fund the ~~364 Day Facility. The amounts available under~~redemption of the 364 Day Facility are available for use by us for working capital and general corporate purposes, but specifically excluding any use to back-stop amounts issued under the Commercial Paper Program. The commitments under the 364 Day Credit Facility will be automatically reduced to $375 million on May 13, 2016 and to $250 million on August 13, 2016. No amounts were outstanding under the 364 Day Facility as of March 31, 2016.NYSE Notes discussed below.

Commercial Paper Program

We have entered into a U.S. dollar commercial paper program, or the Commercial Paper Program. Our Commercial Paper Program is currently backed by the borrowing capacity available under the Credit Facility, equal to the amount of the commercial paper that is issued and outstanding at any given point in time. The effective interest rate of commercial paper issuances does not materially differ from short term interest rates (such as USD LIBOR). The fluctuation of these rates due to market conditions may impact our interest expense.

Commercial paper notes of ~~$2.0~~$1.5 billion with original maturities ranging from 13 to 8981 days were outstanding as of March 31, ~~2016~~2017 under our Commercial Paper Program. As of March 31, ~~2016,~~2017, the weighted average interest rate on the ~~$2.0~~$1.5 billion outstanding under our Commercial Paper Program was ~~0.54%~~0.95% per annum, with a weighted average maturity of 2221 days. We repaid ~~a portion~~$117 million of the amounts outstanding under the Commercial Paper Program during the three months ended March 31, ~~2016~~2017 primarily using cash flows from ~~operations and a portion of our unrestricted cash balances.~~

~~Senior Notes~~

On November 24, 2015, we issued $2.5 billion in aggregate senior notes, including $1.25 billion principal amount of 2.75% senior unsecured fixed rate notes due November 2020, or the 2020 Senior Notes, and $1.25 billion principal amount of 3.75% senior unsecured fixed rate notes due November 2025, or the 2025 Senior Notes. We used the net proceeds from the 2020 Senior Notes and 2025 Senior Notes offering, together with $1.6 billion of borrowings under our Commercial Paper Program, to finance the $4.1 billion cash portion of the purchase price of the acquisition of Interactive Data (Note 3).operations.

NYSE Notes

~~During the three months ended March 31, 2015, the amortization of the increase in the fair value~~redemption of the NYSE Notes ~~that was recorded in connection~~ with the ~~NYSE acquisition purchase accounting was $12 million. No significant amortization expenses were recorded after the repayment~~issuance of new senior term notes. However, if we are unable to issue new senior term notes or to do so on favorable terms, then we would fund the NYSE ~~EUR Notes.~~Notes redemption under the Commercial Paper Program or with the unused amount available under the Credit Facility, or a combination of these sources.


7.	Equity

We currently sponsor employee and director stock option and restricted stock plans. Stock options and restricted stock are granted at the discretion of the compensation committee of the board of directors. All stock options and restricted stock awards are granted at an exercise price equal to the fair value of the common stock on the date of grant. The grant date fair value is based on the closing stock price on the date of grant. The fair value of the stock options and restricted stock on the date of grant is recognized as expense over the vesting period, net of estimated forfeitures. The non-cash compensation expenses recognized in our consolidated statements of income for stock options and restricted stock were ~~$29~~$34 million and ~~$24~~$29 million for the three months ended March 31, 2017 and 2016, ~~and 2015,~~ respectively.

Stock Option Plans

The following is a summary of stock options for the three months ended March 31, ~~2016:~~2017:


	Number of Options		Weighted Average Exercise Price per Option		Number of Options		Weighted Average Exercise Price per Option
Outstanding at December 31, 2015	774,551		$	159.66
Outstanding at December 31, 2016					3,878,705		$	36.05
Granted	150,323		250.07		723,533		57.31
Exercised	(28,098	)	145.07		(111,240	)	27.92
Outstanding at March 31, 2016	896,776		175.28
Outstanding at March 31, 2017					4,490,998		39.68

Details of stock options outstanding as of March 31, ~~2016~~2017 are as follows:


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (In millions)		Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (In millions)
Vested or expected to vest	896,776	$	175.28	6.7	$	56	4,490,998	$	39.68	7.0	$	91
Exercisable	596,892	$	148.32	5.5	$	52	3,062,860	$	33.81	6.0	$	80

The total intrinsic value of stock options exercised during both the three months ended March 31, ~~2016~~2017 and ~~2015~~2016 were $3 ~~million and $5 million, respectively.~~million. As of March 31, ~~2016,~~2017, there were $13 million in total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 2.1 years as the stock options vest.

We use the Black-Scholes option pricing model for purposes of valuing stock option awards. During the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, we used the weighted-average assumptions in the table below to compute the value of all options for shares of common stock granted to employees:


	Three Months Ended March 31,						Three Months Ended March 31,
Assumptions:	2016			2015			2017			2016
Risk-free interest rate	1.51		%	1.08		%	1.84		%	1.51		%
Expected life in years	5.0			5.0			5.0			5.0
Expected volatility	24		%	24		%	21		%	24		%
Expected dividend yield	1.36		%	1.25		%	1.40		%	1.36		%
Estimated weighted-average fair value of options granted per share	$	49.39		$	40.94		$	10.49		$	9.88

The risk-free interest rate is based on the zero-coupon U.S. Treasury yield curve in effect at the time of grant. The expected life computation is derived from historical exercise patterns and anticipated future patterns. Expected volatilities are based on historical volatility of our stock.

Restricted Stock Plans

In January ~~2016,~~2017, we reserved a maximum of ~~330,924~~1,534,218 restricted shares for potential issuance as performance-based restricted shares to certain of our employees. The number of shares that will ultimately be granted under ~~the performance awards~~this award will be based on our actual financial performance as compared to financial performance targets set by our board of directors and compensation committee for the year ending December 31, ~~2016.~~2017, as well as our 2017 total shareholder return as compared to that of the S&P 500 Index. The maximum compensation expense to be recognized under these performance-based restricted shares is ~~$80~~$85 million if the maximum financial performance target is met and all ~~330,924~~1,534,218 shares vest. The compensation expense to be recognized under these performance-based restricted shares will be ~~$39~~$42 million if the target financial performance is met, which would result in ~~165,462~~767,109 shares vesting. ~~These restricted shares are also subject to a market condition that could reduce the number of shares that are ultimately granted.~~ We will recognize expense on an accelerated basis over the three-year vesting period based on our quarterly assessment of the probable ~~2016~~2017 actual financial performance as compared to the ~~2016~~2017 financial performance targets. As of March 31, ~~2016,~~2017, we determined that it is probable that the financial performance level will be at target for ~~2016.~~2017. Based on this assessment, we recorded non-cash compensation expense of $5 million for the three months ended March 31, ~~2016,~~2017 related to these shares and the remaining ~~$34~~$37 million in non-cash compensation expense will be recorded on an accelerated basis over the remaining vesting period, including $19 million of which will be recorded over the remainder of ~~2016.~~2017.

The following is a summary of the non-vested restricted shares for the three months ended March 31, ~~2016:~~2017:


	Number of Restricted Stock Shares	Weighted Average Grant-Date Fair Value per Share		Number of Restricted Stock Shares	Weighted Average Grant-Date Fair Value per Share
Non-vested at December 31, 2015	1,254,235	$	199.44
Non-vested at December 31, 2016				6,435,871	$	45.33
Granted	536,784	247.57		2,971,902	56.97
Vested	(412,048)	184.66		(3,023,025)	44.25
Forfeited	(19,020)	223.31		(86,044)	50.40
Non-vested at March 31, 2016	1,359,951	223.04
Non-vested at March 31, 2017				6,298,704	51.81

Restricted stock shares granted in the table above include both time-based and performance-based grants. Performance-based shares have been ~~adjusted~~presented to reflect the actual shares to be issued based on the achievement of past performance targets. Non-vested performance-based restricted shares granted are presented in the table above at the ~~maximum~~target number of restricted shares that would vest if the maximum performance targets are met. As of March 31, ~~2016,~~2017, there were ~~$195~~$235 million in total unrecognized compensation costs related to the time-based restricted stock and the performance-based restricted stock. These costs are expected to be recognized over a weighted-average period of ~~1.8~~2.0 years as the restricted stock vests. These unrecognized compensation costs assume that a target performance level will be met on the performance-based restricted shares granted in January ~~2016.~~2017. During the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, the total fair value of restricted stock vested under all restricted stock plans was ~~$103~~$175 million and ~~$80~~$103 million, respectively.

Stock Repurchase Program

~~During 2015,~~In August 2016, our board of directors approved an aggregate of $1.0 billion for future repurchases of our common stock with no fixed expiration date, subject to applicable laws and regulations. The shares repurchased are held in treasury stock. As of March 31, 2017, the remaining board authorization permits repurchases ~~were completed~~of up to $721 million of our common stock. We expect funding for any share repurchases to come from our operating cash flow or borrowings under ~~stock repurchase~~our debt facilities or commercial paper program. Repurchases may be made from time to time on the open market, through established trading plans, in privately-negotiated transactions or otherwise, in accordance with all applicable securities laws, rules and regulations. We have entered into a Rule 10b5-1 trading plan, as authorized by our board of ~~directors. In connection with our acquisition~~directors, to govern some or all of ~~Interactive Data during~~ the ~~fourth quarter of 2015, we suspended our stock repurchase plan and that plan has now expired. We did not repurchase any~~repurchases of our ~~outstanding~~shares of common stock, ~~during~~and we began to repurchase shares in October 2016. We may discontinue the stock repurchases at any time and may amend or terminate the Rule 10b5-1 trading plan at any time. The approval of our board of directors for the share repurchases does not obligate us to acquire any particular amount of our common stock. In addition, our board of directors may increase or decrease the amount of capacity we have for repurchases from time to time.

During the three months ended March 31, ~~2016.~~2017, we repurchased 3,911,026 shares of our outstanding common stock at a cost of $229 million. These repurchases were completed on the open market and under our 10b5-1 trading plan. The timing and extent of future repurchases ~~if any,~~ that are not made pursuant to a Rule 10b5-1 trading plan will be at our discretion and will depend upon many conditions. Our management ~~and board of directors~~ periodically ~~review~~reviews whether or not to be active in

repurchasing our stock. In making a determination regarding any stock repurchases, we consider multiple factors. The factors may include: overall stock market conditions, our common stock price movements, the remaining amount authorized for repurchases by our board of directors, the potential impact of a stock repurchase program on our corporate debt ratings, our expected free cash flow and working capital needs, our current and future planned strategic growth initiatives, and other potential uses of our cash and capital resources.

Dividends

During the three months ended March 31, 2017 and 2016, we paid cash dividends per share of $0.20 and $0.17, respectively, for an aggregate payout of $120 million and $102 million, respectively. The declaration of dividends is subject to the discretion of our board of directors, and may be affected by various factors, including our future earnings, financial condition, capital requirements, levels of indebtedness, credit ratings and other considerations our board of directors deem relevant. Our board of directors has adopted a quarterly dividend declaration policy providing that the declaration of any dividends will be determined quarterly by the board or audit committee of the board of directors taking into account such factors as our evolving business model, prevailing business conditions and our financial results and capital requirements, without a predetermined annual net income payout ratio.


8.	Income Taxes

Our effective tax rate was 30% ~~and 27%~~ for both the three months ended March 31, ~~2016~~2017 and ~~2015, respectively.~~2016. The effective tax rates for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016 were lower than the federal statutory rate primarily due to favorable foreign income tax rate differentials, partially offset by state income taxes. ~~The favorable~~Favorable foreign income tax rate ~~differential results~~differentials result primarily from lower income tax rates in the U.K. ~~The effective~~and various other lower tax ~~rate for~~jurisdictions as compared to the ~~three months ended March 31, 2016 is higher than the effective~~income tax ~~rate for the comparable period in 2015 primarily due to a mix of foreign versus U.S. based income and an increase to deferred income taxes~~rates in the ~~current year, partially offset by the tax benefit from the early adoption of ASU 2016-09 (Note 2).~~U.S.

Our non-U.S. subsidiaries had ~~$3.1~~$4.0 billion in cumulative undistributed earnings as of March 31, ~~2016.~~2017. This amount represents the post-income tax earnings under U.S. GAAP adjusted for previously taxed income. The earnings from our non-U.S. subsidiaries are

considered to be indefinitely reinvested. Accordingly, no provision for U.S. federal and state income taxes has been made in the accompanying consolidated financial statements. Further, a determination of the unrecognized deferred tax liability is not practicable. Any future distribution by way of dividend of these non-U.S. earnings may subject us to both U.S. federal and state income taxes, as adjusted for non-U.S. tax credits, and withholding taxes payable to various non-U.S. countries.


9.	Clearing Organizations

We operate regulated central counterparty clearing houses for the settlement and clearance of derivative contracts. The clearing houses include ICE Clear Europe, ICE Clear Credit, ICE Clear ~~U.S.,~~US, ICE Clear Canada, ICE Clear Netherlands and ICE Clear Singapore (referred to herein collectively as the “ICE Clearing Houses”).

ICE Clear Europe performs the clearing and settlement for all futures and options contracts traded through ICE Futures Europe and ICE Endex, for ~~CDS contracts submitted for clearing in Europe, and for~~ energy futures and options contracts trading through ICE Futures U.S., and for CDS contracts submitted for clearing in Europe.

ICE Clear Credit performs the clearing and settlement for CDS contracts submitted for clearing in North America.

ICE Clear ~~U.S.~~US performs the clearing and settlement of agricultural, metals, currencies and financial futures and options contracts traded through ICE Futures U.S.

ICE Clear Canada performs the clearing and settlement for all futures and options contracts traded through ICE Futures Canada.

ICE Clear Netherlands offers clearing for The Order Machine, a multi-lateral trading facility for equity options.

ICE Clear Singapore performs the clearing and settlement for all futures and options contracts traded through ICE Futures Singapore.

Each of the ICE Clearing Houses requires all clearing members to maintain cash on deposit or pledge certain assets, which may include government obligations, non-government obligations ~~letters of credit~~ or gold to guarantee performance of the clearing members’ open positions. Such amounts in total are known as “original ~~margin.”~~margin”. The ICE Clearing Houses may make intraday original margin calls in circumstances where market conditions require additional protection. The daily profits and losses from and to the ICE Clearing Houses due to the marking-to-market of open contracts is known as “variation margin”. The ICE Clearing Houses mark all outstanding contracts to market, and therefore pay and collect variation margin, at least once daily, and in some cases multiple times throughout the day. Marking-to-market allows the ICE Clearing Houses to identify any clearing members that may be unable to satisfy the financial obligations resulting from changes in the prices of their open contracts before those financial obligations become exceptionally large and jeopardize the ability of the ICE Clearing Houses to ensure financial performance of clearing members’ open positions.

Each of the ICE Clearing Houses requires that each clearing member make deposits into a fund known as a “guaranty fund”, which is maintained by the relevant ICE Clearing House. These amounts serve to secure the obligations of a clearing member to the ICE Clearing House to which it has made the guaranty fund deposit and may be used to cover losses sustained by the respective ICE Clearing House in the event of a default of a clearing member.

The ICE Clearing Houses seek to reduce their exposure through a risk management program that includes initial and ongoing financial standards for clearing member admission and continued membership, original and variation margin requirements, and mandatory deposits to the guaranty fund. The amounts that the clearing members are required to maintain in the original margin and guaranty fund accounts are determined by standardized parameters established by the risk management departments and reviewed by the risk committees and the boards of directors of each of the ICE Clearing Houses and may fluctuate over time. As of March 31, ~~2016~~

2017 and December 31, ~~2015,~~2016, the ICE Clearing Houses have received or have been pledged ~~$88.5~~$97.7 billion and ~~$87.2~~$95.7 billion, respectively, in cash and non-cash collateral in original margin and guaranty fund deposits to cover price movements of underlying contracts for both periods. The ICE Clearing Houses also have powers of assessment that provide the ability to collect additional funds from their clearing members to cover a defaulting member’s remaining obligations up to the limits established under the respective rules of each ICE Clearing House.

Should a particular clearing member fail to deposit original margin, or fail to make a variation margin payment, when and as required, the relevant ICE Clearing House may liquidate or hedge the clearing member’s open positions and use the clearing member’s original margin and guaranty fund deposits to make up any amount owed. In the event that those deposits are not sufficient to pay the amount owed in full, the ICE Clearing Houses may utilize the respective guaranty fund deposits of their respective clearing members on a pro-rata basis for that purpose.

We have contributed $150 million, $50 million and $50 million in cash to the ICE Clear Europe, ICE Clear Credit and ICE Clear ~~U.S.~~US guaranty funds, respectively, as of March 31, ~~2016,~~2017, and such amounts are at risk and could be used in the event of a clearing member default where the amount of the defaulting clearing member’s original margin and guaranty fund deposits are insufficient. We have also contributed $3 million in cash in total to the ICE Clear Canada, ICE Clear Netherlands and ICE Clear Singapore guaranty

funds. The ~~$250~~$253 million combined contributions to the guaranty funds as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016 are included in long-term restricted cash in the accompanying consolidated balance sheets.

As of March 31, ~~2016, original~~2017, our cash margin deposits and guaranty fund ~~cash deposits~~ are as follows for the ICE Clearing Houses (in millions):


	ICE Clear Europe		ICE Clear Credit		ICE Clear U.S.		Other ICE Clearing Houses		Total		ICE Clear Europe		ICE Clear Credit		ICE Clear US		Other ICE Clearing Houses		Total
Original margin	$	28,795	$	14,064	$	4,383	$	172	$	47,414	$	22,597	$	19,504	$	4,933	$	124	$	47,158
Guaranty fund	2,981		1,596		325		13		4,915		2,643		2,170		328		55		5,196
Total	$	31,776	$	15,660	$	4,708	$	185	$	52,329	$	25,240	$	21,674	$	5,261	$	179	$	52,354

As of December 31, ~~2015, original~~2016, our cash margin deposits and guaranty fund ~~cash deposits~~ are as follows for the ICE Clearing Houses (in millions):


	ICE Clear Europe		ICE Clear Credit		ICE Clear U.S.		Other ICE Clearing Houses		Total		ICE Clear Europe		ICE Clear Credit		ICE Clear US		Other ICE Clearing Houses		Total
Original margin	$	28,454	$	13,750	$	3,882	$	159	$	46,245	$	27,046	$	16,833	$	6,184	$	107	$	50,170
Guaranty fund	2,589		2,011		311		13		4,924		2,444		2,135		316		85		4,980
Total	$	31,043	$	15,761	$	4,193	$	172	$	51,169	$	29,490	$	18,968	$	6,500	$	192	$	55,150

We have recorded these cash deposits in the accompanying consolidated balance sheets as current assets with corresponding current liabilities to the clearing members of the relevant ICE Clearing House. All cash ~~securities~~ and ~~letters of credit~~securities are available only to meet the financial obligations of that clearing member to the relevant ICE Clearing House. ICE Clear Europe, ICE Clear Credit, ICE Clear ~~U.S.,~~US, ICE Clear Canada, ICE Clear Netherlands and ICE Clear Singapore are separate legal entities and are not subject to the liabilities of the other ICE Clearing Houses or the obligations of the members of the other ICE Clearing Houses. The amount of these cash deposits may fluctuate due to the types of margin collateral choices available to clearing members and the change in the amount of deposits required. As a result, these assets and corresponding liabilities may vary significantly over time.

~~Except with respect to ICE Clear Credit, the majority of~~Of the cash held by the ICE Clearing Houses, as of March 31, 2017, $31.9 billion is secured in reverse repurchase agreements with primarily overnight maturities or direct investment in ~~U.S.~~ government securities. ICE Clear Credit, ~~has been designated as~~ a systemically important financial market utility as designated by the Financial Stability Oversight Council, ~~and has been authorized to establish and maintain a cash account at the Federal Reserve Bank of Chicago. ICE Clear Credit~~ held ~~$6.8~~$17.3 billion of its U.S. dollar cash in the guaranty fund and in original margin in ~~the~~ cash ~~account~~accounts at the Federal Reserve Bank of Chicago as of March 31, ~~2016.~~2017. The remaining cash deposits at the ICE Clearing Houses are held in demand deposit accounts at large, highly rated financial institutions and directly in U.S. Treasury securities with original maturities of less than 12 months. The carrying value of these securities approximates their fair value due to the short-term nature of the instruments and repurchase agreements.

In addition to the cash deposits for original margin and the guaranty fund, the ICE Clearing Houses have also received other assets from clearing members, which ~~may~~ include government obligations, and may include other non-cash collateral such as certain agency and corporate debt ~~letters of credit~~ or gold to mitigate credit risk. These assets are not reflected in the accompanying consolidated balance sheets as the risks and rewards of these assets remain with the clearing members unless the ICE Clearing Houses have sold or re-pledged the assets or in the event of a clearing member default, where the clearing member is no longer entitled to redeem the assets. Any income, gain or loss accrues to the clearing member. For certain non-cash deposits, the ICE Clearing Houses may impose discount or ~~"haircut"~~“haircut” rates to ensure adequate collateral levels to account for fluctuations in the market value of these deposits. As of March 31, ~~2016~~2017 and December 31, ~~2015,~~2016, the assets pledged by the clearing members as original margin and guaranty fund deposits for each of the ICE Clearing Houses are detailed below (in millions):


	As of March 31, 2016								As of December 31, 2015								As of March 31, 2017								As of December 31, 2016
	ICE Clear Europe		ICE Clear Credit		ICE Clear U.S.		Other ICE Clearing Houses		ICE Clear Europe		ICE Clear Credit		ICE Clear U.S.		Other ICE Clearing Houses		ICE Clear Europe		ICE Clear Credit		ICE Clear US		Other ICE Clearing Houses		ICE Clear Europe		ICE Clear Credit		ICE Clear US		Other ICE Clearing Houses
Original margin:
Government securities at face value	$	21,153	$	5,659	$	8,161	$	44	$	21,690	$	4,989	$	8,161	$	97	$	26,671	$	5,028	$	12,735	$	20	$	22,961	$	6,013	$	10,542	$	37
Letters of credit	—		—		—		398		—		—		—		381
Other																	—		—		—		373		—		—		—		368
Total	$	21,153	$	5,659	$	8,161	$	442	$	21,690	$	4,989	$	8,161	$	478	$	26,671	$	5,028	$	12,735	$	393	$	22,961	$	6,013	$	10,542	$	405
Guaranty fund:
Government securities at face value	$	256	$	290	$	158	$	61	$	267	$	229	$	158	$	61	$	249	$	90	$	152	$	39	$	217	$	178	$	147	$	40


10.	Fair Value Measurements

Our financial instruments consist primarily of cash and cash equivalents, short-term and long-term restricted cash and investments, short-term and long-term investments, customer accounts receivable, margin deposits and guaranty funds, cost and equity method investments, short-term and long-term debt and certain other short-term assets and liabilities. The fair value of our financial instruments are measured based on a three-level hierarchy:

Level 1 inputs — quoted prices for identical assets or liabilities in active markets.

Level 2 inputs — observable inputs other than Level 1 inputs such as quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are directly observable.

Level 3 inputs — unobservable inputs supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

~~In general, we~~We use Level 1 inputs to determine fair value. The Level 1 assets consist of U.S. Treasury securities, equity and other securities listed in active markets, and investments in publicly traded mutual funds held for the purpose of providing future payments of the supplemental executive retirement and the supplemental executive savings plans.

Financial assets and liabilities recorded in the accompanying consolidated balance sheets as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016 are classified in their entirety based on the lowest level of input that is significant to the asset or liability’s fair value measurement. Financial instruments measured at fair value on a recurring basis as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016 are as follows (in millions):


	As of March 31, 2016						As of December 31, 2015						As of March 31, 2017						As of December 31, 2016
	Level 1		Level 2 and 3		Total		Level 1		Level 2 and 3		Total		Level 1		Level 2 and 3		Total		Level 1		Level 2 and 3		Total
Assets at fair value:
Long-term investment in equity securities	$	352	$	—	$	352	$	299	$	—	$	299	$	—	$	—	$	—	$	432	$	—	$	432
U.S. Treasury securities	452		—		452		449		—		449		532		—		532		500		—		500
Mutual Funds	25		—		25		29		—		29		21		—		21		23		—		23
Total assets at fair value	$	829	$	—	$	829	$	777	$	—	$	777	$	553	$	—	$	553	$	955	$	—	$	955

As of March 31, ~~2016,~~2017, the fair value of our $1.24 billion 2020 Senior Notes was ~~$1.28~~$1.27 billion, the fair value of our $1.24 billion 2025 Senior Notes was ~~$1.28~~$1.29 billion, the fair value of our ~~$852~~$851 million NYSE ~~USD~~ Notes was ~~$859~~$851 million, the fair value of our ~~$789~~$791 million 2023 Senior Notes was ~~$840~~$832 million, and the fair value of our ~~$597~~$598 million 2018 Senior Notes was $607 million. The fair values of these fixed rate notes were estimated using quoted market prices for these instruments. The fair value of our commercial paper approximates the carrying value since the rates of interest on this short-term debt approximate market rates as of March 31, ~~2016~~2017. All other financial instruments are determined to approximate carrying value due to the short period of time to their maturities.

~~The long-term investment in equity securities represents our investment~~Until March 29, 2017, we held a 12% ownership interest in Cetip, S.A., or Cetip, which ~~is recorded~~we classified as an available-for-sale ~~investment, and is recorded and held in Brazilian reais.~~long-term investment. Cetip was ~~valued~~recorded at ~~$352 million as of March 31, 2016,~~its fair value using its quoted market price. Changes in the fair value of ~~the Cetip investment~~available-for-sale securities are ~~currently~~ reflected in accumulated other comprehensive income, ~~(loss)~~ and ~~do not impact earnings, except to~~include the ~~extent that~~effects of both stock price and foreign currency translation fluctuations. The unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income until realized. Realized gains and losses, and declines in value deemed to be ~~other than temporary (Note 2). As~~other-than-temporary, are recognized in earnings.

We acquired the common stock of Cetip for an aggregate consideration of $514 million in cash in July 2011. During the year ended December 31, 2013, we recognized an impairment loss on our Cetip investment of $190 million, primarily due to unfavorable foreign exchange rate changes, which was equal to the difference between the $324 million fair value as of December 31, 2013 and the original investment cost of $514 million. The $324 million fair value of the Cetip investment as of December 31, 2013 became our new cost basis. The long-term investment in equity securities as of December 31, 2016 represents our investment in Cetip, which was valued at $432 million, including a $108 million accumulated unrealized gain.

On March 29, 2017, Cetip and BM&FBOVESPA S.A. finalized a merger agreement. BM&FBOVESPA S.A., which changed its name to B3 S.A. - Brasil, Bolsa, Balcao, or B3, following the merger with Cetip, is a stock exchange and leading operator of registration, clearing, custodial and settlement services for equities, financial securities, indices, rates, commodities and currencies and is located in São Paulo, Brazil. The merger valued our Cetip investment at $500 million. We received the proceeds in cash and in B3 common stock.

The cash component was valued at $319 million, which was subject to Brazilian capital gains tax of $28 million that was remitted to the Brazilian tax authorities in March 2017. The net amount of $291 million is presented in the accompanying consolidated balance sheet as of March 31, ~~2016, we had an accumulated unrealized~~2017 as a receivable in prepaid expenses and other current assets. We ultimately received net cash proceeds in April 2017 of $286 million, which is net of a foreign exchange loss of $5 million that was incurred in April 2017.

We received 29,623,756 B3 common shares valued at their quoted market price of $181 million, which also is included in prepaid expenses and other current assets in the accompanying consolidated balance sheet as of March 31, 2017. A deferred capital gain tax of $26 million related to ~~this investment~~the B3 shares is presented as a non-current deferred tax liability as of ~~$28 million.~~March 31, 2017. In April 2017, we sold the B3 common shares for net proceeds of $152 million, which is net of the amounts remitted for the Brazilian capital gains tax and further transaction expenses of $3 million that were incurred in April 2017.

The $500 million fair value of our investment in Cetip asincluded an accumulated unrealized gain of March 31, 2016 is based on a stock price of R$40.15 per share. In April 2016, Cetip and BM&FBOVESPA in Brazil entered into a merger agreement. Consummation of the merger remains subject to approval by the shareholders of both companies and the regulatory bodies of the Central Bank of Brazil, the Securities and Exchange Commission of Brazil and Brazil’s Council for Economic Defense. The proposed merger values Cetip at R$42.22 per share based upon the April

29, 2016 BM&FBOVESPA closing stock price. Under the terms of the merger agreement, Cetip shareholders will receive a combination of cash (75%) and BM&FBOVESPA stock (25%). Given that a portion of the purchase price consists of BM&FBOVESPA stock, the merger agreement includes an adjustment mechanism that provides for a stock valuation$176 million, based on the ~~BMF&BOVESPA average trading price during~~$324 million cost basis. In connection with the ~~30 trading days preceding~~sale of our equity investment in Cetip, the ~~last required regulatory approval, with~~$176 million accumulated unrealized gain was reclassified out of accumulated other comprehensive income and was recognized in other income as a ~~minimum~~realized investment gain in the accompanying consolidated statement of income for the three months ended March 31, 2017. We plan to use the $438 million in net cash and stock ~~valuation of R$42 per share and a maximum stock valuation of R$48.51 per share. In addition,~~proceeds received from the merger ~~agreement provides~~and sale of B3 shares in April 2017 to pay down amounts outstanding under our Commercial Paper Program and for ~~a CDI interbank rate adjustment for the cash portion of the transaction to account for the period of announcement to closing.~~ share repurchases.

As of March 31, ~~2016,~~2017, we ~~held $452~~were holding $532 million in U.S. Treasury ~~securities, all of which had remaining maturities of less than one year at the date of purchase.~~securities. Of these securities, ~~$28 million were recorded as cash and cash equivalents, $274~~$382 million were recorded as short-term restricted cash and investments and $150 million were recorded as long-term restricted cash and investments in the accompanying consolidated balance sheet as of March 31, ~~2016. All of~~2017. We account for the U.S. Treasury securities ~~recorded~~held using the available-for-sale method.

Mutual funds represent equity and fixed income mutual funds held for the purpose of providing future payments for the supplemental executive savings plan and the supplemental executive retirement plan and are classified as ~~cash and cash equivalents have remaining maturities of less than 90 days.~~available-for-sale securities.

We did not use Level 2 and 3 inputs to determine the fair value of assets or liabilities measured at fair value on a recurring basis as of March 31, ~~2016~~2017 or December 31, ~~2015.~~2016. We measure certain assets, such as intangible assets and cost and equity method investments, at fair value on a non-recurring basis. These assets are recognized at fair value if they are deemed to be impaired. As of March 31, ~~2016~~2017 and December 31, ~~2015,~~2016, none of these assets were required to be recorded at fair value since ~~no impairment indicators~~none of these assets were present. Cost and equity method investments were $116 million as of both March 31, 2016 and December 31, 2015 and are classified as other non-current assets in the accompanying consolidated balance sheets.deemed impaired.


11.	Condensed Consolidating Financial Statements (Unaudited)

In connection with our acquisition of NYSE, Intercontinental Exchange, Inc., or ICE, and NYSE Holdings LLC, or NYSE Holdings, established various guarantees to protect against structural subordination of each entity’s existing indebtedness. NYSE Holdings is our ~~wholly-owned~~100% owned subsidiary and fully and unconditionally guarantees, on an unsecured and unsubordinated basis, the payment of principal, premium, if any, and interest of ~~our Credit Facility, Commercial Paper Program and~~ our senior notes. Similarly, ICE fully and unconditionally guarantees, on an unsecured and unsubordinated basis, the payment of principal, premium, if any, and interest of the NYSE ~~USD~~ Notes. The guarantees will remain in place until ~~each applicable debt obligation has been satisfied.~~the NYSE Notes mature in October 2017.

The following consolidating financial information sets forth, under the equity method of accounting, the condensed consolidating statements of income and comprehensive income, the condensed consolidating balance sheets, and the condensed consolidating statements of cash flows for (i) ICE (Parent); (ii) NYSE Holdings; (iii) the subsidiary non-guarantors; (iv) elimination entries necessary to consolidate each of ICE (Parent) and NYSE Holdings with the non-guarantor subsidiaries; and (v) on a consolidated basis. The condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements.

Intercontinental Exchange, Inc.

Condensed Consolidating Balance Sheets

As of March 31, ~~2016~~2017

(In millions)


	ICE (Parent)		Subsidiary Guarantor - NYSE Holdings		Subsidiary Non-Guarantors		Consolidating Adjustments			Consolidated Total		ICE (Parent)		Subsidiary Guarantor - NYSE Holdings		Subsidiary Non-Guarantors		Consolidating Adjustments			Consolidated Total
Current assets:
Cash and cash equivalents	$	1	$	—	$	467	$	—		$	468	$	3	$	—	$	357	$	—		$	360
Intercompany receivable	3,045		—		—		(3,045		)	—		2,211		—		—		(2,211		)	—
Margin deposits and guaranty funds	—		—		52,329		—			52,329		—		—		52,354		—			52,354
Notes receivable from affiliate, current	—		281		38		(319		)	—		—		281		33		(314		)	—
Other current assets	5		—		1,752		—			1,757		—		—		2,359		—			2,359
Total current assets	3,051		281		54,586		(3,364		)	54,554		2,214		281		55,103		(2,525		)	55,073
Property and equipment, net	—		—		1,018		—			1,018		—		—		1,132		—			1,132
Other non-current assets:
Goodwill and other intangible assets, net	—		—		22,734		—			22,734		—		—		22,658		—			22,658
Investment in subsidiaries	21,514		9,913		—		(31,427		)	—		23,761		13,571		—		(37,332		)	—
Notes receivable from affiliate, non-current	—		3,482		4,036		(7,518		)	—		620		6,318		7,098		(14,036		)	—
Other non-current assets	18		11		825		—			854		102		10		488		—			600
Total other non-current assets	21,532		13,406		27,595		(38,945		)	23,588		24,483		19,899		30,244		(51,368		)	23,258
Total assets	$	24,583	$	13,687	$	83,199	$	(42,309	)	$	79,160	$	26,697	$	20,180	$	86,479	$	(53,893	)	$	79,463

Current liabilities:
Short-term debt	$	2,048	$	—	$	—	$	—		$	2,048	$	1,525	$	851	$	—	$	—		$	2,376
Margin deposits and guaranty funds	—		—		52,329		—			52,329		—		—		52,354		—			52,354
Intercompany payable	—		1,636		1,409		(3,045		)	—		—		1,864		347		(2,211		)	—
Notes payable to affiliates, current	319		—		—		(319		)	—		283		31		—		(314		)	—
Other current liabilities	61		—		1,198		—			1,259		64		—		1,212		—			1,276
Total current liabilities	2,428		1,636		54,936		(3,364		)	55,636		1,872		2,746		53,913		(2,525		)	56,006
Non-current liabilities:
Long-term debt	3,866		852		—		—			4,718		3,872		—		—		—			3,872
Notes payable to affiliates, non-current	3,241		795		3,482		(7,518		)	—		5,194		1,903		6,939		(14,036		)	—
Other non-current liabilities	—		—		3,692		—			3,692		4		—		3,757		—			3,761
Total non-current liabilities	7,107		1,647		7,174		(7,518		)	8,410		9,070		1,903		10,696		(14,036		)	7,633
Total liabilities	9,535		3,283		62,110		(10,882		)	64,046		10,942		4,649		64,609		(16,561		)	63,639
Redeemable non-controlling interest	—		—		34		—			34		—		—		37		—			37

Equity:
Total shareholders' equity	15,048		10,404		21,023		(31,427		)	15,048
Total shareholders’ equity												15,755		15,531		21,801		(37,332		)	15,755
Non-controlling interest in consolidated subsidiaries	—		—		32		—			32		—		—		32		—			32
Total equity	15,048		10,404		21,055		(31,427		)	15,080		15,755		15,531		21,833		(37,332		)	15,787
Total liabilities and equity	$	24,583	$	13,687	$	83,199	$	(42,309	)	$	79,160	$	26,697	$	20,180	$	86,479	$	(53,893	)	$	79,463

Intercontinental Exchange, Inc.

Condensed Consolidating Balance Sheets

As of December 31, ~~2015~~2016

(In millions)


	ICE (Parent)		Subsidiary Guarantor - NYSE Holdings		Subsidiary Non-Guarantors		Consolidating Adjustments			Consolidated Total		ICE (Parent)		Subsidiary Guarantor - NYSE Holdings		Subsidiary Non-Guarantors		Consolidating Adjustments			Consolidated Total
Current assets:
Cash and cash equivalents	$	1	$	—	$	626	$	—		$	627	$	1	$	—	$	406	$	—		$	407
Intercompany receivable	3,176		—		—		(3,176		)	—		2,340		—		—		(2,340		)	—
Margin deposits and guaranty funds	—		—		51,169		—			51,169		—		—		55,150		—			55,150
Note receivable from affiliate, current	—		705		77		(782		)	—		—		281		23		(304		)	—
Other current assets	5		—		1,512		—			1,517		—		—		1,576		—			1,576
Total current assets	3,182		705		53,384		(3,958		)	53,313		2,341		281		57,155		(2,644		)	57,133
Property and equipment, net	—		—		1,037		—			1,037		—		—		1,129		—			1,129
Other non-current assets:
Goodwill and other intangible assets, net	—		—		22,837		—			22,837		—		—		22,711		—			22,711
Investment in subsidiaries	21,120		9,840		—		(30,960		)	—		23,266		13,238		—		(36,504		)	—
Note receivable from affiliate, non-current	—		3,128		3,370		(6,498		)	—		620		5,958		6,373		(12,951		)	—
Other non-current assets	20		10		770		—			800		100		11		919		—			1,030
Total other non-current assets	21,140		12,978		26,977		(37,458		)	23,637		23,986		19,207		30,003		(49,455		)	23,741
Total assets	$	24,322	$	13,683	$	81,398	$	(41,416	)	$	77,987	$	26,327	$	19,488	$	88,287	$	(52,099	)	$	82,003

Current liabilities:
Short-term debt	$	2,591	$	—	$	—	$	—		$	2,591	$	1,642	$	851	$	—	$	—		$	2,493
Margin deposits and guaranty funds	—		—		51,169		—			51,169		—		—		55,150		—			55,150
Intercompany payable	—		1,784		1,392		(3,176		)	—		—		1,935		405		(2,340		)	—
Notes payable to affiliates, current	358		—		424		(782		)	—		281		23		—		(304		)	—
Other current liabilities	36		—		947		—			983		31		—		943		—			974
Total current liabilities	2,985		1,784		53,932		(3,958		)	54,743		1,954		2,809		56,498		(2,644		)	58,617
Non-current liabilities:
Long-term debt	3,865		852		—		—			4,717		3,871		—		—		—			3,871
Notes payable to affiliates, non-current	2,629		741		3,128		(6,498		)	—		4,781		1,592		6,578		(12,951		)	—
Other non-current liabilities	35		—		3,617		—			3,652		4		—		3,721		—			3,725
Total non-current liabilities	6,529		1,593		6,745		(6,498		)	8,369		8,656		1,592		10,299		(12,951		)	7,596
Total liabilities	9,514		3,377		60,677		(10,456		)	63,112		10,610		4,401		66,797		(15,595		)	66,213
Redeemable non-controlling interest	—		—		35		—			35		—		—		36		—			36

Equity:
Total shareholders' equity	14,808		10,306		20,654		(30,960		)	14,808
Total shareholders’ equity												15,717		15,087		21,417		(36,504		)	15,717
Non-controlling interest in consolidated subsidiaries	—		—		32		—			32		—		—		37		—			37
Total equity	14,808		10,306		20,686		(30,960		)	14,840		15,717		15,087		21,454		(36,504		)	15,754
Total liabilities and equity	$	24,322	$	13,683	$	81,398	$	(41,416	)	$	77,987	$	26,327	$	19,488	$	88,287	$	(52,099	)	$	82,003

Intercontinental Exchange, Inc.

Condensed Consolidating Statements of Income

Three Months Ended March 31, 2017

(In millions)



	ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total
Revenues:
Transaction and clearing, net	$	—		$	—		$	798		$	—		$	798
Data services	—			—			520			—			520
Listings and other revenues	—			—			151			—			151
Revenues	—			—			1,469			—			1,469
Transaction-based expenses	—			—			305			—			305
Revenues, less transaction-based expenses	—			—			1,164			—			1,164
Operating expenses:
Compensation and benefits	1			—			244			—			245
Acquisition-related transaction and integration costs	—			—			14			—			14
Technology and communication	—			—			98			—			98
Selling, general, administrative and other	—			—			91			—			91
Depreciation and amortization	—			—			134			—			134
Operating expenses	1			—			581			—			582
Operating income (loss)	(1		)	—			583			—			582
Intercompany interest on loans	(10		)	18			(8		)	—			—
Other income (expense), net	(37		)	(4		)	182			—			141
Total other income (expense), net	(47		)	14			174			—			141
Income (loss) before income taxes	(48		)	14			757			—			723
Income tax expense	—			—			213			—			213
Equity earnings from subsidiaries	550			430			—			(980		)	—
Net income	$	502		$	444		$	544		$	(980	)	$	510
Net income attributable to non-controlling interest	—			—			(8		)	—			(8		)
Net income attributable to ICE	$	502		$	444		$	536		$	(980	)	$	502

Intercontinental Exchange, Inc.

Condensed Consolidating Statements of Comprehensive Income

Three Months Ended March 31, 2017

(In millions)



	ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total
Net income	$	502		$	444		$	544		$	(980	)	$	510
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			25			—			25
Change in fair value of available-for-sale-securities	—			—			68			—			68
Reclassification of realized gain on available-for-sale investment to other income	—			—			(176		)	—			(176		)
Other comprehensive loss	—			—			(83		)	—			(83		)
Comprehensive loss of subsidiaries	(83		)	(87		)	—			170			—
Comprehensive income	419			357			461			(810		)	427
Comprehensive income attributable to non-controlling interests	—			—			(8		)	—			(8		)
Comprehensive income attributable to ICE	$	419		$	357		$	453		$	(810	)	$	419

Intercontinental Exchange, Inc.

Condensed Consolidating Statements of Income

Three Months Ended March 31, 2016

(In millions)


	ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total			ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total
Revenues:
Transaction and clearing, net	$	—		$	—		$	929		$	—		$	929		$	—		$	—		$	929		$	—		$	929
Data services	—			—			477			—			477			—			—			477			—			477
Listings and other revenues	—			—			148			—			148			—			—			148			—			148
Revenues	—			—			1,554			—			1,554			—			—			1,554			—			1,554
Transaction-based expenses	—			—			400			—			400			—			—			400			—			400
Revenues, less transaction-based expenses	—			—			1,154			—			1,154			—			—			1,154			—			1,154
Operating expenses:
Compensation and benefits	—			—			236			—			236			—			—			236			—			236
Acquisition-related transaction and integration costs																—			—			27			—			27
Technology and communication	—			—			92			—			92			—			—			92			—			92
Acquisition-related transaction and integration costs	—			—			27			—			27
Selling, general, administrative and other	—			—			72			—			72			—			—			72			—			72
Depreciation and amortization	—			—			143			—			143			—			—			143			—			143
Operating expenses	—			—			570			—			570			—			—			570			—			570
Operating income	—			—			584			—			584			—			—			584			—			584
Intercompany interest on loans	(4		)	8			(4		)	—			—			(4		)	8			(4		)	—			—
Other income (expense), net	(41		)	(4		)	1			—			(44		)	(41		)	(4		)	1			—			(44		)
Total other income (expense), net	(45		)	4			(3		)	—			(44		)	(45		)	4			(3		)	—			(44		)
Income (loss) before income taxes	(45		)	4			581			—			540			(45		)	4			581			—			540
Income tax expense	—			—			163			—			163			—			—			163			—			163
Equity earnings from subsidiaries	414			113			—			(527		)	—			414			113			—			(527		)	—
Net income	$	369		$	117		$	418		$	(527	)	$	377		$	369		$	117		$	418		$	(527	)	$	377
Net income attributable to non-controlling interest	—			—			(8		)	—			(8		)	—			—			(8		)	—			(8		)
Net income attributable to ICE	$	369		$	117		$	410		$	(527	)	$	369		$	369		$	117		$	410		$	(527	)	$	369

Intercontinental Exchange, Inc.

Condensed Consolidating Statements of Comprehensive Income

Three Months Ended March 31, 2016

(In millions)


	ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total			ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total
Net income	$	369		$	117		$	418		$	(527	)	$	377		$	369		$	117		$	418		$	(527	)	$	377
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			(74		)	—			(74		)	—			—			(74		)	—			(74		)
Change in fair value of available-for-sale-securities	—			—			54			—			54			—			—			54			—			54
Total other comprehensive loss	—			—			(20		)	—			(20		)
Other comprehensive loss																—			—			(20		)	—			(20		)
Comprehensive loss of subsidiaries	(25		)	(19		)	—			44			—			(25		)	(19		)	—			44			—
Comprehensive income	344			98			398			(483		)	357			344			98			398			(483		)	357
Comprehensive income attributable to non-controlling interests	—			—			(8		)	—			(8		)	—			—			(8		)	—			(8		)
Comprehensive income attributable to ICE	$	344		$	98		$	390		$	(483	)	$	349		$	344		$	98		$	390		$	(483	)	$	349

Intercontinental Exchange, Inc.

Condensed Consolidating Statements of ~~Income~~Cash Flows

Three Months Ended March 31, ~~2015~~2017

(In millions)

ICE
(Parent)
Subsidiary Guarantor - NYSE Holdings Subsidiary
Non-Guarantors
Consolidating
Adjustments

Consolidated
Total
Revenues:
   Transaction and clearing, net $ —
$ —
$ 836
$ —
$ 836
   Data services —
—
200
—
200
   Listings and other revenues —
—
144
—
144
Revenues —
—
1,180
—
1,180
Transaction-based expenses —
—
330
—
330
Revenues, less transaction-based expenses —
—
850
—
850
Operating expenses:
   Compensation and benefits —
—
151
—
151
   Technology and communication —
—
51
—
51
   Acquisition-related transaction and integration costs —
—
19
—
19
   Selling, general, administrative and other 1
—
77
—
78
   Depreciation and amortization —
—
89
—
89
Operating expenses 1
—
387
—
388
Operating income (loss) (1 ) —
463
—
462
Total other income (expense), net 18
(30 ) (9 ) —
(21 )
Income (loss) before income taxes 17
(30 ) 454
—
441
Income tax expense 7
—
111
—
118
Equity earnings from subsidiaries 305
97
—
(402 ) —
Net income $ 315
$ 67
$ 343
$ (402 ) $ 323
Net income attributable to non-controlling interest —
—
(8 ) —
(8 )
Net income attributable to ICE $ 315
$ 67
$ 335
$ (402 ) $ 315

~~Intercontinental Exchange, Inc.~~

~~Condensed Consolidating Statements of Comprehensive Income~~

~~Three Months Ended March 31, 2015~~

~~(In millions)~~

ICE
(Parent)
Subsidiary Guarantor - NYSE Holdings Subsidiary
Non-Guarantors
Consolidating
Adjustments

Consolidated
Total
Net income $ 315
$ 67
$ 343
$ (402 ) $ 323
Other comprehensive income (loss):
Foreign currency translation adjustments —
1
(38 ) —
(37 )
Change in fair value of available-for-sale-securities —
—
(70 ) —
(70 )
Total other comprehensive income (loss) —
1
(108 ) —
(107 )
Comprehensive loss of subsidiaries (107 ) (27 ) —
134
—
Comprehensive income 208
41
235
(268 ) 216
Comprehensive income attributable to non-controlling interests —
—
(8 ) —
(8 )
Comprehensive income attributable to ICE $ 208
$ 41
$ 227
$ (268 ) $ 208



	ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total
Net cash provided by (used in) operating activities	$	(2	)	$	112		$	509		$	(8	)	$	611
Investing activities:
Cash received for divestiture (net of cash paid for acquisition)	—			—			22			—			22
Loans to subsidiaries	129			(360		)	(735		)	966			—
Capital expenditures and capitalized software development costs	—			—			(66		)	—			(66		)
Increase in restricted cash and investments	—			—			(64		)	—			(64		)
Net cash provided by (used in) investing activities	129			(360		)	(843		)	966			(108		)
Financing activities:
Repayments of commercial paper, net	(117		)	—			—			—			(117		)
Intercompany borrowing	415			248			303			(966		)	—
Dividends to shareholders	(120		)	—			—			—			(120		)
Intercompany dividends	—			—			(8		)	8			—
Repurchases of common stock	(229		)	—			—			—			(229		)
Other financing activities	(74		)	—			(11		)	—			(85		)
Net cash provided by (used in) financing activities	(125		)	248			284			(958		)	(551		)
Effect of exchange rates on cash and cash equivalents	—			—			1			—			1
Net increase (decrease) in cash and cash equivalents	2			—			(49		)	—			(47		)
Cash and cash equivalents, beginning of period	1			—			406			—			407
Cash and cash equivalents, end of period	$	3		$	—		$	357		$	—		$	360

Intercontinental Exchange, Inc.

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2016

(In millions)


	ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total			ICE (Parent)			Subsidiary Guarantor - NYSE Holdings			Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Total
Net cash provided by (used in) operating activities	$	(15	)	$	24		$	609		$	(21	)	$	597		$	(15	)	$	24		$	609		$	(21	)	$	597
Investing activities:
Increase in restricted cash	—			—			(3		)	—			(3		)
Loans to subsidiaries	131			70			(627		)	426			—			131			70			(627		)	426			—
Capital expenditures, capitalized software development costs and other	—			—			(56		)	—			(56		)
Capital expenditures and capitalized software development costs																—			—			(56		)	—			(56		)
Increase in restricted cash and investments																—			—			(3		)	—			(3		)
Net cash provided by (used in) investing activities	131			70			(686		)	426			(59		)	131			70			(686		)	426			(59		)
Financing activities:
Repayments of commercial paper, net	(543		)	—			—			—			(543		)	(543		)	—			—			—			(543		)
Intercompany borrowing	573			(94		)	(53		)	(426		)	—			573			(94		)	(53		)	(426		)	—
Dividends to shareholders	(102		)	—			—			—			(102		)	(102		)	—			—			—			(102		)
Intercompany dividends	—			—			(21		)	21			—			—			—			(21		)	21			—
Payments relating to treasury shares received for restricted stock tax payments and stock option exercises	(47		)	—			—			—			(47		)
Other financing activities	3			—			(8		)	—			(5		)	(44		)	—			(8		)	—			(52		)
Net cash used in financing activities	(116		)	(94		)	(82		)	(405		)	(697		)	(116		)	(94		)	(82		)	(405		)	(697		)
Net decrease in cash and cash equivalents	—			—			(159		)	—			(159		)	—			—			(159		)	—			(159		)
Cash and cash equivalents, beginning of period	1			—			626			—			627			1			—			626			—			627
Cash and cash equivalents, end of period	$	1		$	—		$	467		$	—		$	468		$	1		$	—		$	467		$	—		$	468

~~Intercontinental Exchange, Inc.~~

~~Condensed Consolidating Statements of Cash Flows~~

~~Three Months Ended March 31, 2015~~

~~(In millions)~~

ICE
(Parent)
Subsidiary Guarantor - NYSE Holdings
Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated
Total
Net cash provided by (used in) operating activities $ 82
$ (612 ) $ 1,008
$ (13 ) $ 465
Investing activities:
Decrease in restricted cash —
—
34
—
34
Loans to subsidiaries —
73
(707 ) 634
—
Additional contribution to equity method investee —
—
(60 ) —
(60 )
Capital expenditures, capitalized software development costs and other —
—
(60 ) —
(60 )
Net cash provided by (used in) investing activities —
73
(793 ) 634
(86 )
Financing activities:
Proceeds from commercial paper, net 35
—
—
—
35
Intercompany borrowing 173
534
(73 ) (634 ) —
Dividends to shareholders (73 ) —
—
—
(73 )
Intercompany dividends —
—
(13 ) 13
—
Repurchases of common stock (196 ) —
—
—
(196 )
Other financing activities (19 ) —
(15 ) —
(34 )
Net cash provided by (used in) financing activities (80 ) 534
(101 ) (621 ) (268 )
Effect of exchange rates on cash and cash equivalents —
—
(11 ) —
(11 )
Net increase (decrease) in cash and cash equivalents 2
(5 ) 103
—
100
Cash and cash equivalents, beginning of period 6
5
641
—
652
Cash and cash equivalents, end of period $ 8
$ —
$ 744
$ —
$ 752


12.	Segment Reporting

services and securities listings businesses. Our chief operating decision maker does not review total assets, intersegment revenues/expenses or statements of income below operating income by segments; therefore, such information is not presented below. Financial data for our business segments is as follows for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016 (in millions):


	Trading and Clearing Segment		Data and Listings Segment		Consolidated		Trading and Clearing Segment		Data and Listings Segment		Consolidated
Three Months Ended March 31, 2017:
Revenues, less transaction-based expenses							$	538	$	626	$	1,164
Operating expenses							216		366		582
Operating income							322		260		582
Three Months Ended March 31, 2016:
Revenues, less transaction-based expenses	$	574	$	580	$	1,154	$	574	$	580	$	1,154
Operating expenses	213		357		570		213		357		570
Operating income	361		223		584		361		223		584
Three Months Ended March 31, 2015:
Revenues, less transaction-based expenses	$	549	$	301	$	850
Operating expenses	226		162		388
Operating income	323		139		462

Revenue from one clearing member of the Trading and Clearing segment comprised 10% of our Trading and Clearing revenues for the three months ended March 31, 2017. Clearing members are primarily intermediaries and represent a broad range of principal trading firms. If a clearing member ceased its operations, we believe that the trading firms would continue to conduct transactions and would clear those transactions through another clearing member firm. No additional customers or clearing members accounted for more than 10% of our segment revenues or consolidated revenues ~~less transaction-based expenses,~~ for the three months ended March 31, ~~2016~~2017 and ~~2015.~~2016.


13.	Earnings Per Common Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016 (in millions, except per share amounts):


	Three Months Ended March 31,				Three Months Ended March 31,
	2016		2015		2017		2016
Basic:
Net income attributable to Intercontinental Exchange, Inc.	$	369	$	315	$	502	$	369
Weighted average common shares outstanding	119		112		594		595
Basic earnings per common share	$	3.10	$	2.81	$	0.84	$	0.62
Diluted:
Weighted average common shares outstanding	119		112		594		595
Effect of dilutive securities - stock options and restricted shares	1		—		5		3
Diluted weighted average common shares outstanding	120		112		599		598
Diluted earnings per common share	$	3.08	$	2.80	$	0.84	$	0.62

Basic earnings per common share is calculated using the weighted average common shares outstanding during the period. The weighted average common shares outstanding increased for the three months ended March 31, 2016, over the prior year period, primarily due to stock issued for the Interactive Data and Trayport acquisitions in December 2015, partially offset by stock repurchases during 2015. We issued 6.5 million shares of our common stock to Interactive Data stockholders and 2.5 million shares of our common stock to Trayport stockholders, weighted to show these additional shares outstanding for periods after the respective acquisition dates (Note 3).

Common equivalent shares from stock options and restricted stock awards, using the treasury stock method, are included in the diluted per share calculations unless the effect of their inclusion would be antidilutive. During the three months ended March 31, 2017 and 2016, 586,866 and ~~2015, 130,109 and 289,269~~650,545 outstanding stock options, respectively, were not included in the computation of diluted earnings per common share since the inclusion would have had an antidilutive effect because the outstanding stock option exercise prices were greater than the average market price of the common shares during the relevant periods. Certain figures in the table above may not recalculate due to rounding.


14.	Subsequent Events

We have evaluated subsequent events and determined that no events or transactions met the definition of a subsequent event for purposes of recognition or disclosure in the accompanying consolidated financial ~~statements.~~

statements except those events disclosed in Note 10.


ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q, including the sections entitled “Notes to Consolidated Financial Statements”, “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be forward-looking statements. Any forward looking statements are based on our present beliefs and assumptions as well as the information currently available to us. Forward-looking statements may be introduced by or contain terminology such as “may,” “will,” “should,” “could,” “would,” “targets,” “goal,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the antonyms of these terms or other comparable terminology. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance, cash flows, financial position or achievements to differ materially from those expressed or implied by these forward-looking statements. These risks and other factors include those set forth in Item 1(A) under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, or our ~~2015~~2016 Form 10-K, as filed with the SEC on February ~~4, 2016.~~7, 2017.

Forward-looking statements and other risks and factors that may affect our performance include, but are not limited to: conditions in global financial markets and domestic and international economic, political and social conditions; the impact of the introduction of or any changes in laws, regulations, rules or government policy with respect to financial markets, increased regulatory scrutiny or enforcement actions and our ability to comply with these requirements; volatility in commodity prices, equity prices, and price volatility of financial benchmarks and instruments such as interest rates, credit spreads, equity indices and foreign exchange rates; the business environment in which we operate and trends in our industry, including trading volumes, clearing, data services, fees, changing regulations, competition and consolidation; continued high renewal rates of subscription-based data revenues; the impact of the introduction of or any changes in laws, regulations, rules or government policy with respect to financial markets, increased regulatory scrutiny or enforcement actions and our ability to comply with these requirements; our ability to identify and effectively pursue, implement and integrate acquisitions and strategic alliances; our ability to continue to realize the synergies and benefits of our acquisitions within the expected time frame, and to integrate acquired operations with our business; the success of our clearing houses and our ability to minimize the risks associated with operating clearing houses in multiple jurisdictions; the success of our equity exchanges and the exchanges’ compliance with their regulatory and oversight responsibilities; the resilience of our electronic platforms and soundness of our business continuity and disaster recovery plans; continued high renewal rates of subscription-based data revenues; our ability to identify and effectively pursue, implement and integrate acquisitions and strategic alliances; our ability to complete and realize the synergies and benefits of our acquisitions within the expected time frame, and to integrate acquired operations with our business; our ability to effectively maintain our growth; the performance and reliability of our other technologies and those of third party service providers, including our ability to keep pace with technological developments and ensure that the technology we utilize is not vulnerable to security risks or other disruptive events; our ability to identify trends and adjust our business to benefit from such trends; the accuracy of our cost and other financial estimates and our belief that cash flows from operations will be sufficient to service our debt and fund our operational and capital expenditure needs; our ability to ~~identify trends and adjust our business to benefit from such trends; our ability to~~ maintain existing market participants and data customers, and attract new ones, and to offer additional products and services, leverage our risk management capabilities and enhance our technology in a timely and cost-effective fashion; our ability to attract and retain key talent; our ability to protect our intellectual property rights and to operate our business without violating the intellectual property rights of others; and potential adverse results of threatened or pending litigation and regulatory actions and proceedings.

We caution you not to place undue reliance on any forward-looking statements as they speak only as of the date on which such statements were made, and we undertake no obligation to update any forward-looking statement or to reflect the occurrence of an unanticipated event. New factors emerge from time to time, and it is not possible for management to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

In this Quarterly Report on Form 10-Q, unless otherwise indicated, the terms “Intercontinental Exchange”, “ICE”, “we”, “us”, “our”, “our company” and “our business” refer to Intercontinental Exchange, Inc., together with its consolidated subsidiaries. Due to rounding, figures may not sum exactly.

Overview

We are a leading global operator of regulated exchanges, clearing houses and listings venues, and a provider of data services for commodity and financial markets. We operate regulated marketplaces for trading, listing and clearing a broad array of derivatives contracts and securities ~~contracts~~ across major asset classes, including energy and agricultural commodities, interest rates, equities, equity derivatives, exchange traded funds, credit derivatives, bonds and currencies. We offer end-to-end market data services to support the trading, investment and risk management needs of customers across virtually all asset classes.

Our exchanges include futures exchanges in the U.S., U.K., Continental Europe, Canada and Singapore, and cash equities, ~~exchanges~~equity options and ~~equity options~~bond exchanges in the U.S. We also operate OTC markets for physical energy and CDS trade execution. To serve global derivatives markets, we operate central counterparty clearing houses in the U.S., U.K., Continental Europe, Canada and Singapore. We offer a range of data ~~and connectivity~~ services ~~to customers in~~for global financial and commodity markets, including ~~fixed income~~ pricing and reference data, exchange data, analytics, feeds, desktop and ~~desktop offerings.~~connectivity solutions. Through our ~~trading and~~markets, clearing ~~in addition to our~~houses, listings and market data

services, we provide end-to-end solutions for our customers through liquid markets, benchmark products, access to capital markets, ~~information,~~ and ~~a range of~~ related services to support their ~~investing, trading,~~ability to manage risk ~~management~~ and ~~capital raising activities.~~raise capital. Our business is currently conducted as two reportable business segments, our Trading and Clearing segment and our Data and Listings segment, and the majority of our identifiable assets are located in the U.S. and U.K.

Recent Developments

~~Completed Acquisitions~~National Stock Exchange Acquisition

On ~~December 14, 2015,~~January 31, 2017, we acquired 100% of ~~Interactive Data~~National Stock Exchange, Inc., now named NYSE National. The acquisition gives the NYSE Group a fourth U.S. exchange license. NYSE National is distinct from NYSE Group’s three listings exchanges because NYSE National will only be a trading venue and will not be a listings market. NYSE Group’s three listings exchanges, NYSE, NYSE MKT and NYSE Arca, have unique market models designed for corporate and ETF issuers. Upon closing the transaction, NYSE National ceased operations on February 1, 2017. We will engage with NYSE National members, buy-side participants and retail brokerage firms before finalizing operational plans for NYSE National’s re-launch, which is expected to occur in 2017.

Cetip Investment Gain

Until March 29, 2017, we held a 12% ownership interest in Cetip, S.A., or Cetip, which we classified as an available-for-sale long-term investment. On March 29, 2017, Cetip and BM&FBOVESPA S.A. finalized a merger agreement. BM&FBOVESPA S.A., which changed its name to B3 S.A. - Brasil, Bolsa, Balcao, or B3, following the merger with Cetip, is a stock exchange and leading operator of registration, clearing, custodial and settlement services for equities, financial securities, indices, rates, commodities and currencies and is located in São Paulo, Brazil. The merger valued our Cetip investment at $500 million. We received the proceeds in cash ~~transaction.~~ and in B3 common stock.

The ~~total purchase~~cash component was valued at $319 million, which was subject to Brazilian capital gains tax of $28 million that was remitted to the Brazilian tax authorities in March 2017. The net amount of $291 million is presented in the consolidated balance sheet as of March 31, 2017 as a receivable in prepaid expenses and other current assets. We ultimately received net cash proceeds in April 2017 of $286 million, which is net of a foreign exchange loss of $5 million that was incurred in April 2017.

We received 29,623,756 B3 common shares valued at their quoted market price ~~was $5.6 billion comprised~~ of ~~cash consideration~~$181 million, which also is included in prepaid expenses and other current assets in the consolidated balance sheet as of ~~$4.1 billion~~March 31, 2017. A deferred capital gain tax of $26 million related to the B3 shares is presented as a non-current deferred tax liability as of March 31, 2017. In April 2017, we sold the B3 common shares for net proceeds of $152 million, which is net of the amounts remitted for the Brazilian capital gains tax and ~~6.5~~further transaction expenses of $3 million ~~shares~~that were incurred in April 2017.

The $500 million fair value of our ~~common~~investment in Cetip included an accumulated unrealized gain of $176 million, based on the $324 million cost basis. In connection with the sale of our equity investment in Cetip, the $176 million accumulated unrealized gain was reclassified out of accumulated other comprehensive income and was recognized in other income as a realized investment gain in the consolidated statement of income for the three months ended March 31, 2017. We plan to use the $438 million in net cash and stock proceeds received from the merger and ~~their results~~sale of B3 shares in April 2017 to pay down amounts outstanding under our Commercial Paper Program and for share repurchases.

Refer to note 10 to our consolidated financial statements and related notes, which are included elsewhere in ~~our consolidated results effective from~~this Quarterly Report, for more information on the ~~acquisition date. Interactive Data is a leading provider of financial market data, analytics~~Cetip investment gain.

Trayport Acquisition and ~~related trading solutions, serving the mutual fund, bank, asset management, hedge fund, securities and financial instrument processing and administration sectors.~~ Potential Divestiture

On December 11, 2015, we acquired 100% of Trayport in a stock transaction. The total purchase price was $620 million, comprised of ~~2.5~~12.6 million shares of our common ~~stock, and their results are included in our consolidated results effective from the acquisition date.~~stock. Trayport is a software company that licenses its technology to serve exchanges, OTC brokers and traders to facilitate electronic and hybrid trade execution primarily in the energy markets. ~~Refer~~The acquisition enables us to ~~note 3~~provide new technology and software-related services to our energy customers.

The U.K. Competition and Markets Authority, or the CMA, undertook a review of our acquisition of Trayport under the merger control laws of the U.K. In October 2016, the CMA issued its findings and ordered a divestment of Trayport to remedy what the CMA indicated it believed to be a substantial lessening of competition in the supply of trade execution services and trade clearing services to energy traders in the European Economic Area. In November 2016, we filed an appeal with the Competition Appeal Tribunal, or the CAT, to challenge the CMA’s decision. In March 2017, the CAT upheld the CMA decision that we should divest Trayport. Following careful consideration of the CAT’s judgment, we are seeking to appeal the CAT’s decision at the U.K. Court of Appeals. If we are allowed to appeal to the U.K. Court of Appeals and if our appeal is successful, the matter will be remanded for additional review. If

our appeal is not allowed or not successful, we will be obligated to sell Trayport. There is no certainty of the price we could receive if a sale were required. The timing of a final decision is uncertain at this time. Until a final determination is made as to whether we are permitted to retain Trayport, we will not integrate Trayport into our existing business operations.

The functional currency of Trayport is the pound sterling, as this is the currency in which Trayport operates. The $620 million in Trayport net assets were recorded on our December 11, 2015 opening balance sheet at a pound sterling/U.S. dollar exchange rate of 1.5218 (£407 million). Because our consolidated financial statements are presented in U.S. dollars, we must translate the Trayport net assets into U.S. dollars at the exchange rates in effect at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against the pound sterling will affect the value of the Trayport balance sheet, with gains or losses included in the cumulative translation adjustment account, a component of equity. As of the result of the decrease in the pounds sterling/U.S. dollar exchange rate to 1.2552 as of March 31, 2017, the portion of our equity attributable to the Trayport net assets in accumulated other comprehensive loss from foreign currency translation was $108 million as of March 31, 2017. If we are required to sell Trayport, we would include the accumulated translation adjustment when computing the gain or loss from the sale.

Interactive Data Managed Solutions Divestiture

On March 31, 2017, we sold Interactive Data Managed Solutions, or IDMS, a unit of Interactive Data, to FactSet. There was no gain or loss recognized on the sale of IDMS. IDMS is a managed solutions and ~~related notes, which are included elsewhere in this Quarterly Report on Form 10-Q, for more information on these acquisitions.~~

~~Pending Acquisition~~

~~In March 2016, we entered into a definitive agreement to acquire Standard & Poor’s Securities Evaluations, Inc., or SPSE, a~~portal provider ~~of fixed income evaluated pricing, and Credit Market Analysis Limited, or CMA, a provider of independent data~~ for the OTC markets from McGraw Hill Financial. When completed, the acquisition will enable us to offer customers new data and valuation services. Under the terms of the agreement, we can elect to satisfy our payment of the purchase price upon closing in either cash or shares of our common stock. The completion of the transaction is subject to regulatory approvals.global wealth management industry.

Regulation

Our markets are primarily subject to the jurisdiction of regulatory agencies in the U.S., U.K., Canada, Singapore and the European Union. ~~Domestic and foreign~~Global policy makers have undertaken reviews of their existing legal framework governing financial markets in connection with regulatory reform, and have either passed new laws and regulations, or are in the process of debating and/or enacting new laws and regulations that apply to our business and to our ~~customers'~~customers’ businesses. ~~As this is established, legislative~~Legislative and regulatory actions may ~~change~~impact the way in which we or our customers conduct ~~our~~ business and may create uncertainty, ~~for market participants,~~ which could affect trading volumes or demand for market data. As ~~a result, it is difficult to predict all of the effects that the legislation and its implementing regulations will have on us. As~~ discussed ~~more fully~~in Item 1 “Business - Regulation” included in our ~~2015~~2016 Form 10-K, the implementation of Markets in Financial Instruments Directives II, or MiFID II, and its counterpart the European Market Infrastructure Regulation, or EMIR, may result in operational, regulatory and/or business risk. ~~In February 2016,~~

Most of the ~~European Union announced plans for a twelve-month postponement of~~specific regulations which support the MiFID II ~~implementation and compliance from 2017 to 2018.~~

Also in February 2016, U.S. and European regulators reached an agreement relating to regulatory equivalence and margin treatment for clearing houses. The proposed agreement will allow European clearing houses to margin customers at a one day gross margin period of risk (equivalent to the U.S. rules for clearing houses) and require U.S. clearing houses to margin proprietary positions at a two day net margin period of risk (equivalent to the European rules for clearing houses). U.S. clearing houses will also be required to demonstrate implementation of specific anti-procyclicality measures, equivalent to European clearing houses. The proposed agreement would exempt U.S. agricultural products (including ICE Futures U.S.'s coffee, cocoa and sugar contracts) from any changes. Ifframework have now been approved by the European Parliament and European Council. The European Securities and Markets Authority, or ESMA, and the national regulatory authorities are continuing to work on detailed aspects of the framework which are relevant to the markets operated by ICE Futures Europe and ICE Endex, including position limits and the determination of pre-trade and post-trade price transparency parameters for financial instruments.

In March 2017, the U.K. officially triggered Article 50 and notified the European Council of its intention to leave the European Union. The triggering of Article 50 begins the process of withdrawal from the European Union, which will last two years unless extended by the ~~proposed agreement would allow~~unanimous decision of member states. We are monitoring the impact to our ~~U.S. clearing houses~~business of the U.K. leaving the European Union. The impact to ~~continue to access European customers~~our business and ~~allow ICE Clear Europe to margin customers~~corresponding regulatory changes are uncertain at this time, and may not be known in ~~a manner similar to U.S. clearing houses.~~the near future.

Financial Highlights

The following ~~summarizes~~charts and table summarize our results and significant changes in our consolidated financial performance for the periods presented (dollars in millions, except per share amounts):


	Three Months Ended March 31,								Three Months Ended March 31,
	2016			2015			Change		2017			2016			Change
Revenues, less transaction-based expenses	$	1,154		$	850		36	%
Operating expenses	$	570		$	388		47	%
Adjusted operating expenses⁽¹⁾	$	476		$	336		42	%
Total revenues, less transaction-based expenses									$	1,164		$	1,154		1	%
Total operating expenses									$	582		$	570		2	%
Adjusted total operating expenses⁽¹⁾									$	495		$	476		4	%
Operating income	$	584		$	462		26	%	$	582		$	584		—	%
Adjusted operating income⁽¹⁾	$	678		$	514		32	%	$	669		$	678		(1	)%
Operating margin	51		%	54		%	(3 pts)		50		%	51		%	(1 pt)
Adjusted operating margin⁽¹⁾	59		%	60		%	(1 pt)		57		%	59		%	(2 pts)
Other expense, net	$	44		$	21		106	%
Other income (expense), net									$	141		(44		)	n/a
Income tax expense	$	163		$	118		38	%	$	213		$	163		31	%
Effective tax rate	30		%	27		%	3 pts		30		%	30		%	—
Net income attributable to ICE	$	369		$	315		17	%	$	502		$	369		36	%
Adjusted net income attributable to ICE⁽¹⁾	$	441		$	344		28	%	$	441		$	441		—	%
Diluted earnings per share attributable to ICE common shareholders	$	3.08		$	2.80		10	%	$	0.84		$	0.62		35	%
Adjusted diluted earnings per share attributable to ICE common shareholders⁽¹⁾	$	3.68		$	3.06		20	%	$	0.74		$	0.74		—	%
Cash flows from operating activities	$	597		$	465		28	%	$	611		$	597		2	%

⁽¹⁾The adjusted numbers in the charts and table above are calculated by excluding items that are not reflective of our cash operations and core business performance, and for adjusted net income attributable to ICE and adjusted diluted earnings per share attributable to ICE common shareholders, are presented net of ~~taxes, as applicable.~~taxes. As a result, these adjusted numbers are not calculated in accordance with GAAP. See “- Non-GAAP Financial Measures” below.

Revenues, less transaction-based expenses, increased ~~$304~~$10 million for the three months ended March 31, ~~2016~~2017 from the comparable period in 2015, primarily due to our acquisitions of Interactive Data and Trayport, and to a lesser extent, revenue increases in our exchange-related data services, cash equities, Brent crude and agricultural transaction and clearing. We recognized $260 million in Interactive Data and Trayport data services revenues for the three months ended March 31, 2016. See “- Trading and Clearing ~~Segment"~~Segment” and ~~"Data~~“Data and Listings Segment” ~~below. Partially offsetting~~below for a discussion of the ~~revenue increases were~~changes in our revenues. The increase in revenues, from the comparable period in 2016, was partially offset by $20 million in unfavorable foreign exchange effects ~~of $8 million~~ arising from the strengthening U.S. ~~dollar (primarily impacting revenues billed in pounds sterling and euros) for the three months ended March 31, 2016 from the comparable period in 2015.~~dollar. See Item 3 “Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk” below for additional information on the impact of currency fluctuations. Excluding the $20 million in unfavorable foreign exchange effects, our revenues, less transaction-based expenses would have been $1.2 billion for the three months ended March 31, 2017, an increase of 3% from the comparable period in 2016.

Operating expenses increased ~~$182~~$12 million for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015, primarily due to $217 million~~2016. See “- Consolidated Operating Expenses” below for a discussion of the significant changes in our consolidated operating expenses. The increase in operating expenses, ~~relating to Interactive Data and Trayport~~from the comparable period in 2016, was partially offset by $11 million in favorable foreign exchange effects arising from the strengthening U.S. dollar. Excluding the $11 million in favorable foreign exchange effects, our operating expenses would have been $593 million for the three months ended March 31, ~~2016. Offsetting the Interactive Data and Trayport operating expenses was a $35 million decrease in operating expense~~2017, an increase of 4% from the comparable period in ~~2015, including~~2016.

In connection with Cetip’s merger with BM&FBOVESPA S.A. on March 29, 2017, we recognized a ~~$13~~$176 million ~~decrease~~realized investment gain in selling, general and administrative expenses and a $9 million decrease in professional services expenses. See “- Consolidated Operating Expenses” below. Partially offsetting the operating expense increases were favorable foreign exchange effects of $4 million arising from the strengthening U.S. dollar (primarily impacting operating expenses incurred in pounds sterling and euros)other income (expense), net for the three months ended March 31, ~~2016 from the comparable period in 2015.~~

Other expense, net increased for the three months ended March 31, 2016 from the comparable period in 2015, primarily due to the additional interest expense we recognized on the new debt we incurred to finance the Interactive Data acquisition in December 2015.2017. See “- ~~Debt” below.~~Recent Developments - Cetip Investment Gain” above.

Variability in Quarterly Comparisons

The business environments in which we operate directly affect our results of operations. Our results have been and will continue to be affected by many factors, including, without limitation, market volatility and the level of trading activity in our markets, which during any period is significantly influenced by general market conditions; legislative and regulatory changes, as well as our fulfillment of our regulatory obligations; competition; demand for our market data services and our market share; our system reliability; our ability to offer new products; our acquisition activities and the pace of industry consolidation; broad trends in the data and finance industry; the number and financial health of companies listed on our cash markets; geopolitical events; real and perceived supply and demand imbalances; changing technology in the financial services industry; and our reputation, among other factors. In particular, in recent years, ~~the~~our business environment has been characterized by industry consolidation and increasing competition among global markets for trading, ~~volumes~~clearing and listings; the globalization of exchanges, customers and competitors; market participants’ rising demand for speed ~~capacity~~ and ~~reliability,~~data capacity, which requires ~~continuing~~ongoing investment in technology; evolving and disparate regulation across multiple jurisdictions; and increasing ~~competition for market data revenues.~~ focus on capital and cost efficiencies.

Price volatility

increases the need to hedge risk and creates demand among market participants for the exchange of ~~risk.~~risk through trading and clearing. Market liquidity is one of the primary market attributes for attracting and maintaining customers and is an important indicator of a market’s strength. ~~The maintenance~~In addition, the ability to evolve existing products to serve emerging needs, develop new products and ~~growth of~~respond to competitive dynamics in pricing, exclusivity and consolidation is important to our ~~revenues could also be impacted if we face increased pressure on pricing.~~business. Changes in these and other factors could cause our revenues to fluctuate from period to period and these fluctuations may affect the reliability of period to period comparisons of our revenues and operating results. For additional information regarding the factors that affect our results of operations, see Item 1(A) ~~"Risk Factors"~~“Risk Factors” included in our ~~2015~~2016 Form 10-K.

Segment Reporting

We ~~operated as a single reportable business segment as of December 31, 2015. As of March 31, 2016, we operated~~operate as two business segments: our Trading and Clearing segment and our Data and Listings segment. This presentation is reflective of how our chief operating decision maker reviews and operates our business. Our Trading and Clearing segment comprises our transaction-based execution and clearing businesses. Our Data and Listings segment comprises our subscription-based data services and securities listings businesses. Our chief operating decision maker does not review total assets, intersegment revenues/expenses or statements of income below operating income by segments; therefore, such information is not presented below.

While revenues are allocated directly to segments, a significant portion of our operating expenses are not solely related to a specific segment because the expenses serve functions that are necessary for the operation of both segments. Because these expenses do not relate to a single segment, we have employed a reasonable allocation method to allocate expenses between the segments for presentation purposes. We have elected to use a pro-rata revenue approach as the allocation method for the expenses that do not relate solely to one segment. Further, precise allocation of expenses to specific revenue streams within these segments is not reasonably possible. Accordingly, we did not allocate expenses to specific revenue streams within the segments.

Trading and Clearing Segment

The following charts and table ~~presents~~present our selected statements of income data for our Trading and Clearing segment (dollars in millions):

⁽¹⁾The adjusted numbers in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.


	Three Months Ended March 31,						Three Months Ended March 31,
	2016		2015		Change		2017		2016		Change
Revenues:
Brent crude futures and options contracts	$	82	$	74	11	%	$	80	$	82	(2	)%
Other oil futures and options contracts	29		33		(10	)	35		29		20
Gasoil futures and options contracts	24		24		(2	)	26		24		8
Natural gas futures and options contracts	57		58		(3	)	55		57		(4	)
Power futures and options contracts	21		21		4		18		21		(14	)
Emissions and other energy futures and options contracts	17		17		—		14		17		(18	)
Sugar futures and options contracts	32		27		19		26		32		(18	)
Other agricultural and metals futures and options contracts	30		26		15		30		30		(1	)
Interest rates futures and options contracts	56		56		—		49		56		(12	)
Other financial futures and options contracts	38		33		12		34		38		(9	)
Cash equities and equity options							381		490		(22	)
Credit default swaps	40		43		(7	)	37		40		(7	)
Cash equities and equity options	490		412		19
Other transaction	13		12		14
Other transactions							13		13		(5	)
Transaction and clearing, net	929		836		11		798		929		(14	)
Other revenues	45		43		5		45		45		—
Revenues	974		879		11		843		974		(13	)
Transaction-based expenses	400		330		21		305		400		(24	)
Revenues, less transaction-based expenses	574		549		4		538		574		(6	)
Other operating expenses	158		166		(4	)	168		158		7
Acquisition-related transaction and integration costs	1		8		(88	)	—		1		(92	)
Depreciation and amortization	54		52		3		48		54		(11	)
Operating expenses	213		226		(6	)	216		213		2
Operating income	$	361	$	323	12	%	$	322	$	361	(11	)%

Transaction and Clearing Revenues

Overview

Our transaction and clearing revenues are reported on a net basis, except for the ~~NYSE-related~~NYSE transaction-based expenses discussed below, and consist of fees collected from our derivatives, ~~trading and clearing, and from our~~ cash ~~trading~~equities and equity options ~~exchanges.~~trading and derivatives clearing. In our derivatives markets, we earn transaction and clearing revenues from both counterparties to each contract that is traded and/or cleared, and in our equity and equity options markets, we receive trade execution fees as well as routing fees related to orders in our markets which are routed to other markets for execution.

~~Revenues~~Rates per-contract are driven by the number of contracts or securities traded and the fees charged per contract, net of certain rebates. Our per-contract transaction and clearing revenues will depend upon many factors, including, but not limited to, market conditions, transaction and clearing volume, product mix, pricing, applicable revenue sharing and market making agreements, and new product introductions. Because transaction and clearing revenues are generally assessed on a per-contract basis, revenues and profitability fluctuate with changes in contract volume ~~but~~and, though not to the same degree, due to product mix.

For the three months ended March 31, 2017 and 2016, 20% and 22%, respectively, of our Trading and Clearing segment revenues, less transaction-based expenses, were billed in pounds sterling or euros. As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues denominated in foreign currencies changes accordingly. The strengthening of the U.S. dollar compared to the pound sterling and euro reduced our Trading and Clearing segment revenues, less transaction-based expenses, by $13 million for the three months ended March 31, 2017, from the comparable period in 2016.

Our transaction and clearing revenues are presented net of rebates. We recorded rebates of ~~$182~~$194 million and ~~$141~~$182 million for the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively. We offer rebates in certain of our markets primarily to support market liquidity and trading volume by providing qualified participants in those markets a discount to the applicable commission rate. Such

rebates are calculated based on volumes traded. The increase in the rebates is due primarily to an increase in the number of participants in the rebate programs offered on various contracts, an increase in our traded volume and an increase in the number of rebate programs. The level of rebates as a percentage of our total transaction and clearing revenues remained relatively consistent for the three months ended March 31, ~~2016~~2017 and ~~2015.~~

2016.

Commodities Markets

We operate global crude oil and refined oil futures markets, including the ICE Brent, ICE WTI and ICE Gasoil futures and options contracts, as well as over 400 refined oil futures products that relate to our benchmark futures ~~contracts. Total oil volume~~contracts and ~~revenues increased 8% and 3%, respectively, for the three months ended March 31, 2016 from the comparable period in 2015.~~other key price benchmarks. The ICE Brent crude futures contract is relied upon by a broad range of global market participants, including oil producing nations and multinational companies, to price and hedge their crude oil production and consumption. ICE Gasoil is a key refined oil benchmark in Europe and Asia. Total oil volume and revenues both increased 5% for the three months ended March 31, 2017 from the comparable period in 2016. ICE Brent crude futures and options volume increased 2% for the three months ended March 31, 2017 from the comparable period in 2016 and ICE WTI crude futures and options volume increased ~~12% and 4%~~9% for the three months ended March 31, ~~2016, respectively,~~2017 from the comparable period in ~~2015,~~2016. The increase in oil volume was primarily ~~due to increased oil price volatility and broader~~driven by market volatility related to OPEC cuts in ~~oil products, equities and foreign exchange rates.~~supply.

Our global natural gas futures and options volume increased 4% and revenues ~~declined 9% and 3%~~decreased 4%, respectively, for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015. Our North American~~2016. Volume increased primarily due to growth in U.S. natural gas volume ~~declined during~~due to greater price volatility in the first quarter of 2017 than in the first quarter of 2016 ~~from the comparable period in 2015,~~and revenues decreased primarily due to ~~a warmer winter, high North American~~increased market making rebates that apply at higher volume levels and the impact of currency in our European natural gas ~~inventories and lower price volatility compared to the first quarter of 2015.~~markets.

Total volume and revenues in our agricultural and metals futures and options markets ~~increased 20% and 17%, respectively,~~both decreased 10% for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015.~~2016. Volume in our largest agricultural contract, sugar futures and options, ~~increased 16%~~decreased 15% for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015,~~2016 and volume in our other agricultural and metal futures and options volume ~~increased 23%~~decreased 6% for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015.~~2016. The ~~increases~~decreases in agricultural volume were primarily driven by ~~increased price volatility due~~the relatively extreme weather conditions in the first quarter of 2016 compared to ~~changing supply and demand expectations largely related to weather and production levels for sugar and cocoa, and inventory levels for cotton.~~the first quarter of 2017.

Financial Markets

Financial futures and options volume increased 12% and revenues ~~increased 21% and 5%~~decreased 11%, respectively, for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015.~~2016. Interest rate futures and options volume increased 23% for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015,~~2016, primarily due to ~~uncertainty around~~expectations for heightened central bank ~~actions and economic data~~activity during the first quarter of ~~2016. Revenue~~2017. Revenues decreased while volume increased ~~at a lower rate than volume~~for the interest rates futures and options primarily due to ~~increased market making rebates at higher volume levels and~~ the impact of foreign currency ~~translation.~~

translation and increased market making rebates that apply at higher volume levels. Other financial futures and options volume ~~increased 15%~~decreased 18% for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015,~~2016, primarily due to lower price volatility in ~~equity indexes driven by strong~~ global equity ~~market volatility. Volume in our MSCI futures and options contracts increased 67%~~markets.

Cash equities handled volume decreased 26% for the three months ended March 31, ~~2016~~2017, from the comparable period in ~~2015.~~

~~CDS clearing~~2016, primarily due to a reduction in U.S. equities market volatility during the first quarter of 2017 compared to the prior year period. Cash equities revenues, net of transaction-based expenses, were ~~$29~~$52 million for ~~both~~ the three months ended March 31, 2017, a decrease of 17% from net cash equities revenues of $62 million for the three months ended March 31, 2016.

Equity options volume decreased 28% for the three months ended March 31, 2017, from the comparable period in 2016, primarily due to lower U.S. equity market volatility. Equity options revenues, net of transaction-based expenses, were $24 million for the three months ended March 31, 2017, a decrease of 13% from net equity options revenues of $28 million for the three months ended March 31, 2016.

CDS clearing revenues were $30 million and ~~2015,~~$29 million for the three months ended March 31, 2017 and 2016, respectively, and notional value of CDS cleared during the same periods were $3.0 trillion and $3.7 trillion, ~~and $3.3 trillion,~~ respectively. Buyside participation at our U.S. CDS clearing house, ICE Clear Credit, continues to grow driven by increased participation from both U.S. and European buyside customers due to the breadth of products and cost efficient margining in the U.S. relative to Europe. CDS trade execution revenues were ~~$11~~$7 million and ~~$15~~$11 million for the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively. The ~~notional value of~~decrease in the ~~underlying~~ CDS ~~traded was $133 billion and $278 billion~~trade execution revenues for the three months ended March 31, 2017, from the comparable period in 2016, is primarily due to the sale and ~~2015, respectively.~~

~~Cash equities handled volume increased 25% for~~discontinuance of our U.S. and U.K. CDS voice brokerage operations in the third quarter of 2016. The increase in CDS clearing revenues was driven by record buyside clearing during the three months ended March 31, 2016, from the comparable period in 2015, primarily due to increased market volatility. Cash equities revenues, net of transaction-based expenses, were $62 million for the three months ended March 31, 2016, an increase of 21% from $51 million for the three months ended March 31, 2015.

Equity options volume increased 11% for the three months ended March 31, 2016 compared to the same period in 2015 due to market volatility. Equity options revenues, net of transaction-based expenses, were $28 million for the three months ended March 31, 2016, a decrease of 11% from net equity options revenues of $31 million for the three months ended March 31, 2015. Equity options rate per contract decreased compared to the prior year period primarily due to increased market maker rebates at higher volume levels. 2017.

Other Revenues

Other revenues include interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, exchange membership fees and agricultural grading and certification fees.

Selected Operating Data

The following charts and table ~~presents~~present trading activity in our futures and options markets by commodity type based on the total number of contracts traded, as well as futures and options ~~rate~~rates per contract (in millions, except for percentages and ~~rate~~rates per contract amounts):



Volume and Rates per Contract


	Three Months Ended March 31,						Three Months Ended March 31,
	2016		2015		Change		2017		2016		Change
Number of contracts traded:
Brent crude futures and options	61		54		12	%	62		61		2	%
Other oil futures and options	24		24		3		27		24		12
Gasoil futures and options	16		16		—		17		16		5
Natural gas futures and options	59		65		(9	)	61		59		4
Power futures and options	7		8		(8	)	6		7		(11	)
Emissions and other energy futures and options	3		3		7		2		3		(23	)
Sugar futures and options	13		11		16		11		13		(15	)
Other agricultural and metals futures and options	15		12		23		14		15		(6	)
Interest rates futures and options	117		95		23		144		117		23
Other financial futures and options	33		28		15		35		42		(18	)
Total	348		316		10	%	379		357		6	%

Rate per contract:
Rates per contract:
Energy futures and options rate per contract	$	1.35	$	1.34	1	%	$	1.29	$	1.35	(4	)%
Agricultural and metals futures and options rate per contract	$	2.29	$	2.34	(2	)%	$	2.29	$	2.29	—	%
Financial futures and options rate per contract	$	0.60	$	0.69	(13	)%	$	0.45	$	0.57	(20	)%

Open interest is the aggregate number of contracts (long or short) that clearing members hold either for their own account or on behalf of their clients. The following charts and table ~~presents~~present our quarter-end open interest for our futures and options contracts (in ~~millions,~~thousands, except for percentages).

As of March 31,
2016 2015 Change
Open interest — in millions of contracts:
Brent crude futures and options 4
4
4 %
Other oil futures and options 5
5
(9 )
Gasoil futures and options 1
1
9
Natural gas futures and options 18
20
(9 )
Power futures and options 8
7
4
Emissions and other energy futures and options 2
2
(3 )
Sugar futures and options 2
2
4
Other agricultural and metals futures and options 2
2
16
Interest rates futures and options 19
15
33
Other financial futures and options 5
5
4
Total 66
63
5 %



Open Interest



	As of March 31,
	2017	2016	Change
Open interest — in thousands of contracts:
Brent crude futures and options	4,234	4,197	1	%
Other oil futures and options	5,544	4,872	14
Gasoil futures and options	961	829	16
Natural gas futures and options	19,718	18,329	8
Power futures and options	6,973	7,686	(9	)
Emissions and other energy futures and options	1,728	1,917	(10	)
Sugar futures and options	1,522	1,671	(9	)
Other agricultural and metals futures and options	2,409	2,367	2
Interest rates futures and options	21,585	19,293	12
Other financial futures and options	5,917	5,393	10
Total	70,591	66,554	6	%

The following charts and table ~~presents~~present selected cash equities and equity options trading data for the three months ended March 31, ~~2016~~2017 and ~~2015.~~2016. All trading volume below is presented as net daily trading volume and is single counted.


	Three Months Ended March 31,						Three Months Ended March 31,
	2016		2015		Change		2017		2016		Change
Cash equities (shares in millions):
NYSE listed (tape A) issues:
Handled volume	1,481		1,182		25	%	1,128		1,481		(24	)%
Matched volume	1,462		1,161		26	%	1,117		1,462		(24	)%
Total NYSE listed consolidated volume	4,576		3,680		24	%	3,583		4,576		(22	)%
Share of total matched consolidated volume	32.0	%	31.6	%	0.4 pts		31.2	%	32.0	%	(0.8 pts)
NYSE Arca, NYSE MKT and regional listed (tape B) issues:
Handled volume	440		324		36	%	323		440		(27	)%
Matched volume	423		308		38	%	314		423		(26	)%
Total NYSE Arca, NYSE MKT and regional listed consolidated volume	1,874		1,355		38	%	1,383		1,874		(26	)%
Share of total matched consolidated volume	22.6	%	22.7	%	(0.1 pts)		22.7	%	22.6	%	0.1 pts
Nasdaq listed (tape C) issues:
Handled volume	231		214		8	%	144		231		(38	)%
Matched volume	220		201		9	%	135		220		(39	)%
Total Nasdaq listed consolidated volume	2,114		1,903		11	%	1,887		2,114		(11	)%
Share of total matched consolidated volume	10.4	%	10.5	%	(0.2 pts)		7.2	%	10.4	%	(3.2 pts)
Total cash handled volume	2,152		1,720		25	%	1,595		2,152		(26	)%
Total cash market share matched	24.6	%	24.1	%	0.5 pts		22.8	%	24.6	%	(1.7 pts)

Equity options (contracts in thousands):
NYSE equity options volume	3,012		2,717		11	%	2,172		3,012		(28	)%
Total equity options volume	15,280		14,822		3	%	14,606		15,280		(4	)%
NYSE share of total equity options	19.7	%	18.3	%	1.4 pts		14.9	%	19.7	%	(4.8 pts)

Revenue capture or rate per contract:
Cash equities revenue capture (per 100 shares)	$0.047		$0.049		(4	)%	$0.052		$0.047		9	%
Equity options rate per contract	$0.149		$0.185		(19	)%	$0.177		$0.149		19	%

Handled volume represents the total number of shares of equity securities, exchange traded funds, or ETFs, and crossing session activity internally matched on our exchanges or routed to and executed on an external market center. Matched volume represents the total number of shares of equity securities, ETFs and crossing session activity executed on our exchanges.

Transaction-Based Expenses

Our equities and equity options markets pay fees to the SEC pursuant to Section 31 of the Exchange Act. Section 31 fees ~~collected from customers~~ are recorded on a gross basis as a component of transaction and clearing fee revenue. These Section 31 fees are designed to recover the ~~government's~~government’s costs of supervising and regulating the securities markets and securities professionals. We, in turn, collect activity assessment fees, which are included in transaction and clearing revenues in our consolidated statements of income, from member organizations clearing or settling trades on the equities and options exchanges and recognize these amounts when invoiced. The activity assessment fees are designed so that they are equal to the Section 31 fees ~~which~~that are included in transaction-based expenses in our consolidated statements of income. As a result, activity assessment fees and the corresponding Section 31 fees do not have an impact on our net income. Activity assessment fees received are included in cash at the time of receipt and, as required by law, the amount due to the SEC is remitted semi-annually and recorded as an accrued liability until paid. As of March 31, ~~2016,~~2017, the accrued liability related to the un-remitted SEC Section 31 fees was ~~$97~~$90 million.

We also incur liquidity payments made to cash and options trading customers and routing charges made to other exchanges that are included in transaction-based expenses. We incur routing charges when we do not have the best bid or offer in the market for a security that a customer is trying to buy or sell on one of our securities exchanges. In that case, we route the customer’s order to the external market center that displays the best bid or offer. The external market center charges us a fee per share (denominated in tenths

of a cent per share) for routing to its system. We record routing charges on a gross basis as a component of transaction and clearing fee revenue.

Operating Expenses, Operating Income and Operating Margin

Trading and Clearing segment operating expenses ~~decreased $13~~increased $3 million for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015, primarily due to decreases in our acquisition-related transaction and integration costs and our professional services expenses.~~2016. See “- Consolidated Operating Expenses” below. Trading and Clearing segment ~~adjusted~~ operating ~~expenses were $192 million and $198~~income decreased $39 million for the three months ended March 31, 2017 from the comparable period in 2016. Trading and Clearing segment operating margins were 60% and 63% for the three months ended March 31, 2017 and 2016, respectively.

Trading and ~~2015,~~Clearing segment adjusted operating expenses were $194 million and $192 million for the three months ended March 31, 2017 and 2016, respectively. Trading and Clearing segment adjusted operating income was $344 million and $382 million for the three months ended March 31, 2017 and 2016, respectively. Trading and Clearing segment adjusted operating margins were 64% and 66% for the three months ended March 31, 2017 and 2016, respectively. See “- Non-GAAP Financial Measures” below.

Data and Listings Segment

The following charts and table ~~presents~~present our selected statements of income data for our Data and Listings segment (dollars in millions):

Three Months Ended
March 31,
2016 2015 Change
Revenues:
Pricing and analytics $ 204
$ 25
710 %
Desktops and connectivity 145
58
150
Exchange data 128
117
9
Data services 477
200
138
Listings 103
101
3
Revenues 580
301
93
Other operating expenses 242
114
112
Acquisition-related transaction and integration costs 26
11
138
Depreciation and amortization 89
37
140
Operating expenses 357
162
120
Operating income $ 223
$ 139
61 %

~~Data Services Revenues~~



	Three Months Ended March 31,
	2017		2016		Change
Revenues:
Pricing and analytics	$	238	$	204	17	%
Exchange data	138		128		7
Desktops and connectivity	144		145		—
Data services	520		477		9
Listings	106		103		2
Revenues	626		580		8
Other operating expenses	266		242		10
Acquisition-related transaction and integration costs	14		26		(48	)
Depreciation and amortization	86		89		(3	)
Operating expenses	366		357		3
Operating income	$	260	$	223	16	%

The Data and Listings segment represents subscription-based, or recurring, revenue businesses that relate to data services and listings services offered across our trading and clearing businesses and ICE ~~NYSE,~~Data Services. Through ICE ~~Benchmark Administration, Interactive~~ Data ~~SuperDerivatives and Trayport. We~~Services, we generate revenues from a range of market data services, including the dissemination of our exchange and evaluated pricing data and analytics, desktops, ~~and~~ connectivity and ~~exchange~~ market data. Through NYSE, NYSE MKT and NYSE Arca, we generate listings revenue related to the provision of listings services for public companies and ETFs, and related corporate actions for listed companies.

For the three months ended March 31, 2017 and 2016, 10% and 13%, respectively, of our Data and Listings segment revenues were billed in pounds sterling or euros (all relating to our data services revenues). As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues denominated in foreign currencies changes accordingly. The strengthening of the U.S. dollar compared to the pound sterling and euro reduced our Data and Listings segment revenues by $7 million for the three months ended March 31, 2017, from the comparable period in 2016.

Data Services Revenues

Our pricing and analytics services consist of an extensive set of independent evaluated pricing services focused primarily on fixed income and international equity securities, valuation services, reference data, market data, end of day pricing, fixed income, ~~and~~ equity portfolio ~~analytics. We provide~~analytics and risk management ~~analytics, market data and valuation services for financial instruments.~~analytics. We also serve as an administrator of regulated benchmarks, including LIBOR, the ICE Swap Rate and the LBMA Gold Price. Our index services offer a range of products across fixed income, energy, equities, ETFs and other asset classes to provide the methodology, pricing and licensing of key benchmarks.

Our desktop and connectivity services comprise ~~technology based~~technology-based information platforms, feeds and ~~connectivity.~~connectivity solutions. These include trading applications, ~~and~~ desktop solutions, ~~as well as market~~ data feeds and infrastructure to support trading, voice brokers ~~wealth management,~~ and investment functions. Our desktop and web-based applications deliver real-time market information, analytical and decision support tools to support trading and investment decisions. Through our consolidated feeds, clients receive consolidated real-time and/or delayed financial data from global exchanges, trading venues and data sources for exchange-traded and OTC markets.

Our ~~connectivity~~ services are primarily provided by our Secured Financial Transaction Infrastructure, or SFTI, network, and related connectivity and colocation services for the transmission of exchange data to our customers. SFTI isoffer clients a secure, resilient, private multi-participant network that provides ~~connectivity~~access to global exchanges and content service ~~providers via dedicated data circuits with a redundant design to help ensure that no single point of failure exists across the network.~~providers. Our ~~connectivity~~ infrastructure managed services solution also offers colocation space, direct exchange access, proximity hosting and support services that enable access to real-time exchange data, and facilitates low latency, secure electronic ~~trading. We also offer server colocation space at our data centers for~~ market ~~participants to house their servers and applications on equivalent terms.~~

access.

Our exchange data revenues primarily represents subscription fees for the provision of our market data that is created from activity in our Trading and Clearing segment. In our derivatives markets, exchange data ~~fees primarily~~revenues relate to subscription fees charged for customer and license access from third party data vendors, or quote vendors such as Thomson Reuters orand Bloomberg, and from end users, as well as view-only data access, direct access services, terminal access, daily indices, forward curves, and ~~other valuation services, and~~ end of day reports.

We earn exchange data ~~fees~~revenues relating to our cash equity and options markets, and related data ~~and network~~ services. We collect cash trading market data fees principally for consortium-based data products and, to a lesser extent, for NYSE proprietary data products. Consortium-based data fees are determined by the securities industry plans and are charged to vendors based on their redistribution of data. Consortium-based data revenues (net of administrative costs) are distributed to participating securities markets on the basis of a formula set by the SEC under Regulation NMS. Last trade prices and quotes in New York Stock Exchange-listed, NYSE MKT-listed, and NYSE Arca-listed securities are disseminated through “Tape A” and “Tape B,” which constitute the majority of our revenues from consortium-based market data revenues.

Our data services revenues increased 9% for the three months ended March 31, ~~2016,~~2017, from the comparable period in ~~2015, primarily~~2016, due to the ~~acquisition~~strong retention rate of ~~Interactive Data and Trayport in December 2015,~~existing customers, the addition of new ~~users,~~customers, increased ~~usage~~purchases by existing customers, the development of new and enhanced products serving the need for an expanded ~~product offerings~~range of data, regulatory compliance and ~~related fee increases. We recognized $260 million~~analytics solutions, and our acquisitions of Securities Evaluations and Credit Market Analysis from S&P Global in ~~data services revenues for Interactive Data and Trayport during~~October 2016. These increases were partially offset by the ~~three months ended March 31, 2016.~~impact of foreign currency translation.

Listings Revenues

We recognize listings revenues in our securities markets from ~~two types of~~ fees applicable to companies listed on our cash equities exchanges - original listing fees and annual listing fees. Original listing fees consist of two components: initial listing fees and fees related to ~~other~~ corporate-related actions. Initial listing fees, subject to a minimum and maximum amount, are based on the number of shares that a company initially lists. Initial listing fees are recognized as revenue on a straight-line basis over estimated service periods of nine years for NYSE and five years for NYSE Arca and NYSE MKT. U.S. companies pay annual fees based on the number of outstanding shares the company has and non-U.S. companies pay annual fees based on the number of outstanding shares the company has issued or held in the U.S. Annual fees are recognized as revenue on a pro rata basis over the calendar year, and generally received as cash in the first quarter of the year.

In addition, ~~other~~we earn corporate actions-related listing fees ~~are paid by listed companies~~ in connection with actions involving the issuance of new shares, such as stock splits, rights issues and sales of additional securities, as well as mergers and acquisitions. ~~Other corporate~~Corporate actions-related listing fees are recognized as revenue on a straight-line basis over estimated service periods of six years for NYSE and three years for NYSE Arca and NYSE MKT. Unamortized balances are recorded as deferred revenue in our consolidated balance sheet.

Listings revenues increased for the three months ended March 31, 2016, from the comparable period in 2015, primarily due to the amortization of the original listing fees earned since the acquisition of NYSEOperating Expenses, Operating Income and ~~due to additional annual listing fee revenue from new customers.~~

Operating ~~Expenses~~Margin

Data and Listings segment operating expenses increased ~~$195~~$9 million for the three months ended March 31, ~~2016~~2017 from the comparable period in ~~2015,~~2016, primarily due to ~~$217 million in~~ operating expenses recognized during the three months ended March 31, 2017 relating to ~~Interactive~~the acquisitions of Securities Evaluations and Credit Market Analysis, partially offset by a reduction in the acquisition-related transaction and integration costs. See “- Consolidated Operating Expenses” below. Data and ~~Trayport~~Listings segment operating income increased $37 million for the three months ended March 31, ~~2016. See “- Consolidated Operating Expenses” below for further details on~~2017 from the ~~Interactive~~comparable period in 2016. Data and ~~Trayport~~Listings segment operating ~~expenses~~margins were 42% and 39% for the three months ended March 31, ~~2016.~~ 2017 and 2016, respectively. The operating income and operating margin increases were driven by the revenue increases discussed above, partially offset by the increase in the operating expenses.

Data and Listings segment adjusted operating expenses were ~~$284~~$301 million and ~~$138~~$284 million for the three months ended March 31, 2017 and 2016, respectively. Data and ~~2015,~~Listings segment adjusted operating income was $325 million and $296 million for the three months ended March 31, 2017 and 2016, respectively. Data and Listings segment adjusted operating margins were 52% and 51% for the three months ended March 31, 2017 and 2016, respectively. See “- Non-GAAP Financial Measures” below.

Consolidated Operating Expenses

The following chart and table ~~presents~~present our consolidated operating expenses (dollars in millions):


	Three Months Ended March 31,						Three Months Ended March 31,
	2016		2015		Change		2017		2016		Change
Compensation and benefits	$	236	$	151	56	%	$	245	$	236	4	%
Professional services							32		32		2
Acquisition-related transaction and integration costs							14		27		(49	)
Technology and communication	92		51		82		98		92		6
Professional services	32		33		(2	)
Rent and occupancy	18		16		12		18		18		2
Acquisition-related transaction and integration costs	27		19		40
Selling, general and administrative	22		29		(25	)	41		22		92
Depreciation and amortization	143		89		60		134		143		(6	)
Total operating expenses	$	570	$	388	47	%	$	582	$	570	2	%

~~As of~~For the three months ended March 31, 2017 and 2016, ~~we had 5,526 employees~~16% and as18%, respectively, of ~~March 31, 2015, we had 2,887 employees. The increase~~our consolidated operating expenses were incurred in pounds sterling or euros. As the ~~employee headcount was primarily due~~pound sterling or euro exchange rate changes, the U.S. equivalent of operating expenses denominated in foreign currencies changes accordingly. Due to the ~~acquisitions~~strengthening of ~~Interactive Data~~the U.S. dollar compared to the pound sterling and ~~Trayport in December 2015. We recognized $88~~euro, our consolidated operating expenses decreased $11 million ~~in compensation and benefits expenses relating to these acquisitions~~ for the three months ended March 31, 2017 from the comparable period in 2016. See Item 3 “- Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk” below for additional information on the impact of currency fluctuations.

As of March 31, 2017 and 2016, we had 5,242 and 5,526 employees, respectively. The employees as of March 31, 2017 are net of 306 IDMS employees following our divestiture of IDMS on March 31, 2017 (See “- Recent Developments” above). In addition to the decrease relating to the IDMS employees, our employee headcount decreased over the last year primarily due to employee terminations in connection with our integration of Interactive Data, partially offset by the acquisitions of Securities Evaluations and Credit Market Analysis in October 2016. Non-cash compensation expenses recognized in our consolidated financial statements for employee stock options and restricted stock were ~~$29~~$34 million and ~~$24~~$29 million for the three months ended March 31, 2017 and 2016, respectively. Our compensation and 2015, respectively. The increase in non-cash compensation expenses is a result of a greater restricted stock award value in the January 2016 annual award, primarily due to the issuance of more restricted stock awards to NYSE employees and employees at other acquired companies than in the same period in the prior year.

~~Technology and communication~~benefits expenses increased for the three months ended March 31, ~~2016,~~2017, from the comparable period in ~~2015,~~2016, primarily due to ~~$41 million relating to~~the integration of the Interactive Data ~~and Trayport for~~employees into the ICE incentive plans during the first quarter of ~~2016.~~

~~Professional services expenses decreased~~2017, partially offset by the foreign currency decrease for ~~the three months ended March 31, 2016, from the comparable period in 2015, primarily due to integration of remaining NYSE corporate functions~~our U.K. and European based employees and the ~~recognition~~net decrease in our employee headcount.

We incurred acquisition-related transaction and integration costs of ~~a credit from a third party service provider related to fees charged during 2015, along with the continued reduction of contractors at NYSE. In addition, we incurred lower legal fees~~$14 million during the three months ended March 31, ~~2016, from the comparable period in 2015. Legal fees, which are included in professional services expenses,~~2017 primarily ~~related to class action lawsuits in which NYSE is a defendant. The decreases were partially offset by $8 million in professional services expenses~~ relating to our integrations of Interactive Data, Securities Evaluations and ~~Trayport for the first quarter of 2016.~~

Rent and occupancy expenses increased for the three months ended March 31, 2016, from the comparable period in 2015, primarily due to $7 million relating to Interactive Data and Trayport for the first quarter of 2016. The increase was partially offset by reduced rent and occupancy costs related to consolidation of our New York and London office locations during 2015.

Credit Market Analysis. We incurred acquisition-related transaction and integration costs of $27 million during the three months ended March 31, 2016 primarily relating to our integration of Interactive Data and ~~NYSE, our pending acquisition of SPSE and CMA, and~~ various other potential ~~acquisitions. We incurred acquisition-related transaction~~ and ~~integration costs during the three months ended March 31, 2015 primarily relating to our integration of NYSE.~~discontinued acquisitions. The integration costs primarily relate to employee termination, lease termination and professional services costs.

~~Selling, general~~Technology and ~~administrative~~communication expenses ~~decreased~~increased for the three months ended March 31, ~~2016,~~2017, from the comparable period in ~~2015,~~2016, primarily due to the acquisitions of Securities Evaluations and Credit Market Analysis, partially offset by the foreign currency decrease.

Selling, general and administrative expenses increased for the three months ended March 31, 2017, from the comparable period in 2016, primarily due to the acquisitions of Securities Evaluations and Credit Market Analysis, a $10 million accrual made during the three months ended March 31, 2017 relating to ongoing investigations and inquiries, and the release of $11 million ofon non-income-related tax reserves during the three months ended March 31, ~~2016. This decrease was~~2016, partially offset by ~~$6 million in selling, general and administrative expenses relating to Interactive Data and Trayport for~~ the ~~first quarter of 2016.~~foreign currency decrease.

We recorded amortization expenses on the intangible assets acquired as part of our acquisitions, as well as on other intangible assets, of ~~$82~~$70 million and ~~$38~~$82 million for the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively. We recorded depreciation expenses on our fixed assets of ~~$61~~$64 million and ~~$51~~$61 million for the three months ended March 31, 2017 and 2016, ~~and 2015,~~ respectively. ~~We recognized~~The decrease in the amortization expenses ~~and depreciation expenses for Interactive Data and Trayport of $45 million and $11 million, respectively,~~ for the three months ended March 31, ~~2016.~~2017, from the comparable period in 2016, is primarily due to a reduction in amortization expenses recorded on intangible assets which became fully amortized (primarily related to certain of the NYSE intangible assets) and the foreign currency decrease, partially offset by amortization expenses on the Securities Evaluations and Credit Market Analysis intangible assets.

Consolidated Non-Operating Income (Expense)

Income and expenses incurred through activities outside of our core operations are considered non-operating. The following ~~tables present~~table presents our non-operating income (expenses) (dollars in millions):


	Three Months Ended March 31,								Three Months Ended March 31,
	2016			2015			Change		2017			2016			Change
Other income (expense):
Interest expense	$	(46	)	$	(23	)	101	%	$	(45	)	$	(46	)	(2	)%
Other income, net	2			2			33		186			2			n/a
Total other expense, net	$	(44	)	$	(21	)	106	%
Net income from continuing operations attributable to non-controlling interest	$	(8	)	$	(8	)	6	%
Total other income (expense), net									$	141		$	(44	)	n/a
Net income attributable to non-controlling interest									$	(8	)	$	(8	)	(6	)%

The increase in interest expense for the three months ended March 31, 2016, from the comparable period in 2015, is primarily due to the interest expense we recognized on the additional debt incurred to finance for the Interactive Data acquisition in December 2015. See “- Debt” below.

~~We recognized dividend income received relating to our investment in Cetip in other income of $4 million and $3 million for the three months ended March 31, 2016 and 2015, respectively.~~ We recognized equity income relating to our ~~40%~~ ownership in MERSCORP Holdings, Inc., owner of Mortgage Electronic Registrations Systems, Inc., or collectively MERS, and The Options Clearing Corporation, or OCC, in other income, which was $5 million for both the three months ended March 31, 2017 and $12016. We recognized dividend income received relating to our available-for-sale investment in Cetip in other income of $5 million and $4 million for the three months ended March 31, 2017 and 2016, respectively. In connection with Cetip’s merger with BM&FBOVESPA S.A. on March 29, 2017, we recognized a $176 million realized investment gain in other income for the three months ended March 31, 2017. See “- Recent Developments - Cetip Investment Gain” above.

We incurred foreign currency transaction losses of $2 million for the three months ended March 31, 2016 and 2015, respectively. The OCC equity income for the first quarter of each year include true-ups based on the OCC final audited results from the prior year. Excluding the true-ups, our OCC equity income would have been $2 million for both the three months ended March 31, 2016 and 2015.

~~We incurred foreign currency transaction losses of $2 million and $5 million~~there was no impact for the three months ended March 31, ~~2016 and 2015, respectively.~~2017. Foreign currency gains and losses are recorded in other income (expense) and relate to the settlement of foreign currency assets, liabilities and payables that occur through our foreign operations that are received in non-functional currencies due to the increase or decrease in the period-end foreign currency exchange rates between periods.

For consolidated subsidiaries in which our ownership is less than 100%, and for which we have control over the assets, liabilities and management of the entity, the outside stockholders’ interests are shown as non-controlling interests.

Consolidated Income Tax Provision

Consolidated income tax expense was ~~$163~~$213 million and ~~$118~~$163 million for the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively. The change in consolidated income tax expense between ~~periods~~years is primarily due to the ~~change~~tax impact of changes in our pre-tax income and the ~~change~~changes in our effective tax rate each ~~period.~~year. Our effective tax rate was 30% ~~and 27%~~ for both the three months ended March 31, ~~2016~~2017 and ~~2015, respectively.~~2016. The effective tax rates for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016 were lower than the federal statutory rate primarily due to favorable foreign income tax rate differentials, partially offset by state income taxes. ~~The favorable~~Favorable foreign income

tax rate ~~differential results~~differentials result primarily from lower tax rates in the U.K. ~~The effective~~and various other lower tax ~~rate for~~jurisdictions as compared to the ~~three months ended March 31, 2016 is higher than the effective~~ tax ~~rate for the comparable period in 2015 primarily due to a mix of foreign versus U.S. based income and an increase to deferred income taxes~~rates in the ~~current year, partially offset by the tax benefit from the early adoption of ASU 2016-09.~~U.S.

Quarterly Results of Operations

The following quarterly unaudited consolidated statements of income data have been prepared on substantially the same basis as our audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of our consolidated results of operations for the quarters presented. The historical results for any quarter do not necessarily indicate the results expected for any future period. The following table sets forth quarterly consolidated statements of

income data (in millions):


	Three Months Ended,															Three Months Ended,
	March 31, 2016 ⁽¹⁾			December 31, 2015 ⁽¹⁾			September 30, 2015			June 30, 2015			March 31, 2015			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Revenues:
Brent crude futures and options contracts	$	82		$	64		$	65		$	60		$	74		$	80		$	75		$	70		$	72		$	82
Other oil futures and options contracts	29			26			27			26			33			35			32			30			27			29
Gasoil futures and options contracts	24			24			24			21			24			26			25			25			24			24
Natural gas futures and options contracts	57			52			46			43			58			55			54			46			51			57
Power futures and options contracts	21			20			17			21			21			18			21			18			23			21
Emissions and other energy futures and options contracts	17			16			13			12			17			14			17			10			15			17
Sugar futures and options contracts	32			23			30			30			27			26			18			25			34			32
Other agricultural and metals futures and options contracts	30			25			23			27			26			30			29			27			33			30
Interest rates futures and options contracts	56			57			43			50			56			49			40			37			44			56
Other financial futures and options contracts	38			33			38			32			33			34			34			33			36			38
Cash equities and equity options																381			426			410			454			490
Credit default swaps	40			34			38			34			43			37			34			35			34			40
Cash equities and equity options	490			428			457			379			412
Other transaction	13			12			10			12			12
Other transactions																13			13			11			13			13
Total transaction and clearing, net	929			814			831			747			836			798			818			777			860			929
Pricing and analytics	204			63			36			27			25			238			234			209			211			204
Exchange data																138			132			136			139			128
Desktops and connectivity	145			76			58			58			58			144			149			144			147			145
Exchange data	128			118			115			120			117
Total data services	477			257			209			205			200			520			515			489			497			477
Listings	103			102			101			101			101			106			105			106			105			103
Other revenues	45			46			46			43			43			45			46			44			42			45
Revenues	1,554			1,219			1,187			1,096			1,180
Total revenues																1,469			1,484			1,416			1,504			1,554
Transaction-based expenses	400			344			371			299			330			305			346			338			375			400
Revenues, less transaction-based expenses	1,154			875			816			797			850
Total revenues, less transaction-based expenses																1,164			1,138			1,078			1,129			1,154
Compensation and benefits	236			166			150			144			151			245			237			236			236			236
Professional services																32			36			32			37			32
Acquisition-related transaction and integration costs																14			19			14			20			27
Technology and communication	92			56			49			47			51			98			97			93			92			92
Professional services	32			37			37			32			33
Rent and occupancy	18			12			14			15			16			18			18			17			17			18
Acquisition-related transaction and integration costs	27			54			8			7			19
Selling, general and administrative	22			34			24			29			29			41			33			31			30			22
Depreciation and amortization(1)	143			98			94			93			89			134			140			181			146			143
Operating expenses	570			457			376			367			388
Total operating expenses																582			580			604			578			570
Operating income	584			418			440			430			462			582			558			474			551			584
Other expense, net ⁽²⁾	(44		)	(27		)	(17		)	(32		)	(21		)
Other income (expense), net ⁽²⁾																141			(28		)	(31		)	(35		)	(44		)
Income tax expense ⁽³⁾	163			18			113			109			118			213			171			93			153			163
Net income	$	377		$	373		$	310		$	289		$	323		$	510		$	359		$	350		$	363		$	377
Net income attributable to non-controlling interest	(8		)	(3		)	(4		)	(6		)	(8		)	(8		)	(7		)	(6		)	(6		)	(8		)
Net income attributable to ICE	$	369		$	370		$	306		$	283		$	315		$	502		$	352		$	344		$	357		$	369

⁽¹⁾~~We acquired Trayport on December 11, 2015~~The increase in the depreciation and ~~Interactive Data on December 14, 2015 and have included their financial results in our results of operations~~amortization expenses for the ~~periods subsequent~~three months ended September 30, 2016 is primarily due to ~~their acquisition dates, with all revenues included in data services revenues.~~the $33 million Creditex customer relationship intangible asset impairment.

⁽²⁾~~Other expense,~~In connection with Cetip’s merger with BM&FBOVESPA S.A. on March 29, 2017, we recognized a $176 million realized investment gain in other income (expense), net for the three months ended ~~June 30, 2015 includes $19 million in litigation settlements and accruals.~~March 31, 2017. See “- Recent Developments - Cetip Investment Gain” above.

⁽³⁾The decrease in the income tax ~~expense~~expenses for the three months ended ~~December 31, 2015~~September 30, 2016 is primarily due to the deferred tax benefit associated with future U.K. income tax rate ~~reductions along with certain favorable settlements with various taxing authorities.~~reductions.

Liquidity and Capital Resources

Below are charts that reflect our capital allocation. The acquisition and integration costs in the chart below includes the acquisition-related transaction and integration costs in each period.

We have financed our operations, growth and cash needs primarily through income from operations and borrowings under our various debt facilities. Our principal capital requirements have been to fund capital expenditures, working capital, strategic acquisitions and investments, stock repurchases, dividends to our shareholders and the continued development of our ~~electronic trading and clearing platforms.~~technology platforms that support our businesses. We believe that our cash on hand and cash flows from operations will be sufficient to repay our outstanding debt as it matures. In the future, we may need to incur additional debt or issue additional equity securities, which we may be unable to do or to do on favorable terms. See “- Future Capital Requirements” below.

Our commercial paper program enables us to borrow efficiently at reasonable short term interest rates and provides us with the flexibility to de-lever using our strong annual cash flows from operating activities whenever our leverage becomes elevated as a result of investment or acquisition activities. We reduced our outstanding commercial paper during the three months ended March 31, ~~2016~~2017 by ~~$543~~$117 million, ~~enabled by strong~~primarily using cash flows ~~during the quarter which include annual listings billings and a reduction in our unrestricted cash balance~~ from ~~year end.~~operations.

Upon maturity of old issuances of commercial paper and to the extent old issuances are not repaid by cash on hand, we are exposed to the rollover risk of not being able to issue new commercial paper. To mitigate the rollover risk, we maintain an undrawn back-stop bank revolving credit facility for an aggregate amount equaling at any time the amount issued under our commercial paper program. If we were not able to issue new commercial paper, we have the option of drawing on the back-stop revolving facility, however electing to do so would result in higher interest expense. See “- Debt” below.

Consolidated cash and cash equivalents were ~~$468~~$360 million and ~~$627~~$407 million as of March 31, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively, and short-term and long-term restricted cash and investments were ~~$919 million~~$1.0 billion and ~~$920~~$943 million as of March 31, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively. We plan to use the $438 million in net cash and stock proceeds received from the Cetip merger and sale of B3 shares in April 2017 to pay down amounts outstanding under our Commercial Paper Program and for share repurchases. See “- Recent Developments - Cetip Investment Gain” above.

As of March 31, ~~2016,~~2017, the amount of unrestricted cash held by our non-U.S. subsidiaries was ~~$296~~$201 million. While we consider our non-U.S. earnings to be indefinitely reinvested overseas, if these cash balances are needed for our operations in the U.S., any repatriation by way of dividend may be subject to both U.S. federal and state income taxes, as adjusted for any non-U.S. tax credits.

However, we do not have any current needs or foreseeable future needs or other plans to repatriate cash by way of dividends from our non-U.S. subsidiaries.

Our board of directors has adopted a quarterly dividend declaration policy providing that the declaration of any dividends will be approved quarterly by the board of directors or audit committee of the board of directors taking into account such factors as our evolving business model, prevailing business conditions and our financial results and capital requirements, without a predetermined annual net income payout ratio. During ~~2015,~~the first quarter of 2017, we paid a quarterly dividend of $0.20 per share of our common stock ~~repurchases were completed under stock repurchase plans authorized by~~for an aggregate payout of $120 million. On May 3, 2017, we announced a $0.20 per share dividend for the second quarter of 2017 with the dividend payable on June 30, 2017 to shareholders of record as of June 16, 2017.

In August 2016, our board of ~~directors. In connection with our acquisition~~directors approved an aggregate of ~~Interactive Data during the fourth quarter of 2015, we suspended our stock repurchase plan and that plan has now expired. We did not repurchase any~~$1.0 billion for future repurchases of our ~~outstanding~~ common stock ~~during~~with no fixed expiration date, subject to applicable laws and regulations. During the three months ended March 31, ~~2016. The timing~~2017, we repurchased 3,911,026 shares of our outstanding common stock at a cost of $229 million. These repurchases were completed on the open market and ~~extent of future repurchases, if any, that are not made pursuant to a Rule~~under our 10b5-1 trading ~~plan will be at our discretion and will depend upon many conditions. Our management and~~plan. As of March 31, 2017, the remaining board authorization permits repurchases of ~~directors periodically review whether or not~~up to ~~be active in repurchasing our stock. In making a determination regarding any stock repurchases, we consider multiple factors. The factors may include: overall stock market conditions,~~$721 million of our common ~~stock price movements, the remaining amount authorized~~stock. Refer to note 7 to our consolidated financial statements and related notes, which are included elsewhere in this Quarterly Report, for ~~repurchases by~~more information on our ~~board of directors, the potential impact of a~~ stock repurchase program on our corporate debt ratings, our expected free cash flow and working capital needs, our current and future planned strategic growth initiatives, and other potential uses of our cash and capital resources.program.

Cash Flows

The following tables present the major components of net increases (decreases) in cash and cash equivalents (in millions):


	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2017			2016
Net cash provided by (used in):
Operating activities	$	597		$	465		$	611		$	597
Investing activities	(59		)	(86		)	(108		)	(59		)
Financing activities	(697		)	(268		)	(551		)	(697		)
Effect of exchange rate changes	—			(11		)	1			—
Net increase (decrease) in cash and cash equivalents	$	(159	)	$	100
Net decrease in cash and cash equivalents							$	(47	)	$	(159	)

Operating Activities

Net cash provided by operating activities primarily consists of net income adjusted for certain non-cash items, including depreciation and amortization and the effects of changes in working capital. Fluctuations in net cash provided by operating activities are primarily attributable to increases and decreases in our net income between periods and due to fluctuations in working capital. The $132 million increase in net cash provided by operating activities for the three months ended March 31, 2016, from the comparable period in 2015, is primarily due to the $54 million increase in our net income, the $54 million increase in our non-cash depreciation and amortization expenses and other fluctuations in working capital. See “- Financial Highlights” above.

Investing Activities

Consolidated net cash used in investing activities for the three months ended March 31, ~~2016~~2017 and ~~2015~~2016 primarily relates to increases in ~~the~~our capital expenditures and capitalized software development costs, ~~additional contribution to our equity method investee,~~cash received in divestiture or paid for acquisition, and changes in restricted cash.

We had capital expenditures of ~~$31~~$32 million and ~~$39~~$31 million for the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively, and we had capitalized software development expenditures of ~~$25~~$34 million and ~~$21~~$25 million for the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively. The capital expenditures primarily relate to hardware purchases to continue the development and expansion of our electronic platforms, data services and clearing houses and leasehold improvements associated with the new and renovated office spaces in Atlanta, New York and London. The software development expenditures primarily relate to the continued development and expansion of our electronic trading platforms, data services and clearing houses.

We received cash from the divestiture of IDMS, net of the cash paid ~~cash~~for the NYSE National acquisition, of ~~$60~~$22 million for the three months ended March 31, ~~2015 relating to an additional investment in the OCC.~~ 2017. See “- Recent Developments” above.

We had a net ~~decrease~~increases in restricted cash and investments of ~~$34~~$64 million and $3 million for the three months ended March 31, ~~2015.~~2017 and 2016, respectively. The net restricted cash ~~decrease~~increase for the three months ended March 31, 2017 primarily related to ~~a decrease~~increases in the regulatory capital restricted cash at ~~LIFFE Administration~~ICE Clear Europe and ~~Management, or LIFFE, as all of the regulatory capital for LIFFE is held in pounds sterling~~ICE Clear US due to revenue increases and ~~it decreased~~additional costs incurred due to the ~~impact~~growth of ~~the strengthening U.S. dollar on~~ our ~~pound sterling/U.S. dollar exchange rate.~~clearing businesses.

Financing Activities

Consolidated net cash used in financing activities for the three months ended March 31, 2017 primarily relates to $117 million in net repayments under our commercial paper program, $229 million in repurchases of common stock, $120 million in dividend

payments to our shareholders, and $77 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises.

Consolidated net cash used in financing activities for the three months ended March 31, 2016 primarily relates to $543 million in net repayments under our commercial paper program, $102 million in dividend ~~and dividend equivalent~~ payments to our shareholders, and $47 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises.

Consolidated net cash used in financing activities for the three months ended March 31, 2015 primarily relates to $196 million in repurchases of common stock, $73 million in dividend and dividend equivalent payments to our shareholders and $36 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises, partially offset by $35 million in net proceeds under our commercial paper program.Debt

~~Debt~~

Our total debt, including short-term and long-term debt, consisted of the following as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016 (in millions):


	As of March 31, 2016		As of December 31, 2015		As of March 31, 2017		As of December 31, 2016
Debt:
Commercial Paper	$	2,048	$	2,591	$	1,525	$	1,642
NYSE Notes (2.00% senior unsecured notes due October 5, 2017)					851		851
Short-term debt	2,048		2,591		2,376		2,493
NYSE USD Notes (2.00% senior unsecured notes due October 5, 2017)	852		852
2018 Senior Notes (2.50% senior unsecured notes due October 15, 2018)	597		597		598		598
2020 Senior Notes (2.75% senior unsecured notes due December 1, 2020)	1,239		1,239		1,242		1,242
2023 Senior Notes (4.00% senior unsecured notes due October 15, 2023)	789		789		791		790
2025 Senior Notes (3.75% senior unsecured notes due December 1, 2025)	1,241		1,240		1,241		1,241
Long-term debt	4,718		4,717		3,872		3,871
Total debt	$	6,766	$	7,308	$	6,248	$	6,364

Credit Facility

~~364 Day Facility~~

purposes but specifically excluding any use to back-stop amounts issued under the Commercial Paper Program. The commitments under the 364 Day Credit Facility will be automatically reduced to $375 million on May 13, 2016 and to $250 million on August 13, 2016. No amounts were outstanding under the 364 Day Facility as of March 31, 2016.NYSE Notes discussed below.

Commercial Paper Program

~~Senior Notes~~

NYSE Notes

In connection with our acquisition on November 13, 2013 of NYSE Euronext, which we refer to as NYSE following the initial public offering and sale of Euronext in 2014, we assumed the outstanding NYSE debt instruments, which includedThe $850 million, of 2.00% senior unsecured fixed rate ~~notes~~NYSE Notes are due in October ~~2017, or~~2017. We currently plan to fund the redemption of the NYSE ~~USD~~ Notes ~~and €920 million ($1.1 billion)~~with the issuance of ~~5.375%~~new senior ~~unsecured fixed rate~~term notes. However, if we are unable to issue new senior term notes ~~that were due in June 2015,~~ or to do so on favorable terms, then we would fund the NYSE ~~EUR~~ Notes ~~and together~~redemption under the Commercial Paper Program or with the ~~NYSE USD Notes,~~unused amount available under the ~~NYSE Notes. On June 30, 2015, we repaid the NYSE EUR Notes using cash that had been set aside in July 2014 from the proceeds~~Credit Facility, or a combination of ~~the sale of Euronext.~~these sources.

Committed ~~Repurchase Agreement~~Contingent Liquidity Facilities

To provide a tool to address the liquidity needs of ~~the~~our clearing ~~house~~houses and manage the liquidation of margin and guaranty fund deposits held in the form of cash and high quality sovereign debt, ICE Clear Europe, ICE Clear Credit and ICE Clear ~~U.S.~~US have entered into Committed Repurchase Agreement Facilities, or Committed Repo. Additionally, ICE Clear Credit has entered into Committed F/X Facilities to support these liquidity needs. As of March 31, ~~2016,~~2017, the following facilities were in place:

ICE Clear Europe: $1.05 billion in Committed Repo ~~was $1.0 billion at ICE Clear Europe, $500 million at ICE Clear Credit and $250 million at ICE Clear~~to finance U.S. ~~ICE Clear Europe's Committed Repo is available in U.S. dollars,~~dollar, euro and pound sterling sovereign debt deposits.


ICE Clear Credit:	$300 million in Committed Repo to finance U.S. dollar and euro sovereign debt deposits, €500 million in Committed Repo to finance euro sovereign debt deposits, and €1.0 billion in Committed F/X Facilities to finance euro payment obligations with U.S. dollar deposits.

ICE Clear ~~Credit's~~US: $250 million in Committed Repo ~~is available in~~to finance U.S. dollars and euro, and ICE Clear U.S.'s Committed Repo is available in U.S. dollars. These arrangements provide these clearing houses with additional liquidity that may be utilized if there is a need to convert high qualitydollar sovereign debt ~~into cash on a same-day basis during a market disruption that makes it difficult to sell and settle such sovereign debt on a same-day basis.~~deposits.

Future Capital Requirements

Our future capital requirements will depend on many factors, including the rate of growth across our trading and clearing and data ~~services~~ and listings ~~businesses,~~segments, strategic plans and acquisitions, available sources for financing activities, required technology and clearing initiatives, regulatory requirements, the timing and introduction of new products and enhancements to existing products, the geographic mix of our business, potential stock repurchases, and the continuing market acceptance of our electronic trading and clearing platforms. We currently expect to make aggregate operational capital expenditures and to incur capitalized software development costs ranging between ~~$270~~$280 million and ~~$280~~$300 million for the year ended December 31, ~~2016,~~2017, which we believe will support the enhancement of our technology, business integration and the continued ~~expansion~~growth of our businesses. In addition, we currently expect between ~~$45~~$40 million to ~~$55~~$45 million in real estate capital expenditures during ~~2016, on~~2017 for leasehold ~~improvement expenditures~~improvements primarily associated with our ~~Atlanta~~New York headquarters.

Our board of directors has adopted a quarterly dividend declaration policy providing that the declaration of any dividends will be approved quarterly by the board of directors or audit committee of the board of directors taking into account such factors as our evolving business model, prevailing business conditions and our financial results and capital requirements, without a predetermined annual net income payout ratio. During the first quarter of 2016, we paid a quarterly dividend of $0.85 per share of our common stock for an aggregate payout of $102 million, which includes the payment of dividend equivalents. On May 4, 2016, we announced a $0.85

~~per share dividend for the second quarter of 2016 with the dividend payable on June 30, 2016 to shareholders of record as of June 16, 2016.~~

As of March 31, ~~2016,~~2017, we had ~~$6.8~~$6.2 billion in outstanding debt. We currently have a $3.4 billion Credit Facility. After factoring in the ~~$2.0~~$1.5 billion ~~currently~~ required to backstop our Commercial Paper Program ~~$1.4~~as of March 31, 2017, $1.9 billion of our Credit Facility is currently available for general corporate ~~purposes.~~purposes, including for the potential repayment of the $850 million NYSE Notes when they mature in October 2017. The Credit ~~Facility, our $500 million 364 Day~~ Facility and our Commercial Paper Program are currently the only significant agreements or arrangements that we have with third parties for liquidity and capital resources. In the event of any strategic acquisitions, mergers or investments, or if we are required to raise capital for any reason or desire to return capital to our stockholders, we may incur additional debt, issue additional equity to raise ~~the~~ necessary funds, repurchase additional shares of our common stock or pay a dividend. However, we cannot provide assurance that such financing or transactions will be available or successful, or that the terms of such financing or transactions will be favorable to us. We currently plan to fund the redemption of the NYSE Notes in October 2017 with the issuance of new senior term notes. However, if we are unable to issue new senior term notes or to do so on favorable terms, then we would fund the NYSE Notes redemption under the Commercial Paper Program or with the unused amount available under the Credit Facility, or a combination of these sources. See “- Debt” above.

Non-GAAP Financial Measures

We use non-GAAP measures internally to evaluate our performance and in making financial and operational decisions. When viewed in conjunction with our GAAP results and the accompanying reconciliation, we believe that our presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparison of results because the items described below as adjustments to GAAP are not reflective of our core business performance. These financial measures are not in accordance with, or an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We use these adjusted results because we believe they more clearly highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our core operating performance. We strongly recommend that investors review the GAAP financial measures included in this Quarterly Report, ~~on Form 10-Q,~~ including our consolidated financial statements and the notes thereto.

Adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common shareholders and adjusted earnings per share for the periods presented below are calculated by adding or subtracting the adjustments described below, which are not reflective of our cash operations and core business performance, and their related income tax effect and other tax adjustments (in millions, except for percentages and per share amounts):


	Trading and Clearing Segment						Data and Listings Segment						Consolidated						Trading and Clearing Segment						Data and Listings Segment						Consolidated
	Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2016			2015			2016			2015			2017			2016			2017			2016			2017			2016
Revenues, less transaction-based expenses	$	574		$	549		$	580		$	301		$	1,154		$	850		$	538		$	574		$	626		$	580		$	1,164		$	1,154
Operating expenses	213			226			357			162			570			388			$	216		$	213		$	366		$	357		$	582		$	570
Less: NYSE and Interactive Data transaction and integration costs	1			8			16			11			17			19
Less: Interactive Data and NYSE transaction and integration costs																			—			1			12			16			12			17
Less: Amortization of acquisition-related intangibles	20			20			57			13			77			33			12			20			53			57			65			77
Less: Accrual relating to ongoing investigations and inquiries																			10			—			—			—			10			—
Adjusted operating expenses	$	192		$	198		$	284		$	138		$	476		$	336		$	194		$	192		$	301		$	284		$	495		$	476
Operating income	$	361		$	323		$	223		$	139		$	584		$	462		$	322		$	361		$	260		$	223		$	582		$	584
Adjusted operating income	$	382		$	351		$	296		$	163		$	678		$	514		$	344		$	382		$	325		$	296		$	669		$	678
Operating margin	63		%	59		%	39		%	46		%	51		%	54		%	60		%	63		%	42		%	39		%	50		%	51		%
Adjusted operating margin	66		%	64		%	51		%	54		%	59		%	60		%	64		%	66		%	52		%	51		%	57		%	59		%

Net income attributable to ICE common shareholders													$	369		$	315														$	502		$	369
Add: NYSE and Interactive Data transaction and integration costs													17			19
Add: Interactive Data and NYSE transaction and integration costs																															12			17
Add: Amortization of acquisition-related intangibles													77			33															65			77
Less: Income tax effect for the above items													(35		)	(19		)
Add/(Less): Deferred tax adjustments on acquisition-related intangibles													13			(4		)
Add: Accrual relating to ongoing investigations and inquiries																															10			—
Less: Cetip investment gain																															(176		)	—
Add/(Less): Income tax effect for the above items																															28			(35		)
Add: Deferred tax adjustment on acquisition-related intangibles																															—			13
Adjusted net income attributable to ICE common shareholders													$	441		$	344														$	441		$	441

Basic earnings per share attributable to ICE common shareholders													$	3.10		$	2.81														$	0.84		$	0.62
Diluted earnings per share attributable to ICE common shareholders													$	3.08		$	2.80														$	0.84		$	0.62

Adjusted basic earnings per share attributable to ICE common shareholders													$	3.71		$	3.07														$	0.74		$	0.74
Adjusted diluted earnings per share attributable to ICE common shareholders													$	3.68		$	3.06														$	0.74		$	0.74

Acquisition-related transaction costs are included as part of our core business expenses, except for those that are directly related to the announcement, closing, financing or termination of a transaction. However, ~~all~~the acquisition-related transaction and integration

costs relating to ~~NYSE~~Interactive Data and ~~Interactive Data~~NYSE are included in non-GAAP adjustments given the sizes of these acquisitions. As of June 30, 2016, the integration of NYSE had been completed and we will no longer include any NYSE integration costs as non-GAAP adjustments following this date. Amortization of acquisition-related intangibles are included in non-GAAP adjustments as excluding these non-cash expenses provides greater clarity regarding our financial strength and stability of cash operating results. During the three months ended March 31, 2017 we also include as non-GAAP adjustments the $176 million Cetip realized investment gain as it is not part of our core business operations and the $10 million accrual relating to ongoing investigations and inquiries as it is a non-recurring item.

The income tax effects relating to ~~these~~the items above are included in non-GAAP adjustments as well as deferred tax adjustments on acquisition-related ~~intangibles.~~intangibles and other tax adjustments. The tax items in non-GAAP adjustments are either the tax impacts of the pre-tax non-GAAP adjustments or are tax items as described below that are not in the normal course of business and are not indicative of our core business performance. Deferred tax adjustments on acquisition-related intangibles include the impact of U.S. state tax law and apportionment changes which resulted in deferred tax benefits of $13 million for the three months ended March 31, 2016.

For additional information on these items, refer to our consolidated financial statements and related notes, which are included elsewhere in this Quarterly Report and “- Recent Developments - Cetip Investment Gain”, “- Consolidated Operating Expenses” and “- Consolidated Income Tax Provision” above.

Contractual Obligations and Commercial Commitments

In the first quarter of ~~2016,~~2017, there were no significant changes to our contractual obligations and commercial commitments from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ~~2015~~2016 Form 10-K.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, often referred to as structured finance or special purpose entities, which have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

New and Recently Adopted Accounting Pronouncements

Refer to note 2 to our consolidated financial statements above for information on the new and recently adopted accounting pronouncements that are applicable to us.

Critical Accounting Policies and Estimates

In the first quarter of ~~2016,~~2017, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ~~2015~~2016 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of our operating and financing activities, we are exposed to market risks such as interest rate risk, foreign currency exchange rate risk and credit risk. We have implemented policies and procedures designed to measure, manage, monitor and report risk exposures, which are regularly reviewed by the appropriate management and supervisory bodies.

Interest Rate Risk

We have exposure to market risk for changes in interest rates relating to our cash and cash equivalents, short-term investments, short-term and long-term restricted cash and investments, and indebtedness. As of March 31, ~~2016~~2017 and December 31, ~~2015,~~2016, our cash and cash equivalents, short-term investments and short-term and long-term restricted cash and investments were $1.4 billion and ~~$1.6~~$1.4 billion, respectively, of which ~~$380~~$227 million and ~~$439~~$272 million, respectively, were denominated in pounds sterling, euros or Canadian dollars. The remaining cash and cash equivalents, short-term investments and short-term and long-term restricted cash and investments are denominated in U.S. dollars. We do not use our investment portfolio for trading or other speculative purposes. A hypothetical decrease in long-term interest rates to zero basis points would decrease annual pre-tax earnings by $2 million as of March 31, ~~2016,~~2017, assuming no change in the amount or composition of our cash and cash equivalents, short-term investments and short-term and long-term restricted cash and investments.

Our investment in Cetip, which is recorded as an available-for-sale, long-term investment and is recorded and held in Brazilian reais, was valued at $352 million as of March 31, 2016, including an accumulated unrealized gain of $28 million. Changes in the fair value of the Cetip investment are currently reflected in accumulated other comprehensive income (loss) and do not impact earnings, except to the extent that unrealized losses are deemed to be other than temporary.

As of March 31, ~~2016,~~2017, we had ~~$6.8~~$6.2 billion in outstanding debt, of which $3.9 billion relates to senior notes and ~~$852~~$851 million relates to the NYSE Notes, all of which bear interest at fixed interest rates. The remaining amount outstanding of ~~$2.0~~$1.5 billion relates to our Commercial Paper Program, which bears interest at fluctuating rates and, therefore, subjects us to interest rate risk. A hypothetical 100 basis point increase in long-term interest rates relating to the amounts outstanding under our Commercial Paper Program as of March 31, ~~2016~~2017 would decrease annual pre-tax earnings by ~~$20~~$15 million, assuming no change in the volume or composition of our outstanding indebtedness and no hedging activity.

The interest rates on our Commercial Paper Program are currently evaluated based upon current maturities and market conditions. The weighted average interest rate on our Commercial Paper Program increased from 0.74% as of December 31, 2016 to 0.95% as of March 31, 2017. The increase in the Commercial Paper Program weighted average interest rate was primarily due to the decision by the U.S. Federal Reserve in March 2017 to increase the federal funds short-term interest rate by 25 basis points to 1.00%. The Federal Reserve also signaled that they intend to continue to increase the federal fund short-term interest rate over the next several years, and if this occurs, this will continue to increase the weighted average interest rate on our Commercial Paper Program. See Item 2 “- Management’s Discussion and Analysis of Financial Condition and Results of Operations - Debt” included elsewhere in this Quarterly Report.

Foreign Currency Exchange Rate Risk

As an international business, we are subject to foreign currency exchange rate risk. We may experience gains or losses from foreign currency transactions in the future given that a significant part of our assets, liabilities, revenues and expenses are recorded in euros or pounds sterling. Certain assets, liabilities, revenues and expenses of foreign subsidiaries are denominated in the local functional currency of such subsidiaries. Our exposure to foreign denominated earnings for the three months ended March 31, ~~2016~~2017 is

presented by primary foreign currency in the following table (dollars in millions, except exchange rates):


	Three Months Ended March 31, 2016						Three Months Ended March 31, 2017
	Pound sterling			Euro			Pound Sterling			Euro
Average exchange rate to the U.S. dollar in the current year period	$	1.4450		$	1.1027		$	1.2396		$	1.0654
Average exchange rate to the U.S. dollar in the same period in the prior year	$	1.5171		$	1.1299		$	1.4450		$	1.1027
Average exchange rate decrease	(5		)%	(2		)%	(14		)%	(3		)%
Foreign denominated percentage of:
Revenues, less transaction-based expenses	10		%	5		%	10		%	5		%
Operating expenses	12		%	4		%	11		%	4		%
Operating income	8		%	7		%	9		%	3		%
Impact of the currency fluctuations ⁽¹⁾ on:
Revenues, less transaction-based expenses	$	(6	)	$	(2	)	$	(18	)	$	(2	)
Operating expenses	$	(3	)	$	(1	)	$	(10	)	$	(1	)
Operating income	$	(2	)	$	(1	)	$	(8	)	$	(1	)

⁽¹⁾Represents the impact of currency fluctuation for the three months ended March 31, ~~2016~~2017 compared to the same period in the prior year.

We have a significant part of our assets, liabilities, revenues and expenses recorded in pounds sterling or euros. For the three months ended March 31, ~~2016, 16%~~2017, 15% of our consolidated revenues, less transaction-based expenses, were denominated in pounds sterling or euros and ~~16%~~15% of our consolidated expenses were denominated in pounds sterling or euros. As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues and expenses denominated in foreign currencies changes accordingly.

We have foreign currency transaction risk related to the settlement of foreign currency denominated assets, liabilities and payables that occur through our operations, which are received in or paid in pounds sterling or euros, due to the increase or decrease in the foreign currency exchange rates between periods. We ~~had~~incurred foreign currency transaction losses of $2 ~~million and $5~~ million for the three months ended March 31, 2016, ~~and 2015, respectively,~~ primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S. dollar ~~which strengthened.~~(there was no impact for the three months ended March 31, 2017). A 10% adverse change in the underlying foreign currency exchange rates as of March 31, ~~2016~~2017 would result in a foreign currency transaction loss of $6$5 million, assuming no change in the composition of the foreign currency denominated assets, liabilities and payables and assuming no hedging activity.

We entered into foreign currency hedging transactions during the three months ended March 31, ~~2016~~2017 as economic hedges to ~~hedge~~help mitigate a portion of our foreign ~~currency transaction~~exchange risk exposure and may enter into additional hedging transactions in the future to help mitigate our foreign exchange risk exposure. Although we may enter into additional hedging transactions in the future to help mitigate our foreign exchange risk exposure, these hedging arrangements may not be effective, particularly in the event of imprecise forecasts of the levels of our non-U.S. denominated assets and liabilities.

We have foreign currency translation risk equal to our net investment in our foreign subsidiaries. The financial statements of these subsidiaries are translated into U.S. dollars using a current rate of exchange, with gains or losses included in the cumulative translation adjustment account, a component of equity. Our exposure to the net investment in foreign currencies is presented by primary foreign currencies in the table below (in millions):


	As of March 31, 2016				As of March 31, 2017
	Position in pounds sterling		Position in euros		Position in Pounds Sterling		Position in Euros
Assets	£	1,561	€	248	£	1,269	€	203
of which goodwill represents	523		43		522		43
Liabilities	248		96		123		102
Net currency position	£	1,313	€	152	£	1,146	€	101
Impact on consolidated equity of a 10% decrease in foreign currency exchange rates	$	189	$	17	$	144	$	11

As of March 31, ~~2016~~2017 and December 31, ~~2015~~2016, the portion of our equity attributable to accumulated other comprehensive loss from foreign currency translation was ~~$119~~$320 million and ~~$45~~$345 million, respectively. As of March 31, ~~2016,~~2017, we had net exposure of pounds sterling and euros of ~~£1.3~~£1.1 billion ($~~1.9~~1.4 billion) and ~~€152~~€101 million ($~~173~~109 million), respectively. Based on these March 31, ~~2016~~2017 net currency positions, a hypothetical 10% decrease of the pound sterling against U.S. dollar would negatively impact our equity by ~~$189~~$144 million and a hypothetical 10% decrease of the euro against U.S. dollar would negatively impact our equity by ~~$17~~$11 million. For the three months ended March 31, ~~2016,~~2017, currency exchange rate differences had a ~~negative~~positive impact of ~~$74~~$25 million on our consolidated ~~equity.~~equity, primarily due to the increase in the pound sterling/U.S. dollar exchange rate to 1.2552 as of March 31, 2017 (from 1.2336 as of

December 31, 2016). The future impact on our business relating to the U.K. leaving the European Union and the corresponding regulatory changes are uncertain at this time, including future impacts on currency exchange rates.

Credit Risk

We are exposed to credit risk in our operations in the event of a counterparty default. We limit our exposure to credit risk by rigorously selecting the counterparties with which we make our investments and execute agreements. Credit risk is monitored by using exposure limits depending on ratings assigned by rating agencies as well as the nature and maturity of transactions. Our investment objective is to invest in securities that preserve principal while maximizing yields, without significantly increasing risk. We seek to substantially mitigate credit risk associated with investments by ensuring that these financial assets are placed with governments, well-capitalized financial institutions and other creditworthy counterparties.

An ongoing review is performed to evaluate changes in the status of counterparties. In addition to the intrinsic creditworthiness of counterparties, our policies require diversification of counterparties (banks, financial institutions, bond issuers and funds) so as to avoid a concentration of risk.

Our clearing houses hold material amounts of clearing member cash deposits which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks. Refer to note 9 to our consolidated financial statements, ~~above~~which are included elsewhere in this Quarterly Report, for more information on the clearing houses cash deposits, which were ~~$52.3~~$52.4 billion as of March 31, ~~2016.~~2017. While we seek to achieve a reasonable rate of return which may generate interest income for our clearing members, we are primarily concerned with preservation of capital and managing the risks associated with these deposits. As the clearing houses may pass on interest revenues (minus costs) to the members, this could include negative or reduced yield due to market conditions. For a summary of the risks associated with this investment activity and how these risks are mitigated, see Part II, Item 7(A) “Quantitative and Qualitative Disclosures About Market Risk” in our ~~2015~~2016 Form 10-K.

Impact of Inflation

We have not been adversely affected by inflation as technological advances and competition have generally caused prices for the hardware and software that we use for our electronic platforms to remain constant or to decline. In the event of inflation, we believe that we will be able to pass on any price increases to our participants, as the prices that we charge are not governed by long-term contracts.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Changes in Internal Controls over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. As a result, no corrective actions were taken.

PART II. Other Information

ITEM 1. LEGAL PROCEEDINGS

We are subject to legal proceedings, claims and ~~claims~~investigations that arise in the ordinary course of our business. ~~Typically,~~These include, for example, several ongoing investigations and inquiries from the SEC and other regulators as well as the matters described in Part I, Item 3 “Legal Proceedings” in our 2016 Form 10-K. We establish accruals for those matters in circumstances when a loss contingency is considered probable and the related amount is reasonably estimable. Any such accruals may be adjusted as circumstances change. During the three months ended March 31, 2017, we recorded a $10 million accrual relating to ongoing investigations and inquiries. Assessments of losses are inherently subjective and involve unpredictable factors. We do not believe that the resolution of ~~ordinary course~~these legal matters will have a material adverse effect on our consolidated financial ~~condition,~~conditions, results of operations or liquidity. It is possible, however, that future results of operations for any particular quarterly or annual period ~~could~~may be materially and adversely affected by any developments ~~relating to the~~in legal proceedings, claims and ~~claims. Refer to Part 1, Item 3, “Legal Proceedings” in our 2015 Form 10-K for a summary of our legal proceedings and claims.~~investigations.

ITEM 1(A). RISK FACTORS

In the first quarter of ~~2016,~~2017, there were no significant new risk factors from those disclosed in Part 1, Item 1A, ~~"Risk Factors"~~“Risk Factors” in our ~~2015~~2016 Form 10-K. In addition to the other information set forth in this Quarterly Report, including the regulatory update information of Item 2 - ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, you should carefully consider the factors discussed under ~~"Risk Factors"~~“Risk Factors” and the regulation discussion under ~~"Business~~“Business - ~~Regulation"~~Regulation” in our ~~2015~~2016 Form 10-K. These risks could materially and adversely affect our business, financial condition and results of operations. The risks and uncertainties in our ~~2015~~2016 Form 10-K are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Stock Repurchases

~~None.~~The table below sets forth the information with respect to purchases made by or on behalf of Intercontinental Exchange, Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act) of our common stock during the three months ended March 31, 2017.



Period (2017)	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs(1)	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions)(1)
January 1 - January 31	503,138	$57.18	1,406,058	$921
February 1 - February 28	2,680,423	$58.34	4,086,481	$765
March 1 - March 31	727,465	$59.95	4,813,946	$721
Total	3,911,026	$58.49	4,813,946	$721


(1)	Refer to Note 7 to our consolidated financial statements and related notes, which are included elsewhere in this Quarterly Report, for details on our stock repurchase plans.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS



Exhibit Number		Description of Document
3.1	—	Seventh Amended and Restated Bylaws of Intercontinental Exchange, Inc. effective January 31, 2017 (incorporated by reference to Exhibit 3.1 to Intercontinental Exchange, Inc.’s Current Report on Form 8-K filed with the SEC on February 1, 2017, File No. 001-36198).

31.1	—	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2	—	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1	—	Section 1350 Certification of Chief Executive Officer.

32.2	—	Section 1350 Certification of Chief Financial Officer.

101	—	The following materials from Intercontinental Exchange, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2016,~~2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, Accumulated Other Comprehensive Loss and Redeemable Non-Controlling Interest (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text.*

As provided in Rule 406T of Regulation S-T, this information is “furnished” and not “filed” for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. Such exhibit will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 unless Intercontinental Exchange, Inc. specifically incorporates it by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.



	Intercontinental Exchange, Inc. (Registrant)

Date: May ~~4, 2016~~3, 2017	By:	/s/ Scott A. Hill
		Scott A. Hill
		Chief Financial Officer
		(Principal Financial Officer)

4752



Cash and cash equivalents	$	301
Goodwill	3,248
Identifiable intangible assets	2,883
Other assets and liabilities, net	273
Deferred tax liabilities on identifiable intangible assets	(1,071		)
Total purchase price	$	5,634



Preliminary Intangible Assets	Acquisition-Date Preliminary Fair Value		Foreign Currency Translation			Accumulated Amortization			Net Book Value		Useful Life (Years)
Customer relationships	$	2,452	$	(26	)	$	(30	)	$	2,396	20 to 25
Developed technology	168		(2		)	(7		)	159		5 to 8
In-process research and development	129		—			—			129		N/A
Data/databases	109		(2		)	(8		)	99		4
Trade names and trademarks	12		—			(3		)	9		2
Market data provider relationships	11		—			—			11		20
Non-compete agreements	2		—			—			2		1
Total	$	2,883	$	(30	)	$	(48	)	$	2,805



Total revenues, less transaction-based expenses	$	1,100
Operating income	518
Net income attributable to ICE	333
Earnings per common share:
Basic	$	2.76
Diluted	$	2.74