Deferred Revenue

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Deferred Revenue

Revenue Recognition

Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our balance sheets as customer accounts receivable. We do not have obligations for warranties, returns or refunds to customers, other than rebates, which are settled each period and therefore do not result in variable consideration. We do not have significant revenue recognized from performance obligations that were satisfied in prior periods, and we do not have any transaction price allocated to unsatisfied performance obligations other than in our deferred revenue. Deferred revenue represents our contract liabilities related to our annual, original and other listings revenues as well as certain data, clearing and mortgage services and other revenues. See Note 7 for our discussion of deferred revenue balances, activity, and expected timing of recognition. We have elected not to provide disclosures about the transaction price allocated to unsatisfied performance obligations if contract durations are less than one year, or if we are not required to estimate the transaction price. For all of our contracts with customers, except for listings and certain data, clearing and mortgage services, our performance obligations are short term in nature and there is no significant variable consideration. In addition, we have elected the practical expedient of excluding sales taxes from transaction prices. We have assessed the costs incurred to obtain or fulfill a contract with a customer and determined them to be immaterial.

Certain judgments and estimates are used in the identification and timing of satisfaction of performance obligations and the related allocation of transaction price. We believe that these represent a faithful depiction of the transfer of services to our customers. Refer to Note 5 to our consolidated financial statements included in our 2019 Form 10-K where our primary revenue contract classifications are described in detail.

The following table depicts the disaggregation of our revenue according to business line and segment (in millions). Amounts here have been aggregated as they follow consistent revenue recognition patterns, and are consistent with the segment information in Note 15:

	Trading and Clearing Segment		Data and Listings Segment		Total Consolidated
Nine Months Ended September 30, 2020:
Transaction and clearing, net	$	3,726	$	—	$	3,726
Data services	—		1,727		1,727
Listings	—		334		334
Other revenues	224		—		224
Total revenues	3,950		2,061		6,011
Transaction-based expenses	1,646		—		1,646
Total revenues, less transaction-based expenses	$	2,304	$	2,061	$	4,365
Timing of Revenue Recognition
Services transferred at a point in time	$	1,982	$	—	$	1,982
Services transferred over time	322		2,061		2,383
Total revenues, less transaction-based expenses	$	2,304	$	2,061	$	4,365

	Trading and Clearing Segment		Data and Listings Segment		Total Consolidated
Nine Months Ended September 30, 2019:
Transaction and clearing, net	$	2,698	$	—	$	2,698
Data services	—		1,652		1,652
Listings	—		336		336
Other revenues	194		—		194
Total revenues	2,892		1,988		4,880
Transaction-based expenses	976		—		976
Total revenues, less transaction-based expenses	$	1,916	$	1,988	$	3,904
Timing of Revenue Recognition
Services transferred at a point in time	$	1,653	$	—	$	1,653
Services transferred over time	263		1,988		2,251
Total revenues, less transaction-based expenses	$	1,916	$	1,988	$	3,904

	Trading and Clearing Segment		Data and Listings Segment		Total Consolidated
Three Months Ended September 30, 2020:
Transaction and clearing, net	$	1,155	$	—	$	1,155
Data services	—		589		589
Listings	—		111		111
Other revenues	75		—		75
Total revenues	1,230		700		1,930
Transaction-based expenses	519		—		519
Total revenues, less transaction-based expenses	$	711	$	700	$	1,411
Timing of Revenue Recognition
Services transferred at a point in time	$	595	$	—	$	595
Services transferred over time	116		700		816
Total revenues, less transaction-based expenses	$	711	$	700	$	1,411

	Trading and Clearing Segment		Data and Listings Segment		Total Consolidated
Three Months Ended September 30, 2019:
Transaction and clearing, net	$	929	$	—	$	929
Data services	—		553		553
Listings	—		114		114
Other revenues	67		—		67
Total revenues	996		667		1,663
Transaction-based expenses	327		—		327
Total revenues, less transaction-based expenses	$	669	$	667	$	1,336
Timing of Revenue Recognition
Services transferred at a point in time	$	578	$	—	$	578
Services transferred over time	91		667		758
Total revenues, less transaction-based expenses	$	669	$	667	$	1,336

The Trading and Clearing segment revenues above include $209 million and $188 million for the nine months ended September 30, 2020 and 2019, respectively, and $57 million and $66 million for the three months ended September 30,

2020 and 2019, respectively, for services transferred over time related to risk management of open interest performance obligations. A majority of these performance obligations are performed over a short period of time of one month or less.

Beginning in the second quarter of 2019, we have reflected amounts owed under certain third-party revenue share arrangements as technology and communication operating expenses rather than as had been previously recorded net within transaction and clearing revenues. These are included within our Trading and Clearing segment.

Deferred Revenue

Our contract liabilities, or deferred revenue, represent consideration received that is yet to be recognized as revenue. Total deferred revenue was $360 million as of September 30, 2020, including $267 million in current deferred revenue and $93 million in other non-current liabilities. The changes in our deferred revenue during the nine months ended September 30, 2020 are as follows (in millions):

	Annual Listings Revenues		Original Listings Revenues		Other Listings Revenues		Data Services and Other Revenues		Mortgage Technology		Total
Deferred revenue balance at December 31, 2019	$	—	$	19	$	94	$	88	$	—	$	201
Additions	384		9		34		367		25		819
Amortization	(288)		(15)		(31)		(326)		—		(660)
Deferred revenue balance at September 30, 2020	$	96	$	13	$	97	$	129	$	25	$	360

The changes in our deferred revenue during the nine months ended September 30, 2019 are as follows (in millions):

	Annual Listings Revenues		Original Listings Revenues		Other Listings Revenues		Data Services and Other Revenues		Total
Deferred revenue balance at December 31, 2018	$	—	$	25	$	100	$	92	$	217
Additions	387		11		30		300		728
Amortization	(289)		(17)		(30)		(277)		(613)
Deferred revenue balance at September 30, 2019	$	98	$	19	$	100	$	115	$	332

Included in the amortization recognized during the nine months ended September 30, 2020 is $92 million related to the deferred revenue balance as of January 1, 2020. Included in the amortization recognized for the nine months ended September 30, 2019 is $94 million related to the deferred revenue balance as of January 1, 2019. As of September 30, 2020, the remaining deferred revenue balance will be recognized over the period of time we satisfy our performance obligations as described in Note 5. Deferred revenue for mortgage technology is related to Ellie Mae and has been included as of September 30, 2020 following our September 2020 acquisition of Ellie Mae.