In this Quarterly Report on Form 10-Q, unless otherwise indicated, the terms "Intercontinental Exchange," "ICE," "we," "us," "our," "our company" and "our business" refer to Intercontinental Exchange, Inc., together with its consolidated subsidiaries. References to "ICE Products" mean products listed on one or more of our markets. All references to "options" or "options contracts" in the context of our futures products refer to options on futures contracts. Solely for convenience, references in this Quarterly Report to any trademarks, service marks and trade names owned by ICE are listed without the ®, ™ and © symbols, but we will assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names. We also include references to third-party trademarks, trade names and service marks in this Quarterly Report. Except as otherwise expressly noted, our use or display of any such trademarks, trade names or service marks is not an endorsement or sponsorship and does not indicate any relationship between us and the parties who own such marks and names. The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report. Due to rounding, figures in tables may not sum exactly. Forward-Looking Statements This Quarterly Report on Form 10-Q, including the sections entitled "Notes to Consolidated Financial Statements," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be forward-looking statements. These forward-looking statements relate to future events or our future financial performance and are based on our present beliefs and assumptions as well as the information currently available to us. They involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance, cash flows, financial position or achievements to differ materially from those expressed or implied by these statements. Forward-looking statements may be introduced by or contain terminology such as "may," "will," "should," "could," "would," "targets," "goal," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," or the antonyms of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, cash flows, financial position or achievements. Accordingly, we caution you not to place undue reliance on any forward-looking statements we may make. Factors that may affect our performance and the accuracy of any forward-looking statements include, but are not limited to, those listed below: •conditions in global financial markets and domestic and international economic, political and social conditions; •the impacts of the COVID-19 pandemic on our business, results of operations and financial condition as well as the broader business environment; •the impact of the introduction of or any changes in laws, regulations, rules or government policies with respect to financial markets, climate change, increased regulatory scrutiny or enforcement actions and our ability to comply with these requirements; •volatility in commodity prices, equity prices and price volatility of financial benchmarks and instruments such as interest rates, credit spreads, equity indices, foreign exchange rates, and mortgage origination and refinancing trends; •the business environment in which we operate and trends in our industry, including trading volumes, clearing, data services, fees, changing regulations, competition and consolidation; •our ability to minimize the risks associated with operating clearing houses in multiple jurisdictions; •our equity and options exchanges' compliance with their respective regulatory and oversight responsibilities; •the resilience of our electronic platforms and soundness of our business continuity and disaster recovery plans; •changes in renewal rates of subscription-based data revenues; •our ability to execute our growth strategy, identify and effectively pursue, implement and integrate acquisitions and strategic alliances and realize the synergies and benefits of such transactions within the expected time frame; •the performance and reliability of our trading and clearing technologies and those of third-party service providers; •our ability to keep pace with technological developments and client preferences; 29 -------------------------------------------------------------------------------- •our ability to ensure that the technology we utilize is not vulnerable to cyber-attacks, hacking and other cybersecurity risks or other disruptive events or to minimize the impact of any such events; •our ability to identify trends and adjust our business to benefit from such trends; •our ability to evolve our benchmarks and indices in a manner that maintains or enhances their reliability and relevance; •the accuracy of our cost and other financial estimates and our belief that cash flows from operations will be sufficient to service our debt and to fund our operational and capital expenditure needs; •our ability to incur additional debt; •our ability to maintain existing market participants and data customers, and to attract new ones; •our ability to offer additional products and services, leverage our risk management capabilities and enhance our technology in a timely and cost-effective fashion; •our ability to attract and retain key talent; •our ability to protect our intellectual property rights and to operate our business without violating the intellectual property rights of others; •potential adverse results of threatened or pending litigation and regulatory actions and proceedings; •our ability to realize the expected benefits of our majority investment in Bakkt which could result in additional unanticipated costs and risks; and •our ability to detect illegal activity such as fraud, money laundering, tax evasion and ransomware scams through digital currency transactions that are easily exploited. These risks and other factors include those set forth in Part 1, Item 1(A) under the caption "Risk Factors" in our Annual Report on Form 10-K for the year endedDecember 31, 2019 , or our 2019 Form 10-K, as filed with theSEC onFebruary 6, 2020 . Due to the uncertain nature of these factors, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any of these statements to reflect events or circumstances occurring after the date of this Quarterly Report. New factors may emerge and it is not possible to predict all factors that may affect our business and prospects. Overview We are a leading global operator of regulated exchanges, clearing houses and listings venues, and a provider of data services for commodity, financial, fixed income and equity markets. We operate regulated marketplaces for listing, trading and clearing of a broad array of derivatives contracts and securities across major asset classes. These asset classes include: energy and agricultural commodities, metals, interest rates, equities, ETFs, credit derivatives, digital assets, bonds and currencies. We also offer mortgage and technology services to the mortgage industry. In addition, we offer comprehensive data services to support the trading, investment, risk management and connectivity needs of customers around the world and across asset classes. Our exchanges include derivative exchanges in theU.S. ,U.K. , EU,Canada andSingapore , and cash equities, equity options and bond trading venues in theU.S. We also operate OTC markets for physical energy, fixed income and CDS trade execution. To serve global derivatives markets, we operate central counterparty clearing houses, or CCPs, in theU.S. ,U.K. , EU,Canada andSingapore . We offer a range of data services, globally, for financial and commodity markets, including pricing and reference data, exchange data, analytics, feeds, index services, desktops and connectivity solutions. Through our markets, clearing houses, listings and data services, we provide comprehensive solutions for our customers to manage risk and raise capital through liquid markets, benchmark products, access to capital markets and related services. Our business is conducted as two reportable business segments, our Trading and Clearing segment and our Data and Listings segment, and the majority of our identifiable assets are located in theU.S. andU.K. Recent Developments COVID-19 The coronavirus (COVID-19) pandemic has created economic and financial disruptions globally and has led governmental authorities to take unprecedented measures to mitigate the spread of the disease, including travel bans, border closings, business closures, quarantines and shelter-in-place orders, and to take actions designed to stabilize markets and promote economic growth. From an operational perspective, our businesses, including our exchanges, clearing houses, listing venues, and data services businesses, have remained open and we do not have any plans to close any of our business operations as a 30 -------------------------------------------------------------------------------- result of the COVID-19 pandemic. However, due to the COVID-19 pandemic, we have taken preventative measures and implemented contingency plans, and currently most of our employees are working remotely. In response to government mandates, we closed all of our office facilities between early March and lateApril 2020 , with only our operationally essential employees working on-site at our facilities for business continuity purposes. As various governments began easing orders requiring office closures in late April, we began a phased re-opening of certain of our office facilities allowing a limited number of operationally non-essential workers to also work on-site. In particular, NYSE, one of our subsidiaries, has partially re-opened its trading floors since initiating fully electronic trading for its exchanges and temporarily closing all trading floors inMarch 2020 . Those employees working on-site are utilizing an alternating framework to allow for social distancing. These measures are in compliance, as necessary, with local government mandates and social distancing directives. We continue to monitor local government mandates in determining our office re-openings, re-closures and work-related travel. Global health concerns relating to COVID-19 and preventive measures taken to reduce its spread have created significant volatility in the financial markets, which has resulted in higher trading volumes for some of our products and increased demand for our services. The extent of the impact of the pandemic on our business will depend largely on future developments, including the duration and spread of the outbreak, its severity and the actions taken to contain the disease or treat its impact. We continue to monitor this dynamic situation, including guidance and regulations issued byU.S. and other governmental authorities. In light of the rapidly evolving nature of the COVID-19 outbreak, we are not able at this time to estimate the ultimate effect of the pandemic on our business, results of operations or financial condition in the future. Acquisition of Bridge2 Solutions OnFebruary 21, 2020 , we acquired Bridge2 Solutions, a leading provider of loyalty solutions for merchants and consumers. Bridge2 Solutions enables some of the world's leading brands to engage customers and drive loyalty. It powers incentive and employee perk programs for companies across a wide spectrum of industries. Regulation Our activities and the markets in which we operate are subject to regulations that impact us as well as our customers, and, in turn, meaningfully influence our activities, the manner in which we operate and our strategy. We are primarily subject to the jurisdiction of regulatory agencies in theU.S. ,U.K. , EU,Canada ,Singapore and Abu Dhabi Global Markets. Failure to satisfy regulatory requirements can or may give rise to sanctions by the applicable regulator. Global policy makers have undertaken reviews of their existing legal framework governing financial markets in connection with regulatory reform, and have either passed new laws and regulations, or are in the process of debating and/or enacting new laws and regulations that apply to our business and to our customers' businesses. During most of 2020, global policy makers have been focused on the impact of and responses to the COVID-19 pandemic. As a consequence, many regulatory initiatives have been postponed. Legislative and regulatory actions may impact the way in which we or our customers conduct business and may create uncertainty, which could affect trading volumes or demand for market data. See Part 1, Item 1 "Business - Regulation" and Part 1, Item 1(A) "Risk Factors" included in our 2019 Form 10-K for a discussion of the primary regulations applicable to our business and certain risks associated with those regulations. The key areas in the evolving regulatory landscape that are likely to impact our business are: •Brexit timing and implications. OnJanuary 31, 2020 , theU.K. officially withdrew from the EU. In connection with theU.K.'s withdrawal from the EU, theU.K. and the EU entered into a withdrawal agreement, which, amongst other things, includes a transitional period untilDecember 31, 2020 , during which EU law will continue to apply in and to theU.K. •Continued access by EU market participants toU.K. CCPs and exchanges. Under the terms of the withdrawal agreement, EU law will continue to apply in and to theU.K. for a transitional period untilDecember 31, 2020 . During such time, EU market participants will be able to continue clearing throughU.K. CCPs such asICE Clear Europe , and accessingU.K. trading venues, such asICE Futures Europe . Access by EU market participants toU.K. CCPs following the end of the transitional period will be contingent upon equivalence being granted to theU.K. by theEuropean Commission , or EC, andU.K. CCPs being recognized by theEuropean Securities and Markets Authority, or ESMA. Separately,ICE Futures Europe and ICE Endex will continue to be able to permit access by EU andU.K. persons to transact on their platforms, even in the absence of any trade agreement being entered into by theU.K. and EU prior to the end of the transitional period and/or any trading venue equivalence decisions by theFinancial Conduct Authority , orFCA , or the EC. The lack of equivalence decisions for trading venues, however, may result in increased costs for certain EU andU.K. market participants which could impact trading onICE Futures Europe and ICE Endex. The impact to our business and corresponding regulatory changes remain uncertain at this time. We are monitoring 31 -------------------------------------------------------------------------------- the impact to our business as a result of these discussions and are pursuing avenues to facilitate continued access for EU andU.K. customers to our services in the event that the transition period ends without any equivalence determination addressing access to CCPs and trading venues being made. •The proposed revisions to the regulatory structure of non-EU clearing houses. OnJanuary 1, 2020 , the European Market Infrastructure Regulation, or EMIR, 2.2 became effective, which revises the EU's current regulatory and supervisory structure for EU and non-EU clearing houses. These revisions may have an impact on our non-EU clearing houses if they are determined to be systemically important or likely to become systemically important to the financial stability of the EU or one or more of its Member States. InJune 2020 , the EC published draft delegated regulations on the criteria for determining whether a non-EU clearing house is systemically important to the EU and, for those non-EU clearing houses that are systemically important to the EU, ESMA will assess whether compliance with the clearing house's home country regulation satisfies compliance with EU requirements. The implementation of these delegated regulations could impact one or more of our non-EU clearing houses. •Requirement that European exchanges and CCPs offer non-discriminatory access. The non-discriminatory access provisions of the Markets in Financial Instruments Directive II, or MiFID II, would require our European exchanges and CCPs to offer access to third parties on commercially reasonable terms. In addition, MiFID II could require our European exchanges and CCPs to allow participants to trade and/or clear at other venues, which may encourage competing venues to offer lookalikes of our products. OnJuly 3, 2020 , the application of these non-discriminatory access requirements for exchange-traded derivatives was postponed untilJuly 3, 2021 . •Market data requirements. OurU.K. and EU derivatives exchanges could be impacted by changes to requirements related to the dissemination of market data. In itsDecember 2019 report to the EC, ESMA recommended against, among other things, outright regulation of market data prices, however ESMA suggested that users could gain transparency into how market data prices are set with the help of new supervisory guidance and targeted changes to the MiFID II/Markets in Financial Instruments Regulation text.The EC is considering ESMA's report and is considering further legislative action in this area. In addition, inOctober 2019 , theSEC proposed a change to Rule 608 that would eliminate the provision allowing market data fee changes proposed by the National Market System Plans, or NMS Plans, to become immediately effective. Further, inMay 2020 , theSEC finalized an order directing the exchanges and theFinancial Industry Markets Authority , orFINRA , to submit to theSEC byAugust 11, 2020 a proposed new, single NMS Plan to replace the three existing NMS Plans that govern the dissemination of real-time, consolidated equity market data for NMS stocks, or the SIP Order. Once submitted to theSEC , the proposed new, single NMS Plan would not replace the current NMS Plans until it is published for comment and approved by theSEC . Approval of the new SIP Plan by theSEC may affect the NYSE's revenues from the sale of consolidated market data since all the market data fees for consolidated market data would be required to be re-filed with theSEC and would not be effective until approved. InJune 2020 , the NYSE, Nasdaq and Cboe Global Markets filed petitions for review of the SIP Order with theU.S. Court of Appeals for the District of Columbia Circuit . •Position limits. The adoption and implementation of position limit rules in theU.S. and the EU could have an impact on our commodities business if comparable trading venues in foreign jurisdictions are not subject to equivalent rules. Position limits became effective in the EU beginningJanuary 2018 under MiFID II and are relevant to the markets operated byICE Futures Europe and ICE Endex. TheFCA has published position limits for certain commodity contracts. InApril 2020 , ESMA issued a report recommending restricting the scope of the position limits regime to critical or significant contracts and the EC continues to work on proposals to revise the position limit framework as part of its ongoing review of MiFID II. InJanuary 2020 , the CFTC proposed a rule which replaces the CFTC's prior Dodd-Frank position limit efforts. There is potential for further divergence between MiFID II andU.S. position limit rules if theU.S. makes changes to the financial regulations and the EU either does not make changes to MiFID II or makes changes inconsistent withU.S. regulations. •Benchmarks Regulation. InOctober 2019 , the EC published a consultation reviewing the EU Benchmarks Regulation, or BMR, and included a proposal to provide competent authorities with broader powers to require a benchmark administrator to change the methodology of a critical benchmark, such as LIBOR. InJune 2020 , theU.K. Government announced its intention to amend theU.K.'s regulatory framework for benchmarks to ensure theFCA has the power to manage and direct any wind-down period prior to a LIBOR cessation, including powers to direct a methodology change for a critical benchmark. Increasing the powers of theFCA or a competent authority to change the methodology of a benchmark or the underlying market represented by a benchmark, such as LIBOR, could result in increased risks to the administrator and users of such benchmark, such as the operator of a derivatives market. •The SEC TransactionFee Pilot . InDecember 2018 , theSEC adopted a TransactionFee Pilot . The final rule established a pilot program, for at least one-year and up to two-years, that would limit the fees charged and rebates paid by our five national securities exchanges in certain securities to be designated by theSEC . OnJune 16, 2020 , theU.S. Court of Appeals for the District of Columbia Circuit vacated the TransactionFee Pilot , finding that theSEC 32 -------------------------------------------------------------------------------- exceeded its authority. As a result of this ruling, the exchanges will not be required to implement the change to their fees and rebates, as set forth in the TransactionFee Pilot . Consolidated Financial Highlights The following summarizes our results and significant changes in our consolidated financial performance for the periods presented (dollars in millions, except per share amounts and YTD represents the six-month periods endedJune 30th ): [[Image Removed: ice-20200630_g1.jpg]][[Image Removed: ice-20200630_g2.jpg]][[Image Removed: ice-20200630_g3.jpg]][[Image Removed: ice-20200630_g4.jpg]][[Image Removed: ice-20200630_g5.jpg]][[Image Removed: ice-20200630_g6.jpg]] Six Months Ended June 30, Three Months Ended June 30, 2020 2019 Change 2020 2019 Change Revenues, less transaction-based expenses$ 2,954 $ 2,568 15 %$ 1,395 $ 1,298 8 % Operating expenses$ 1,328 $ 1,223 9 %$ 651 $ 618 5 % Adjusted operating expenses(1)$ 1,172 $ 1,068 10 %$ 575 $ 540 6 % Operating income$ 1,626 $ 1,345 21 %$ 744 $ 680 10 % Adjusted operating income(1)$ 1,782 $ 1,500 19%$ 820 $ 758 8 % Operating margin 55 % 52 % 3 pts 53 % 52 % 1 pt Adjusted operating margin(1) 60 % 58 % 2 pts 59 % 58 % 1 pt Other income (expense), net$ (117) $ (91) 28 %$ (71) $ (52) 38 % Income tax expense$ 323 $ 284 14 %$ 145 $ 150 (3) % Effective tax rate 21 % 23 % (2 pts) 22 % 24 % (2 pts) Net income attributable to ICE$ 1,173 $ 956 23 %$ 523 $ 472 11 % Adjusted net income attributable to ICE(1)$ 1,292 $ 1,061 22 %$ 584 $ 534 9 % Diluted earnings per share attributable to ICE common stockholders$ 2.13 $ 1.68 27 %$ 0.95 $ 0.84 13 % Adjusted diluted earnings per share attributable to ICE common stockholders(1)$ 2.34 $ 1.87 25 %$ 1.07 $ 0.94 14 % Cash flows from operating activities$ 1,378 $ 1,382 - % (1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance. Adjusted net income attributable to ICE and adjusted diluted earnings per share attributable to ICE common stockholders are presented net of taxes. These adjusted numbers are not calculated in accordance withU.S. GAAP. See "- Non-GAAP Financial Measures" below. 33 -------------------------------------------------------------------------------- •Revenues, less transaction-based expenses, increased$386 million and$97 million for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. See "-Trading and Clearing Segment" and "Data and Listings Segment" below for a discussion of the significant changes in our revenues. The increase in revenues during the six months and three months endedJune 30, 2020 includes$10 million and$5 million , respectively, in unfavorable foreign exchange effects arising from fluctuations in theU.S. dollar from the comparable periods in 2019. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations. •Operating expenses increased$105 million and$33 million for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. See "-Consolidated Operating Expenses" below for a discussion of the significant changes in our operating expenses. The increase in operating expenses during the six months and three months endedJune 30, 2020 includes$4 million and$2 million , respectively, in favorable foreign exchange effects arising from fluctuations in theU.S. dollar from the comparable periods in 2019. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations. Variability in Quarterly Comparisons Our business environment has been characterized by: •globalization of marketplaces, customers and competitors; •commodity, interest rate and financial markets uncertainty; •growing demand for data to inform customers' risk management and investment decisions; •evolving, increasing and disparate regulation across multiple jurisdictions; •price volatility increasing customers' demand for risk management services; •increasing focus on capital and cost efficiencies; •customers' preference to manage risk in markets demonstrating the greatest depth of liquidity and product diversity; •the evolution of existing products and new product innovation to serve emerging customer needs and changing industry agreements; •rising demand for speed, data, data capacity and connectivity by market participants, necessitating increased investment in technology; and •consolidation and increasing competition among global markets for trading, clearing and listings. For additional information regarding the factors that affect our results of operations, see Item 1(A) "Risk Factors" included in our 2019 Form 10-K, and Part II, Item 1(A) "Risk Factors" below. Segment Results Our business is conducted through two reportable business segments: •Trading and Clearing, which comprises our transaction-based execution and clearing businesses; and •Data and Listings, which comprises our subscription-based data services and securities listings businesses. While revenues are recorded specifically in the segment in which they are earned or to which they relate, a significant portion of our operating expenses are not solely related to a specific segment because the expenses serve functions that are necessary for the operation of both segments. We use a pro-rata revenue approach as the allocation method for the expenses that do not relate solely to one segment. Further, we did not allocate expenses to specific revenue streams within these segments since such an allocation is not reasonably possible. Our two segments do not engage in intersegment transactions. 34 -------------------------------------------------------------------------------- Trading and Clearing Segment The following presents selected statements of income data for our Trading and Clearing segment (dollars in millions and YTD represents the six-month periods endedJune 30th ): [[Image Removed: ice-20200630_g7.jpg]] [[Image Removed: ice-20200630_g8.jpg]][[Image Removed: ice-20200630_g9.jpg]][[Image Removed: ice-20200630_g10.jpg]][[Image Removed: ice-20200630_g11.jpg]] (1) The adjusted numbers in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance withU.S. GAAP. See "- Non-GAAP Financial Measures" below. 35 --------------------------------------------------------------------------------
Three Months Ended June Six Months Ended June 30, 30, 2020 2019 Change 2020 2019 Change Revenues: Energy futures and options contracts $ 629$ 484 30 %$ 276 $ 255 8 % Agricultural and metals futures and options contracts 143 134 7 59 72
(18)
Financial futures and options contracts 199 161 23 76 78
(3)
Cash equities and equity options 1,341 800 68 672 410 64 Fixed income and credit 233 167 40 111 80 38 OTC and other transactions 26 23 13 13 12 14 Transaction and clearing, net 2,571 1,769
45 1,207 907 33 Other revenues 149 127 17 74 63 17 Revenues 2,720 1,896 43 1,281 970 32 Transaction-based expenses 1,127 649 74 571 336 70 Revenues, less transaction-based expenses 1,593 1,247 28 710 634 12 Other operating expenses 448 359 25 216 189 14 Depreciation and amortization 130 117 12 64 59 10 Acquisition-related transaction and integration costs 14 1 n/a 2 1 57 Operating expenses 592 477 24 282 249 13 Operating income$ 1,001 $ 770 30 %$ 428 $ 385 11 % Transaction and Clearing Revenues Our transaction and clearing revenues consist of fees collected from our derivatives, fixed income, cash equities and equity options trading, derivatives clearing and mortgage technology services. Because transaction and clearing revenues are generally assessed on a per-contract basis, revenues and profitability fluctuate with changes in contract volume and due to product mix. Rates per-contract, or RPC, are driven by the number of contracts or securities traded and the fees charged per contract, net of certain rebates. Our per-contract transaction and clearing revenues will depend upon many factors, including, but not limited to, market conditions, transaction and clearing volume, product mix, pricing, applicable revenue sharing and market making agreements, and new product introductions. For the six months endedJune 30, 2020 and 2019, 19% and 20%, respectively, of our Trading and Clearing segment revenues, less transaction-based expenses, were billed in pounds sterling or euros and for the three months endedJune 30, 2020 and 2019, 17% and 19%, respectively, of our Trading and Clearing segment revenues, less transaction-based expenses, were billed in pounds sterling or euros. For the six months and three months endedJune 30, 2020 as compared to the same periods in 2019, foreign currency fluctuations due to the strengthening of theU.S. dollar compared to the pound sterling and euro resulted in a decrease of$8 million and$4 million , respectively, to our Trading and Clearing segment revenues, less transaction-based expenses. See Item 3 "- Quantitative and Qualitative Disclosures About Market Risk -Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations. Our transaction and clearing revenues are presented net of rebates. We offer rebates in certain of our markets primarily to support market liquidity and trading volume by providing qualified participants in those markets a discount to the applicable commission rate. Such rebates are calculated based on volumes traded. We recorded rebates of$525 million and$435 million for the six months endedJune 30, 2020 and 2019, respectively, and$219 million and$220 million for the three months endedJune 30, 2020 and 2019, respectively. The increase in rebates for the six months endedJune 30, 2020 from the comparable period in 2019 was primarily due to the increase in volumes traded. Rebates were flat for the three months endedJune 30, 2020 from the comparable period in 2019. •Energy Futures and Options Contracts: Total energy volume increased 34% and revenues increased 30% for the six months endedJune 30, 2020 from the comparable period in 2019 and volume increased 14% and revenues increased 8% for the three months endedJune 30, 2020 from the comparable period in 2019. -Total oil volume increased 33% for the six months endedJune 30, 2020 from the comparable period in 2019 and increased 5% for the three months endedJune 30, 2020 from the comparable period in 2019 due to increased risk management activity driven by shifting supply/demand dynamics related to various geopolitical events and the emergence of COVID-19. 36 -------------------------------------------------------------------------------- -Our global natural gas futures and options volume increased 41% and 40% for the six months and three months endedJune 30, 2020 , respectively. The volume increase in our North American natural gas products was primarily driven by shifting supply/demand dynamics and various geopolitical events. The strength in our European TTF gas volumes was driven by the continued emergence of TTF as not only the European benchmark, but also the emerging global benchmark, for natural gas as the commodity continues to globalize. •Agricultural and Metals Futures and Options Contracts: In our agricultural and metals futures and options markets total volume increased 6% for the six months endedJune 30, 2020 and decreased 18% for the three months endedJune 30, 2020 from the comparable periods in 2019 and revenues increased 7% for the six months endedJune 30, 2020 and decreased 18% for the three months endedJune 30, 2020 from the comparable periods in 2019. The overall increase in agricultural volumes for the six months endedJune 30, 2020 was primarily driven by price volatility resulting from shifting supply/demand dynamics related to COVID-19, the sharp decline in global oil prices and weather concerns. The overall decrease in agricultural volumes for the three months endedJune 30, 2020 was primarily driven by lower commodity price volatility than the prior year period. -Sugar futures and options volumes increased 19% and decreased 6% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. -Other agricultural and metal futures and options volume decreased 5% and 27% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. •Financial Futures and Options Contracts: In our financial futures and options markets total volume increased 12% and decreased 13%, respectively, for the six months and three months endedJune 30, 2020 from the comparable periods in 2019 and revenues increased 23% and decreased 3%, respectively, for the six months and three months endedJune 30, 2020 from the comparable periods in 2019. -Interest rate futures and options volume increased 8% and decreased 17% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019 and revenue increased 13% and decreased 14% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. The interest rate futures and options volume increase for the six months endedJune 30, 2020 was driven, in part, by uncertainty related to the economic impact of COVID-19. The interest rate futures and options volume decrease for the three months endedJune 30, 2020 was primarily driven by the impact of quantitative easing measures implemented by major central banks in response to COVID-19. Interest rate futures and options revenues were$111 million and$97 million for the six months endedJune 30, 2020 and 2019, respectively, and$39 million and$44 million for the three months endedJune 30, 2020 and 2019, respectively. -Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, increased 29% and 8% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. Other financial futures and options volume increased for the six months and three months endedJune 30, 2020 , due to increased equity market volatility driven by uncertainty related to COVID-19. Other financial futures and options revenues were$88 million and$64 million for the six months endedJune 30, 2020 and 2019, respectively, and$37 million and$34 million for the three months endedJune 30, 2020 and 2019, respectively. •Cash Equities and Equity Options: Cash equities handled volume increased 53% and 61% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019 due to heightened volatility driven by uncertainty related to COVID-19 and various geopolitical events. Cash equities revenues, net of transaction-based expenses, were$163 million and$102 million for the six months endedJune 30, 2020 and 2019, respectively, and$80 million and$50 million for the three months endedJune 30, 2020 and 2019, respectively. Equity options volume increased 42% and 44% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019 primarily due to higher industry volumes and heightened volatility driven by uncertainty related to COVID-19 and various geopolitical events. Equity options revenues, net of transaction-based expenses, were$51 million and$49 million for the six months endedJune 30, 2020 and 2019, respectively, and$21 million and$24 million for the three months endedJune 30, 2020 and 2019, respectively. •Fixed Income and Credit: Fixed income and credit includes revenues fromICE Mortgage Services , ICE Bonds and CDS execution and clearing. 37 -------------------------------------------------------------------------------- CDS clearing revenues were$84 million and$67 million for the six months endedJune 30, 2020 and 2019, respectively, and$32 million and$29 million for the three months endedJune 30, 2020 and 2019, respectively. The notional value of CDS cleared was$11.0 trillion and$7.6 trillion for the six months endedJune 30, 2020 and 2019, respectively, and$3.9 trillion and$3.2 trillion for the three months endedJune 30, 2020 and 2019, respectively. The increase in CDS clearing revenues for the six months and three months endedJune 30, 2020 from the comparable periods in 2019 included record buy-side activity in terms of index notional amount cleared during the period driven by heightened market volatility related to COVID-19. Mortgage services revenues were$98 million and$48 million for the six months endedJune 30, 2020 and 2019, respectively, and$54 million and$27 million for the three months endedJune 30, 2020 and 2019, respectively. The increase in mortgage services revenues was primarily driven by the acquisition of Simplifile inJune 2019 . •OTC and Other Transactions: OTC and other transactions include revenues from our OTC energy business and other trade confirmation services. Other Revenues Other revenues primarily include interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of ourU.S. securities exchanges, designated market maker service fees, technology development fees, exchange membership fees and agricultural grading and certification fees. The increase in other revenues for the six months and three months endedJune 30, 2020 from the comparable periods in 2019 was primarily due to increased interest income earned on certain clearing margin deposits reflecting higher balances, increased regulatory fees and the acquisition of Bridge2 Solutions. Selected Operating Data The following charts and tables present trading activity in our futures and options markets by commodity type based on the total number of contracts traded, as well as futures and options rate per contract (in millions, except for percentages and rate per contract amounts and YTD represents the six-month periods endedJune 30th ):
Volume and Rate per Contract
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38 -------------------------------------------------------------------------------- Six Months Ended June 30, Three Months Ended June 30, 2020 2019 Change 2020 2019 Change Number of contracts traded (in millions): Energy futures and options 437 325 34 % 193 169 14 % Agricultural and metals futures and options 62 59 6 25 32 (18) Financial futures and options 354 317 12 131 149 (13) Total 853 701 22 % 349 350 - % Six Months Ended June 30, Three Months Ended June 30, 2020 2019 Change 2020 2019 Change Average Daily Volume of contracts traded (in thousands): Energy futures and options 3,499 2,624 33 % 3,068 2,694 14 % Agricultural and metals futures and options 497 474 5 408 498 (18) Financial futures and options 2,795 2,521 11 2,069 2,369 (13) Total 6,791 5,619 21 % 5,545 5,561 - % Six Months Ended June 30, Three Months Ended June 30, 2020 2019 Change 2020 2019 Change Rate per contract: Energy futures and options$ 1.44 $ 1.49 (3) %$ 1.42 $ 1.50 (5) % Agricultural and metals futures and options$ 2.31 $ 2.28 1 %$ 2.33 $ 2.31 1 % Financial futures and options$ 0.56 $ 0.50 11 %$ 0.58 $ 0.51 12 % Open interest is the aggregate number of contracts (long or short) that clearing members hold either for their own account or on behalf of their clients. Open interest refers to the total number of contracts that are currently "open," - in other words, contracts that have been traded but not yet liquidated by either an offsetting trade, exercise, expiration or assignment. Open interest is also a measure of the future activity remaining to be closed out in terms of the number of contracts that members and their clients continue to hold in the particular contract and by the number of contracts held for each contract month listed by the exchange. The following charts and table present our quarter-end open interest for our futures and options contracts (in thousands, except for percentages):
Open Interest
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39 -------------------------------------------------------------------------------- As ofJune 30, 2020 2019
Change
Open interest - in thousands of contracts: Energy futures and options 44,044 37,030 19 % Agricultural and metals futures and options 3,515 3,517
-
Financial futures and options 25,723 29,201 (12) Total 73,282 69,748 5 % The following charts and table present selected cash and equity options trading data (all trading volume below is presented as average net daily trading volume, or ADV, and is single counted and YTD represents the six-month periods endedJune 30th ): [[Image Removed: ice-20200630_g18.jpg]][[Image Removed: ice-20200630_g19.jpg]][[Image Removed: ice-20200630_g20.jpg]][[Image Removed: ice-20200630_g21.jpg]] Six Months Ended June 30, Three Months Ended June 30, 2020 2019 Change 2020 2019 Change NYSE cash equities: Total cash handled volume (shares in millions) 2,758 1,809 53 % 2,782 1,733
61 %
Total cash market share matched 23.2 % 24.5 % (1.3) pts 22.1 % 24.4 %
(2.3) pts
NYSE equity options (contracts in thousands): NYSE equity options volume 4,623 3,249 42 % 4,566 3,169 44 % Total equity options volume 25,992 17,329 50 % 26,643 17,327 54 % NYSE share of total equity options 17.8 % 18.7 % (1.0) pts 17.1 % 18.3 %
(1.2) pts
Revenue capture or rate per contract: Cash equities rate per contract (per 100 shares)$0.047 $0.045 4 %$0.046 $0.046 - % Equity options rate per contract$0.09 $0.12 (27) %$0.07 $0.12 (39) % 40
-------------------------------------------------------------------------------- Handled volume represents the total number of shares of equity securities, ETFs and crossing session activity internally matched on our exchanges or routed to and executed on an external market center. Matched volume represents the total number of shares of equity securities, ETFs and crossing session activity executed on our exchanges. Transaction-Based Expenses Our equities and equity options markets pay fees to theSEC pursuant to Section 31 of the Exchange Act. Section 31 fees are recorded on a gross basis as a component of transaction and clearing fee revenue. These Section 31 fees are assessed to recover the government's costs of supervising and regulating the securities markets and professionals and are subject to change. We, in turn, collect corresponding activity assessment fees from member organizations clearing or settling trades on the equities and options exchanges, and recognize these amounts in our transaction and clearing revenues when invoiced. The activity assessment fees are designed to equal the Section 31 fees. As a result, activity assessment fees and the corresponding Section 31 fees do not have an impact on our net income, although the timing of payment by us will vary from collections. Section 31 fees were$320 million and$169 million for the six months endedJune 30, 2020 and 2019, respectively, and$154 million and$100 million for the three months endedJune 30, 2020 and 2019, respectively. The fees we collect are included in cash at the time of receipt and we remit the amounts to theSEC semi-annually as required. The total amount is included in accrued liabilities and was$316 million as ofJune 30, 2020 . We make liquidity payments to cash and options trading customers, as well as routing charges made to other exchanges which are included in transaction-based expenses. We incur routing charges when we do not have the best bid or offer in the market for a security that a customer is trying to buy or sell on one of our securities exchanges. In that case, we route the customer's order to the external market center that displays the best bid or offer. The external market center charges us a fee per share (denominated in tenths of a cent per share) for routing to its system. We record routing charges on a gross basis as a component of transaction and clearing fee revenue. Cash liquidity payments, routing and clearing fees were$807 million and$480 million for the six months endedJune 30, 2020 and 2019, respectively, and$417 million and$236 million for the three months endedJune 30, 2020 and 2019, respectively. Operating Expenses, Operating Income and Operating Margin The following chart summarizes our Trading and Clearing segment's operating expenses, operating income and operating margin (dollars in millions). See "- Consolidated Operating Expenses" below for a discussion of the significant changes in our operating expenses. Three Months Ended Trading and Clearing Segment: Six Months Ended June 30, June 30, 2020 2019 Change 2020 2019 Change Operating expenses$ 592 $ 477 24 %$ 282 $ 249 13 % Adjusted operating expenses(1)$ 531 $ 431 23 %$ 256 $ 226 14 % Operating income$ 1,001 $ 770 30 %$ 428 $ 385 11 % Adjusted operating income(1)$ 1,062 $ 816 30 %$ 454 $ 408 11 % Operating margin 63 % 62 % 1 pt 60 % 61 % (1 pt) Adjusted operating margin(1) 67 % 65 % 2 pts 64 % 64 % - (1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance. These adjusted numbers are not calculated in accordance withU.S. GAAP. See "- Non-GAAP Financial Measures" below. 41 -------------------------------------------------------------------------------- Data and Listings Segment The following charts and table present our selected statements of income data for our Data and Listings segment (dollars in millions and YTD represents the six-month periods endedJune 30th ): [[Image Removed: ice-20200630_g22.jpg]] [[Image Removed: ice-20200630_g23.jpg]][[Image Removed: ice-20200630_g24.jpg]][[Image Removed: ice-20200630_g25.jpg]][[Image Removed: ice-20200630_g26.jpg]] (1) The adjusted numbers in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance withU.S. GAAP. See "- Non-GAAP Financial Measures" below. 42 --------------------------------------------------------------------------------
Three Months Ended June Six Months Ended June 30, 30, 2020 2019 Change 2020 2019 Change Revenues: Pricing and analytics$ 558 $ 536 4 %$ 282 $ 270 4 % Exchange data and feeds 363 356 2 183 180 2 Desktops and connectivity 217 207 5 109 103 6 Data services 1,138 1,099 4 574 553 4 Listings 223 222 - 111 111 - Revenues 1,361 1,321 3 685 664 3 Other operating expenses 552 548 1 276 271 2 Depreciation and amortization 184 198 (8) 93 98 (6) Operating expenses 736 746 (1) 369 369 - Operating income$ 625 $ 575 9 %$ 316 $ 295 7 % Our Data and Listings segment represents largely subscription-based, or recurring, revenues from data services and listings services offered across our trading and clearing businesses andICE Data Services . ThroughICE Data Services , we generate revenues from a range of global financial and commodity markets, including pricing and reference data, exchange data, analytics, feeds, index services, desktops and connectivity solutions. Through NYSE, NYSE American and NYSE Arca, we generate listings revenue related to the provision of listings services for public companies and ETFs, and related corporate actions for listed companies. For both the six months and three months endedJune 30, 2020 and the six months and three months endedJune 30, 2019 , 7% of our Data and Listings segment revenues were billed in pounds sterling or euros (all relating to our data services revenues). As the pound sterling or euro exchange rate changes, theU.S. equivalent of revenues denominated in foreign currencies changes accordingly. Due to the strengthening of theU.S. dollar compared to the pound sterling and euro, for the six months and three months endedJune 30, 2020 as compared to the same periods in 2019, foreign currency fluctuations resulted in a decrease of$2 million and$1 million , respectively, to our Data and Listings segment revenues. Our data services revenues are primarily subscription-based and increased 4% for both the six months and three months endedJune 30, 2020 from the comparable periods in 2019. The increase in revenues was primarily due to the strong retention rate of existing customers, the addition of new customers, increased purchases by existing customers and increases in pricing of our products. •Pricing and Analytics: Our pricing and analytics revenues increased 4% for both the six months and three months endedJune 30, 2020 from the comparable periods in 2019. The increase in revenue was due to strength in our index businesses and continued growth in our pricing and reference data business driven by the strong retention rate of existing customers, the addition of new customers, increased purchases by existing customers and increases in pricing of our products. This growth was partially offset by$1 million of unfavorable fluctuations in theU.S. dollar as compared to the pound sterling and euro for the six months and three months endedJune 30, 2020 from the comparable period in 2019. •Exchange Data and Feeds: Our exchange data and feeds revenues increased 2% for both the six months and three months endedJune 30, 2020 from the comparable periods in 2019. The increase in revenue was largely due to continued growth in our futures exchange data and our consolidated feed offering, which was driven by the strong retention rate of existing customers, the addition of new customers and increases in pricing of our products. •Desktops and Connectivity: Our desktop and connectivity revenues increased 5% and 6% for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. The increase in revenue was driven primarily by growth in our connectivity services including the ICE Global Network, coupled with stronger desktop revenues. Annual Subscription Value, or ASV, represents, at a point in time, the data services revenues subscribed for the succeeding 12 months. ASV does not include new sales, contract terminations or price changes that may occur during that 12-month period. ASV also does not include certain data services revenue streams that are not subscription-based. Revenue from ASV businesses has historically represented approximately 90% of our data revenues. Thus, while it is an indicative forward-looking metric, it does not provide a growth forecast of the next 12 months of data services revenues. 43 -------------------------------------------------------------------------------- As ofJune 30, 2020 , ASV was$2.057 billion , which increased 4.2% compared to the ASV as ofJune 30, 2019 . This does not adjust for year-over-year foreign exchange fluctuations or impacts of acquisitions. Listings Revenues Listings revenues in our securities markets arise from fees applicable to companies listed on our cash equities exchanges- original listing fees and annual listing fees. Original listing fees consist of two components: initial listing fees and fees related to corporate actions. Initial listing fees, subject to a minimum and maximum amount, are based on the number of shares that a company initially lists. All listings fees are billed upfront and the identified performance obligations are satisfied over time. Revenue related to the investor relations performance obligation is recognized ratably over the period these services are provided, with the remaining revenue recognized ratably over time as customers continue to list on our exchanges. In addition, we earn corporate actions-related listing fees in connection with actions involving the issuance of new shares, such as stock splits, rights issues and sales of additional securities, as well as mergers and acquisitions. Listings fees related to other corporate actions are considered contract modifications of our listing contracts and are recognized ratably over time as customers continue to list on our exchanges. Our listings revenues were flat for both the six months and three months endedJune 30, 2020 compared to the comparable periods in 2019. Operating Expenses, Operating Income and Operating Margin The following chart summarizes our Data and Listings segment's operating expenses, operating income and operating margin (dollars in millions). See "- Consolidated Operating Expenses" below for a discussion of the significant changes in our operating expenses. Three Months Ended Data and Listings Segment: Six Months Ended June 30, June 30, 2020 2019 Change 2020 2019 Change Operating expenses$ 736 $ 746 (1) %$ 369 $ 369 - % Adjusted operating expenses(1)$ 641 $ 637 1 %$ 319 $ 314 1 % Operating income$ 625 $ 575 9 %$ 316 $ 295 7 % Adjusted operating income(1)$ 720 $ 684 5 %$ 366 $ 350 5 % Operating margin 46 % 44 % 2 pts 46 % 44 % 2 pts Adjusted operating margin(1) 53 % 52 % 1 pt 53 % 53 % - (1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance. These adjusted numbers are not calculated in accordance withU.S. GAAP. See "- Non-GAAP Financial Measures" below. 44 -------------------------------------------------------------------------------- Consolidated Operating Expenses The following presents our consolidated operating expenses (dollars in millions and YTD represents the six-month periods ended June 30th):[[Image Removed: ice-20200630_g27.jpg]] Six Months Ended June 30, Three Months Ended June 30, 2020 2019 Change 2020 2019 Change Compensation and benefits$ 551 $ 507 9 %$ 273 $ 259 5 % Professional services 63 62 - 34 29 13 Acquisition-related transaction and integration costs 14 1 n/a 2 1 56 Technology and communication 257 220 17 126 113 12 Rent and occupancy 40 35 16 19 18 9 Selling, general and administrative 89 83 8 40 41
(2)
Depreciation and amortization 314 315 - 157 157 - Total operating expenses$ 1,328 $ 1,223 9 %$ 651 $ 618 5 % The majority of our operating expenses do not vary directly with changes in our volume and revenues, except for certain technology and communication expenses, including data acquisition costs, licensing and other fee-related arrangements and a portion of our compensation expense that is tied directly to our data sales or overall financial performance. We expect our operating expenses to increase in absolute terms in future periods in connection with the growth of our business, and to vary from year-to-year based on the type and level of our acquisitions, our integrations and other investments. For both the six months endedJune 30, 2020 and 2019, 12% of our operating expenses were billed in pounds sterling or euros and for both the three months endedJune 30, 2020 and 2019, 11% of our operating expenses were billed in pounds sterling or euros. Due to fluctuations in theU.S. dollar compared to the pound sterling and euro, our consolidated 45 -------------------------------------------------------------------------------- operating expenses decreased$4 million and$2 million for the six months and three months endedJune 30, 2020 , respectively, from the comparable periods in 2019. See Item 3 "- Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk" below for additional information. Compensation and Benefits Expenses Compensation and benefits expense is our most significant operating expense and includes non-capitalized employee wages, bonuses, non-cash or stock compensation, certain severance costs, benefits and employer taxes. The bonus component of our compensation and benefits expense is based on both our financial performance and individual employee performance. The performance-based restricted stock compensation expense is also based on our financial performance. Therefore, our compensation and benefits expense will vary year-to-year based on our financial performance and fluctuations in our number of employees. The below chart summarizes the significant drivers of our compensation and benefits expense results for the periods presented (dollars in millions, except employee headcount). Six Months Ended June 30, Three Months Ended June 30, 2020 2019 Change 2020 2019 Change Employee headcount 6,423 5,351 20 % Stock-based compensation expenses$ 61 $ 64 (5) %$ 31 $ 35
(13) %
Employee headcount increased for the six months endedJune 30, 2020 from the comparable period in 2019 primarily due to 259 new employees at Bridge2 Solutions and 630 new employees in our ICE India office, who had previously been our contractors. Total compensation and benefits expenses increased for the six months and three months endedJune 30, 2020 from the comparable periods in 2019 primarily due to$26 million and$15 million , respectively, in additional costs related to the acquisitions of Simplifile and Bridge2 Solutions and the establishment of ICE India, as well as increases of$11 million and$4 million , respectively, of expenses related to other increases in employee headcount and 2020 merit pay. The stock-based compensation expenses in the table above relate to employee stock option and restricted stock awards. Professional Services Expenses Professional services expense includes fees for consulting services received on strategic and technology initiatives, temporary labor, as well as regulatory, legal and accounting fees, and may fluctuate as a result of changes in the use of these services in our business. Professional services expenses were flat for the six months endedJune 30, 2020 from the comparable period in 2019. Professional services expenses increased for the three months endedJune 30, 2020 from the comparable period in 2019 due to increased costs associated with regulatory and litigation matters. Acquisition-Related Transaction and Integration Costs We incurred$14 million and$2 million in acquisition-related transaction costs for the six months and three months endedJune 30, 2020 , respectively, primarily related to the Bakkt acquisition of Bridge2 Solutions. The Bridge2 Solutions acquisition costs include expenses of$10 million resulting from a Bakkt incentive award market condition estimation adjustment that was directly related to theMarch 2020 capital call to fund the acquisition of Bridge2 Solutions. For both the six months and three months endedJune 30, 2019 , we incurred$1 million in acquisition-related transaction and integration costs. We expect to continue to explore and pursue various potential acquisitions and other strategic opportunities to strengthen our competitive position and support our growth. As a result, we may incur acquisition-related transaction costs in future periods. Technology and Communication Expenses Technology support services consist of costs for running our wholly-owned data centers, hosting costs paid to third-party data centers and maintenance of our computer hardware and software required to support our technology and cybersecurity. These costs are driven by system capacity, functionality and redundancy requirements. Communication expenses consist of costs for network connections for our electronic platforms and telecommunications costs. Technology and communications expense also includes fees paid for access to external market data, licensing and other fee agreement expenses. Technology and communications expenses may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs and connections with customers to access our electronic platforms directly. 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 46 -------------------------------------------------------------------------------- as had been previously recorded net within transaction and clearing revenues, which resulted in an increase in technology and communications expense of$14 million and$3 million for the six months and three months endedJune 30, 2020 , respectively, as compared to the comparable period in 2019. Also, for the six months and three months endedJune 30, 2020 total technology and communications expenses increased$6 million and$4 million , respectively, due to our acquisition of Simplifile in 2019 and Bridge2 Solutions and$15 million and$5 million , respectively, related to increased 2020 third-party revenue share fees. Rent and Occupancy Expenses Rent and occupancy expense relates to leased and owned property and includes rent, maintenance, real estate taxes, utilities and other related costs. We have significant operations located in and aroundAtlanta, New York ,London and Hyderabad with smaller offices located throughout the world. Rent and occupancy expenses increased for the six months endedJune 30, 2020 from the comparable period in 2019 primarily due to the early termination of our NYSE Chicago office lease. Rent and occupancy expenses were flat for the three months endedJune 30, 2020 from the comparable period in 2019. Selling, General and Administrative Expenses Selling, general and administrative expenses include marketing, advertising, public relations, insurance, bank service charges, dues and subscriptions, travel and entertainment, non-income taxes and other general and administrative costs. Selling, general and administrative expenses increased for the six months endedJune 30, 2020 from the comparable period in 2019 primarily due to a$10 million charitable contribution in support of COVID-19 relief efforts, partially offset by lower travel expenses, marketing costs and non-income taxes. Selling, general and administrative expenses decreased for the three months endedJune 30, 2020 from the comparable period in 2019 primarily due to lower travel expenses and marketing costs offset by accruals related to investigations and inquiries. Depreciation and Amortization Expenses Depreciation and amortization expense results from depreciation of long-lived assets such as buildings, leasehold improvements, aircraft, hardware and networking equipment, software, furniture, fixtures and equipment over their estimated useful lives. This expense includes amortization of intangible assets obtained in our acquisitions of businesses, as well as on various licensing agreements, over their estimated useful lives. Intangible assets subject to amortization consist primarily of customer relationships, trading products with finite lives and technology. This expense also includes amortization of internally-developed and purchased software over its estimated useful life. We recorded amortization expenses on intangible assets acquired as part of our acquisitions, as well as on other intangible assets, of$141 million and$156 million for the six months endedJune 30, 2020 and 2019, respectively, and$71 million and$79 million for the three months endedJune 30, 2020 and 2019, respectively. Amortization expense decreased for the six months and three months endedJune 30, 2020 from the comparable periods in 2019 as a result of certain Interactive Data intangible assets that became fully amortized in the fourth quarter of 2019. We recorded depreciation expenses on our fixed assets of$173 million and$159 million for the six months endedJune 30, 2020 and 2019, respectively, and$86 million and$78 million for the three months endedJune 30, 2020 and 2019, respectively. Depreciation expense increased for the six months and three months endedJune 30, 2020 from the comparable periods in 2019 primarily due to depreciation resulting from increased software development and networking equipment. 47
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Consolidated Non-Operating Income (Expense) Income and expenses incurred through activities outside of our core operations are considered non-operating. The following tables present our non-operating income (expenses) (dollars in millions):
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