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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from ________ to ________
Commission file number: 001-38855
___________________________________
Nasdaq, Inc.
(Exact name of registrant as specified in its charter)
Delaware 52-1165937
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
151 W. 42nd Street, New York, New York 10036
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: +1 212 401 8700
No Changes
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value per share NDAQ The Nasdaq Stock Market
0.900% Senior Notes due 2033 NDAQ33 The Nasdaq Stock Market
0.875% Senior Notes due 2030 NDAQ30 The Nasdaq Stock Market
1.75% Senior Notes due 2029 NDAQ29 The Nasdaq Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No    
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding at October 26, 2021
Common Stock, $0.01 par value per share 167,222,005  shares





Nasdaq, Inc.
   
Page  
Part I. FINANCIAL INFORMATION
 
     
Item 1.
2
     
2
3
4
5
6
7
Item 2.
Item 3.
Item 4.
Part II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
     
Item 3.
     
Item 4.
Item 5.
Item 6.
   



i


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


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










































This Quarterly Report on Form 10-Q includes market share and industry data that we obtained from industry publications and surveys, reports of governmental agencies and internal company surveys. Industry publications and surveys generally state that the information they contain has been obtained from sources believed to be reliable, but we cannot assure you that this information is accurate or complete. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on the most currently available market data. For market comparison purposes, The Nasdaq Stock Market data in this Quarterly Report on Form 10-Q for IPOs is based on data generated internally by us; therefore, the data may not be comparable to other publicly-available IPO data. Data in this Quarterly Report on Form 10-Q for new listings of equity securities on The Nasdaq Stock Market is based on data generated internally by us, which includes issuers that switched from other listing venues, closed-end funds and ETPs. Data in this Quarterly Report on Form 10-Q for IPOs and new listings of equity securities on the Nasdaq Nordic and Nasdaq Baltic exchanges and Nasdaq First North also is based on data generated internally by us. IPOs and new listings data is presented as of period end. While we are not aware of any misstatements regarding industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors. We refer you to the “Risk Factors” section in our Form 10-K for the fiscal year ended December 31, 2020 that was filed with the SEC on February 23, 2021. 
Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations.
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Forward-Looking Statements
The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains these types of statements. Words such as “may,” “will,” “could,” “should,” “anticipates,” “envisions,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words or terms of similar substance used in connection with any discussion of future expectations as to industry and regulatory developments or business initiatives and strategies, future operating results or financial performance, and other future developments are intended to identify forward-looking statements. These include, among others, statements relating to:
our strategic direction;
the integration of acquired businesses, including accounting decisions relating thereto;
the scope, nature or impact of acquisitions, divestitures, investments, joint ventures or other transactional activities;
the effective dates for, and expected benefits of, ongoing initiatives, including transactional activities and other strategic, restructuring, technology, de-leveraging and capital return initiatives;
our products and services;
the impact of pricing changes;
tax matters;
the cost and availability of liquidity and capital;
any litigation, or any regulatory or government investigation or action, to which we are or could become a party or which may affect us; and
the potential impact of the COVID-19 pandemic and the response of governments and other third parties on our business, operations, results of operations, financial condition, workforce or the operations or decisions of our customers, suppliers or business partners.
Forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following:
our operating results may be lower than expected;
our ability to successfully integrate acquired businesses or divest sold businesses or assets, including the fact that any integration or transition may be more difficult, time consuming or costly than expected, and we may be unable to realize synergies from business combinations, acquisitions, divestitures or other transactional activities;
loss of significant trading and clearing volumes or values, fees, market share, listed companies, market data customers or other customers;
our ability to develop and grow our non-trading businesses, including our technology and analytics offerings;
our ability to keep up with rapid technological advances and adequately address cybersecurity risks;
economic, political and market conditions and fluctuations, including interest rate and foreign currency risk, inherent in U.S. and international operations;
the performance and reliability of our technology and technology of third parties on which we rely;
any significant error in our operational processes;
our ability to continue to generate cash and manage our indebtedness; and
adverse changes that may occur in the litigation or regulatory areas, or in the securities markets generally, or increased regulatory oversight domestically or internationally.
Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the uncertainty and any risk related to forward-looking statements that we make. These risk factors are more fully described in the “Risk Factors section in our Form 10-K that was filed with the SEC on February 23, 2021. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. You should carefully read this entire Quarterly Report on Form 10-Q, including “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and the related notes. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statement, release publicly any revisions to any forward-looking statements or report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Nasdaq, Inc.
Condensed Consolidated Balance Sheets
(in millions, except share and par value amounts)
September 30, 2021 December 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 303  $ 2,745 
Restricted cash and cash equivalents 29  37 
Financial investments 185  195 
Receivables, net 552  566 
Default funds and margin deposits 4,202  3,942 
Other current assets 225  175 
Total current assets 5,496  7,660 
Property and equipment, net 495  475 
Goodwill 8,510  6,850 
Intangible assets, net 2,885  2,255 
Operating lease assets 383  381 
Other non-current assets 628  358 
Total assets $ 18,397  $ 17,979 
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 166  $ 175 
Section 31 fees payable to SEC 14  224 
Accrued personnel costs 221  227 
Deferred revenue 380  235 
Other current liabilities 132  121 
Default funds and margin deposits 4,202  3,942 
Short-term debt 480  — 
Total current liabilities 5,595  4,924 
Long-term debt 5,447  5,541 
Deferred tax liabilities, net 395  502 
Operating lease liabilities 398  389 
Other non-current liabilities 207  187 
Total liabilities 12,042  11,543 
Commitments and contingencies
Equity
Nasdaq stockholders’ equity:
Common stock, $0.01 par value, 300,000,000 shares authorized, shares issued: 173,886,216 at September 30, 2021 and 171,278,761 at December 31, 2020; shares outstanding: 167,206,649 at September 30, 2021 and 164,933,678 at December 31, 2020
Additional paid-in capital 1,983  2,547 
Common stock in treasury, at cost: 6,679,567 shares at September 30, 2021 and 6,345,083 shares at December 31, 2020
(425) (376)
Accumulated other comprehensive loss (1,511) (1,368)
Retained earnings 6,296  5,628 
Total Nasdaq stockholders’ equity 6,345  6,433 
Noncontrolling interests 10 
Total equity 6,355  6,436 
Total liabilities and equity $ 18,397  $ 17,979 
                                            
See accompanying notes to condensed consolidated financial statements.
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Nasdaq, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(in millions, except per share amounts)
  Three Months Ended September 30, Nine Months Ended September 30,
  2021 2020 2021 2020
Revenues:      
Market Technology $ 114  $ 86  $ 332  $ 251 
Investment Intelligence 272  236  787  654 
Corporate Platforms 155  131  451  382 
Market Services 814  954  2,823  2,855 
Other revenues 26  21 
Total revenues 1,357  1,413  4,419  4,163 
Transaction-based expenses:        
Transaction rebates (472) (517) (1,642) (1,525)
Brokerage, clearance and exchange fees (47) (181) (243) (523)
Revenues less transaction-based expenses 838  715  2,534  2,115 
Operating expenses:        
Compensation and benefits 230  198  700  582 
Professional and contract services 36  38  101  96 
Computer operations and data communications 47  39  137  109 
Occupancy 27  29  81  80 
General, administrative and other 42  13  66  99 
Marketing and advertising 12  32  20 
Depreciation and amortization 67  51  197  149 
Regulatory 22  16 
Merger and strategic initiatives 13  70  12 
Restructuring charges —  11  31  36 
Total operating expenses 482  389  1,437  1,199 
Operating income 356  326  1,097  916 
Interest income —  — 
Interest expense (33) (24) (95) (77)
Net gain on divestiture of business —  —  84  — 
Other income 42  43 
Net income from unconsolidated investees 54  90  97 
Income before income taxes 371  357  1,220  945 
Income tax provision 83  93  292  237 
Net income attributable to Nasdaq $ 288  $ 264  $ 928  $ 708 
Per share information:        
Basic earnings per share $ 1.72  $ 1.61  $ 5.61  $ 4.31 
Diluted earnings per share $ 1.69  $ 1.58  $ 5.53  $ 4.25 
Cash dividends declared per common share $ 0.54  $ 0.49  $ 1.57  $ 1.45 



See accompanying notes to condensed consolidated financial statements.
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Nasdaq, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(in millions)
  Three Months Ended September 30, Nine Months Ended September 30,
  2021 2020 2021 2020
Net income $ 288  $ 264  $ 928  $ 708 
Other comprehensive income (loss):      
Foreign currency translation gains (losses) (45) 60  (112) 29 
Income tax benefit (expense)(1)
(14) 23  (31) 25 
Foreign currency translation, net (59) 83  (143) 54 
Comprehensive income attributable to Nasdaq $ 229  $ 347  $ 785  $ 762 
____________
(1)    Primarily relates to the tax effect of unrealized gains and losses on Euro denominated notes.



See accompanying notes to condensed consolidated financial statements.

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Nasdaq, Inc. 
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
(in millions)
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Shares $ Shares $ Shares $ Shares $
Common stock 169  164  165  165 
Additional paid-in capital
Beginning balance 2,435  2,533  2,547  2,632 
Share repurchase program —  —  —  (34) (3) (410) (2) (186)
ASR agreement(1)
(2) (475) —  (2) (475) —  — 
Share-based compensation 23  24  66  64 
Stock option exercises, net — 
Other issuances of common stock, net(2)
—  —  6 254  12 
Ending balance 1,983  2,524  1,983  2,524 
Common stock in treasury, at cost
Beginning balance (423) (367) (376) (336)
Other employee stock activity —  (2) —  —  (49) (31)
Ending balance (425) (367) (425) (367)
Accumulated other comprehensive loss
Beginning balance (1,452) (1,715) (1,368) (1,686)
Other comprehensive income (loss) (59) 83  (143) 54 
Ending balance (1,511) (1,632) (1,511) (1,632)
Retained earnings
Beginning balance 6,098  5,301  5,628  5,027 
Impact of adoption of ASU 2016-13
—  —  —  (12)
Net income 288  264  928  708 
Cash dividends declared per common share
(90) (81) (260) (239)
Ending balance 6,296  5,484  6,296  5,484 
Total Nasdaq stockholders’ equity 6,345  6,011  6,345  6,011 
Noncontrolling interests
Beginning balance 11  — 
Net activity related to noncontrolling interests
(1) — 
Ending balance 10  10 
Total Equity 167  $ 6,355  164  $ 6,014  167  $ 6,355  164  $ 6,014 
____________
(1)    See “ASR Agreement,” of Note 11, “Nasdaq Stockholders’ Equity,” for further discussion.
(2)    For the nine months ended September 30, 2021 primarily relates to the tax impact of shares accelerated and issued upon the sale of our U.S. Fixed Income business. See “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion.





See accompanying notes to condensed consolidated financial statements.
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Nasdaq, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in millions)
Nine Months Ended September 30,
2021 2020
Cash flows from operating activities:
Net income $ 928  $ 708 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 197  149 
Share-based compensation 66  64 
Deferred income taxes 94  19 
Extinguishment of debt 33  36 
Net gain on divestiture of business (84) — 
Net income from unconsolidated investees (90) (97)
Other reconciling items included in net income 26 
Net change in operating assets and liabilities, net of effects of acquisitions:
Receivables, net 32  (109)
Other assets (142) 43 
Accounts payable and accrued expenses (4) (18)
Section 31 fees payable to SEC (210) (69)
Accrued personnel costs (5) (6)
Deferred revenue 138  70 
Other liabilities(1)
(263)
Net cash provided by operating activities 699  817 
Cash flows from investing activities:
Purchases of securities (269) (252)
Proceeds from sales and redemptions of securities 266  372 
Proceeds from divestiture of business, net of cash divested 190  — 
Acquisition of businesses, net of cash and cash equivalents acquired (2,430) (157)
Purchases of property and equipment (113) (128)
Other investing activities (84)
Net cash used in investing activities (2,440) (157)
Cash flows from financing activities:
Proceeds from (repayments of) commercial paper, net 480  (391)
Repayments of borrowings under our credit commitment and debt obligations (804) (1,470)
Payment of debt extinguishment cost (33) (36)
Proceeds from issuances of long-term debt, net of issuance costs and utilization of credit commitment 826  1,928 
Repurchases of common stock (410) (186)
ASR agreement (475) — 
Dividends paid (260) (239)
Proceeds received from employee stock activity and other issuances 17  14 
Payments related to employee shares withheld for taxes (49) (31)
Other financing activities
Net cash used in financing activities (701) (408)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents (8)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents (2,450) 255 
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period 2,782  362 
Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 332  $ 617 
Supplemental Disclosure Cash Flow Information
Cash paid for:
Interest $ 79  $ 69 
Income taxes, net of refund(1)
$ 425  $ 218 
____________
(1)    Includes payment of an acquired tax liability in the second quarter of 2021 related to the Verafin acquisition. See “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture,” for further discussion.

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



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

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


In the U.S., we operate six options exchanges and three cash equity exchanges. The Nasdaq Stock Market, the largest of our cash equities exchanges, is the largest single venue of liquidity for trading U.S.-listed cash equities. We also operate a Canadian exchange for the trading of certain Canadian-listed securities.
In Europe, we operate exchanges in Stockholm (Sweden), Copenhagen (Denmark), Helsinki (Finland), and Reykjavik (Iceland), as well as the clearing operations of Nasdaq Clearing, as Nasdaq Nordic. We also operate exchanges in Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania) as Nasdaq Baltic. Collectively, Nasdaq Nordic and Nasdaq Baltic offer trading in cash equities, depository receipts, warrants, convertibles, rights, fund units and ETFs, as well as trading and clearing of derivatives and clearing of resale and repurchase agreements. Additionally, in June 2021, we completed the acquisition of a majority stake in Puro.earth, a Finnish-based leading marketplace for carbon removal.
The European portion of Nasdaq Fixed Income provides a wide range of products and services, such as trading and clearing, for fixed income products in Sweden, Denmark, Finland, Iceland, Estonia, Lithuania and Latvia.
Nasdaq Commodities is the brand name for Nasdaq’s European commodity-related products and services. Nasdaq Commodities’ offerings include derivatives in power, natural gas and carbon emission markets, seafood, electricity certificates and clearing services. These products are listed on Nasdaq Oslo ASA, except for seafood, which is listed on Fishpool, a third party platform.
Through our Trade Management Services business, we provide market participants with a wide variety of alternatives for connecting to and accessing our markets. Our marketplaces may be accessed via a number of different protocols used for quoting, order entry, trade reporting, and connectivity to various data feeds. We also offer the Nasdaq Workstation, a browser-based, front-end interface that allows market participants to view data and enter orders, quotes and trade reports. In addition, we offer a variety of add-on compliance tools to help firms comply with regulatory requirements.
We provide colocation services to market participants, whereby we offer firms cabinet space and power to house their own equipment and servers within our data centers. Additionally, we offer a number of wireless connectivity offerings between select data centers using millimeter wave and microwave technology.
Our broker services operations business primarily offers technology and customized securities administration solutions to financial participants in the Nordic market. As noted above, we have commenced an orderly wind-down of our Nordic broker services operations business.
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2. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of Nasdaq, its wholly-owned subsidiaries and other entities in which Nasdaq has a controlling financial interest. When we do not have a controlling interest in an entity, but exercise significant influence over the entity’s operating and financial policies, such investment is accounted for under the equity method of accounting. We recognize our share of earnings or losses of an equity method investee based on our ownership percentage. See “Equity Method Investments,” of Note 6, “Investments,” for further discussion of our equity method investments.
The accompanying condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results. These adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.
As permitted under U.S. GAAP, certain footnotes or other financial information can be condensed or omitted in the interim condensed consolidated financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in Nasdaq’s Form 10-K. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP.
Certain prior year amounts have been reclassified to conform
to the current year presentation.
Accounting Estimates
In preparing our condensed consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities in our condensed consolidated balance sheets. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary.
Nasdaq has considered the impact of COVID-19 on the assumptions and estimates used in evaluating our assets and liabilities, including but not limited to our goodwill, intangible assets, equity method investments, equity securities and allowance for losses on accounts receivable. We determined that there were no material adverse impacts on our financial position and results of operations as of or for the three and nine months ended September 30, 2021 and 2020. In addition, there were no material impairment charges recorded for the three and nine months ended September 30, 2021 and 2020. These estimates may change as new events occur and additional information is obtained. Actual results could differ from these estimates under different assumptions or conditions.


Subsequent Events
There have been no subsequent events through the issuance date of this Quarterly Report on Form 10-Q that would require disclosure in, or adjustment to, the condensed consolidated financial statements.
3. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following tables summarize the disaggregation of revenue by major product and service and by segment for the three months ended September 30, 2021 and 2020:
Three Months Ended September 30,
  2021 2020
  (in millions)
Market Technology
Anti Financial Crime Technology $ 66  $ 32 
Marketplace Infrastructure Technology 48  54 
Investment Intelligence
Market data 102  105 
Index 119  86 
Analytics 51  45 
Corporate Platforms
Listing services 99  78 
IR & ESG Services 56  53 
Market Services
Transaction-based trading and clearing, net 214  181 
Trade management services 81  75 
Other revenues
Revenues less transaction-based expenses $ 838  $ 715 
Substantially all revenues from the Market Technology, Investment Intelligence and Corporate Platforms segments were recognized over time for the three months ended September 30, 2021 and 2020. For the three months ended September 30, 2021, approximately 69.3% of Market Services revenues were recognized at a point in time and 30.7% were recognized over time. For the three months ended September 30, 2020, approximately 67.2% of Market Services revenues were recognized at a point in time and 32.8% were recognized over time.
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Nine Months Ended September 30,
  2021 2020
  (in millions)
Market Technology
Anti Financial Crime Technology $ 175  $ 94 
Marketplace Infrastructure Technology 157  157 
Investment Intelligence
Market data 310  298 
Index 328  227 
Analytics 149  129 
Corporate Platforms
Listing services 282  224 
IR & ESG Services 169  158 
Market Services
Transaction-based trading and clearing, net 696  589 
Trade management services 242  218 
Other revenues 26  21 
Revenues less transaction-based expenses $ 2,534  $ 2,115 
Substantially all revenues from the Market Technology, Investment Intelligence and Corporate Platforms segments were recognized over time for the nine months ended September 30, 2021 and 2020. For the nine months ended September 30, 2021, approximately 71.2% of Market Services revenues were recognized at a point in time and 28.8% were recognized over time. For the nine months ended September 30, 2020, approximately 69.8% of Market Services revenues were recognized at a point in time and 30.2% were recognized over time.
Contract Balances
Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our Condensed Consolidated Balance Sheets as receivables, which are net of allowance for doubtful accounts of $18 million as of September 30, 2021 and $21 million as of December 31, 2020. The changes in the balance between periods were immaterial. We do not have obligations for warranties, returns or refunds to customers.
For the majority of our contracts with customers, except for our market technology and listings services contracts, our performance obligations are short-term in nature and there is no significant variable consideration.





We do not have a material amount of revenue recognized from performance obligations that were satisfied in prior periods. We do not provide disclosures about transaction price allocated to unsatisfied performance obligations if contract durations are less than one year. Excluding our market technology contracts, for contract durations that are one-year or greater, materially all of the transaction price allocated to unsatisfied performance obligations is included in deferred revenue. For our market technology contracts, the portion of transaction price allocated to unsatisfied performance obligations is presented in the table below. Deferred revenue primarily represents our contract liabilities related to our fees for Market Technology, Investment Intelligence, annual and initial listings, and IR & ESG Services contracts. Deferred revenue is the only significant contract asset or liability as of September 30, 2021.
See Note 7, “Deferred Revenue,” for our discussion on deferred revenue balances, activity, and expected timing of recognition.
Transaction Price Allocated to Remaining Performance Obligations
As stated above, for contract durations that are one-year or greater, we do not have a material portion of transaction price allocated to unsatisfied performance obligations that are not included in deferred revenue other than for our market technology contracts.
For our market technology contracts, the following table summarizes the amount of the transaction price allocated to performance obligations that are unsatisfied as of September 30, 2021:
(in millions)
Remainder of 2021 $ 95 
2022 415 
2023 253 
2024 131 
2025 78 
2026+ 135 
Total $ 1,107 
Market technology deferred revenue, as discussed in Note 7, “Deferred Revenue,” represents consideration received that is yet to be recognized as revenue for unsatisfied performance obligations.
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4. ACQUISITIONS AND DIVESTITURE
We completed the following divestiture and acquisitions in 2021 and 2020. Financial results of each transaction are included in our condensed consolidated financial statements from the date of each acquisition.
2021 Divestiture
In June 2021, we sold our U.S. Fixed Income business, which was part of our FICC business within our Market Services segment, to Tradeweb Markets Inc., or Tradeweb. We recognized a pre-tax gain on the sale of $84 million, net of disposal costs. The pre-tax gain is included in net gain on divestiture of business in the Condensed Consolidated Statements of Income.
As part of the purchase price consideration related to this business when it was acquired in 2013, we agreed to future annual issuances of 992,247 shares of Nasdaq common stock, which approximated certain tax benefits associated with the transaction. Such contingent future issuances of Nasdaq common stock were to be issued annually through 2027 if Nasdaq’s total gross revenues equaled or exceeded $25 million in each such year. The contingent future issuances of Nasdaq common stock were subject to anti-dilution protections and acceleration upon certain events.
Upon the consummation of the sale of our U.S. Fixed Income business, the aggregate number of Nasdaq shares remaining under the contingent obligation described above were reduced (pursuant to the discounting adjustment provisions set forth in the original purchase agreement for Nasdaq's acquisition of the business) and accelerated, resulting in an issuance of approximately 6.2 million shares of Nasdaq common stock to an assignee of the entity that sold this business to us in 2013.
Nasdaq intends to use the proceeds from the sale, available tax benefits and working and clearing capital of this business, as well as other sources of cash, to repurchase shares of Nasdaq common stock in order to offset the earnings per share dilution from the sale.
To facilitate these repurchases, the board of directors has authorized an increase to the share repurchase program. See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders' Equity,” for further discussion.










2021 Acquisition
Acquisition of Verafin
In February 2021, we completed the acquisition of Verafin, a SaaS technology provider of anti-financial crime management solutions that provides a cloud-based platform to help detect, investigate, and report money laundering and financial fraud, for an aggregate purchase price of $2.75 billion, subject to certain adjustments. The $2.75 billion purchase price includes a cash payment of $102 million, reflected in cash from operating activities in our Condensed Consolidated Statements of Cash Flows, the release of which is subject to certain employment-related conditions over three years following the closing of the transaction. This payment was recorded as a prepaid expense and is recorded in other current and non-current assets in our Condensed Consolidated Balance Sheets and will be amortized to merger and strategic initiatives expense on a straight-line basis over a three-year period. Verafin is part of our Market Technology segment.
Nasdaq used the net proceeds from our offering of senior notes in December 2020, commercial paper issuances, and cash on hand to fund this acquisition. See “Commercial Paper Program,” and “Senior Unsecured Notes Due 2022, 2031 and 2040,” of Note 8, “Debt Obligations,” for further discussion.
As of September 30, 2021, the allocation of purchase price includes the effect of a $9 million measurement period adjustment recorded during the second quarter. This adjustment resulted in an increase to both total net liabilities acquired and goodwill. Additional adjustments to the provisional values may result before the end of the measurement period, a period not to exceed 12 months from the acquisition date. These adjustments, which may include tax and other estimates will be recorded in the reporting period in which the adjustment amounts are determined. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill.
(in millions)
Goodwill $ 1,882 
Acquired Intangible Assets 815 
Total Net Liabilities Acquired (46)
Purchase Consideration $ 2,651 

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Intangible Assets
The following table presents the details of acquired intangible assets for Verafin at the date of acquisition. Acquired intangible assets with finite lives are amortized using the straight-line method.
Customer
Relationships
Technology
Trade
Name
Total Acquired Intangible Assets
Intangible asset value (in millions) $ 532  $ 246  $ 37  $ 815 
Discount rate used 7.5  % 7.5  % 7.5  %
Estimated average useful life 22 years 7 years 20 years
Customer Relationships
Customer relationships represent the non-contractual and contractual relationships with customers.
Methodology
Customer relationships were valued using the income approach, specifically an excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return that is attributable to the intangible asset being valued.
Discount Rate
The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the customer relationships relative to the overall business. In developing a discount rate for the customer relationships, we estimated a weighted-average cost of capital for the overall business and we utilized this rate as an input when discounting the cash flows. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.
For our acquisition of Verafin, a discounted tax amortization benefit was added to the fair value of the assets under the assumption that the customer relationships would be amortized for tax purposes over a period of 20 years.
Estimated Useful Life
We estimate the useful life based on the historical behavior of the customers and a parallel analysis of the customers using the excess earnings method.
Technology
As part of our acquisition of Verafin, we acquired developed technology.






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

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Pro Forma Results and Acquisition-Related Costs
The condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 include the financial results of the above acquisitions from the dates of these acquisitions. Pro forma financial results have not been presented since these acquisitions both individually and in the aggregate were not material to our financial results.
Acquisition-related costs for the transactions described above
were expensed as incurred and are included in merger and strategic initiatives expense in the Condensed Consolidated Statements of Income.
5. GOODWILL AND ACQUIRED INTANGIBLE ASSETS
Goodwill
The following table presents the changes in goodwill by business segment during the nine months ended September 30, 2021:
(in millions)
Market Technology
Balance at December 31, 2020 $ 309 
Goodwill acquired 1,873 
Other adjustments (6)
Balance at September 30, 2021 $ 2,176 
Investment Intelligence
Balance at December 31, 2020 $ 2,541 
Divestiture of business (23)
Other adjustments (61)
Balance at September 30, 2021 $ 2,457 
Corporate Platforms
Balance at December 31, 2020 $ 481 
Other adjustments (11)
Balance at September 30, 2021 $ 470 
Market Services
Balance at December 31, 2020 $ 3,519 
Goodwill acquired 15 
Divestiture of business (37)
Other adjustments (90)
Balance at September 30, 2021 $ 3,407 
Total
Balance at December 31, 2020 $ 6,850 
Goodwill acquired 1,888 
Divestiture of business (60)
Other adjustments (168)
Balance at September 30, 2021 $ 8,510 
In the preceding table:
Divestiture of business relates to the sale of our U.S. Fixed Income business. See “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion. In addition to revenues earned through Market Services, our U.S. Fixed Income business also earned fees from market data, which are included in our Investment Intelligence segment. Therefore, a portion of the goodwill was allocated to this segment.
Other adjustments includes foreign currency translation adjustment. For Market Technology, it also includes a measurement period adjustment related to our acquisition of Verafin. See “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture,” for further discussion.
As of September 30, 2021, the amount of goodwill, primarily relating to our acquisition of Verafin, that is expected to be deductible for tax purposes in future periods is $1.8 billion.
Goodwill represents the excess of purchase price over the value assigned to the net assets, including identifiable intangible assets, of a business acquired. Goodwill is allocated to our reporting units based on the assignment of the fair values of each reporting unit of the acquired company. We test goodwill for impairment at the reporting unit level annually, or in interim periods if certain events occur indicating that the carrying amount may be impaired, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. There was no impairment of goodwill for the three and nine months ended September 30, 2021 and 2020; however, events such as prolonged economic weakness or unexpected significant declines in operating results of any of our reporting units or businesses, may result in goodwill impairment charges in the future.


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Acquired Intangible Assets
The following table presents details of our total acquired intangible assets, both finite- and indefinite-lived:
September 30, 2021 December 31, 2020
Finite-Lived Intangible Assets (in millions)
Gross Amount
Technology $ 316  $ 76 
Customer relationships 2,049  1,599 
Trade names and other 60  18 
Foreign currency translation adjustment (131) (104)
Total gross amount $ 2,294  $ 1,589 
Accumulated Amortization
Technology $ (50) $ (24)
Customer relationships (683) (648)
Trade names and other (10) (6)
Foreign currency translation adjustment 74  58 
Total accumulated amortization $ (669) $ (620)
Net Amount
Technology $ 266  $ 52 
Customer relationships 1,366  951 
Trade names and other 50  12 
Foreign currency translation adjustment (57) (46)
Total definite-lived intangible assets $ 1,625  $ 969 
Indefinite-Lived Intangible Assets
Exchange and clearing registrations $ 1,257  $ 1,257 
Trade names 121  121 
Licenses 52  52 
Foreign currency translation adjustment (170) (144)
Total indefinite-lived intangible assets $ 1,260  $ 1,286 
Total intangible assets $ 2,885  $ 2,255 
The change in the gross and net amounts for technology, customer relationships and trade names and other finite-lived intangible assets as of September 30, 2021 compared with December 31, 2020 is primarily related to our acquisition of Verafin. The change in the gross and net amounts for customer relationships as of September 30, 2021 compared with December 31, 2020 is also related to the divestiture of our U.S. Fixed Income business. See “2021 Acquisition,” and “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” for further discussion of these transactions.
The following table presents our amortization expense for acquired finite-lived intangible assets:
Three Months Ended September 30,
2021 2020
(in millions)
Amortization expense $ 40  $ 26 
Nine Months Ended September 30,
2021 2020
(in millions)
Amortization expense $ 116  $ 76 
The increase in amortization expense for the three and nine months ended September 30, 2021 compared with the same periods in 2020 was primarily due to additional amortization expense for acquired intangible assets related to our acquisition of Verafin. These amounts are included in depreciation and amortization expense in the Condensed Consolidated Statements of Income.
The table below presents the estimated future amortization expense (excluding the impact of foreign currency translation adjustments of $57 million as of September 30, 2021) of acquired finite-lived intangible assets as of September 30, 2021:
(in millions)
Remainder of 2021 $ 41 
2022 162 
2023 159 
2024 153 
2025 151 
2026+ 1,016 
Total $ 1,682 
6. INVESTMENTS
The following table presents the details of our investments:
September 30, 2021 December 31, 2020
(in millions)
Financial investments
$ 185  $ 195 
Equity method investments $ 401  $ 216 
Equity securities $ 74  $ 60 
Financial Investments
As of September 30, 2021, financial investments are comprised of trading securities, primarily highly rated European government debt securities, of which $166 million are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing. As of December 31, 2020, financial investments are comprised of trading securities, primarily highly rated European government debt securities, of which $175 million are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing.
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Equity Method Investments
We record our estimated pro-rata share of earnings or losses each reporting period and record any dividends as a reduction in the investment balance. As of September 30, 2021 and 2020, our equity method investments primarily included our 40.0% equity interest in OCC.
The carrying amounts of our equity method investments are included in other non-current assets in the Condensed Consolidated Balance Sheets. No material impairments were recorded for the three and nine months end September 30, 2021 and 2020.
Net income recognized from our equity interest in the earnings and losses of these equity method investments, primarily OCC, was $6 million for the three months ended September 30, 2021, $54 million for the three months ended September 30, 2020, $90 million for the nine months ended September 30, 2021 and $97 million for the nine months ended September 30, 2020. For the three and nine months ended September 30, 2021, lower equity interest in the earnings of OCC is primarily driven by a reduction in clearing fee rates that OCC charges its customers, partially offset by increased volumes.
Equity Securities 
The carrying amounts of our equity securities are included in other non-current assets in the Condensed Consolidated Balance Sheets. We elected the measurement alternative for primarily all of our equity securities as they do not have a readily determinable fair value. No material adjustments were made to the carrying value of our equity securities for the three and nine months ended September 30, 2021 and 2020. As of September 30, 2021 and December 31, 2020, our equity securities represent various strategic investments made through our corporate venture program as well as investments acquired through various acquisitions.
7. DEFERRED REVENUE
Deferred revenue represents consideration received that is yet to be recognized as revenue. The changes in our deferred revenue during the nine months ended September 30, 2021 are reflected in the following table: 
 
Balance at December 31, 2020
Additions Revenue Recognized Adjustments
Balance at September 30, 2021
(in millions)
Market Technology $ 53  $ 82  $ (45) $ (2) $ 88 
Investment Intelligence 97  71  (64) —  104 
Corporate Platforms:
Initial Listing 91  80  (33) (2) 136 
Annual Listings 83  (2) (1) 82 
IR & ESG Services 46  48  (40) —  54 
Other 17  12  (7) (2) 20 
Total $ 306  $ 376  $ (191) $ (7) $ 484 
In the table above:
Additions reflect deferred revenue billed in the current period, net of recognition. Market Technology additions include deferred revenue acquired as part of the acquisition of Verafin.
Revenue recognized includes revenue recognized during the current period that was included in the beginning balance.
Adjustments reflect foreign currency translation adjustments.
Other revenue primarily includes deferred revenue from non-U.S. listing of additional shares fees. Listing of additional shares fees are included in our Listing Services business.
As of September 30, 2021, we estimate that our deferred revenue will be recognized in the following years:
Fiscal year ended: 2021 2022 2023 2024 2025 2026+ Total
(in millions)
Market Technology $ 41  $ 46  $ $ —  $ —  $ —  $ 88 
Investment Intelligence 47  57  —  —  —  —  104 
Corporate Platforms:
Initial Listings 14  44  30  21  14  13  136 
Annual Listings 82  —  —  —  —  —  82 
IR & ESG Services 29  25  —  —  —  —  54 
Other —  20 
Total $ 218  $ 178  $ 36  $ 24  $ 15  $ 13  $ 484 

In the above table, 2021 represents the remaining three months of 2021.
The timing of recognition of our deferred market technology revenues is primarily dependent upon the completion of customization and any significant modifications made pursuant to existing market technology contracts. As such, as it relates to market technology revenues, the timing represents our best estimate.
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8. DEBT OBLIGATIONS
The following table presents the changes in the carrying amount of our debt obligations during the nine months ended September 30, 2021:
December 31, 2020 Additions Payments, Foreign Currency Translation and Accretion September 30, 2021
(in millions)
Short-term debt - commercial paper $ —  $ 3,409  $ (2,929) $ 480 
Long-term debt - senior unsecured notes:
2024 Notes 498  —  —  498 
2023 Notes 730  —  (730) — 
2026 Notes 497  —  498 
2029 Notes 726  —  (37) 689 
2030 Notes 726  —  (37) 689 
2050 Notes 485  —  486 
2022 Notes 597  —  598 
2031 Notes 643  —  —  643 
2040 Notes 643  —  —  643 
2033 Notes —  726  (19) 707 
2020 Credit Facility (4) 100  (100) (4)
Total long-term debt 5,541  826  (920) 5,447 
Total debt obligations $ 5,541  $ 4,235  $ (3,849) $ 5,927 
Commercial Paper Program
Our U.S. dollar commercial paper program is supported by our 2020 Credit Facility which provides liquidity support for the repayment of commercial paper issued through this program. See “2020 Credit Facility” below for further discussion. The effective interest rate of commercial paper issuances fluctuates as short term interest rates and demand fluctuate. The fluctuation of these rates may impact our interest expense.
In February 2021, we issued $475 million of commercial paper to partially fund the acquisition of Verafin. For further discussion of the acquisition of Verafin, see “2021 Acquisition,” of Note 4, “Acquisitions and Divestiture.”
In July 2021, we issued commercial paper to partially fund our ASR agreement. See “ASR Agreement,” of Note 11, “Nasdaq Stockholders' Equity."




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



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

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

Summary of Restricted Stock Activity
The following table summarizes our restricted stock activity for the nine months ended September 30, 2021:
Restricted Stock
  Number of Awards Weighted-Average Grant Date Fair Value
Unvested at January 1, 2021 1,639,051  $ 84.21 
Granted 469,442  147.68 
Vested (477,127) 79.30 
Forfeited (97,951) 100.17 
Unvested at September 30, 2021 1,533,415  $ 104.15 
As of September 30, 2021, $87 million of total unrecognized compensation cost related to restricted stock is expected to be recognized over a weighted-average period of 1.9 years.
PSUs
PSUs are based on performance measures that impact the amount of shares that each recipient will receive upon vesting. Prior to April 1, 2020, we had two performance-based PSU programs for certain officers, a one-year performance-based program and a three-year cumulative performance-based program that focuses on TSR. Effective April 1, 2020, to better align the equity programs for eligible officers, the one-year performance-based program was eliminated and all eligible officers now participate in the three-year cumulative performance-based program. While the performance periods are complete for all PSUs granted under the one-year performance-based program, some shares underlying these PSUs have not vested.
One-Year PSU Program
The grant date fair value of PSUs under the one-year performance-based program was based on the closing stock price at the date of grant less the present value of future cash dividends. Under this program, an eligible employee received a target grant of PSUs, but could have received from 0.0% to 150.0% of the target amount granted, depending on the achievement of performance measures. These awards vest ratably on an annual basis over a three-year period commencing with the end of the one-year performance period. Compensation cost is recognized over the performance period and the three-year vesting period based on the probability that such performance measures will be achieved, taking into account an estimated forfeiture rate.


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Three-Year PSU Program
Under the three-year performance-based program, each eligible individual receives PSUs, subject to market conditions, with a three-year cumulative performance period that vest at the end of the performance period. Compensation cost is recognized over the three-year performance period, taking into account an estimated forfeiture rate, regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. Performance will be determined by comparing Nasdaq’s TSR to two peer groups, each weighted 50.0%. The first peer group consists of exchange companies, and the second peer group consists of all companies in the S&P 500. Nasdaq’s relative performance ranking against each of these groups will determine the final number of shares delivered to each individual under the program. The award issuance under this program will be between 0.0% and 200.0% of the number of PSUs granted and will be determined by Nasdaq’s overall performance against both peer groups. However, if Nasdaq’s TSR is negative for the three-year performance period, regardless of TSR ranking, the award issuance will not exceed 100.0% of the number of PSUs granted. We estimate the fair value of PSUs granted under the three-year PSU program using the Monte Carlo simulation model, as these awards contain a market condition.
Grants of PSUs that were issued in 2018 with a three-year performance period exceeded the applicable performance parameters. As a result, an additional 150,290 units above the original target were granted in the first quarter of 2021 and were fully vested upon issuance.
The following weighted-average assumptions were used to determine the weighted-average fair values of the PSU awards granted under the three-year PSU program for the nine months ended September 30, 2021 and 2020:
Nine Months Ended September 30,
2021 2020
Weighted-average risk free interest rate 0.31  % 0.27  %
Expected volatility 30.11  % 27.40  %
Weighted-average grant date share price $ 150.85  $ 92.34 
Weighted-average fair value at grant date $ 206.17  $ 111.50 
In the table above:
The risk-free interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant; and
We use historic volatility for PSU awards issued under the three-year PSU program, as implied volatility data could not be obtained for all the companies in the peer groups used for relative performance measurement within the program.
In addition, the annual dividend assumption utilized in the Monte Carlo simulation model is based on Nasdaq’s dividend yield at the date of grant.
Summary of PSU Activity
The following table summarizes our PSU activity for the nine months ended September 30, 2021:
PSUs
One-Year Program Three-Year Program
  Number of Awards   Weighted-Average Grant Date Fair Value Number of Awards Weighted-Average Grant Date Fair Value
Unvested at January 1, 2021 169,548  $ 83.33  809,989  $ 108.12 
Granted —  —  340,718  166.77 
Vested (17,532) 82.45  (392,727) 116.86 
Forfeited (18,829) 83.31  (12,736) 139.59 
Unvested at September 30, 2021 133,187  $ 83.45  745,244  $ 129.80 
In the table above, the granted amount includes additional awards granted based on overachievement of performance parameters as well as target awards.
As of September 30, 2021, $1 million of total unrecognized compensation cost related to the one-year PSU program is expected to be recognized over a weighted-average period of 1.1 years. For the three-year PSU program, $45 million of total unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.5 years.
Stock Options
A summary of stock option activity for the nine months ended September 30, 2021 is as follows:
  Number of Stock Options Weighted-Average Exercise Price
Outstanding at January 1, 2021 293,353  $ 63.22 
Exercised (24,409) 25.28 
Forfeited (127) 25.28 
Outstanding and exercisable at September 30, 2021 268,817  $ 66.68 
There were no stock options granted, exercised or forfeited for the three months ended September 30, 2021.
The net cash proceeds from the exercise of 24,409 stock options for the nine months ended September 30, 2021 was $1 million. The net cash proceeds from the exercise of 25,113 stock options for the three months ended September 30, 2020 was $1 million. The net cash proceeds from the exercise of 80,378 stock options for the nine months ended September 30, 2020 was $2 million.

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








Common Stock in Treasury, at Cost
We account for the purchase of treasury stock under the cost method with the shares of stock repurchased reflected as a reduction to Nasdaq stockholders’ equity and included in common stock in treasury, at cost in the Condensed Consolidated Balance Sheets. Shares repurchased under our share repurchase program are currently retired and canceled and are therefore not included in the common stock in treasury balance. If treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired. We held 6,679,567 shares of common stock in treasury as of September 30, 2021 and 6,345,083 shares as of December 31, 2020, most of which are related to shares of our common stock withheld for the settlement of employee tax withholding obligations arising from the vesting of restricted stock and PSUs.
Share Repurchase Program
As discussed in “2021 Divestiture,” of Note 4, “Acquisitions and Divestiture,” on June 16, 2021, our board of directors authorized an increase to our share repurchase program to an aggregate authorized amount of $1.5 billion. As of September 30, 2021, the remaining aggregate authorized amount under the existing share repurchase program was $984 million.
These purchases may be made from time to time at prevailing market prices in open market purchases, privately-negotiated transactions, block purchase techniques, an accelerated share repurchase program or otherwise, as determined by our management. The purchases are primarily funded from existing cash balances. The share repurchase program may be suspended, modified or discontinued at any time, and has no defined expiration date.
The following is a summary of our share repurchase activity, excluding the repurchases done through our ASR agreement described below, reported based on settlement date, for the nine months ended September 30, 2021:
Nine Months Ended September 30, 2021
Number of shares of common stock repurchased 2,623,551 
Average price paid per share
$ 156.11 
Total purchase price (in millions)
$ 410 
In the table above, the number of shares of common stock repurchased excludes an aggregate of 334,484 shares withheld upon the vesting of restricted stock and PSUs for the nine months ended September 30, 2021.
As discussed above in “Common Stock in Treasury, at Cost,” shares repurchased under our share repurchase program are currently retired and cancelled.

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ASR Agreement
In July 2021 we entered into an ASR agreement to repurchase $475 million of common stock and received an initial delivery of 2,039,940 shares of common stock. The ASR agreement was entered into pursuant to our $1.5 billion share repurchase authorization as discussed in "Share Repurchase Program," above. We expect to receive the remaining shares in the fourth quarter of 2021.
Preferred Stock
Our certificate of incorporation authorizes the issuance of 30,000,000 shares of preferred stock, par value $0.01 per share, issuable from time to time in one or more series. As of September 30, 2021 and December 31, 2020, no shares of preferred stock were issued or outstanding.
Cash Dividends on Common Stock
During the first nine months of 2021, our board of directors declared and paid the following cash dividends:
Declaration Date Dividend Per
Common Share
Record Date Total Amount Paid Payment Date
      (in millions)  
January 27, 2021 $ 0.49  March 12, 2021 $ 81  March 26, 2021
April 21, 2021 0.54  June 11, 2021 89  June 25, 2021
July 21, 2021 0.54  September 10, 2021 90  September 24, 2021
$ 260 
The total amount paid of $260 million was recorded in retained earnings in the Condensed Consolidated Balance Sheets at September 30, 2021.
In October 2021, the board of directors approved a regular quarterly cash dividend of $0.54 per share on our outstanding common stock. The dividend is payable on December 17, 2021 to shareholders of record at the close of business on December 3, 2021. The estimated amount of this dividend is $90 million. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the board of directors.
The board of directors maintains a dividend policy with the intention to provide stockholders with regular and increasing dividends as earnings and cash flows increase.
12. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
  Three Months Ended September 30,
  2021 2020
Numerator: (in millions, except share and per share amounts)
Net income attributable to common shareholders $ 288  $ 264 
Denominator:    
Weighted-average common shares outstanding for basic earnings per share
167,692,369  164,171,067 
Weighted-average effect of dilutive securities:    
Employee equity awards 2,487,642  2,328,540 
Contingent issuance of common stock —  992,247 
Weighted-average common shares outstanding for diluted earnings per share
170,180,011  167,491,854 
Basic and diluted earnings per share:
   
Basic earnings per share $ 1.72  $ 1.61 
Diluted earnings per share $ 1.69  $ 1.58 

Nine Months Ended September 30,
2021 2020
Numerator: (in millions, except share and per share amounts)
Net income attributable to common shareholders $ 928  $ 708 
Denominator:
Weighted-average common shares outstanding for basic earnings per share
165,506,859  164,377,053 
Weighted-average effect of dilutive securities:
Employee equity awards 2,407,484  2,071,848 
Contingent issuance of common stock —  330,749 
Weighted-average common shares outstanding for diluted earnings per share
167,914,343  166,779,650 
Basic and diluted earnings per share:
Basic earnings per share $ 5.61  $ 4.31 
Diluted earnings per share $ 5.53  $ 4.25 

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

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Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis
Our non-financial assets, which include goodwill, intangible assets, and other long-lived assets, are not required to be carried at fair value on a recurring basis. Fair value measures of non-financial assets are primarily used in the impairment analysis of these assets. Any resulting asset impairment would require that the non-financial asset be recorded at its fair value. Nasdaq uses Level 3 inputs to measure the fair value of the above assets on a non-recurring basis. As of September 30, 2021 and December 31, 2020, there were no non-financial assets measured at fair value on a non-recurring basis.
14. CLEARING OPERATIONS
Nasdaq Clearing
Nasdaq Clearing is authorized and supervised under EMIR as a multi-asset clearinghouse by the SFSA. Such authorization is effective for all member states of the European Union and certain other non-member states that are part of the European Economic Area, including Norway. The clearinghouse acts as the CCP for exchange and OTC trades in equity derivatives, fixed income derivatives, resale and repurchase contracts, power derivatives, emission allowance derivatives, and seafood derivatives. 
Through our clearing operations in the financial markets, which include the resale and repurchase market, the commodities markets, and the seafood market, Nasdaq Clearing is the legal counterparty for, and guarantees the fulfillment of, each contract cleared. These contracts are not used by Nasdaq Clearing for the purpose of trading on its own behalf. As the legal counterparty of each transaction, Nasdaq Clearing bears the counterparty risk between the purchaser and seller in the contract. In its guarantor role, Nasdaq Clearing has precisely equal and offsetting claims to and from clearing members on opposite sides of each contract, standing as the CCP on every contract cleared. In accordance with the rules and regulations of Nasdaq Clearing, default fund and margin collateral requirements are calculated for each clearing member’s positions in accounts with the CCP. See “Default Fund Contributions and Margin Deposits” below for further discussion of Nasdaq Clearing’s default fund and margin requirements.
Nasdaq Clearing maintains three member sponsored default funds: one related to financial markets, one related to commodities markets and one related to the seafood market. Under this structure, Nasdaq Clearing and its clearing members must contribute to the total regulatory capital related to the clearing operations of Nasdaq Clearing. This structure applies an initial separation of default fund contributions for the financial, commodities and seafood markets in order to create a buffer for each market’s counterparty risks. As of September 1, 2021, the mutualized default fund has been eliminated and the default fund structure is fully segregated. See “Default Fund Contributions” below for further discussion of Nasdaq
Clearing’s default fund. A power of assessment and a liability waterfall have also been implemented to further align risk between Nasdaq Clearing and its clearing members. See “Power of Assessment” and “Liability Waterfall” below for further discussion.
Nasdaq Commodities Clearing Default
In September 2018, a member of the Nasdaq Clearing commodities market defaulted due to the inability to post sufficient collateral to cover increased margin requirements for the positions of the relevant member, which had experienced losses due to sharp adverse movements in the Nordic - German power market spread. Nasdaq Clearing followed default procedures and offset the future market risk on the defaulting member’s positions.
Immediately following the event, Nasdaq Clearing launched a comprehensive enhancement program to strengthen the resilience and robustness of the clearinghouse.
In December 2018, we initiated a capital relief program. The capital relief program was a voluntary program open to each commodities default fund participant; each such participant who agreed to the capital relief program received a proportion of the funds made available under the capital relief program as reflected by their proportionate share of the aggregate of the clearing members' default fund replenishments.
Since the member default in 2018, Nasdaq Clearing has been working to maximize the recovery from the defaulted member. All funds recovered are applied towards the default fund participants on a pro rata basis. As of September 30, 2021, the expected recovery together with the capital relief program amounts to approximately 80% of the initial loss, of which the majority has been paid and the remainder is expected to be paid during 2021.
In December 2018, the SFSA initiated a review of Nasdaq Clearing. In January 2021, the SFSA issued a warning combined with an administrative fine of approximately $34 million (SEK 300 million) to Nasdaq Clearing based on their review. Nasdaq Clearing has assessed the SFSA´s decision and has appealed the decision to the Administrative Court. As of September 30, 2021, no accrual has been recorded related to this matter as the outcome cannot be reasonably estimated.
Default Fund Contributions and Margin Deposits
As of September 30, 2021, clearing member default fund contributions and margin deposits were as follows:
  September 30, 2021
  Cash Contributions Non-Cash Contributions Total Contributions
  (in millions)
Default fund contributions
$ 614  $ 207  $ 821 
Margin deposits 3,588  7,327  10,915 
Total $ 4,202  $ 7,534  $ 11,736 
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Of the total default fund contributions of $821 million, Nasdaq Clearing can utilize $739 million as capital resources in the event of a counterparty default. The remaining balance of $82 million pertains to member posted surplus balances.
Our clearinghouse holds material amounts of clearing member cash deposits which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks. While we seek to achieve a reasonable rate of return, we are primarily concerned with preservation of capital and managing the risks associated with these deposits.
Clearing member cash contributions are maintained in demand deposits held at central banks and large, highly rated financial institutions or secured through direct investments, primarily central bank certificates and highly rated European government debt securities with original maturities primarily 1 year or less, reverse repurchase agreements and multilateral development bank debt securities. Investments in reverse repurchase agreements range in maturity from 1 day to 13 days and are secured with highly rated government securities. The carrying value of these securities approximates their fair value due to the short-term nature of the instruments and reverse repurchase agreements.
Nasdaq Clearing has invested the total cash contributions of $4,202 million as of September 30, 2021 and $3,942 million as of December 31, 2020, in accordance with its investment policy as follows:
  September 30, 2021 December 31, 2020
  (in millions)
Demand deposits $ 2,731  $ 2,086 
Central bank certificates 685  1,111 
European government debt securities
353  470 
Reverse repurchase agreements
188  180 
Multilateral development bank debt securities 245  95 
Total
$ 4,202  $ 3,942 
In the investment activity related to default fund and margin contributions, we are exposed to counterparty risk related to reverse repurchase agreement transactions, which reflect the risk that the counterparty might become insolvent and, thus, fail to meet its obligations to Nasdaq Clearing. We mitigate this risk by only engaging in transactions with high credit quality reverse repurchase agreement counterparties and by limiting the acceptable collateral under the reverse repurchase agreement to high quality issuers, primarily government securities and other securities explicitly guaranteed by a government. The value of the underlying security is monitored during the lifetime of the contract, and in the event the market value of the underlying security falls below the reverse repurchase amount, our clearinghouse may require additional collateral or a reset of the contract.
Default Fund Contributions
Required contributions to the default funds are proportional to the exposures of each clearing member. When a clearing member is active in more than one market, contributions must be made to all markets’ default funds in which the member is active. Clearing members’ eligible contributions may include cash and non-cash contributions. Cash contributions received are maintained in demand deposits held at central banks and large, highly rated financial institutions or invested by Nasdaq Clearing, in accordance with its investment policy, either in central bank certificates, highly rated government debt securities, reverse repurchase agreements with highly rated government debt securities as collateral, or multilateral development bank debt securities. Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing. Clearing members’ cash contributions are included in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Non-cash contributions include highly rated government debt securities that must meet specific criteria approved by Nasdaq Clearing. Non-cash contributions are pledged assets that are not recorded in the Condensed Consolidated Balance Sheets as Nasdaq Clearing does not take legal ownership of these assets and the risks and rewards remain with the clearing members. These balances may fluctuate over time due to changes in the amount of deposits required and whether members choose to provide cash or non-cash contributions. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default. In addition to clearing members’ required contributions to the liability waterfall, Nasdaq Clearing is also required to contribute capital to the liability waterfall and overall regulatory capital as specified under its clearinghouse rules. As of September 30, 2021, Nasdaq Clearing committed capital totaling $137 million to the liability waterfall and overall regulatory capital, in the form of government debt securities, which are recorded as financial investments in the Condensed Consolidated Balance Sheets. The combined regulatory capital of the clearing members and Nasdaq Clearing is intended to secure the obligations of a clearing member exceeding such member’s own margin and default fund deposits and may be used to cover losses sustained by a clearing member in the event of a default.
Margin Deposits
Nasdaq Clearing requires all clearing members to provide collateral, which may consist of cash and non-cash contributions, to guarantee performance on the clearing members’ open positions, or initial margin. In addition, clearing members must also provide collateral to cover the daily margin call if needed. See “Default Fund Contributions” above for further discussion of cash and non-cash contributions.
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Similar to default fund contributions, Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing and are recorded in revenues. These cash deposits are recorded in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Pledged margin collateral is not recorded in our Condensed Consolidated Balance Sheets as all risks and rewards of collateral ownership, including interest, belong to the counterparty. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default.
Nasdaq Clearing marks to market all outstanding contracts and requires payment from clearing members whose positions have lost value. The mark-to-market process helps identify any clearing members that may not be able to satisfy their financial obligations in a timely manner allowing Nasdaq Clearing the ability to mitigate the risk of a clearing member defaulting due to exceptionally large losses. In the event of a default, Nasdaq Clearing can access the defaulting member’s margin and default fund deposits to cover the defaulting member’s losses.
Regulatory Capital and Risk Management Calculations
Nasdaq Clearing manages risk through a comprehensive counterparty risk management framework, which is comprised of policies, procedures, standards and financial resources. The level of regulatory capital is determined in accordance with Nasdaq Clearing’s regulatory capital and default fund policy, as approved by the SFSA. Regulatory capital calculations are continuously updated through a proprietary capital-at-risk calculation model that establishes the appropriate level of capital.
As mentioned above, Nasdaq Clearing is the legal counterparty for each contract cleared and thereby guarantees the fulfillment of each contract. Nasdaq Clearing accounts for this guarantee as a performance guarantee. We determine the fair value of the performance guarantee by considering daily settlement of contracts and other margining and default fund requirements, the risk management program, historical evidence of default payments, and the estimated probability of potential default payouts. The calculatio