ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the fiscal year ended | ||||||||
OR | ||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period | from ________ to ________ |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at February 13, 2023 | ||||||||||
Common Stock, $0.01 par value per share | shares |
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Item 16. |
IPOs | 161 | ||||
Switches from the New York Stock Exchange LLC, or NYSE, and the NYSE American LLC, or NYSE American | 14 | ||||
Upgrades from OTC | 46 | ||||
ETPs and Other Listings | 145 | ||||
Total | 366 | ||||
The Nasdaq Stock Market IPO win rates: | |||||
2022 total | 89 | % | |||
Operating companies | 92 | % | |||
SPACs | 86 | % |
Period | (a) Total Number of Shares Purchased | (b) Average Price Paid Per Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | ||||||||||||||||||||||
October 2022 | ||||||||||||||||||||||||||
Share repurchase program | — | $ | — | — | $ | 293 | ||||||||||||||||||||
Employee transactions | 27,913 | $ | 59.76 | N/A | N/A | |||||||||||||||||||||
November 2022 | ||||||||||||||||||||||||||
Share repurchase program | — | $ | — | — | $ | 293 | ||||||||||||||||||||
Employee transactions | 231 | $ | 66.52 | N/A | N/A | |||||||||||||||||||||
December 2022 | ||||||||||||||||||||||||||
Share repurchase program | — | $ | — | — | $ | 650 | ||||||||||||||||||||
Employee transactions | 56,480 | $ | 61.76 | N/A | N/A | |||||||||||||||||||||
Total Quarter Ended December 31, 2022 | ||||||||||||||||||||||||||
Share repurchase program | — | $ | — | — | $ | 650 | ||||||||||||||||||||
Employee transactions | 84,624 | $ | 61.11 | N/A | N/A |
Peer Group | |||||||||||||||||
• | ASX Limited | • | Deutsche Börse AG | • | LSE | ||||||||||||
• | B3 S.A. | • | Euronext N.V. | • | Singapore Exchange Limited | ||||||||||||
• | Bolsas Mexicana de Valores, S.A.B. de C.V. | • | Hong Kong Exchanges and Clearing Limited | • | TMX Group Limited | ||||||||||||
• | Cboe | • | ICE | ||||||||||||||
• | CME Group Inc. | • | Japan Exchange Group, Inc. |
Fiscal Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||||||||||||||||||||||
Nasdaq, Inc. | $ | 100 | $ | 108 | $ | 145 | $ | 183 | $ | 293 | $ | 260 | |||||||||||||||||||||||
Nasdaq Composite Index | 100 | 97 | 133 | 192 | 235 | 159 | |||||||||||||||||||||||||||||
S&P 500 | 100 | 96 | 126 | 149 | 192 | 157 | |||||||||||||||||||||||||||||
Peer Group | 100 | 112 | 149 | 186 | 208 | 184 |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||||
Revenues less transaction-based expenses | $ | 3,582 | $ | 3,420 | $ | 2,903 | 4.7 | % | 17.8 | % | ||||||||||
Operating expenses | 2,018 | 1,979 | 1,669 | 2.0 | % | 18.6 | % | |||||||||||||
Operating income | 1,564 | 1,441 | 1,234 | 8.5 | % | 16.8 | % | |||||||||||||
Net income attributable to Nasdaq | $ | 1,125 | $ | 1,187 | $ | 933 | (5.2) | % | 27.2 | % | ||||||||||
Diluted earnings per share | $ | 2.26 | $ | 2.35 | $ | 1.86 | (3.8) | % | 26.3 | % | ||||||||||
Cash dividends declared per common share | $ | 0.78 | $ | 0.70 | $ | 0.65 | 11.4 | % | 7.7 | % |
▪ | Anti-Financial Crime support and SaaS subscription contracts | |||||||
▪ | Proprietary market data subscriptions and annual listing fees within our Data & Listing Services business, index data subscriptions and guaranteed minimum on futures contracts within our Index business and subscription contracts under our Workflow & Insights business. | |||||||
▪ | Market technology support and SaaS subscription contracts as well as trade management services contracts, excluding one-time service requests. |
Year Ended December 31, | Percentage Change | ||||||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | |||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Market Platforms | $ | 4,225 | $ | 4,048 | $ | 4,179 | 4.4 | % | (3.1) | % | |||||||||||||
Capital Access Platforms | 1,684 | 1,568 | 1,287 | 7.4 | % | 21.8 | % | ||||||||||||||||
Anti-Financial Crime | 306 | 231 | 116 | 32.5 | % | 99.1 | % | ||||||||||||||||
Other revenues | 11 | 39 | 43 | (71.8) | % | (9.3) | % | ||||||||||||||||
Total revenues | 6,226 | 5,886 | 5,625 | 5.8 | % | 4.6 | % | ||||||||||||||||
Transaction rebates | (2,092) | (2,168) | (2,028) | (3.5) | % | 6.9 | % | ||||||||||||||||
Brokerage, clearance and exchange fees | (552) | (298) | (694) | 85.2 | % | (57.1) | % | ||||||||||||||||
Total revenues less transaction-based expenses | $ | 3,582 | $ | 3,420 | $ | 2,903 | 4.7 | % | 17.8 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Trading Services | $ | 3,663 | $ | 3,503 | $ | 3,654 | 4.6 | % | (4.1) | % | ||||||||||
Marketplace Technology | 562 | 545 | 525 | 3.1 | % | 3.8 | % | |||||||||||||
Total Market Platforms | $ | 4,225 | $ | 4,048 | $ | 4,179 | 4.4 | % | (3.1) | % | ||||||||||
Transaction-based expenses: | ||||||||||||||||||||
Transaction rebates | (2,092) | (2,168) | (2,028) | (3.5) | % | 6.9 | % | |||||||||||||
Brokerage, clearance and exchange fees | (552) | (298) | (694) | 85.2 | % | (57.1) | % | |||||||||||||
Total Market Platforms, net | $ | 1,581 | $ | 1,582 | $ | 1,457 | (0.1) | % | 8.6 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
U.S. Equity Derivative Trading | $ | 371 | $ | 343 | $ | 287 | 8.2 | % | 19.5 | % | ||||||||||
Cash Equity Trading | 397 | 429 | 381 | (7.5) | % | 12.6 | % | |||||||||||||
U.S. Tape plans | 149 | 155 | 162 | (3.9) | % | (4.3) | % | |||||||||||||
Other | 102 | 110 | 102 | (7.3) | % | 7.8 | % | |||||||||||||
Trading Services, net | $ | 1,019 | $ | 1,037 | $ | 932 | (1.7) | % | 11.3 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
U.S. Equity Derivative Trading Revenues | $ | 1,252 | $ | 1,367 | $ | 1,122 | (8.4) | % | 21.8 | % | ||||||||||
Section 31 fees | 89 | 32 | 69 | 178.1 | % | (53.6) | % | |||||||||||||
Transaction-based expenses: | ||||||||||||||||||||
Transaction rebates | (878) | (1,018) | (828) | (13.8) | % | 22.9 | % | |||||||||||||
Section 31 fees | (89) | (32) | (69) | 178.1 | % | (53.6) | % | |||||||||||||
Brokerage and clearance fees | (3) | (6) | (7) | (50.0) | % | (14.3) | % | |||||||||||||
U.S. Equity derivative trading revenues, net | $ | 371 | $ | 343 | $ | 287 | 8.2 | % | 19.5 | % |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
U.S. equity options | |||||||||||||||||
Total industry average daily volume (in millions) | 38.2 | 37.2 | 27.7 | ||||||||||||||
Nasdaq PHLX matched market share | 11.6 | % | 12.4 | % | 12.7 | % | |||||||||||
The Nasdaq Options Market matched market share | 8.0 | % | 8.1 | % | 9.8 | % | |||||||||||
Nasdaq BX Options matched market share | 2.8 | % | 1.4 | % | 0.2 | % | |||||||||||
Nasdaq ISE Options matched market share | 5.7 | % | 6.6 | % | 7.8 | % | |||||||||||
Nasdaq GEMX Options matched market share | 2.3 | % | 4.3 | % | 5.6 | % | |||||||||||
Nasdaq MRX Options matched market share | 1.6 | % | 1.6 | % | 0.7 | % | |||||||||||
Total matched market share executed on Nasdaq’s exchanges | 32.0 | % | 34.4 | % | 36.8 | % | |||||||||||
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Cash Equity Trading Revenues | $ | 1,605 | $ | 1,578 | $ | 1,582 | 1.7 | % | (0.3) | % | ||||||||||
Section 31 fees | 436 | 229 | 586 | 90.4 | % | (60.9) | % | |||||||||||||
Transaction-based expenses: | ||||||||||||||||||||
Transaction rebates | (1,184) | (1,118) | (1,169) | 5.9 | % | (4.4) | % | |||||||||||||
Section 31 fees | (436) | (229) | (586) | 90.4 | % | (60.9) | % | |||||||||||||
Brokerage and clearance fees | (24) | (31) | (32) | (22.6) | % | (3.1) | % | |||||||||||||
Cash equity trading revenues, net | $ | 397 | $ | 429 | $ | 381 | (7.5) | % | 12.6 | % |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Total U.S.-listed securities | |||||||||||||||||
Total industry average daily share volume (in billions) | 11.9 | 11.4 | 10.9 | ||||||||||||||
Matched share volume (in billions) | 522.8 | 491.9 | 508.3 | ||||||||||||||
The Nasdaq Stock Market matched market share | 16.2 | % | 15.8 | % | 16.8 | % | |||||||||||
Nasdaq BX matched market share | 0.5 | % | 0.6 | % | 0.9 | % | |||||||||||
Nasdaq PSX matched market share | 0.8 | % | 0.7 | % | 0.6 | % | |||||||||||
Total matched market share executed on Nasdaq’s exchanges | 17.5 | % | 17.1 | % | 18.3 | % | |||||||||||
Market share reported to the FINRA/Nasdaq Trade Reporting Facility | 35.2 | % | 34.9 | % | 31.8 | % | |||||||||||
Total market share | 52.7 | % | 52.0 | % | 50.1 | % | |||||||||||
Nasdaq Nordic and Nasdaq Baltic securities | |||||||||||||||||
Average daily number of equity trades executed on Nasdaq’s exchanges | 908,813 | 1,036,523 | 933,822 | ||||||||||||||
Total average daily value of shares traded (in billions) | $ | 5.4 | $ | 6.4 | $ | 5.6 | |||||||||||
Total market share executed on Nasdaq’s exchanges | 71.5 | % | 76.9 | % | 78.1 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
U.S. Tape plans | $ | 149 | $ | 155 | $ | 162 | (3.9) | % | (4.3) | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Other | $ | 102 | $ | 110 | $ | 102 | (7.3) | % | 7.8 | % |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Nasdaq Nordic and Nasdaq Baltic options and futures | |||||||||||||||||
Total average daily volume of options and futures contracts | 296,626 | 287,182 | 320,204 |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Marketplace Technology | $ | 562 | $ | 545 | $ | 525 | 3.1 | % | 3.8 | % |
As of or Three Months Ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
ARR | $ | 503 | $ | 479 | $ | 468 | ||||||||||||||
Quarterly annualized SaaS revenues | 39 | 31 | 27 | |||||||||||||||||
Order intake | $ | 264 | $ | 304 | $ | 167 |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Data & Listing Services | $ | 729 | $ | 680 | $ | 574 | 7.2 | % | 18.5 | % | ||||||||||
Index | 486 | 459 | 324 | 5.9 | % | 41.7 | % | |||||||||||||
Workflow & Insights | 469 | 429 | 389 | 9.3 | % | 10.3 | % | |||||||||||||
Total Capital Access Platforms | $ | 1,684 | $ | 1,568 | $ | 1,287 | 7.4 | % | 21.8 | % |
As of or Three Months Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
ARR | $ | 1,192 | $ | 1,113 | $ | 986 | |||||||||||
Quarterly annualized SaaS revenues | $ | 388 | $ | 356 | $ | 323 |
Year Ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
IPOs | ||||||||||||||||||||
The Nasdaq Stock Market | 161 | 752 | 316 | |||||||||||||||||
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic | 38 | 174 | 45 | |||||||||||||||||
Total new listings | ||||||||||||||||||||
The Nasdaq Stock Market | 366 | 1,000 | 454 | |||||||||||||||||
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic | 63 | 207 | 67 | |||||||||||||||||
Number of listed companies | ||||||||||||||||||||
The Nasdaq Stock Market | 4,230 | 4,178 | 3,392 | |||||||||||||||||
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic | 1,251 | 1,235 | 1,071 | |||||||||||||||||
As of or Three Months Ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Number of licensed ETPs | 379 | 362 | 339 | |||||||||||||||||
TTM change in period end ETP AUM tracking Nasdaq indexes (in billions) | ||||||||||||||||||||
Beginning balance | $ | 424 | $ | 359 | $ | 233 | ||||||||||||||
Net (depreciation) appreciation | (142) | 83 | 80 | |||||||||||||||||
Net impact of ETP sponsor switches | (1) | (92) | — | |||||||||||||||||
Net inflows | 34 | 74 | 46 | |||||||||||||||||
Ending balance | $ | 315 | $ | 424 | $ | 359 | ||||||||||||||
Quarterly average ETP AUM tracking Nasdaq indexes (in billions) | $ | 326 | $ | 400 | $ | 334 | ||||||||||||||
Quarterly annualized SaaS revenues (in millions) | $ | 220 | $ | 208 | $ | 179 |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Anti-Financial Crime | $ | 306 | $ | 231 | $ | 116 | 32.5 | % | 99.1 | % |
As of or Three Months Ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
ARR | $ | 312 | $ | 269 | $ | 111 | ||||||||||||||
Signed ARR | 338 | 288 | — | |||||||||||||||||
Quarterly annualized SaaS revenues | 298 | 253 | 97 |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Compensation and benefits | $ | 1,003 | $ | 938 | $ | 786 | 6.9 | % | 19.3 | % | ||||||||||
Professional and contract services | 140 | 144 | 137 | (2.8) | % | 5.1 | % | |||||||||||||
Computer operations and data communications | 207 | 186 | 151 | 11.3 | % | 23.2 | % | |||||||||||||
Occupancy | 104 | 109 | 107 | (4.6) | % | 1.9 | % | |||||||||||||
General, administrative and other | 125 | 85 | 142 | 47.1 | % | (40.1) | % | |||||||||||||
Marketing and advertising | 51 | 57 | 39 | (10.5) | % | 46.2 | % | |||||||||||||
Depreciation and amortization | 258 | 278 | 202 | (7.2) | % | 37.6 | % | |||||||||||||
Regulatory | 33 | 64 | 24 | (48.4) | % | 166.7 | % | |||||||||||||
Merger and strategic initiatives | 82 | 87 | 33 | (5.7) | % | 163.6 | % | |||||||||||||
Restructuring charges | 15 | 31 | 48 | (51.6) | % | (35.4) | % | |||||||||||||
Total operating expenses | $ | 2,018 | $ | 1,979 | $ | 1,669 | 2.0 | % | 18.6 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Interest income | $ | 7 | $ | 1 | $ | 4 | 600.0 | % | (75.0) | % | ||||||||||
Interest expense | (129) | (125) | (101) | 3.2 | % | 23.8 | % | |||||||||||||
Net interest expense | (122) | (124) | (97) | (1.6) | % | 27.8 | % | |||||||||||||
Net gain on divestiture of business | — | 84 | — | (100.0) | % | N/M | ||||||||||||||
Other income | 2 | 81 | 5 | (97.5) | % | 1,520.0 | % | |||||||||||||
Net income from unconsolidated investees | 31 | 52 | 70 | (40.4) | % | (25.7) | % | |||||||||||||
Total non-operating income (expenses) | $ | (89) | $ | 93 | $ | (22) | (195.7) | % | (522.7) | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Interest expense on debt | $ | 120 | $ | 115 | $ | 93 | 4.3 | % | 23.7 | % | ||||||||||||||||
Accretion of debt issuance costs and debt discount | 7 | 7 | 6 | — | % | 16.7 | % | |||||||||||||||||||
Other fees | 2 | 3 | 2 | (33.3) | % | 50.0 | % | |||||||||||||||||||
Interest expense | $ | 129 | $ | 125 | $ | 101 | 3.2 | % | 23.8 | % |
Year Ended December 31, | Percentage Change | |||||||||||||||||||
2022 | 2021 | 2020 | 2022 vs. 2021 | 2021 vs. 2020 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Income tax provision | $ | 352 | $ | 347 | $ | 279 | 1.4 | % | 24.4 | % | ||||||||||
Effective tax rate | 23.9 | % | 22.6 | % | 23.0 | % |
Year Ended December 31, | |||||||||||
2022 | 2021 | 2020 | |||||||||
(in millions, except per share amounts) | |||||||||||
U.S. GAAP net income attributable to Nasdaq | $ | 1,125 | $ | 1,187 | $ | 933 | |||||
Non-GAAP adjustments: | |||||||||||
Amortization expense of acquired intangible assets | 153 | 170 | 103 | ||||||||
Merger and strategic initiatives expense | 82 | 87 | 33 | ||||||||
Restructuring charges | 15 | 31 | 48 | ||||||||
Net income from unconsolidated investee | (29) | (52) | (70) | ||||||||
Regulatory matters | 1 | 33 | (6) | ||||||||
Provision for notes receivable | — | — | 6 | ||||||||
Extinguishment of debt | 16 | 33 | 36 | ||||||||
Net gain on divestiture of business | — | (84) | — | ||||||||
Charitable donations | — | — | 17 | ||||||||
Other | 27 | (71) | 14 | ||||||||
Total non-GAAP adjustments | 265 | 147 | 181 | ||||||||
Total non-GAAP tax adjustments | (66) | (61) | (83) | ||||||||
Total non-GAAP adjustments, net of tax | 199 | 86 | 98 | ||||||||
Non-GAAP net income attributable to Nasdaq | $ | 1,324 | $ | 1,273 | $ | 1,031 | |||||
U.S. GAAP effective tax rate | 23.9 | % | 22.6 | % | 23.0 | % | |||||
Total adjustments from non-GAAP tax rate | 0.1 | % | 1.7 | % | 3.0 | % | |||||
Non-GAAP effective tax rate | 24.0 | % | 24.3 | % | 26.0 | % | |||||
Weighted-average common shares outstanding for diluted earnings per share | 497.9 | 505.1 | 500.7 | ||||||||
U.S. GAAP diluted earnings per share | $ | 2.26 | $ | 2.35 | $ | 1.86 | |||||
Total adjustments from non-GAAP net income | 0.40 | 0.17 | 0.20 | ||||||||
Non-GAAP diluted earnings per share | $ | 2.66 | $ | 2.52 | $ | 2.06 |
December 31, 2022 | December 31, 2021 | |||||||||||||
(in millions) | ||||||||||||||
Cash and cash equivalents | $ | 502 | $ | 393 | ||||||||||
Financial investments | 181 | 208 | ||||||||||||
Total financial assets | $ | 683 | $ | 601 |
Year Ended December 31, | |||||||||||
2022 | 2021 | 2020 | |||||||||
Net cash provided by (used in): | (in millions) | ||||||||||
Operating activities | $ | 1,706 | $ | 1,083 | $ | 1,252 | |||||
Investing activities | 49 | (2,653) | (122) | ||||||||
Financing activities | 1,036 | 1,418 | 1,910 | ||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents | (1,293) | (331) | 353 | ||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | 1,498 | (483) | 3,393 | ||||||||
Cash and cash equivalents, restricted cash and cash equivalents at beginning of period | 5,496 | 5,979 | 2,586 | ||||||||
Cash and cash equivalents, restricted cash and cash equivalents at end of period | $ | 6,994 | $ | 5,496 | $ | 5,979 | |||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | |||||||||||
Cash and cash equivalents | $ | 502 | $ | 393 | $ | 2,745 | |||||
Restricted cash and cash equivalents | 22 | 29 | 37 | ||||||||
Restricted cash and cash equivalents (default funds and margin deposits) | 6,470 | 5,074 | 3,197 | ||||||||
Total | $ | 6,994 | $ | 5,496 | $ | 5,979 |
2022 | 2021 | ||||||||||
First quarter | $ | 0.18 | $ | 0.16 | |||||||
Second quarter | 0.20 | 0.18 | |||||||||
Third quarter | 0.20 | 0.18 | |||||||||
Fourth quarter | 0.20 | 0.18 | |||||||||
Total | $ | 0.78 | $ | 0.70 |
Maturity Date | December 31, 2022 | December 31, 2021 | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
Short-term debt: | ||||||||||||||||||||
Commercial paper | $ | 664 | $ | 420 | ||||||||||||||||
2022 Notes | December 2022 | — | 598 | |||||||||||||||||
2024 Notes | June 2024 | — | 499 | |||||||||||||||||
Total short-term debt | $ | 664 | $ | 1,517 | ||||||||||||||||
Long-term debt - senior unsecured notes: | ||||||||||||||||||||
2022 Credit Facility | December 2027 | (5) | (4) | |||||||||||||||||
2026 Notes | June 2026 | 498 | 498 | |||||||||||||||||
2029 Notes | March 2029 | 637 | 676 | |||||||||||||||||
2030 Notes | February 2030 | 637 | 676 | |||||||||||||||||
2031 Notes | January 2031 | 644 | 643 | |||||||||||||||||
2033 Notes | July 2033 | 653 | 694 | |||||||||||||||||
2040 Notes | December 2040 | 644 | 644 | |||||||||||||||||
2050 Notes | April 2050 | 486 | 486 | |||||||||||||||||
2052 Notes | March 2052 | 541 | — | |||||||||||||||||
Total long-term debt | $ | 4,735 | $ | 4,313 | ||||||||||||||||
Total debt obligations | $ | 5,399 | $ | 5,830 |
Payments Due by Period | |||||||||||||||||
(in millions) | Total | <1 year | 1-3 years | 3-5 years | 5+ years | ||||||||||||
Debt obligation by contractual maturity | $ | 7,188 | $ | 765 | $ | 224 | $ | 685 | $ | 5,514 | |||||||
Operating lease obligations | 665 | 77 | 142 | 110 | 336 | ||||||||||||
Purchase obligations | 453 | 86 | 104 | 91 | 172 | ||||||||||||
Total | $ | 8,306 | $ | 928 | $ | 470 | $ | 886 | $ | 6,022 |
Euro | Swedish Krona | Other Foreign Currencies | U.S. Dollar | Total | ||||||||||||||||||||||||||||
(in millions, except currency rate) | ||||||||||||||||||||||||||||||||
Year Ended December 31, 2022 | ||||||||||||||||||||||||||||||||
Average foreign currency rate to the U.S. dollar | 1.054 | 0.099 | # | N/A | N/A | |||||||||||||||||||||||||||
Percentage of revenues less transaction-based expenses | 6.2 | % | 5.1 | % | 4.1 | % | 84.6 | % | 100.0 | % | ||||||||||||||||||||||
Percentage of operating income | 10.1 | % | (2.8) | % | (10.6) | % | 103.3 | % | 100.0 | % | ||||||||||||||||||||||
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses | $ | (22) | $ | (18) | $ | (15) | $ | — | $ | (55) | ||||||||||||||||||||||
Impact of a 10% adverse currency fluctuation on operating income | $ | (16) | $ | (4) | $ | (17) | $ | — | $ | (37) | ||||||||||||||||||||||
Euro | Swedish Krona | Other Foreign Currencies | U.S. Dollar | Total | ||||||||||||||||||||||||||||
(in millions, except currency rate) | ||||||||||||||||||||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||
Average foreign currency rate to the U.S. dollar | 1.183 | 0.117 | # | N/A | N/A | |||||||||||||||||||||||||||
Percentage of revenues less transaction-based expenses | 7.1 | % | 6.2 | % | 4.9 | % | 81.8 | % | 100.0 | % | ||||||||||||||||||||||
Percentage of operating income | 10.4 | % | (4.6) | % | (9.1) | % | 103.3 | % | 100.0 | % | ||||||||||||||||||||||
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses | $ | (24) | $ | (21) | $ | (17) | $ | — | $ | (62) | ||||||||||||||||||||||
Impact of a 10% adverse currency fluctuation on operating income | $ | (15) | $ | (7) | $ | (13) | $ | — | $ | (35) |
Net Assets | Impact of a 10% Adverse Currency Fluctuation | |||||||||||||
(in millions) | ||||||||||||||
Swedish Krona | $ | 2,941 | $ | 294 | ||||||||||
British Pound | 155 | 15 | ||||||||||||
Norwegian Krone | 150 | 15 | ||||||||||||
Canadian Dollar | 107 | 11 | ||||||||||||
Australian Dollar | 99 | 10 | ||||||||||||
Euro | 53 | 5 |
October 1, 2022 | |||||
(in millions) | |||||
Market Technology | $ | 2,122 | |||
Investment Intelligence | 2,256 | ||||
Corporate Platforms | 471 | ||||
Market Services | 3,097 | ||||
$ | 7,946 |
October 1, 2022 | |||||
(in millions) | |||||
Market Platforms | $ | 2,819 | |||
Capital Access Platforms | 4,122 | ||||
Anti-Financial Crime | 1,005 | ||||
$ | 7,946 |
Plan Category | Number of shares to be issued upon exercise of outstanding options, warrants and rights(a) | Weighted-average exercise price of outstanding options, warrants and rights(b) | Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column(a))(c) | |||||||||||||||||
Equity compensation plans approved by stockholders | 1,420,323 | $ | 41.79 | 38,534,312 | ||||||||||||||||
Equity compensation plans not approved by stockholders | — | — | — | |||||||||||||||||
Total | 1,420,323 | $ | 41.79 | 38,534,312 |
Exhibit Number | ||||||||
Share Purchase Agreement, dated as of November 18, 2020, by and among Osprey Acquisition Corporation, a wholly owned subsidiary of Nasdaq, Verafin Holdings Inc., certain shareholders of Verafin (the “Sellers”), and Shareholder Representative Services LLC, solely in its capacity as the representative of the Sellers (incorporated herein by reference to Exhibit 2.2 to the Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 23, 2021).† | ||||||||
Amendment to Share Purchase Agreement, dated as of February 11, 2021, by and among Osprey Acquisition Corporation, a wholly owned subsidiary of Nasdaq, Verafin Holdings Inc., certain shareholders of Verafin (the “Sellers”), and Shareholder Representative Services LLC, solely in its capacity as the representative of the Sellers (incorporated herein by reference to Exhibit 2.3 to the Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 23, 2021). | ||||||||
Amended and Restated Certificate of Incorporation of Nasdaq (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on January 28, 2014). | ||||||||
Certificate of Elimination of Nasdaq’s Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1.1 to the Current Report on Form 8-K filed on January 28, 2014). | ||||||||
Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 19, 2014). | ||||||||
Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on September 8, 2015). | ||||||||
Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on July 20, 2022). | ||||||||
Nasdaq’s By-Laws (incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on November 21, 2016). | ||||||||
Form of Common Stock certificate (incorporated herein by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed on November 4, 2015). | ||||||||
Stockholders’ Agreement, dated as of February 27, 2008, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Borse Dubai Limited (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 3, 2008). | ||||||||
First Amendment to Stockholders’ Agreement, dated as of February 19, 2009, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Borse Dubai Limited (incorporated herein by reference to Exhibit 4.10.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009). | ||||||||
Registration Rights Agreement, dated as of February 27, 2008, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Borse Dubai Limited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on March 3, 2008). | ||||||||
First Amendment to Registration Rights Agreement, dated as of February 19, 2009, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Borse Dubai Limited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 4.11.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009). | ||||||||
Stockholders’ Agreement, dated as of December 16, 2010, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Investor AB (incorporated herein by reference to Exhibit 4.12 to the Annual Report on Form 10-K for the year ended December 31, 2010 filed on February 24, 2011). | ||||||||
First Amendment to Nasdaq Stockholders’ Agreement, dated as of December 14, 2022, between Nasdaq, Inc. and Investor AB (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December 16, 2022). | ||||||||
Indenture, dated as of June 7, 2013, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on June 10, 2013). | ||||||||
First Supplemental Indenture, dated as of June 7, 2013, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Wells Fargo Bank, National Association, as Trustee, Deutsche Bank AG, London Branch, as paying agent, and Deutsche Bank Luxembourg S.A., as registrar and transfer agent (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on June 10, 2013). | ||||||||
Second Supplemental Indenture, dated as of May 29, 2014, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on May 30, 2014). | ||||||||
Third Supplemental Indenture, dated as of May 20, 2016, among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee, and HSBC Bank USA, National Association, as paying agent and as registrar and transfer agent (incorporated herein by reference to the Current Report on Form 8-K filed on May 23, 2016). | ||||||||
Fifth Supplemental Indenture, dated as of September 22, 2017, among Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on September 22, 2017). | ||||||||
Sixth Supplemental Indenture, dated as of April 1, 2019, among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee, and HSBC Bank USA, National Association, as paying agent and as registrar and transfer agent (incorporated by reference to Exhibit 4.2 to the Form 8-A filed on April 1, 2019). | ||||||||
Seventh Supplemental Indenture, dated February 13, 2020, among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee, and HSBC Bank USA, National Association, as paying agent and as registrar and transfer agent (incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-A filed on February 13, 2020). | ||||||||
Eighth Supplemental Indenture, dated April 28, 2020, by and between Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on April 28, 2020). | ||||||||
Ninth Supplemental Indenture, dated December 21, 2020, by and between Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on December 21, 2020). | ||||||||
Tenth Supplemental Indenture, dated December 21, 2020, by and between Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.3 to the Current Report on Form 8-K filed on December 21, 2020). | ||||||||
Eleventh Supplemental Indenture, dated December 21, 2020, by and between Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.4 to the Current Report on Form 8-K filed on December 21, 2020). | ||||||||
Twelfth Supplemental Indenture, dated July 30, 2021, by and among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee and HSBC Bank USA, National Association, as registrar and transfer agent (incorporated by reference to Exhibit 4.2 to the Company’s 8-A filed on July 30, 2021). | ||||||||
Thirteenth Supplemental Indenture, dated as of March 7, 2022, by and between Nasdaq, Inc. and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 7, 2022). | ||||||||
Description of Securities. | ||||||||
Amended and Restated Board Compensation Policy, effective on June 16, 2021 (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 filed on August 4, 2021).* | ||||||||
Nasdaq Executive Corporate Incentive Plan, effective as of January 1, 2015 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 11, 2015).* | ||||||||
Nasdaq, Inc. Equity Incentive Plan (as amended and restated as of April 24, 2018) (incorporated herein by reference to Exhibit 10.1 to the Form S-8 filed on May 25, 2018).* | ||||||||
Form of Nasdaq Non-Qualified Stock Option Award Certificate (incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K for the year ended December 31, 2010 filed on February 24, 2011).* | ||||||||
Form of Nasdaq Restricted Stock Unit Award Certificate (employees) (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed on August 3, 2022).* | ||||||||
Form of Nasdaq Restricted Stock Unit Award Certificate (directors) (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed on August 3, 2022).* | ||||||||
Form of Nasdaq One-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 5, 2019).* | ||||||||
Form of Nasdaq Three-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed on August 3, 2022).* | ||||||||
Form of Nasdaq Continuing Obligations Agreement (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 23, 2022). | ||||||||
Amended and Restated Supplemental Executive Retirement Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit 10.6 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* | ||||||||
Amendment No. 1 to Amended and Restated Supplemental Executive Retirement Plan, effective as of December 31, 2008 (incorporated herein by reference to Exhibit 10.6.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* | ||||||||
Nasdaq Supplemental Employer Retirement Contribution Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* | ||||||||
Nasdaq, Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 16, 2022).* | ||||||||
Nonqualified Stock Option Award Certificate to Adena T. Friedman from Nasdaq, Inc. in connection with grant made on January 3, 2017 (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed on November 7, 2017).* | ||||||||
Employment Agreement between Nasdaq and Adena Friedman, made and entered into on November 19, 2021 and effective as of January 1, 2022 (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 23, 2022).* | ||||||||
Nonqualified Stock Option Award Certificate to Adena T. Friedman from Nasdaq, Inc. in connection with grant made on January 3, 2022 (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 23, 2022).* | ||||||||
Employment Agreement by and between Nasdaq, Inc. and Bradley J. Peterson, dated October 1, 2020 (incorporated herein by reference to Exhibit 10.17 to the Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 23, 2021).* | ||||||||
Employment Agreement by and between Nasdaq, Inc. and Bradley J. Peterson, dated June 22, 2022 (incorporated herein by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed on August 3, 2022). | ||||||||
Employment Offer Letter by and between Nasdaq, Inc. and Michelle Daly (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 3, 2021).* | ||||||||
Nasdaq Change in Control Severance Plan for Executive Vice Presidents and Senior Vice Presidents, effective November 26, 2013, as amended December 6, 2022.* | ||||||||
Credit Agreement, dated as of December 21, 2020, among Nasdaq, Inc., the various lenders from time to time party thereto and, Bank of America, N.A., as administrative agent and issuing bank (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 21, 2020). | ||||||||
LIBOR Transition Amendment, dated as of October 19, 2021 by and among Nasdaq, Inc. and Bank of America, N.A., as administrative agent (incorporated herein by reference to Exhibit 10.23 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 23, 2022). | ||||||||
Amended and Restated Credit Agreement, dated as of December 16, 2022, among Nasdaq, Inc., the various lenders and issuing bank party thereto and Bank of America, N.A., as administrative agent (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 16, 2022). | ||||||||
Form of Commercial Paper Dealer Agreement between Nasdaq, Inc., as Issuer, and the Dealer party thereto (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on April 26, 2017). | ||||||||
Verafin Holdings Inc. Amended and Restated Management Incentive Plan* | ||||||||
Verafin Holdings Inc. Amended and Restated Management Incentive Plan Award Agreement, by and between Verafin Solutions ULC and Brendan Brothers, dated as of January 11, 2023* | ||||||||
Verafin Holdings Inc. Amended and Restated Management Incentive Plan Award Agreement, by and between Verafin Solutions ULC and Jamie King, dated as of October 18, 2022* | ||||||||
Statement regarding computation of per share earnings (incorporated herein by reference from Note 13 to the consolidated financial statements under Part II, Item 8 of this Form 10-K). | ||||||||
List of all subsidiaries. | ||||||||
Consent of Ernst & Young LLP. | ||||||||
Powers of Attorney. | ||||||||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). | ||||||||
Certification of Executive Vice President and Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley. | ||||||||
Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley. | ||||||||
101 | The following materials from the Nasdaq, Inc. Annual Report on Form 10-K for the year ended December 31, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021; (ii) Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020 (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020; (iv) Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2022, 2021 and 2020; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020; and (vi) notes to consolidated financial statements. | |||||||
104 | Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101. |
Nasdaq, Inc. | ||||||||
(Registrant) | ||||||||
By: | /s/ Adena T. Friedman | |||||||
Name: | Adena T. Friedman | |||||||
Title: | Chief Executive Officer | |||||||
Date: | February 23, 2023 | |||||||
By: | /s/ Adena T. Friedman | |||||||
Name: | Adena T. Friedman | |||||||
Title: | Chief Executive Officer and Chair of the Board | |||||||
By: | /s/ Ann M. Dennison | |||||||
Name: | Ann M. Dennison | |||||||
Title: | Executive Vice President and Chief Financial Officer | |||||||
By: | /s/ Michelle Daly | |||||||
Name: | Michelle Daly | |||||||
Title: | Senior Vice President, Controller and Principal Accounting Officer | |||||||
By: | * | |||||||
Name: | Michael R. Splinter | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | Melissa M. Arnoldi | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | Charlene T. Begley | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | Steven D. Black | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | Essa Kazim | |||||||
Title: | Director |
By: | * | |||||||
Name: | Thomas A. Kloet | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | John D. Rainey | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | Johan Torgeby | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | Toni Townes-Whitley | |||||||
Title: | Director | |||||||
By: | * | |||||||
Name: | Alfred W. Zollar | |||||||
Title: | Director | |||||||
* Pursuant to Power of Attorney | ||||||||
By: | /s/ John A. Zecca | |||||||
Name: | John A. Zecca | |||||||
Title: | Attorney-in-Fact |
Market Technology Revenue Recognition | ||||||||
Description of the Matter | As described in Notes 2 and 3 to the consolidated financial statements, the Company enters into long-term market technology contracts with customers to develop customized technology solutions, license the right to use software, and provide support and other services which results in these contracts containing multiple performance obligations. The Company recognized $562 million of Marketplace Technology revenue for the year ended December 31, 2022. Of this amount, a portion relates to market technology contracts where the Company allocates the contract transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the respective market technology contract. In instances where standalone selling price is not directly observable, such as when a product or service is not sold separately, the Company determines the standalone selling price predominantly through an expected cost plus a margin approach. The Company recognizes revenue over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the performance obligation. Revenue recognized subject to such estimation was $75 million for the year ended December 31, 2022. Auditing the Company’s calculation of the standalone selling price and timing of revenue recognition was complex and involved a high degree of subjective auditor judgment because of the significant management judgment required to develop the estimates. The standalone selling price is based on an estimate of total project costs, ongoing monitoring of completion of performance obligations and establishing margins for goods or services where a standalone selling price is not directly observable. |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's processes with respect to estimates that impact the timing and measurement of revenue recognition. For example, we tested controls over the allocation of contract transaction price to performance obligations, including management’s review of the estimated margin used when applying the cost plus an estimated margin to determine the standalone selling price. We also evaluated the design and tested the operating effectiveness of controls over the completeness and accuracy of the data utilized to measure the estimate and recognize the revenue in the appropriate period. We performed substantive audit procedures that included, among other things, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management’s calculation. Specifically, we inspected certain new customer agreements signed during the year, including change requests, and tested management’s determination of the standalone selling price and its allocation to performance obligations in accordance with the cost plus a margin approach, including comparing the margin assumptions to actual margins earned on completed contracts. We also tested the accuracy of the revenue recognized in the current period by inspecting reports relating to the hours recorded on a project. We evaluated the adequacy of the Company’s disclosures in Notes 2 and 3 to the consolidated financial statements related to market technology revenue recognition. |
December 31, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and cash equivalents | |||||||||||
Default funds and margin deposits (including restricted cash and cash equivalents of $ | |||||||||||
Financial investments | |||||||||||
Receivables, net | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Operating lease assets | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | $ | |||||||||
Section 31 fees payable to SEC | |||||||||||
Accrued personnel costs | |||||||||||
Deferred revenue | |||||||||||
Other current liabilities | |||||||||||
Default funds and margin deposits | |||||||||||
Short-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred tax liabilities, net | |||||||||||
Operating lease liabilities | |||||||||||
Other non-current liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Equity | |||||||||||
Nasdaq stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Common stock in treasury, at cost: | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total Nasdaq stockholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Revenues: | |||||||||||||||||
Market Platforms | $ | $ | $ | ||||||||||||||
Capital Access Platforms | |||||||||||||||||
Anti-Financial Crime | |||||||||||||||||
Other revenues | |||||||||||||||||
Total revenues | |||||||||||||||||
Transaction-based expenses: | |||||||||||||||||
Transaction rebates | ( | ( | ( | ||||||||||||||
Brokerage, clearance and exchange fees | ( | ( | ( | ||||||||||||||
Revenues less transaction-based expenses | |||||||||||||||||
Operating expenses: | |||||||||||||||||
Compensation and benefits | |||||||||||||||||
Professional and contract services | |||||||||||||||||
Computer operations and data communications | |||||||||||||||||
Occupancy | |||||||||||||||||
General, administrative and other | |||||||||||||||||
Marketing and advertising | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Regulatory | |||||||||||||||||
Merger and strategic initiatives | |||||||||||||||||
Restructuring charges | |||||||||||||||||
Total operating expenses | |||||||||||||||||
Operating income | |||||||||||||||||
Interest income | |||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||
Net gain on divestiture of business | |||||||||||||||||
Other income | |||||||||||||||||
Net income from unconsolidated investees | |||||||||||||||||
Income before income taxes | |||||||||||||||||
Income tax provision | |||||||||||||||||
Net income | |||||||||||||||||
Net loss attributable to noncontrolling interests | |||||||||||||||||
Net income attributable to Nasdaq | $ | $ | $ | ||||||||||||||
Per share information: | |||||||||||||||||
Basic earnings per share | $ | $ | $ | ||||||||||||||
Diluted earnings per share | $ | $ | $ | ||||||||||||||
Cash dividends declared per common share | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Foreign currency translation gains (losses) | ( | ( | |||||||||||||||
Income tax benefit (expense)(1) | ( | ( | |||||||||||||||
Foreign currency translation, net | ( | ( | |||||||||||||||
Employee benefit plan adjustment gains (losses) | ( | ||||||||||||||||
Employee benefit plan income tax provision | ( | ||||||||||||||||
Employee benefit plan, net | ( | ||||||||||||||||
Total other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||
Comprehensive income | |||||||||||||||||
Comprehensive loss attributable to noncontrolling interests | |||||||||||||||||
Comprehensive income attributable to Nasdaq | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | Shares | $ | ||||||||||||||||||||||||||||||
Common stock | |||||||||||||||||||||||||||||||||||
Additional paid-in capital | |||||||||||||||||||||||||||||||||||
Beginning balance | |||||||||||||||||||||||||||||||||||
Share repurchase program | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
ASR agreement(1) | ( | ( | ( | ( | — | — | |||||||||||||||||||||||||||||
Share-based compensation | |||||||||||||||||||||||||||||||||||
Stock option exercises, net | — | — | — | — | |||||||||||||||||||||||||||||||
Other issuances of common stock, net(2) | |||||||||||||||||||||||||||||||||||
Ending balance | |||||||||||||||||||||||||||||||||||
Common stock in treasury, at cost | |||||||||||||||||||||||||||||||||||
Beginning balance | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other employee stock activity | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Ending balance | ( | ( | ( | ||||||||||||||||||||||||||||||||
Accumulated other comprehensive loss | |||||||||||||||||||||||||||||||||||
Beginning balance | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Ending balance | ( | ( | ( | ||||||||||||||||||||||||||||||||
Retained earnings | |||||||||||||||||||||||||||||||||||
Beginning balance | |||||||||||||||||||||||||||||||||||
Impact of adoption of | — | — | ( | ||||||||||||||||||||||||||||||||
Net income attributable to Nasdaq | |||||||||||||||||||||||||||||||||||
Cash dividends declared per common share | ( | ( | ( | ||||||||||||||||||||||||||||||||
Ending balance | |||||||||||||||||||||||||||||||||||
Total Nasdaq stockholders’ equity | |||||||||||||||||||||||||||||||||||
Noncontrolling interests | |||||||||||||||||||||||||||||||||||
Beginning balance | |||||||||||||||||||||||||||||||||||
Net activity related to noncontrolling interests | |||||||||||||||||||||||||||||||||||
Ending balance | |||||||||||||||||||||||||||||||||||
Total Equity | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Share-based compensation | |||||||||||||||||
Deferred income taxes | |||||||||||||||||
Extinguishment of debt | |||||||||||||||||
Net gain on divestiture of business | ( | ||||||||||||||||
Net income from unconsolidated investees | ( | ( | ( | ||||||||||||||
Other reconciling items included in net income | |||||||||||||||||
Net change in operating assets and liabilities, net of effects of acquisitions: | |||||||||||||||||
Receivables, net | ( | ( | ( | ||||||||||||||
Other assets | ( | ||||||||||||||||
Accounts payable and accrued expenses | ( | ||||||||||||||||
Section 31 fees payable to SEC | ( | ||||||||||||||||
Accrued personnel costs | |||||||||||||||||
Deferred revenue | |||||||||||||||||
Other liabilities(1) | ( | ( | ( | ||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Purchases of securities | ( | ( | ( | ||||||||||||||
Proceeds from sales and redemptions of securities | |||||||||||||||||
Proceeds from divestiture of business, net of cash divested | |||||||||||||||||
Proceeds from sale of investment securities | |||||||||||||||||
Acquisition of businesses, net of cash and cash equivalents acquired | ( | ( | ( | ||||||||||||||
Purchases of property and equipment | ( | ( | ( | ||||||||||||||
Investments related to default funds and margin deposits, net(2) | ( | ||||||||||||||||
Other investing activities | ( | ( | |||||||||||||||
Net cash provided by (used in) investing activities | ( | ( | |||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from (repayments of) commercial paper, net | ( | ||||||||||||||||
Repayments of debt and credit commitment | ( | ( | ( | ||||||||||||||
Payment of debt extinguishment cost | ( | ( | ( | ||||||||||||||
Proceeds from issuances of debt, net of issuance costs and utilization of credit commitment | |||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||
ASR agreement | ( | ( | |||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Proceeds received from employee stock activity and other issuances | |||||||||||||||||
Payments related to employee shares withheld for taxes | ( | ( | ( | ||||||||||||||
Default funds and margin deposits | |||||||||||||||||
Other financing activities | |||||||||||||||||
Net cash provided by financing activities | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents | ( | ( | |||||||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | ( | ||||||||||||||||
Cash and cash equivalents, restricted cash and cash equivalents at beginning of period | |||||||||||||||||
Cash and cash equivalents, restricted cash and cash equivalents at end of period | $ | $ | $ | ||||||||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Restricted cash and cash equivalents | |||||||||||||||||
Restricted cash and cash equivalents (default funds and margin deposits) | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Supplemental Disclosure Cash Flow Information | |||||||||||||||||
Interest paid | $ | $ | $ | ||||||||||||||
Income taxes paid, net of refund(1) | $ | $ | $ |
Year Ended December 31, 2020 | |||||||||||
As Reported | Adjustment | Adjusted | |||||||||
(in millions) | |||||||||||
Net cash provided by operating activities | $ | $ | $ | ||||||||
Net cash used in investing activities | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents | |||||||||||
Net increase in cash, cash equivalents, restricted cash and cash equivalents | |||||||||||
Cash, cash equivalents, restricted cash and cash equivalents at beginning of period | |||||||||||
Cash, cash equivalents, restricted cash and cash equivalents at end of period | $ | $ | $ | ||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | |||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||
Restricted cash and cash equivalents | |||||||||||
Restricted cash and cash equivalents (Default funds and margin deposits) | |||||||||||
Total | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Market Platforms | |||||||||||||||||
Trading Services, net | $ | $ | $ | ||||||||||||||
Marketplace Technology | |||||||||||||||||
Capital Access Platforms | |||||||||||||||||
Data & Listing Services | |||||||||||||||||
Index | |||||||||||||||||
Workflow & Insights | |||||||||||||||||
Anti-Financial Crime | |||||||||||||||||
Other revenues | |||||||||||||||||
Revenues less transaction-based expenses | $ | $ | $ |
Market Technology | Anti-Financial Crime | Workflow & Insights | Total | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
2023 | $ | $ | $ | $ | |||||||||||||||||||
2024 | |||||||||||||||||||||||
2025 | |||||||||||||||||||||||
2026 | |||||||||||||||||||||||
2027 | |||||||||||||||||||||||
2028+ | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(in millions) | |||||
Goodwill | $ | ||||
Acquired Intangible Assets | |||||
Total Net Liabilities Acquired | ( | ||||
Purchase Consideration | $ |
Customer Relationships | Technology | Trade Name | Total Acquired Intangible Assets | |||||||||||
Intangible asset value (in millions) | $ | $ | $ | $ | ||||||||||
Discount rate used | % | % | % | |||||||||||
Estimated average useful life |
(in millions) | |||||
Market Platforms | |||||
Balance at December 31, 2021 | $ | ||||
Foreign currency translation adjustments | ( | ||||
Balance at December 31, 2022 | $ | ||||
Capital Access Platforms | |||||
Balance at December 31, 2021 | $ | ||||
Goodwill acquired | |||||
Foreign currency translation and other adjustments | ( | ||||
Balance at December 31, 2022 | $ | ||||
Anti-Financial Crime | |||||
Balance at December 31, 2021 | $ | ||||
Foreign currency translation adjustments | ( | ||||
Balance at December 31, 2022 | $ | ||||
Total | |||||
Balance at December 31, 2021 | $ | ||||
Balance at Goodwill acquired | |||||
Foreign currency translation adjustments | ( | ||||
Balance at December 31, 2022 | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Finite-Lived Intangible Assets | (in millions) | ||||||||||
Gross Amount | |||||||||||
Technology | $ | $ | |||||||||
Customer relationships | |||||||||||
Trade names and other | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Total gross amount | $ | $ | |||||||||
Accumulated Amortization | |||||||||||
Technology | $ | ( | $ | ( | |||||||
Customer relationships | ( | ( | |||||||||
Trade names and other | ( | ( | |||||||||
Foreign currency translation adjustment | |||||||||||
Total accumulated amortization | $ | ( | $ | ( | |||||||
Net Amount | |||||||||||
Technology | $ | $ | |||||||||
Customer relationships | |||||||||||
Trade names and other | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Total finite-lived intangible assets | $ | $ | |||||||||
Indefinite-Lived Intangible Assets | |||||||||||
Exchange and clearing registrations | $ | $ | |||||||||
Trade names | |||||||||||
Licenses | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Total indefinite-lived intangible assets | $ | $ | |||||||||
Total intangible assets, net | $ | $ | |||||||||
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Amortization expense | $ | $ | $ |
(in millions) | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
2028+ | |||||
Total | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
(in millions) | |||||||||||
Financial investments | $ | $ | |||||||||
Equity method investments | |||||||||||
Equity securities |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in millions) | |||||||||||
Data processing equipment and software | $ | $ | |||||||||
Furniture, equipment and leasehold improvements | |||||||||||
Total property and equipment | |||||||||||
Less: accumulated depreciation and amortization and impairment charges | ( | ( | |||||||||
Total property and equipment, net | $ | $ |
Balance at December 31, 2021 | Additions | Revenue Recognized | Adjustments | Balance at December 31, 2022 | |||||||||||||
(in millions) | |||||||||||||||||
Market Platforms: | |||||||||||||||||
Market Technology | $ | $ | $ | ( | $ | ( | $ | ||||||||||
Capital Access Platforms: | |||||||||||||||||
Initial Listing | ( | ( | |||||||||||||||
Annual Listings | ( | ( | |||||||||||||||
Workflow & Insights | ( | ( | |||||||||||||||
Anti-Financial Crime | ( | ||||||||||||||||
Other | ( | ( | |||||||||||||||
Total | $ | $ | $ | ( | $ | ( | $ | ||||||||||
Fiscal year ended: | 2023 | 2024 | 2025 | 2026 | 2027 | 2028+ | Total | ||||||||||||||||
(in millions) | |||||||||||||||||||||||
Market Platforms: | |||||||||||||||||||||||
Market Technology | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Capital Access Platforms: | |||||||||||||||||||||||
Initial Listings | |||||||||||||||||||||||
Annual Listings | |||||||||||||||||||||||
Workflow & Insights | |||||||||||||||||||||||
Anti-Financial Crime | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
December 31, 2021 | Additions | Payments, Foreign Currency Translation and Accretion | December 31, 2022 | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Short-term debt: | |||||||||||||||||||||||
Commercial paper | $ | $ | $ | ( | $ | ||||||||||||||||||
2022 Notes | ( | ||||||||||||||||||||||
2024 Notes | ( | ||||||||||||||||||||||
Total short-term debt | $ | $ | $ | ( | $ | ||||||||||||||||||
Long-term debt - senior unsecured notes: | |||||||||||||||||||||||
2026 Notes | |||||||||||||||||||||||
2029 Notes | ( | ||||||||||||||||||||||
2030 Notes | ( | ||||||||||||||||||||||
2050 Notes | |||||||||||||||||||||||
2031 Notes | |||||||||||||||||||||||
2040 Notes | |||||||||||||||||||||||
2033 Notes | ( | ||||||||||||||||||||||
2052 Notes | |||||||||||||||||||||||
2022 Credit Facility | ( | ( | ( | ||||||||||||||||||||
Total long-term debt | $ | $ | $ | ( | $ | ||||||||||||||||||
Total debt obligations | $ | $ | $ | ( | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Savings Plan expense | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Retirement Plans expense | $ | $ | $ |
Pension | SERP | Post-retirement | Total | ||||||||||||||||||||
Fiscal Year Ended: | (in millions) | ||||||||||||||||||||||
2023 | $ | $ | $ | $ | |||||||||||||||||||
2024 | |||||||||||||||||||||||
2025 | |||||||||||||||||||||||
2026 | |||||||||||||||||||||||
2027 | |||||||||||||||||||||||
2028 through 2032 | |||||||||||||||||||||||
$ | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Share-based compensation expense before income taxes | $ | $ | $ | ||||||||||||||
Restricted Stock | |||||||||||
Number of Awards | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested at December 31, 2019 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested at December 31, 2020 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested at December 31, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested at December 31, 2022 | $ |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Weighted-average risk free interest rate | % | % | |||||||||
Expected volatility | % | % | |||||||||
Weighted-average grant date share price | $ | $ | |||||||||
Weighted-average fair value at grant date | $ | $ |
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 December 31, 2019 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||
Unvested at December 31, 2020 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||
Unvested at December 31, 2021 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||
Unvested at December 31, 2022 | $ | $ |
Number of Stock Options | Weighted-Average Exercise Price | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||||
Outstanding at December 31, 2019 | $ | |||||||||||||
Exercised | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Outstanding at December 31, 2020 | $ | $ | ||||||||||||
Exercised | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Outstanding at December 31, 2021 | $ | $ | ||||||||||||
Granted | ||||||||||||||
Outstanding at December 31, 2022 | $ | $ | ||||||||||||
Exercisable at December 31, 2022 | $ | $ |
Year Ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Number of shares purchased by employees | ||||||||||||||||||||
Weighted-average price of shares purchased | $ | $ | $ | |||||||||||||||||
Compensation expense (in millions) | $ | $ | $ |
Year Ended December 31, 2022 | ||||||||
Number of shares of common stock repurchased | ||||||||
Average price paid per share | $ | |||||||
Total purchase price (in millions) | $ |
Declaration Date | Dividend Per Common Share | Record Date | Total Amount Paid | Payment Date | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
January 26, 2022 | $ | March 11, 2022 | $ | March 25, 2022 | ||||||||||||||||||||||
April 20, 2022 | June 10, 2022 | June 24, 2022 | ||||||||||||||||||||||||
July 19, 2022 | September 16, 2022 | September 30, 2022 | ||||||||||||||||||||||||
October 19, 2022 | December 2, 2022 | December 16, 2022 | ||||||||||||||||||||||||
$ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Numerator: | (in millions, except share and per share amounts) | ||||||||||||||||
Net income attributable to common shareholders | $ | $ | $ | ||||||||||||||
Denominator: | |||||||||||||||||
Weighted-average common shares outstanding for basic earnings per share | |||||||||||||||||
Weighted-average effect of dilutive securities: | |||||||||||||||||
Employee equity awards | |||||||||||||||||
Contingent issuance of common stock | |||||||||||||||||
Weighted-average common shares outstanding for diluted earnings per share | |||||||||||||||||
Basic and diluted earnings per share: | |||||||||||||||||
Basic earnings per share | $ | $ | $ | ||||||||||||||
Diluted earnings per share | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
European government debt securities | $ | $ | $ | $ | |||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
State-owned enterprises and municipal securities | |||||||||||||||||||||||
Swedish mortgage bonds | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
European government debt securities | $ | $ | $ | $ | |||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
State-owned enterprises and municipal securities | |||||||||||||||||||||||
Swedish mortgage bonds | |||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||
Cash Contributions | Non-Cash Contributions | Total Contributions | |||||||||||||||
(in millions) | |||||||||||||||||
Default fund contributions | $ | $ | $ | ||||||||||||||
Margin deposits | |||||||||||||||||
Total | $ | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
(in millions) | |||||||||||
Demand deposits | $ | $ | |||||||||
Central bank certificates | |||||||||||
Restricted cash and cash equivalents | $ | $ | |||||||||
European government debt securities | |||||||||||
Reverse repurchase agreements | |||||||||||
Multilateral development bank debt securities | |||||||||||
Investments | $ | $ | |||||||||
Total | $ | $ |
December 31, 2022 | |||||
(in millions) | |||||
Commodity and seafood options, futures and forwards | $ | ||||
Fixed-income options and futures | |||||
Stock options and futures | |||||
Index options and futures | |||||
Total | $ |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Commodity and seafood options, futures and forwards | |||||||||||
Fixed-income options and futures | |||||||||||
Stock options and futures | |||||||||||
Index options and futures | |||||||||||
Total |
Leases | Balance Sheet Classification | December 31, 2022 | December 31, 2021 | |||||||||||||||||
(in millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Operating lease assets | Operating lease assets | $ | $ | |||||||||||||||||
Liabilities: | ||||||||||||||||||||
Current lease liabilities | $ | $ | ||||||||||||||||||
Non-current lease liabilities | Operating lease liabilities | |||||||||||||||||||
Total lease liabilities | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Variable lease cost | |||||||||||||||||
Sublease income | ( | ( | ( | ||||||||||||||
Total lease cost | $ | $ | $ |
December 31, 2022 | ||||||||
(in millions) | ||||||||
2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028+ | ||||||||
Total lease payments | ||||||||
Less: interest | ( | |||||||
Present value of lease liabilities | $ |
December 31, 2022 | ||||||||
Weighted-average remaining lease term (in years) | ||||||||
Weighted-average discount rate | % |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | $ | ||||||||||||||
Lease assets obtained in exchange for operating lease liabilities | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Domestic | $ | $ | $ | ||||||||||||||
Foreign | |||||||||||||||||
Income before income tax provision | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Current income taxes provision: | |||||||||||||||||
Federal | $ | $ | $ | ||||||||||||||
State | |||||||||||||||||
Foreign | |||||||||||||||||
Total current income taxes provision | |||||||||||||||||
Deferred income taxes provision (benefit): | |||||||||||||||||
Federal | |||||||||||||||||
State | |||||||||||||||||
Foreign | ( | ( | ( | ||||||||||||||
Total deferred income taxes provision | |||||||||||||||||
Total income tax provision | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Federal income tax provision at the statutory rate | % | % | % | ||||||||||||||
State income tax provision, net of federal effect | % | % | % | ||||||||||||||
Excess tax benefits related to employee share-based compensation | ( | % | ( | % | ( | % | |||||||||||
Non-U.S. subsidiary earnings | % | % | % | ||||||||||||||
Tax credits and deductions | ( | % | ( | % | ( | % | |||||||||||
Change in unrecognized tax benefits | % | % | ( | % | |||||||||||||
Other, net | ( | % | ( | % | ( | % | |||||||||||
Actual income tax provision | % | % | % |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in millions) | |||||||||||
Deferred tax assets: | |||||||||||
Deferred revenues | $ | $ | |||||||||
U.S. federal net operating loss | |||||||||||
Foreign net operating loss | |||||||||||
State net operating loss | |||||||||||
Compensation and benefits | |||||||||||
Tax credits | |||||||||||
Federal benefit of uncertain tax positions | |||||||||||
Operating lease liabilities | |||||||||||
Unrealized losses | |||||||||||
Other | |||||||||||
Gross deferred tax assets | |||||||||||
Less: valuation allowance | ( | ( | |||||||||
Total deferred tax assets, net of valuation allowance | $ | $ | |||||||||
Deferred tax liabilities: | |||||||||||
Amortization of software development costs and depreciation | $ | ( | $ | ( | |||||||
Amortization of acquired intangible assets and goodwill | ( | ( | |||||||||
Investments | ( | ( | |||||||||
Unrealized gains | ( | ||||||||||
Operating lease assets | ( | ( | |||||||||
Other | ( | ( | |||||||||
Gross deferred tax liabilities | $ | ( | $ | ( | |||||||
Net deferred tax liabilities | $ | ( | $ | ( | |||||||
Reported as: | |||||||||||
Non-current deferred tax assets | $ | $ | |||||||||
Deferred tax liabilities, net | ( | ( | |||||||||
Net deferred tax liabilities | $ | ( | $ | ( |
Jurisdiction | December 31, 2021 | Expiration Date | ||||||
(in millions) | ||||||||
Foreign NOL | $ | No expiration | ||||||
Federal NOL | No expiration | |||||||
State NOL | 2025-2040 |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Beginning balance | $ | $ | $ | ||||||||||||||
Additions as a result of tax positions taken in prior periods | |||||||||||||||||
Additions as a result of tax positions taken in the current period | |||||||||||||||||
Reductions related to settlements with taxing authorities | ( | ( | ( | ||||||||||||||
Reductions as a result of lapses of the applicable statute of limitations | ( | ( | ( | ||||||||||||||
Ending balance | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Market Platforms | (in millions) | ||||||||||||||||
Total revenues | $ | $ | $ | ||||||||||||||
Transaction-based expenses | ( | ( | ( | ||||||||||||||
Revenues less transaction-based expenses | |||||||||||||||||
Depreciation and amortization* | |||||||||||||||||
Operating income | |||||||||||||||||
Purchase of property and equipment | |||||||||||||||||
Capital Access Platforms | |||||||||||||||||
Total revenues | |||||||||||||||||
Depreciation and amortization* | |||||||||||||||||
Operating income | |||||||||||||||||
Purchase of property and equipment | |||||||||||||||||
Anti-Financial Crime | |||||||||||||||||
Total revenues | |||||||||||||||||
Depreciation and amortization* | |||||||||||||||||
Operating income | |||||||||||||||||
Purchase of property and equipment | |||||||||||||||||
Corporate Items | |||||||||||||||||
Total revenues | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Operating loss | ( | ( | ( | ||||||||||||||
Consolidated | |||||||||||||||||
Total revenues | $ | $ | $ | ||||||||||||||
Transaction-based expenses | ( | ( | ( | ||||||||||||||
Revenues less transaction-based expenses | $ | $ | $ | ||||||||||||||
Depreciation and amortization | $ | $ | $ | ||||||||||||||
Operating income | $ | $ | $ | ||||||||||||||
Purchase of property and equipment | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Revenues - divested/contributed businesses | $ | $ | $ | ||||||||||||||
Expenses: | |||||||||||||||||
Amortization expense of acquired intangible assets | |||||||||||||||||
Merger and strategic initiatives expense | |||||||||||||||||
Restructuring charges | |||||||||||||||||
Regulatory matters | ( | ||||||||||||||||
Provision for notes receivable | |||||||||||||||||
Extinguishment of debt | |||||||||||||||||
Charitable donations | |||||||||||||||||
Expenses - divested/contributed businesses | |||||||||||||||||
Other | |||||||||||||||||
Total expenses | |||||||||||||||||
Operating loss | $ | ( | $ | ( | $ | ( |
Total Revenues | Property and Equipment, Net | ||||||||||
2022: | (in millions) | ||||||||||
United States | $ | $ | |||||||||
All other countries | |||||||||||
Total | $ | $ | |||||||||
2021: | |||||||||||
United States | $ | $ | |||||||||
All other countries | |||||||||||
Total | $ | $ | |||||||||
2020: | |||||||||||
United States | $ | $ | |||||||||
All other countries | |||||||||||
Total | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||
Asset impairment charges | $ | $ | $ | ||||||||||||||
Consulting services | |||||||||||||||||
Contract terminations | |||||||||||||||||
Employee-related costs | |||||||||||||||||
Other | |||||||||||||||||
Total restructuring charges | $ | $ | $ | ||||||||||||||
(1) | we do not pay interest on any of the 2033 Notes within 30 days of its due date; |
(2) | we fail to pay the principal (or premium, if any) of any 2033 Note, when such principal becomes due and payable, at maturity, upon acceleration, upon redemption or otherwise; |
(3) | we fail to comply with certain covenants under the indenture; |
(4) | we remain in breach of a covenant or warranty in respect of the indenture or 2033 Notes (other than a covenant included in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written notice of default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the outstanding 2033 Notes; |
(5) | we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture; |
(6) | we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least $200,000,000, constituting a default either of payment of principal when due and payable or which results in acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full within 60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding 2033 Notes; or |
(7) | one or more final judgments for the payment of money in an aggregate amount in excess of $200,000,000 above available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed. |
(1) | we do not pay interest on any of the 2030 Notes within 30 days of its due date; |
(2) | we fail to pay the principal (or premium, if any) of any 2030 Note, when such principal becomes due and payable, at maturity, upon acceleration, upon redemption or otherwise; |
(3) | we fail to comply with certain covenants under the indenture; |
(4) | we remain in breach of a covenant or warranty in respect of the indenture or 2030 Notes (other than a covenant included in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written notice of default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the outstanding 2030 Notes; |
(5) | we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture; |
(6) | we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least $150,000,000, constituting a default either of payment of principal when due and payable or which results in acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full within 60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding 2030 Notes; or |
(7) | one or more final judgments for the payment of money in an aggregate amount in excess of $150,000,000 above available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed. |
1. | Purpose. The Nasdaq Change in Control Severance Pay Plan (the “Plan”) has been established by Nasdaq, Inc. ( “Nasdaq” or “the Company”), effective as of November 26, 2013 (as amended December 6, 2022) (“Effective Date”) to promote the long-term financial interests of the Company and its shareholders by (i) providing key employees of the Company and its subsidiaries with assurances of fair and equitable treatment as well as severance benefits consistent with competitive practices in the event of a Change in Control of the Company and (ii) reducing the risk of departures and distractions of such employees in a Change in Control situation which would be detrimental to the Company and its shareholders. |
2. | Definitions. As used in this Plan, the following terms shall have the meanings set forth below: |
(a) | “Board” means the Board of Directors of Nasdaq, Inc. |
(b) | “Cause” means, for Executives employed in the United States, (i) the Executive’s conviction of, or pleading nolo contendere to, any crime, whether a felony or misdemeanor, involving the purchase or sale of any security, mail or wire fraud, theft, embezzlement, moral turpitude, or Nasdaq or its affiliates’ property (with the exception of minor traffic violations or similar misdemeanors); (ii) the Executive’s repeated neglect of his or her duties; or (iii) the Executive’s willful misconduct in connection with the performance of his or her duties. For Executives employed outside of the United States, “Cause” shall be defined consistent with the requirements of local law in the jurisdiction where the Executive is regularly assigned to work. |
(c) | “Change in Control” means the first to occur of any one of the following events: |
(i) | any “Person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) is or becomes the beneficial owner, directly or indirectly, of more than 50% of the Voting Securities (not including any securities acquired directly (or through an underwriter) from Nasdaq), except a Person shall not include: |
(A) | Nasdaq; |
(B) | any Person who becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of Nasdaq’s then outstanding securities eligible to vote in the election of the Board (“Voting Securities”) as a result of a reduction in the number of Voting Securities outstanding due to the repurchase of Voting Securities by Nasdaq unless and until such Person, after becoming aware that such Person has become the beneficial owner of more than 50% of the then outstanding Voting Securities, acquires beneficial ownership of additional Voting Securities representing 1% or more of the Voting Securities then outstanding, |
(C) | any trustee or other fiduciary holding securities under an employee benefit plan of Nasdaq, or |
(D) | any entity owned, directly or indirectly, by the stockholders of Nasdaq in substantially the same proportions as their ownership of Voting Securities is or becomes the beneficial owner, directly or indirectly, of more than 50% of the Voting Securities (not including any securities acquired directly (or through an underwriter) from Nasdaq or the Companies; |
(ii) | the date on which, within any twelve (12) month period (beginning on or after the Effective Date), a majority of the directors then serving on the Board are replaced by directors not endorsed by at least two-thirds (2/3) of the members of the Board before the date of appointment or election; | |||||||
(iii) | there is consummated a merger or consolidation of Nasdaq with any other corporation or entity or Nasdaq issues Voting Securities in connection with a merger or consolidation of any direct or indirect subsidiary of Nasdaq with any other corporation, other than: |
(A) | a merger or consolidation that would result in the Voting Securities outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving or parent entity) more than 50% of Nasdaq’s then outstanding Voting Securities or more than 50% of the combined voting power of such surviving or parent entity outstanding immediately after such merger or consolidation or |
(B) | a merger or consolidation effected to implement a recapitalization of Nasdaq (or similar transaction) in which no Person, directly or indirectly, acquired more than 50% of Nasdaq’s then outstanding Voting Securities (not including any securities acquired directly (or through an underwriter) from Nasdaq or the Companies); or |
(iv) | the consummation of an agreement for the sale or disposition by Nasdaq of all or substantially all of Nasdaq’s assets (or any transaction having a similar effect), provided that such agreement or transaction of similar effect shall in all events require the disposition, within any twelve (12) month period, of at least 40% of the gross fair market value of all of Nasdaq’s then assets; other than a sale or disposition by Nasdaq of all or substantially all of Nasdaq’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned directly or indirectly by stockholders of Nasdaq in substantially the same proportions as their ownership of Nasdaq immediately prior to such sale. |
(d) | “Companies” shall mean Nasdaq or any of its affiliates. |
(e) | “Disability” shall mean either (i) the inability of the Executive to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) the Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Companies. The Executive shall be deemed disabled if he is determined to be (i) totally disabled by the Social Security Administration (or a similar governmental agency in the country where the Executive is regularly assigned to work) or (ii) disabled in accordance with a disability insurance program, provided such definition of disabled under the program complies with the definition of Disability hereunder. Otherwise, such Disability shall be certified by a physician chosen by Nasdaq and reasonably acceptable to the Executive (unless he is then legally incapacitated, in which case such physician shall be reasonably acceptable to the Executive’s authorized legal representative). |
(f) | “Employing Entity” shall mean Nasdaq or the affiliate that employs the Executive. |
(g) | “Executive” shall mean an individual who is either a Non-CEO President, an Executive Vice President or Senior Vice President of the Companies; provided, however that in no event shall an individual be eligible to participate in the Plan if the individual is covered under an active individual severance agreement entered into with the Companies. |
(h) | “Good Reason shall mean the Employing Entity (i) reducing the Executive’s position, duties, or authority; (ii) failing to secure the agreement of any successor entity to the Company that the Executive shall continue in his or her position without reduction in position, duties or authority; or (iii) relocating the Executive’s principal work location beyond a 50 mile radius of his or her work location as of the date immediately preceding the date of a Change in Control; provided that no event or condition shall constitute Good Reason unless (A) the Executive gives the Employing Entity written notice specifying his or her objection to such event or condition within 90 days following the occurrence of such event or condition, (B) such event or condition is not corrected, in all material respects, by the Employing Entity in a manner that is reasonably satisfactory to the Executive within 30 days following the Employing Entity’s receipt of such notice and (C) the Executive resigns from his or her employment with the Employing Entity not more than 30 days following the expiration of the 30-day period described in the foregoing clause (B). |
(i) | “Qualifying Termination” means a termination of Executive’s employment (i) by the Employing Entity other than for Cause or (ii) by Executive for Good Reason. Termination of Executive’s employment on account of death, Disability or voluntary termination other than for Good Reason shall not be treated as a Qualifying Termination. |
3. | Payments Upon Termination of Employment following a Change in Control. If, within the period beginning on a Change in Control and ending two (2) years following such Change in Control, Executive’s employment with the Employing Entity terminates by the Employing Entity for a reason other than for Cause, or within the period beginning on a Change in Control and ending one (1) year following such Change in Control, Executive’s employment with the Employing Entity terminates by the Executive for Good Reason, Executive shall be entitled to the following payments and benefits subject to Section 3(e). |
(a) | Severance. On the sixtieth (60th) day following the date of Executive’s Qualifying Termination, Nasdaq shall pay Executive a lump sum cash payment in accordance with the following schedule: |
(i) | if Executive is a non-CEO President or an Executive Vice President (“EVP”) as of the Executive’s Qualifying Termination, then Executive’s lump sum cash payment shall be equal to the sum of (x) 200% of Executive’s annual salary at the rate in effect on the date of Executive’s Qualifying Termination and (y) 100% of Executive’s “Individual Target Award” (as that term is defined in the Nasdaq Inc. Executive Corporate Incentive Plan (the “Executive Incentive Plan”)) for the Plan Year (as that term is defined in the Incentive Plan) in which Executive’s Qualifying Termination occurs, or if such Individual Target Award has not yet been established for such Plan Year, 100% of Executive’s Individual Target Award for the Plan Year prior to the year in which the Qualifying Termination occurs. |
(ii) | if Executive is a Senior Vice President (“SVP”) as of the Executive’s Qualifying Termination, then the Executive’s lump sum cash payment shall be equal to the sum of (x) 150% of Executive’s annual salary at the rate in effect on the date of Executive’s Qualifying Termination and (y) 100% of Executive’s “Individual Target Award” (as that term is defined in The Nasdaq Inc. Corporate Incentive Plan (the “Corporate Incentive Plan”)) for the Plan Year (as that term is defined in the Corporate Incentive Plan) in which Executive’s Qualifying Termination occurs, or if such Individual Target Award has not yet been established for such Plan Year, 100% of Executive’s Individual Target Award for the Plan Year prior to the year in which the Qualifying Termination occurs. |
(b) | Incentive Compensation. Notwithstanding any provision of the Incentive Plan to the contrary, Nasdaq shall pay Executive on the sixtieth (60th) day following the date of Executive’s Qualifying Termination a lump sum cash payment equal to the sum of (i) any unpaid “Award” (as that term is defined in the Executive Incentive Plan or Corporate Incentive Plan, as applicable) which had been earned by Executive for a completed Plan Year and (ii) Executive’s “Pro-Rata Individual Target Award.” The term Pro-Rata Individual Target Award means in respect to the Plan Year during which Executive’s Qualifying Termination occurs an amount equal to the product of (i) Executive’s Individual Target Award for the Plan Year in which Executive’s Qualifying Termination occurs, or if such Individual Target Award has not yet been established for such Plan Year, 100% of Executive’s Individual Target Award for the Plan Year prior to the year in which the Qualifying Termination occurs and (ii) a fraction, the numerator of which equals the number of days from and including the first day of the Plan Year during which the Qualifying Termination occurred through and including the date of Executive’s Qualifying Termination. | |||||||
(c) | United States Health and Welfare Benefits. Nasdaq shall pay to Executive on a monthly basis during the CIC Coverage Period a taxable monthly cash payment equal to the COBRA premium for the highest level of coverage available under the Employing Entity’s group health plans, but reduced by the monthly amount that Executive would pay for such coverage if the Executive was an active employee. “CIC Coverage Period” shall mean the period (I) commencing on the first day of the month following the Release and Covenants Effective Date (provided that if the 60 day period described in Section 3(e) below begins in one calendar year and ends in another, the CIC Coverage Period shall commence not earlier than January 1 of the calendar year following an Executive’s Qualifying Termination) and (II) ending on the earlier of (x) the expiration of 24 months from the first day of the CIC Coverage Period in the case of an Executive who is a non-CEO President or an EVP as of the Executive’s Qualifying Termination (the expiration of 18 months in the case of an Executive who is a SVP as of the Executive’s Qualifying Termination), and (y) the date that the Executive is eligible for coverage under the health care plans of a subsequent employer. The payments provided by this subparagraph (c) shall be conditioned upon the Executive being covered by the Company’s health care plans immediately prior to the Executive’s Qualifying Termination. The foregoing payments are not intended to limit or otherwise reduce any entitlements that Executive may have under COBRA. |
(d) | Non-United States Health and Welfare Benefits. Executives employed outside the United States shall receive a taxable monthly cash payment equivalent to the Employing Entity’s share of the cost of the highest level of coverage available under the Employing Entity’s group health plans during the CIC Coverage Period unless otherwise required by applicable local law. |
(e) | Outplacement Services. Nasdaq shall provide Executive with outplacement services suitable to Executive’s position during the “Outplacement Coverage Period”; provided that if such outplacement services are provided by a third party, Nasdaq shall pay the cost of such outplacement services to the third party, up to a maximum amount of $50,000, no later than the last day of the third calendar year following the calendar year in which such Qualifying Termination occurs. The “Outplacement Coverage Period” shall mean the period (I) commencing on the first day of the month following the Release and Covenants Effective Date (provided that if the 60 day period described in Section 3(e) below begins in one calendar year and ends in another, the CIC Coverage Period shall commence not earlier than January 1 of the calendar year following an Executive’s Qualifying Termination) and (II) ending on the earlier of (x) the expiration of 12 months from the first day of the Outplacement Coverage Period or, if earlier, (y) the date the Executive first accepts an offer of employment. |
(f) | Release and Restrictive Covenants. Notwithstanding anything to the contrary in this Agreement, receipt of benefits under Section 3 shall be contingent upon (i) Executive executing and delivering to Nasdaq a general release of claims following the date of the Executive’s Qualifying Termination, in substantially the form attached as Exhibit A (“Release”) that, within 60 days of the Executive’s Qualifying Termination, has become irrevocable by the Executive and (ii) Executive executing and delivering to Nasdaq a restrictive covenants and cooperation agreement, in substantially the form attached as Exhibit B (“Covenants”) that, within 60 days of the Executive’s Qualifying Termination, has become irrevocable by the Executive. The date on which the Release and Covenants become irrevocable under this subparagraph (i) shall be referred to as the Release and Covenants Effective Date. If Executive fails to timely execute and deliver to Nasdaq the Release and Covenants, Nasdaq shall have no obligation to pay or provide the benefits provided under this Section 3 to the Executive. Executives employed outside of the United States will be required to execute comparable agreements consistent with the requirements of local law. |
4. | Special Provisions for Executives Employed Outside of the United States: The severance payment under this Plan includes all contractual and statutory payments that the Executive is entitled to upon termination or during or in respect of his/her notice period, including but not limited to: |
i. | salary, pension, bonus, etc., payable in a notice period or in lieu of notice, |
ii. | all severance payments payable under statute or collective or other agreements, and |
iii. | compensation for untaken holiday. |
5. | Withholding Taxes. Nasdaq may withhold from all payments or benefits due to Executive hereunder or under any other plan or arrangement of the Companies all taxes which, by applicable federal, state, local or other law, Nasdaq determines it is required to withhold therefrom. |
6. | Best Net. In connection with the excise tax imposed by Section 4999 of the Internal Revenue Code (“Code”), as amended, the Nasdaq will provide for the “Best Net” so that Executive’s aggregate severance payments and benefits would be reduced to $1.00 less than that amount which would trigger the Code Section 4999 excise tax if such reduction would result in such Executive receiving a greater after-tax benefit than Executive would receive if the full severance benefits were paid (i.e., the aggregate severance payments and benefits that Executive receives will be either the full amount of severance payments and benefits or an amount of severance payments and benefits reduced to the extent necessary so that Executive incurs no excise tax, whichever results in Executive receiving the greater amount, taking into account applicable federal, state and local income, employment and other applicable taxes, as well as the excise tax). |
7. | Code Section 409A. To the extent applicable, it is intended that the Plan comply with the provisions of Code Section 409A. The Plan will be administered and interpreted in a manner consistent with this intent, and any provision that would cause the Plan to fail to satisfy Code Section 409A will have no force and effect until amended to comply therewith (which amendment may be retroactive to the extent permitted by Code Section 409A). Notwithstanding anything contained herein to the contrary, for all purposes of this Plan, Executive shall not be deemed to have had a termination of employment until Executive has incurred a separation from service as defined in Treasury Regulation §1.409A-1(h) and, to the extent required to avoid accelerated taxation and/or tax penalties under Code Section 409A, payment of the amounts payable under the Plan that would otherwise be payable during the six-month period after the date of termination shall instead be paid on the first business day after the expiration of such six-month period, plus interest thereon, at a rate equal to the applicable “Federal short-term rate” (as defined in Code Section 1274(d)) for the month in which such date of termination occurs, from the respective dates on which such amounts would otherwise have been paid until the actual date of payment. In addition, for purposes of the Plan, each amount to be paid and each installment payment shall be construed as a separate, identified payment for purposes of Code Section 409A. With respect to expenses eligible for reimbursement under the terms of this Plan, (i) the amount of such expenses eligible for reimbursement in any taxable year shall not affect the expenses eligible for reimbursement in another taxable year and (ii) any reimbursements of such expenses shall be made no later than the end of the calendar year following the calendar year in which the related expenses were incurred, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Code Section 409A. |
8. | Waiver of Breach. No waiver by any party hereto of a breach of any provision of the Plan by any other party, or of compliance with any condition or provision of the Plan to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party of any similar or dissimilar provisions and conditions at the same or any prior or subsequent time. The failure of any party hereto to take any action by reason of such breach will not deprive such parry of the right to take action at any time while such breach continues |
9. | Amendment and Termination. The Board may amend or terminate the Plan at any time; provided, however that no amendment of the Plan which is adopted on or after a Change in Control or during the 180-day period immediately preceding a Change in Control shall directly or indirectly adversely affect any Executive’s rights and benefits under the Plan without the written consent of that Executive and further provided, that the upon and after a Change in Control, the Plan may not be terminated prior to the second anniversary of the occurrence of such Change in Control. |
10. | Administration. The Committee shall be responsible for administering this Plan. The Committee may employ attorneys, consultants, accountants, agents and other individuals, any of whom may be an employee of Nasdaq, and the Committee, Nasdaq, and its officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such individuals. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon Executives, the Companies, and all other interested individuals. |
11. | Binding Agreement; Successors. In the event of any Change in Control, the provisions of this Plan shall be binding upon the surviving corporation, and such surviving corporation shall be treated as Nasdaq hereunder. This Plan shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive dies while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate. |
12. | Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural. |
13. | Unfunded Plan. Executives shall have no right, title or interest whatsoever in or to any investments that the Companies may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Companies and any Executive, beneficiary, legal representative or any other individual. To the extent that any individual acquires a right to receive payments under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Companies. All payments to be made hereunder shall be paid from the general funds of Nasdaq, and no special or separate fund shall be established, and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan. |
14. | Governing Law and Miscellaneous. The law of the State of New York shall govern this Plan without giving effect to its conflict of law principles. Should a court of competent jurisdiction find that any provision of this Plan is void, voidable, illegal, or unenforceable, no other provision shall be affected thereby and the balance shall be interpreted in a manner that gives effect to the intent of the parties. The normal rules of construction hold that all ambiguities are construed against the drafting party will not apply to the interpretation of this Plan. |
1. | Acknowledgment and Release. Executive hereby accepts the separation package provided under the CIC Plan and hereby releases, discharges, and agrees to hold harmless the Companies, their predecessors, successors, their boards of directors and their members, employees, officers, parent, shareholders, employee benefit plans and their Plan Administrators, trusts, trustees, heirs, successors, and assigns (hereinafter referred to in this Release collectively as the “Releasees”), from all claims, liabilities, demands, and causes of action at law or equity, known or unknown, fixed or contingent, which Executive have, may have, will have, or claim to have against the Releasees as a result of Executive’s employment and/or this separation and the conclusion of Executive’s employment with the Releasees at any time up to and including the date of the execution of this General Executive Release and Waiver, excluding all claims that arise out of an asserted breach of the CIC Plan. Executive’s agreement pursuant to this General Executive Release and Waiver is hereinafter referred to as the “Release”. This includes, but is not limited to, claims arising under federal, state, or local laws prohibiting employment discrimination, including Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as amended (including the Older Workers Benefit Protection Act), the Employment Retirement Income Security Act of 1974, as amended, the Equal Pay Act, the Fair Labor Standards Act, as amended, the District of Columbia Human Rights Act, as amended, the Maryland Human Relations Act, the New York Executive Law, as amended, the New York City Administrative Code, as amended, the New York Labor Law, as amended, the District of Columbia Wage Payment and Wage Collection Law, as amended, the Maryland Wage Payment and Collection Act, as amended, claims growing out of any legal restrictions on an employer’s right to terminate its employees in any jurisdiction, such as claims for wrongful or constructive discharge, breach of any express or implied contract, and/or any claims on any basis whatsoever regarding Executive’s status, pay, position, or title while employed by the Releasees. Excluded from this Release are claims which cannot be lawfully waived, including the right to file an administrative charge of discrimination with federal or state agencies. Executive is, however, waiving all rights to monetary recovery in connection with any such charge. |
2. | Governing Law. The law of the State of New York shall govern this Release without giving effect to its conflict of law principles. Should a court of competent jurisdiction find that any provision of this Release is void, voidable, illegal, or unenforceable, no other provision shall be affected thereby and the balance shall be interpreted in a manner that gives effect to the intent of the parties. The parties agree that the normal rule of construction that holds that all ambiguities are construed against the drafting party will not apply to the interpretation of this Release. | |||||||
1 | Executives assigned outside the United States shall be required to execute a comparable version of this agreement consistent with local law of the jurisdiction where the Executive is assigned. | |||||||
3. | Headings. We further acknowledge that the headings in this Release are for convenience only and have no bearing on the meaning of this Release. |
4. | Time to Consider. Executive acknowledges that Executive has been advised that Executive has twenty-one (21) days from the date of receipt of this Release to consider all the provisions of the Release and do hereby knowingly and voluntarily waive said given twenty-one day period. YOU FURTHER ACKNOWLEDGE THAT YOU HAVE READ THE RELEASE CAREFULLY, HAVE BEEN ADVISED BY NASDAQ TO, AND HAVE IN FACT, CONSULTED AN ATTORNEY, AND FULLY UNDERSTAND THAT BY SIGNING BELOW YOU ARE GIVING UP CERTAIN RIGHTS WHICH YOU MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST THE RELEASEES AS DESCRIBED HEREIN. YOU ACKNOWLEDGE THAT YOU HAVE NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS RELEASE AND AGREE TO ALL OF ITS TERMS VOLUNTARILY. |
5. | Revocation. Executive shall have seven (7) days from the date of Executive’s execution of the Release to revoke the Release, with respect to all claims referred to herein (including, without limitation, any and all claims arising under ADEA). If Executive revokes the Release, Nasdaq will not be obligated to honor its obligations under the CIC Plan. |
6. | No Admission. This Release does not constitute an admission of liability or wrongdoing of any kind by Executive or the Releasees. |
7. | Coordination with Executive Restrictive Covenants and Cooperation Agreement. In addition to the timely submission to Nasdaq of an executed Release, Executive acknowledges and agrees that the payment of any benefits under the CIC Plan to the Executive also is contingent upon the Executive’s timely submission to Nasdaq of an executed Executive Restrictive Covenants and Cooperation Agreement in substantially the form attached as Exhibit B to the CIC Plan. Executive acknowledges that the Executive’s failure to submit to Nasdaq on a timely basis an executed Executive Restrictive Covenants and Cooperation Agreement shall Waiver shall cause the Companies’ obligation to make the payments and/or provide the benefits referred to in the CIC Plan to immediately cease. |
Very truly yours, | ||||||||
Nasdaq, Inc. | ||||||||
By: |
Date: | ||||||||
cc: People @ Nasdaq | ||||||||
Office of General Counsel |
1. | Acknowledgment and Agreement. Executive hereby accepts the separation package provided under the CIC Plan and hereby agrees to the provisions set forth in this Executive Restrictive Covenants and Cooperation Agreement (“Agreement”). Executive acknowledges that failure to submit to Nasdaq and executed Agreement during the time period specified in Section 7 of this Agreement shall cause the Companies’ obligation to make the payments and/or provide the benefits referred to in the CIC Plan to immediately cease. |
2. | Return of Nasdaq Property. Executive agrees to promptly return all property of the Companies to Executive’s manager. This includes (i) all documents, data, materials, details, and copies thereof in any form (electronic or hard copy) that are the property of the Companies or were created using the Companies resources or during any hours worked for the Companies including, without limitation, any data referred to in Section 5 of this Agreement and (ii) all other property of the Companies including, without limitation, all computer equipment, and associated passwords, property passes, keys, hardware keys, credit cards, and identification badges. |
3. | Non-solicitation of Employees. Executive agrees that Executive shall not directly recruit or solicit any current employee of the Companies to leave the employ of the Companies for one year following the date of Executive’s Qualifying Termination. The term “directly” as used in this Section 3 shall mean that Executive shall not initiate such discussions with a current employee of the Companies. |
4. | Post-termination Cooperation. Executive agrees to cooperate with the Companies and to provide all information that the Companies may hereafter reasonably request with respect to any matter involving Executive’s present or former relationship with the Companies, the work Executive has performed, or present or former employees of the Companies so long as such requests do not unreasonably interfere with any other job or important personal activity in which Executive is engaged. Nasdaq agrees to reimburse Executive for all reasonable out-of-pocket costs Executive incurs in connection therewith. |
5. | Non-disclosure of Proprietary Information. Executive agrees that, with regard to all confidential technical, business, tax, financial or proprietary knowledge and information Executive has obtained while employed by any of the Companies (“Proprietary Information”), Executive will not at any time disclose any such Proprietary Information to any person, firm, corporation, association, governmental agency, employee, or entity or use any such Proprietary Information for Executive’s own benefit or for the benefit of any other person, firm, corporation or other entity, except the Companies and except as may be required by court order or subpoena. Executive agrees to notify the Nasdaq Office of General Counsel at the address noted in the CIC Plan as soon as practicable after Executive’s receipt of such a court order or subpoena. For purposes of this letter |
2 | Executives assigned outside the United States shall be required to execute a comparable version of this agreement consistent with local law of the jurisdiction where the Executive is assigned. |
agreement, the term “Proprietary Information” does not include information that is in the public domain. For purposes of this letter agreement, the term “Proprietary Information” shall include, but not be limited to, non-public aspects of all information about or relating to the Companies which: |
i. | relates to specific matters such as trade secrets, pricing and advertising techniques or strategies, research and development activities, software development, market development, exchange registration, the Companies’ costs, expenses, human resources or other employment issues, matters relating to pending litigation, any matters pertaining to pending, past or future mergers, studies, market penetration plans, listing retention plans and strategies, marketing plans and strategies, financial information, communication and/or public relations products, plans, programs, and strategies, financial formulas and methods relating to the Companies’ business, computer software programs, accounting policies and practices, tax information, information from and about tax returns, tax strategies, policies and methods, and all strategic plans or other matters, strategies, and financial or operating information pertaining to clients, lenders, customers, counsel, or transactions as they may exist from time to time which Executive may have acquired or obtained directly or indirectly by virtue of Executive’s employment with any of the Companies; and/or, |
ii. | is known to Executive from Executive’s confidential employment relationship with the Companies. |
6. | Non-disparagement. Executive agrees that Executive shall not issue, circulate, publish or utter any false or disparaging, statement, remarks, opinions or rumors about Nasdaq or its shareholders or any of the Companies unless giving truthful testimony under subpoena or court order. Notwithstanding the preceding or any other provision of this letter agreement to the contrary, Executive may provide truthful information to any governmental agency or self-regulatory organization with or without subpoena or court order. With the exception of communications made in a private corporate communication as an employee or consultant with regard to a listing decision of Executive’s employer or Executive’s consulting client, Executive agree that public communications regarding a preference for listing a security on a market other than Nasdaq, that the quality of Nasdaq as a securities market is in any way inferior to any other securities market or exchange, and/or that the regulatory efforts and programs of Nasdaq or the NASD are or have been lax in any way, are specifically defined as disparaging and will constitute a material breach of this Plan by Executive. Notwithstanding the foregoing, nothing in this Section 5 shall prevent Executive from making good faith, factual and truthful statements related to listing on Nasdaq as long as Executive’s statements are not based on Proprietary Information. |
7. | Non-compete. Executive agrees that for one year following the date of Executive’s Qualifying Termination, Executive will not, directly or indirectly, (i) engage in any “Competitive Business” (as defined below) for Executive’s own account, (ii) enter the employ of, or render any services to, any person engaged in a Competitive Business, (iii) acquire a financial interest in, or otherwise become actively involved with, any person engaged in a Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant, or (iv) interfere with business relationships (whether formed before or after the date of this Agreement) between Nasdaq and customers or suppliers of Nasdaq. For purposes of this Agreement, “Competitive Business” shall mean (x) any national securities exchange registered with the Securities and Exchange Commission, (y) any electronic communications network or (z) any other entity that engages in substantially the same business as Nasdaq, in each case in North America or in any other location in which Nasdaq operates. |
8. | Breach of Agreement. If Executive materially breaches or threatens to materially breach Executive’s obligations in set forth in this Agreement and/or commence a suit or action or complaint in contravention of the Release attached as Exhibit A to the CIC Plan, Executive acknowledges that the Companies’ obligation to make the payments and/or provide the benefits referred to in the CIC Plan shall immediately cease, and that the Companies shall have, in addition to all other rights or remedies provided in law or in equity by reason of Executive’s material breach, the right to seek the return of all payments and benefits paid pursuant to the CIC Plan unless prohibited by applicable law or regulation. Executive specifically agrees and acknowledges that the Companies, after affording Executive reasonable, written notice of the material breach or threatened material breach of this Agreement or the Release of the reasonable opportunity to cure, has the right to cease performing their obligations under the CIC Plan in advance of any determination of material breach by a court of competent jurisdiction. If the Companies cease performing their obligations due to such material breach or threatened material breach and a court of competent jurisdiction later determines that such action was without right, the Companies agree to pay Executive all monies thus withheld plus simple interest at the prime rate in effect at the time the payments ceased and Executive’s reasonable costs and expenses incurred in such action (including attorney fees), and Executive agrees to accept this as Executive’s exclusive remedy therefore, as follows: any benefit under Sections 3(a) and 3(b) of the CIC Plan, as applicable, that are otherwise to be paid in a single lump sum payment, shall, to the extent not otherwise previously paid to Executive, be paid to Executive in full (together with applicable interest) no later than the end of Executive’s first taxable year in which such determination is made. Any reimbursement to Executive of the reasonable costs and expenses incurred in such action shall be made no later than March 15 following the end of the calendar year in which the final decision relating to such action is rendered. If the Companies cease performing their obligations due to such material breach or threatened material breach and a court of competent jurisdiction later determines that a breach occurred and that such action was thus appropriate and permitted under this Plan, Executive agrees to pay, in addition to such other costs as the court may direct, all of the Companies’ reasonable costs and expenses, including attorney’s fees, unless prohibited by applicable law or regulation. |
9. | Time to Consider and Execute. Executive acknowledges that Executive has been advised that Executive has twenty-eight (28) days from the date of receipt of this Agreement (“Executive Period”) to consider all the provisions of the Agreement and to execute this Agreement and return it to Nasdaq. |
10. | Coordination with General Executive Release and Waiver. In addition to the timely submission to Nasdaq of an executed Agreement, Executive acknowledges and agrees that the payment of any benefits under the CIC Plan to the Executive also is contingent upon the Executive’s timely submission to Nasdaq of an executed General Executive Release and Waiver in substantially the form attached as Exhibit A to the CIC Plan. Executive acknowledges that the Executive’s failure to submit to Nasdaq on a timely basis an executed General Executive Release and Waiver shall cause the Companies’ obligation to make the payments and/or provide the benefits referred to in the CIC Plan to immediately cease. |
Very truly yours, | ||||||||
Nasdaq, Inc. | ||||||||
By: |
Date: | ||||||||
cc: People @ Nasdaq | ||||||||
Office of General Counsel |
/s/ Adena T. Friedman | |||||||||||
Name: | Adena T. Friedman | ||||||||||
Title: | Chief Executive Officer |
/s/ Ann M. Dennison | |||||||||||
Name: | Ann M. Dennison | ||||||||||
Title: | Executive Vice President and Chief Financial Officer |
/s/ Adena T. Friedman | |||||||||||
Name: | Adena T. Friedman | ||||||||||
Title: | Chief Executive Officer | ||||||||||
Date: | February 23, 2023 | ||||||||||
/s/ Ann M. Dennison | |||||||||||
Name: | Ann M. Dennison | ||||||||||
Title: | Executive Vice President and Chief Financial Officer | ||||||||||
Date: | February 23, 2023 |
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