NASDAQ, INC. The following discussion and analysis of the financial condition and results of operations of Nasdaq should be read in conjunction with our condensed consolidated financial statements and related notes included in this Form 10-Q. OVERVIEW Nasdaq is a global technology company serving the capital markets and other industries. Our diverse offerings of data, analytics, software and services enables clients to optimize and execute their business vision with confidence. We manage, operate and provide our products and services in four business segments: Market Services, Corporate Platforms, Investment Intelligence and Market Technology. Second Quarter 2021 and Recent Developments Cash Dividend on Common Stock • InJuly 2021 , the board of directors approved a regular quarterly cash dividend of$0.54 per share on our outstanding common stock. • For the three months endedJune 30, 2021 , we returned$88 million to shareholders through dividend payments. Share Repurchase Program •InJune 2021 , our board of directors authorized an increase to our share repurchase program to an aggregate authorized amount of$1.5 billion to facilitate repurchases of shares of Nasdaq common stock in order to offset dilution related to the accelerated share issuance of approximately 6.2 million shares resulting from the sale of ourU.S. Fixed Income business. •During the three months endedJune 30, 2021 , we repurchased 1,501,931 common shares at a cost of$248 million . As ofJune 30, 2021 , the remaining amount authorized for share repurchases under our share repurchase program was$1.46 billion . •InJuly 2021 , we entered into an ASR agreement to repurchase an additional$475 million of shares and received an initial delivery of 2,039,940 shares of common stock. We expect to receive the remaining shares in the fourth quarter of 2021. We expect the remaining planned repurchases related to the sale of ourU.S. Fixed Income business to occur in 2022 and 2023. Corporate Highlights •InJune 2021 , we completed the sale of ourU.S. Fixed Income business, which was part of our FICC business within our Market Services segment to Tradeweb Markets Inc., or Tradeweb and recognized a pre-tax gain on the sale of$84 million , net of disposal costs. This decision aligns with our corporate strategy to concentrate our resources and capital to maximize our potential as a major technology and analytics provider to the global capital markets. •InJune 2021 , we acquired a majority stake in Puro.earth, a leading marketplace for carbon removal and the world's first marketplace to offer industrial carbon removal instruments that are verifiable and tradable through an open, online platform. We also launched the ESG Data Hub that connects investors with expert-led ESG data sets from leading providers across a wide spectrum of areas, including gender diversity, carbon emissions and climate risk. •Overall AUM in ETPs benchmarked to our proprietary indexes totaled$415 billion as ofJune 30, 2021 , an increase of 53% compared toJune 30, 2020 . Index and Analytics revenues saw increases of 57% and 14%, respectively, versus the second quarter of 2020. Index growth was driven by increased demand for both licensed ETPs and licensed index futures contracts, with 15 new licensed ETPs introduced in the quarter, including 12 ETPs that were launched outside theU.S. , marking continued international growth. •The Nasdaq Stock Market ledU.S. exchanges with a 78% total IPO win rate. During the three months endedJune 30, 2021 , we welcomed 135 IPOs, representing$32 billion in capital raised, including 88 operating company IPOs, as well as 47 SPAC IPOs. •OurU.S. options exchanges traded 782 million multiply-listed equity option contracts, an increase of 28% year over year, and led all exchanges during the period in total volume traded for options inclusive of both multiply-listed equity options and index options products. 33
-------------------------------------------------------------------------------- NASDAQ'S OPERATING RESULTSKey Drivers The following table and charts include key drivers and other metrics for our Market Services, Corporate Platforms, Investment Intelligence and Market Technology segments. In evaluating the performance of our business, our senior management closely evaluates these key drivers. Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Market Services Equity Derivative Trading and ClearingU.S. equity options Total industry average daily volume (in millions) 34.6 26.6 37.3 26.0 Nasdaq PHLX matched market share 12.7 % 11.4 % 12.8 % 12.1 % The Nasdaq Options Market matched market share 8.4 % 10.4 % 8.1 % 10.5 % Nasdaq BX Options matched market share 1.1 % 0.2 % 0.9 % 0.2 % Nasdaq ISE Options matched market share 6.1 % 8.3 % 7.0 % 8.3 % Nasdaq GEMX Options matched market share 6.1 % 5.6 % 6.0 % 4.7 % Nasdaq MRX Options matched market share 1.5 % 0.5 % 1.4 % 0.5 % Total matched market share executed on Nasdaq's exchanges 35.9 % 36.4 % 36.2 % 36.3 %
Nasdaq Nordic and Nasdaq Baltic options and futures Total average daily volume of options and futures contracts(1)
262,890 292,551 311,016 377,201
Cash Equity Trading
Total U.S. -listed securities
Total industry average daily share volume (in billions) 10.6 12.4 12.6 11.7
Matched share volume (in billions) 114.2 142.7 266.8 269.9
The Nasdaq Stock Market matched market share 15.8 % 16.8 % 15.8 % 16.8 %
Nasdaq BX matched market share 0.7 % 0.9 % 0.6 % 1.1 %
Nasdaq PSX matched market share 0.7 % 0.6 % 0.7 % 0.6 %
Total matched market share executed on Nasdaq's
exchanges 17.2 % 18.3 % 17.1 % 18.5 %
Market share reported to the FINRA /Nasdaq Trade
Reporting Facility 35.3 % 31.5 % 35.3 % 30.9 %
Total market share(2) 52.5 % 49.8 % 52.4 % 49.4 %
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on
Nasdaq's exchanges 1,019,162 937,245 1,056,726 980,637
Total average daily value of shares traded (in
billions) $ 6.6 $ 5.6 $ 6.8 $ 6.0
Total market share executed on Nasdaq's exchanges 77.3 % 78.3 % 77.9 % 77.7 %
FICC
Fixed Income U.S. fixed income volume ($ billions traded)$ 1,799 $ 1,246 $ 4,292 $ 3,313
Total average daily volume of Nasdaq Nordic and Nasdaq Baltic fixed income contracts
119,198 116,057 122,606 115,586
Commodities
Power contracts cleared (TWh)(3) 206 184 456 475
___________
(1) Includes Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement. (2) Includes transactions executed onThe Nasdaq Stock Market's , Nasdaq BX's and Nasdaq PSX's systems plus trades reported through theFINRA /Nasdaq Trade Reporting Facility. (3) Transactions executed onNasdaq Commodities or OTC and reported for clearing toNasdaq Commodities measured by Terawatt hours (TWh). 34
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Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Corporate Platforms
IPOs
The Nasdaq Stock Market(4) 135 42 410 69
Exchanges that comprise Nasdaq Nordic and Nasdaq
Baltic 62 9 86 16
Total new listings
The Nasdaq Stock Market(4) 192 55 511 111
Exchanges that comprise Nasdaq Nordic and Nasdaq
Baltic(5) 72 13 104 22
Number of listed companies
The Nasdaq Stock Market(6) 3,817 3,156 3,817 3,156
Exchanges that comprise Nasdaq Nordic and Nasdaq
Baltic(7) 1,152 1,042 1,152 1,042
Investment Intelligence
Number of licensed ETPs 359 323 359 323
ETP AUM tracking Nasdaq indexes (in billions) $ 415 $ 272 $ 415 $ 272
TTM(8) net appreciation/ (depreciation) (in
billions) $ 113 $ 34 $ 113 $ 34
TTM(8) net inflows in ETP AUM tracking Nasdaq
indexes (in billions) $ 47 $ 35 $ 47 $ 35
Market Technology
Order intake (in millions)(9) $ 119 ___________
(4) New listings include IPOs, including issuers that switched from other listing venues, closed-end funds and separately listed ETPs. For the three months endedJune 30, 2021 , of the 135 IPOs, 47 were SPACs, for the three months endedJune 30, 2020 , of the 42 IPOs, 7 were SPACs, for the six months endedJune 30, 2021 , of the 410 IPOs, 243 were SPACs and for the six months endedJune 30, 2020 , of the 69 IPOs, 14 were SPACs. (5) New listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North. (6) Number of total listings onThe Nasdaq Stock Market at period end, including 419 ETPs as ofJune 30, 2021 and 410 as ofJune 30, 2020 . (7) Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North. (8) Trailing twelve months (excludes ETP sponsor switches of$17 billion ). (9) Total contract value of orders signed during the period, excludingVerafin . 35 --------------------------------------------------------------------------------
The following chart summarizes our ARR (in millions):
[[Image Removed: ndaq-20210630_g1.jpg]]
ARR for a given period is the annualized revenue derived from subscription
contracts with a defined contract value. This excludes contracts that are not
recurring, are one-time in nature, or where the contract value fluctuates based
on defined metrics. ARR is currently one of our key performance metrics to
assess the health and trajectory of our recurring business. ARR does not have
any standardized definition and is therefore unlikely to be comparable to
similarly titled measures presented by other companies. ARR should be viewed
independently of revenue and deferred revenue and is not intended to be combined
with or to replace either of those items. ARR is not a forecast and the active
contracts at the end of a reporting period used in calculating ARR may or may
not be extended or renewed by our customers.
_____________
Includes:
• Trade Management Services business, excluding one-time service requests.
• U.S. and Nordic annual listing fees, IR and ESG products, including subscription
contracts for IR Insight, Boardvantage and OneReport, and IR advisory services.
Proprietary market data and index data subscriptions as well as subscription
• contracts for eVestment, Solovis , DWA tools and services, Nasdaq Fund Network and
Quandl . Also includes guaranteed minimum on futures contracts
within the Index
business.
• Active Market Technology support and SaaS subscription contracts.
The following chart summarizes our annualized SaaS revenues for the three months
ended
[[Image Removed: ndaq-20210630_g2.jpg]]
36
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Financial Summary
The following table summarizes our financial performance for the three and six
months ended June 30, 2021 when compared to the same periods in 2020. The
comparability of our results of operations between reported periods is impacted
by the acquisition of Verafin in February 2021 . See "2021 Acquisition," of Note
4, "Acquisitions and Divestiture," to the condensed consolidated financial
statements for further discussion. For a detailed discussion of our results of
operations, see "Segment Operating Results" below.
Three Months Ended June 30, Percentage Six Months End June 30,
2021 2020 Change 2021 2020 Percentage Change
(in millions, except per (in millions, except per
share amounts) share amounts)
Revenues less transaction-based expenses
21.0 %$ 1,697 $ 1,400 21.2 % Operating expenses 470 384 22.4 % 956 810 18.0 % Operating income 376 315 19.4 % 741 590 25.6 % Net income attributable to Nasdaq$ 341 $ 241 41.5 %$ 639 $ 444 43.9 % Diluted earnings per share$ 2.05 $ 1.45 41.4 %$ 3.83 $ 2.67 43.4 %
Cash dividends declared per common share
10.2 %$ 1.03 $ 0.96 7.3 % In countries with currencies other than theU.S. dollar, revenues and expenses are translated using monthly average exchange rates. Impacts on our revenues less transaction-based expenses and operating income associated with fluctuations in foreign currency are discussed in more detail under "Item 3. Quantitative and Qualitative Disclosures about Market Risk." Segment Operating Results The following table shows our revenues by segment, transaction-based expenses for our Market Services segment and total revenues less transaction-based expenses: Three Months Ended June 30, Percentage Six Months Ended June 30, 2021 2020 Change 2021 2020 Percentage Change (in millions) (in millions) Market Services$ 878 $ 975 (9.9) %$ 2,017 $ 1,908 5.7 % Transaction-based expenses (566) (699) (19.0) % (1,367) (1,351) 1.2 % Market Services revenues less transaction-based expenses 312 276 13.0 % 650 557 16.7 % Corporate Platforms 154 126 22.2 % 309 254 21.7 % Investment Intelligence 263 213 23.5 % 521 424 22.9 % Market Technology 117 84 39.3 % 217 165 31.5 % Total revenues less transaction-based expenses$ 846 $ 699 21.0 %$ 1,697 $ 1,400 21.2 % 37
-------------------------------------------------------------------------------- The following charts show our Market Services, Corporate Platforms, Investment Intelligence, and Market Technology segments as a percentage of our total revenues, less transaction-based expenses, of$846 million for the three months endedJune 30, 2021 ,$699 million for the three months endedJune 30, 2020 ,$1,697 million for the six months endedJune 30, 2021 and$1,400 million for the six months endedJune 30, 2020 : [[Image Removed: ndaq-20210630_g3.jpg]] [[Image Removed: ndaq-20210630_g4.jpg]]
[[Image Removed: ndaq-20210630_g5.jpg]] [[Image Removed: ndaq-20210630_g6.jpg]]
38
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MARKET SERVICES
The following table shows total revenues, transaction-based expenses, and total
revenues less transaction-based expenses from our Market Services segment:
Three Months Ended June
30, Percentage Six Months Ended June 30,
2021 2020 Change 2021 2020 Percentage Change
(in millions) (in millions)
Market Services Revenues:
Equity Derivative Trading and Clearing
Revenues(1) $ 364 $ 297 22.6 % $ 785 $ 583 34.6 %
Transaction-based expenses:
Transaction rebates (255) (199) 28.1 % (550) (371) 48.2 %
Brokerage, clearance and exchange fees(1) (6) (15) (60.0) % (26) (35) (25.7) %
Equity derivative trading and clearing
revenues less transaction-based expenses 103 83 24.1 % 209 177 18.1 %
Cash Equity Trading Revenues(2) 415 590 (29.7) % 1,033 1,147 (9.9) %
Transaction-based expenses:
Transaction rebates (262) (331) (20.8) % (620) (638) (2.8) %
Brokerage, clearance and exchange fees(2) (43) (153) (71.9) % (170) (306) (44.4) %
Cash equity trading revenues less
transaction-based expenses 110 106 3.8 % 243 203 19.7 %
FICC Revenues 17 15 13.3 % 37 33 12.1 %
Transaction-based expenses:
Brokerage, clearance and exchange fees - (1) (100.0) % (1) (1) - %
FICC revenues less transaction-based
expenses 17 14 21.4 % 36 32 12.5 %
Trade Management Services Revenues 82 73 12.3 % 162 145 11.7 %
Total Market Services revenues less
transaction-based expenses $ 312 $ 276 13.0 % $ 650 $ 557 16.7 %
____________
(1) Includes Section 31 fees of $5 million in the second quarter of 2021, $22
million in the first six months of 2021, $14 million in the second quarter of
2020 and $31 million in the first six months of 2020. Section 31 fees are
recorded as equity derivative trading and clearing revenues with a corresponding
amount recorded in transaction-based expenses.
(2) Includes Section 31 fees of $36 million in the second quarter of 2021, $151
million in the first six months of 2021, $145 million in the second quarter of
2020 and $290 million in the first six months of 2020. Section 31 fees are
recorded as cash equity trading revenues with a corresponding amount recorded in
transaction-based expenses.
Equity Derivative Trading and Clearing Revenues
Equity derivative trading and clearing revenues and equity derivative trading
and clearing revenues less transaction-based expenses increased in the second
quarter and first six months of 2021 compared with the same periods in 2020. The
increases in the second quarter of 2021 were primarily due to higher U.S.
industry trading volumes. The increases in the first six months of 2021 were
primarily due to higher U.S. industry trading volumes and higher U.S. gross
capture rates partially offset by lower overall U.S. matched market share
executed on Nasdaq's exchanges. The increase in equity derivative trading and
clearing revenues was partially offset by lower Section 31 pass-through fee
revenue.
Section 31 fees are recorded as equity derivative trading and clearing revenues
with a corresponding amount recorded as
transaction-based expenses. In the U.S. , we are assessed these fees from the SEC
and pass them through to our customers in the form of incremental fees.
Pass-through fees can increase or decrease due to rate changes by the SEC , our
percentage of the overall industry volumes processed on our systems, and
differences in actual dollar value of shares traded. Since the amount recorded
in revenues is equal to the amount recorded as transaction-based expenses, there
is no impact on our revenues less transaction-based expenses. Section 31 fees
decreased in the second quarter and first six months of 2021 compared with the
same periods in 2020 as lower average SEC fee rates was partially offset by
higher dollar value traded on Nasdaq's exchanges.
Transaction rebates, in which we credit a portion of the per share execution
charge to the market participant, increased in
39
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the second quarter and first six months of 2021 compared with the same periods
in 2020. The increase in the second quarter of 2021 was primarily due to higher
U.S. industry trading volumes. The increase in the first six months of 2021 was
primarily due to higher U.S. industry trading volumes and an increase in the
U.S. rebate capture rate, partially offset by lower overall U.S. matched market
share executed on Nasdaq's exchanges.
Brokerage, clearance and exchange fees decreased in the second quarter and first
six months of 2021 compared with the same periods in 2020 primarily due to lower
Section 31 pass-through fees, as discussed above.
Cash Equity Trading Revenues
Cash equity trading revenues decreased in the second quarter and first six
months of 2021 compared with the same periods in 2020. The decrease in cash
equity trading revenues in the second quarter was primarily due to lower Section
31 pass-through fee revenue, lower U.S. industry trading volumes and lower
overall U.S. matched market share executed on Nasdaq's exchanges, partially
offset by a higher U.S. gross capture rate and higher European value traded. The
decrease in cash equity trading revenues in the first six months was primarily
due to lower Section 31 pass-through fee revenue and lower overall U.S. matched
market share executed on Nasdaq's exchanges, partially offset by higher U.S.
industry trading volumes, higher U.S. and European gross capture rates and
higher European value traded.
Cash equity trading revenues less transaction-based expenses increased in the
second quarter and first six months of 2021 compared with the same periods in
2020. The increase in cash equity trading revenues less transaction based
expenses in the second quarter was in part due to higher U.S. net capture rate
and higher European value traded, partially offset by lower U.S. industry
trading volumes and lower overall U.S. matched market share executed on Nasdaq's
exchanges. The increase in cash equity trading revenues less transaction based
expenses in the first six months was primarily due to higher U.S. and European
net capture rates, higher U.S. industry trading volumes and higher European
value traded, partially offset by lower overall U.S. matched market share
executed on Nasdaq's exchanges.
In addition, the favorable impact from changes in foreign exchange rates of $4
million in the second quarter of 2021 and $9 million in the first six months of
2021 partially offsets the decreases in cash equity trading revenues and
contributes to the increases in cash equity trading revenues less transaction
based expenses for the second quarter and first six months of 2021.
Similar to equity derivative trading and clearing, in the U.S. we record
Section 31 fees as cash equity trading revenues with a corresponding amount
recorded as transaction-based expenses. We are assessed these fees from the SEC
and pass them through to our customers in the form of incremental fees. Since
the amount recorded as revenues is equal to the amount recorded as
transaction-based expenses, there is no impact on our revenues less
transaction-based expenses. Section 31 fees decreased in the second quarter and
first six months of 2021 compared with the same periods in 2020 primarily due to
lower average SEC fee rates, partially offset by higher dollar value traded on
Nasdaq's exchanges.
Transaction rebates decreased in the second quarter and first six months of 2021
compared with the same periods in 2020. For The Nasdaq Stock Market , Nasdaq PSX
and Nasdaq CXC, we credit a portion of the per share execution charge to the
market participant that provides the liquidity, and for Nasdaq BX and Nasdaq
CX2, we credit a portion of the per share execution charge to the market
participant that takes the liquidity. The decrease in the second quarter of 2021
was primarily due to lower U.S. industry trading volumes, lower overall U.S.
matched market share executed on Nasdaq's exchanges and a lower rebate capture
rate. The decrease in the first six months of 2021 was primarily due to lower
overall U.S. matched market share executed on Nasdaq's exchanges and a lower
rebate capture rate, partially offset by higher U.S. industry trading volumes.
Brokerage, clearance and exchange fees decreased in the second quarter and first
six months of 2021 compared with the same periods in 2020 primarily due to lower
Section 31 pass-through fees, as discussed above.
FICC Revenues
FICC revenues and FICC revenues less transaction-based expenses increased in the
second quarter and first six months of 2021 compared with the same periods in
2020 primarily due to a favorable impact from foreign exchange rates. For the
second quarter of 2021, the increase also reflected higher revenues from our
European products.
Trade Management Services Revenues
Trade management services revenues increased in the second quarter and first six
months of 2021 compared with the same periods in 2020 primarily due to higher
demand for our connectivity solutions.
40
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CORPORATE PLATFORMS
The following table shows revenues from our Corporate Platforms segment:
Three Months Ended June
30, Percentage Six Months Ended June 30,
2021 2020 Change 2021 2020 Percentage Change
(in millions) (in millions)Corporate Platforms: Listing Services$ 98 $ 74 32.4 %$ 197 $ 149 32.2 % IR & ESG Services 56 52 7.7 % 112 105 6.7 % Total Corporate Platforms$ 154 $ 126 22.2 %$ 309 $ 254 21.7 % Listing Services Revenues Listing services revenues increased in the second quarter and first six months of 2021 compared with the same periods in 2020. The increase was primarily due to higherU.S. listings revenues due to an increase in the overall number of listed companies and higher NPM revenues due to an increase in private company transactions. IR & ESG Services Revenues Revenues increased in the second quarter and first six months of 2021 compared with the same periods in 2020, primarily due to an increase in IR services revenue from strong sales and higher retention rates along with increases across our ESG product offerings. INVESTMENT INTELLIGENCE The following table shows revenues from our Investment Intelligence segment: Three Months Ended June 30, Percentage Six Months Ended June 30, 2021 2020 Change 2021 2020 Percentage Change (in millions) (in millions) Investment Intelligence: Market Data$ 106 $ 101 5.0 %$ 214 $ 198 8.1 % Index 107 68 57.4 % 209 141 48.2 % Analytics 50 44 13.6 % 98 85 15.3 % Total Investment Intelligence$ 263 $ 213 23.5 %$ 521 $ 424 22.9 % Market Data Revenues Market data revenues increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to organic growth in proprietary data products from new sales, including continued expansion geographically. The increase in the first six months of 2021 was also due to a favorable impact in foreign exchange rates of$4 million . Index Revenues Index revenues increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to higher licensing revenues from higher average AUM in ETPs linked to Nasdaq indexes and higher licensing revenues from futures trading linked to the Nasdaq-100 Index. Analytics Revenues Analytics revenues increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to the growth in our eVestment platform driven by new sales, strong retention, and higher average revenue per client from expanded offerings. 41 -------------------------------------------------------------------------------- MARKET TECHNOLOGY The following table shows revenues from our Market Technology segment: Three Months Ended June 30, Percentage Six Months Ended June 30, 2021 2020 Change 2021 2020 Percentage Change Market Technology: (in millions) (in millions) Anti Financial Crime Technology$ 62 $ 33 87.9 % $ 109$ 63 73.0 % Marketplace Infrastructure Technology 55 51 7.8 % 108 102 5.9 % Market Technology$ 117 $ 84 39.3 % $ 217$ 165 31.5 % Anti Financial Crime Technology Revenues Anti-financial crime technology revenues increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to the inclusion of revenues from our acquisition ofVerafin and continued growth in surveillance solutions. Marketplace Infrastructure Technology Revenues Marketplace infrastructure technology revenues increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to an increase in support licensing and SaaS revenues, and a favorable impact from foreign exchange rates of$2 million in the second quarter and$4 million in the first six months of 2021. EXPENSES Operating Expenses The following table shows our operating expenses: Three Months Ended June 30, Percentage Six Months Ended June 30, 2021 2020 Change 2021 2020 Percentage Change (in millions) (in millions) Compensation and benefits$ 231 $ 189 22.2 % $ 470$ 384 22.4 % Professional and contract services 38 31 22.6 % 65 58 12.1 % Computer operations and data communications 46 35 31.4 % 90 70 28.6 % Occupancy 26 26 - % 55 51 7.8 % General, administrative and other 12 25 (52.0) % 24 86 (72.1) % Marketing and advertising 9 4 125.0 % 19 14 35.7 % Depreciation and amortization 68 50 36.0 % 131 98 33.7 % Regulatory 7 7 - % 14 14 - % Merger and strategic initiatives 12 4 200.0 % 57 10 470.0 % Restructuring charges 21 13 61.5 % 31 25 24.0 % Total operating expenses$ 470 $ 384 22.4 % $ 956$ 810 18.0 % The increase in compensation and benefits expense in the second quarter of 2021 compared with the same period in 2020 was primarily driven by an increase in headcount as a result of our acquisition ofVerafin , higher performance-linked compensation expense and an unfavorable impact from foreign exchange rates of$11 million . The increase in compensation and benefits expense in the first six months of 2021 compared with the same period in 2020 was primarily driven by higher performance-linked compensation expense, an increase in headcount as a result of our acquisition ofVerafin , and an unfavorable impact from foreign exchange rates of$20 million . Headcount increased to 5,696 employees as ofJune 30, 2021 from 4,670 as ofJune 30, 2020 primarily due to our recent acquisition ofVerafin and strategic initiatives, including growth in our Market Technology business. Computer operations and data communications expense increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to our acquisition ofVerafin and higher software maintenance costs due to higher cloud storage costs. Occupancy expense increased in the first six months of 2021 compared with the same period in 2020 primarily due to higher costs associated with additional facility and rent costs resulting from our acquisition ofVerafin and an unfavorable impact from foreign exchange rates. General, administrative and other expense decreased in the second quarter and first six months of 2021 compared with 42 -------------------------------------------------------------------------------- the same periods in 2020 primarily due to charitable donations made to theNasdaq Foundation , COVID-19 response and relief efforts, and social justice charities in 2020. The decrease in the first six months of 2021 was also due to lower travel costs and the absence of debt extinguishment costs in 2021. Marketing and advertising expense increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to an increase in marketing commitments predominantly driven by the increase in new listings. Depreciation and amortization expense increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to additional expense for acquired intangible assets related to our acquisition ofVerafin . Merger and strategic initiatives expense increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to the acquisition ofVerafin . We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above. See Note 19, "Restructuring Charges," to the condensed consolidated financial statements for further discussion of our 2019 restructuring plan and charges associated with this plan. * * * * * * Non-operating Income and Expenses The following table shows our non-operating income and expenses: Three Months Ended June 30, Percentage Six Months Ended June 30, 2021 2020 Change 2021 2020 Percentage Change (in millions) (in millions) Interest income $ -$ 1 (100.0) %$ 1 $ 3 (66.7) % Interest expense (33) (26) 26.9 % (62) (52) 19.2 % Net interest expense (33) (25) 32.0 % (61) (49) 24.5 % Net gain on divestiture of business 84 - N/M 84 - N/M Other income - - - 1 5 (80.0) % Net income from unconsolidated investees 27 26 3.8 % 84 43 95.3 % Total non-operating income (expenses)$ 78 $ 1 7,700.0 %$ 108 $ (1) (10,900.0) % ____________ N/M Not meaningful. Interest Expense Interest expense increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to new issuances of senior notes inDecember 2020 and commercial paper issuances in the first quarter of 2021 to partially fund our acquisition ofVerafin . See "2021 Acquisition," of Note 4, "Acquisitions and Divestiture," to the condensed consolidated financial statements for further discussion of the acquisition ofVerafin . See Note 8, "Debt Obligations," to the condensed consolidated financial statements for further discussion of our debt obligations. The following table shows our interest expense: Three Months Ended June 30, Percentage Six Months Ended June 30, 2021 2020 Change 2021 2020 Percentage Change (in millions) (in millions) Interest expense on debt$ 30 $ 24 25.0 %$ 57 $ 48 18.8 % Accretion of debt issuance costs and debt discount 2 1 100.0 % 4 3 33.3 % Other fees 1 1 - % 1 1 - % Interest expense$ 33 $ 26 26.9 %$ 62 $ 52 19.2 % 43
--------------------------------------------------------------------------------Net Gain on Divestiture of Business The net gain on divestiture of business in the second quarter and first six months of 2021 relates to the sale of ourU.S. Fixed Income business, which is part of our FICC business within our Market Services segment, to Tradeweb. We recognized a pre-tax gain on the sale of$84 million , net of disposal costs. See "2021 Divestiture," of Note 4, "Acquisitions and Divestiture," to the condensed consolidated financial statements for further discussion. Net Income from Unconsolidated Investees Net income from unconsolidated investees increased in the second quarter and first six months of 2021 compared with the same periods in 2020 primarily due to an increase in income recognized from our equity method investment in OCC. See "Equity Method Investments," of Note 6, "Investments," to the condensed consolidated financial statements for further discussion. Tax Matters The following table shows our income tax provision and effective tax rate: Three Months Ended June 30, Percentage Six Months Ended June 30, 2021 2020 Change 2021 2020 Percentage Change ($ in millions) ($ in millions) Income tax provision $ 113$ 75 50.7 %$ 210 $ 145 44.8 % Effective tax rate 24.9 % 23.7 % 24.7 % 24.6 % For further discussion of our tax matters, see Note 16, "Income Taxes," to the condensed consolidated financial statements. NON-GAAP FINANCIAL MEASURES In addition to disclosing results determined in accordance withU.S. GAAP, we also have provided non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share. Management uses this non-GAAP information internally, along withU.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of our ongoing operating performance. These measures are not in accordance with, or an alternative to,U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. Investors should not rely on any single financial measure when evaluating our business. This non-GAAP information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance withU.S. GAAP. We recommend investors review theU.S. GAAP financial measures included in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the notes thereto. When viewed in conjunction with ourU.S. GAAP results and the accompanying reconciliation, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business thanU.S. GAAP measures alone. We understand that analysts and investors regularly rely on non-GAAP financial measures, such as non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share, to assess operating performance. We use non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely onU.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance. Non-GAAP net income attributable to Nasdaq for the periods presented below is calculated by adjusting for the following items: •Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses, the relative operating performance of the businesses between periods, and the earnings power of Nasdaq. Performance measures excluding intangible asset amortization expense therefore provide investors with a useful representation of our businesses' ongoing activity in each period. •Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. Accordingly, we exclude these costs for purposes of calculating non-GAAP measures which provide a more meaningful analysis of Nasdaq's ongoing operating 44 -------------------------------------------------------------------------------- performance or comparisons in Nasdaq's performance between periods. •Restructuring charges: We initiated the transition of certain technology platforms to advance our strategic opportunities as a technology and analytics provider and continue the re-alignment of certain business areas. See Note 19, "Restructuring Charges," to the condensed consolidated financial statements for further discussion of our 2019 restructuring plan. Charges associated with this plan represented a fundamental shift in our strategy and technology as well as executive re-alignment and were excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq's performance between periods. •Net income from unconsolidated investee: See "Equity Method Investments," of Note 6, "Investments," to the condensed consolidated financial statements for further discussion. Our income on our investment in OCC may vary significantly compared to prior years due to the changes in OCC's capital management policy. Accordingly, we will exclude this income from current and prior periods for purposes of calculating non-GAAP measures which provide a more meaningful analysis of Nasdaq's ongoing operating performance or comparisons in Nasdaq's performance between periods. •Other significant items: We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. We believe the exclusion of such amounts allows management and investors to better understand the ongoing financial results of Nasdaq. For the three and six months endedJune 30, 2021 , other significant items primarily included a net gain on divestiture of businesses which primarily represents our pre-tax net gain of$84 million on the sale of ourU.S. Fixed Income business. For the three and six months endedJune 30, 2020 , other significant items included charitable donations made to theNasdaq Foundation , COVID-19 response and relief efforts, and social justice charities which are recorded in general, administrative and other expense in our Condensed Consolidated Statements of Income. The first six months of 2020 also included a loss on extinguishment of debt which is recorded in general, administrative and other expense in our Condensed Consolidated Statements of Income. •Significant tax items: The non-GAAP adjustment to the income tax provision for the three and six months endedJune 30, 2021 and 2020 included the tax impact of each non-GAAP adjustment and for the six months endedJune 30, 2020 , excess tax benefits related to employee share-based compensation to reflect the recognition of the income tax effects of share-based awards when awards vest or are settled. Beginning with the quarter endedMarch 31, 2021 , such excess tax benefits are no longer included as a non-GAAP adjustment as they do not have a material impact on period over period comparison. 45 --------------------------------------------------------------------------------
The following table shows reconciliations between
Three Months Ended June 30, Six Months End June 30,
2021 0 2020 2021 2020
($ in millions, except share and per share amounts)
$ 341
40 26 76 50
Merger and strategic initiatives expense 12 4 57 10
Restructuring charges 21 13 31 25
Net income from unconsolidated investee (26) (25) (83) (41)
Net gain on divestiture of business (84) - (84) -
Extinguishment of debt - - - 36
Charitable donations - 12 - 17
Other 5 2 7 4
Total non-GAAP adjustments (32) 32 4 101
Adjustment to the income tax provision to reflect
non-GAAP adjustments and other tax items 7 (17) - (36)Excess tax benefits related to employee share-based compensation
- - - (3)
Total non-GAAP tax adjustments 7 (17) - (39)
Total non-GAAP adjustments, net of tax (25) 15 4 62
Non-GAAP net income attributable to Nasdaq $ 316 Weighted-average common shares outstanding for diluted earnings per share
166,438,157 166,073,354 166,763,396 166,424,676
U.S. GAAP diluted earnings per share $ 2.05
(0.15) 0.09 0.02 0.37
Non-GAAP diluted earnings per share $ 1.90 LIQUIDITY AND CAPITAL RESOURCES Historically, we have funded our operating activities and met our commitments through cash generated by operations, augmented by the periodic issuance of our common stock and debt. Currently, our cost and availability of funding remain healthy. As ofJune 30, 2021 , our sources and uses of cash were not materially impacted by COVID-19 and we have not identified any material liquidity deficiencies as a result of the COVID-19 pandemic. We will continue to closely monitor and manage our liquidity and capital resources. In addition, we continue to prudently assess our capital deployment strategy through balancing acquisitions, internal investments, debt repayments, and shareholder return activity, including share repurchases and dividends. In the near term, we expect that our operations and the availability under our revolving credit facility and commercial paper program will provide sufficient cash to fund our operating expenses, capital expenditures, debt repayments, any share repurchases, and any dividends. InApril 2021 , we filed a universal shelf registration statement on Form S-3ASR (Automatic Shelf Registration) with theSEC to have the ability to sell various types of securities including debt securities, common stock, preferred stock, depository receipts, warrants, subscription rights, purchase contracts and purchase units. The specific terms of any securities to be sold would be described in supplemental filings with theSEC . The registration statement will expire inApril 2024 . InJuly 2021 , we issued the 2033 Notes and issued a redemption notice for the 2023 Notes. We will primarily use the net proceeds from the sale of the 2033 Notes to redeem the 2023 Notes. See "0.900% Senior Unsecured Notes Due 2033," and "1.75% Senior Unsecured Notes Due 2023," of Note 8, "Debt Obligations," to the condensed consolidated financial statements for further discussion of both the 2023 Notes and 2033 Notes. The value of various assets and liabilities, including cash and cash equivalents, receivables, accounts payable and accrued expenses, the current portion of long-term debt, and commercial paper, can fluctuate from month to month. Working capital (calculated as current assets less current 46 -------------------------------------------------------------------------------- liabilities) was$122 million as ofJune 30, 2021 , compared with$2,736 million as ofDecember 31, 2020 , a decrease of$2,614 million . Current asset balance changes decreased working capital by$2,643 million , due to a decrease in cash and cash equivalents, primarily due to the utilization of cash to partially fund the acquisition ofVerafin , a decrease in default funds and margin deposits and a decrease in accounts receivable, net, partially offset by increases in financial investments, other current assets and restricted cash and cash equivalents. Current liability balance changes increased working capital by$29 million , as decreases in default funds and margin deposits, accrued personnel costs, Section 31 fees payable to theSEC and accounts payable and accrued expenses, were partially offset by increases in short-term debt, deferred revenue and other current liabilities. Principal factors that could affect the availability of our internally-generated funds include: • deterioration of our revenues in any of our business segments; • changes in regulatory and working capital requirements; and • an increase in our expenses. Principal factors that could affect our ability to obtain cash from external sources include: • operating covenants contained in our credit facilities that limit our total borrowing capacity; • increases in interest rates under our credit facilities; • credit rating downgrades, which could limit our access to additional debt; • a decrease in the market price of our common stock; • volatility or disruption in the public debt and equity markets; and • the impact of the COVID-19 pandemic on our business. The following sections discuss the effects of changes in our financial assets, debt obligations, regulatory capital requirements, and cash flows on our liquidity and capital resources. Financial Assets The following table summarizes our financial assets: June 30, 2021 December 31, 2020 (in millions) Cash and cash equivalents $ 390 $ 2,745 Restricted cash and cash equivalents 40 37 Financial investments 235 195 Total financial assets $ 665 $ 2,977 Cash and Cash Equivalents and Restricted Cash and Cash Equivalents Cash and cash equivalents includes all non-restricted cash in banks and highly liquid investments with original maturities of 90 days or less at the time of purchase. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our investment policy, and alternative investment choices. As ofJune 30, 2021 , our cash and cash equivalents of$390 million were primarily invested in bank deposits and money market funds. In the long-term, we may use both internally generated funds and external sources to satisfy our debt obligations and other long-term liabilities. Cash and cash equivalents as ofJune 30, 2021 decreased$2,355 million fromDecember 31, 2020 , primarily due to: •cash paid for our acquisition ofVerafin , net of cash and cash equivalents acquired; •repurchases of our common stock; •cash dividends paid on our common stock; •purchases of property and equipment; •other investing activities; •payments related to employee shares withheld for taxes; •net purchases of securities, partially offset by; •net cash provided by operating activities; •proceeds from commercial paper, net; and •proceeds from divestiture of business, net of cash divested. See "Cash Flow Analysis" below for further discussion. Restricted cash and cash equivalents are restricted from withdrawal due to contractual or regulatory requirements or is not available for general use. Restricted cash and cash equivalents were$40 million as ofJune 30, 2021 and$37 million as ofDecember 31, 2020 , an increase of$3 million . Restricted cash and cash equivalents are classified as restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets. Repatriation of Cash Our cash and cash equivalents held outside of theU.S. in various foreign subsidiaries totaled$189 million as ofJune 30, 2021 and$237 million as ofDecember 31, 2020 . The remaining balance held in theU.S. totaled$201 million as ofJune 30, 2021 and$2,508 million as ofDecember 31, 2020 . Unremitted earnings of certain subsidiaries outside of theU.S. are used to finance our international operations and are considered to be indefinitely reinvested. Share Repurchase Program See "Share Repurchase Program," of Note 11, "Nasdaq Stockholders' Equity," to the condensed consolidated financial statements for further discussion of our share repurchase program. ASR Agreement See "ASR Agreement ," of Note 11, "Nasdaq Stockholders' Equity," to the condensed consolidated financial statements for further discussion of our ASR agreement. 47 -------------------------------------------------------------------------------- Cash Dividends on Common Stock The following table shows quarterly cash dividends paid per common share on our outstanding common stock: 2021 2020 First quarter$ 0.49 $ 0.47 Second quarter 0.54 0.49 Total$ 1.03 $ 0.96 See "Cash Dividends on Common Stock," of Note 11, "Nasdaq Stockholders' Equity," to the condensed consolidated financial statements for further discussion of the dividends. Financial Investments Our financial investments totaled$235 million as ofJune 30, 2021 and were trading securities primarily comprised of highly rated European government debt securities and time deposits. As ofDecember 31, 2020 , financial investments totaled$195 million and were trading securities primarily comprised of highly rated European government debt securities. Of these securities,$167 million as ofJune 30, 2021 and$175 million as ofDecember 31, 2020 are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing. See Note 6, "Investments," to the condensed consolidated financial statements for further discussion. * * * * * * Debt Obligations The following table summarizes our debt obligations by contractual maturity: December 31, Maturity Date June 30, 2021 2020 (in millions) Weighted-average maturity Short-term debt - commercial paper of 20 days $ 221 $ -
Long-term debt:
0.445% senior unsecured notes December 2022 598 597 1.75% senior unsecured notes May 2023 709 730 4.25% senior unsecured notes June 2024 498 498$1.25 billion senior unsecured revolving credit facility December 2025 (4) (4) 3.85% senior unsecured notes June 2026 497 497 1.75% senior unsecured notes March 2029 705 726 0.875% senior unsecured notes February 2030 705 726 1.650% senior unsecured notes January 2031 643 643 2.500% senior unsecured notes December 2040 643 643 3.25% senior unsecured notes April 2050 486 485 Total long-term debt$ 5,480 $ 5,541 Total debt obligations$ 5,701 $ 5,541 In addition to the$1.25 billion revolving credit facility, we also have other credit facilities primarily to support our Nasdaq Clearing operations inEurope , as well as to provide a cash pool credit line for one subsidiary. These credit facilities, which are available in multiple currencies, totaled$223 million as ofJune 30, 2021 and$232 million as ofDecember 31, 2020 in available liquidity, none of which was utilized. As ofJune 30, 2021 , we were in compliance with the covenants of all of our debt obligations. See Note 8, "Debt Obligations," to the condensed consolidated financial statements for further discussion of our debt obligations. Regulatory Capital Requirements Clearing Operations Regulatory Capital Requirements We are required to maintain minimum levels of regulatory capital for the clearing operations of Nasdaq Clearing. The level of regulatory capital required to be maintained is dependent upon many factors, including market conditions and creditworthiness of the counterparty. As ofJune 30, 2021 , our required regulatory capital of$141 million was comprised of highly rated European government debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets. 48 -------------------------------------------------------------------------------- Broker-Dealer Net Capital Requirements Our broker-dealer subsidiaries, Nasdaq Execution Services,NPM Securities , SMTX, and Nasdaq Capital Markets Advisory, are subject to regulatory requirements intended to ensure their general financial soundness and liquidity. These requirements obligate these subsidiaries to comply with minimum net capital requirements. As ofJune 30, 2021 , the combined required minimum net capital totaled$1 million and the combined excess capital totaled$24 million , substantially all of which is held in cash and cash equivalents in the Condensed Consolidated Balance Sheets. The required minimum net capital is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets. Nordic and Baltic Exchange Regulatory Capital Requirements The entities that operate trading venues in the Nordic and Baltic countries are each subject to local regulations and are required to maintain regulatory capital intended to ensure their general financial soundness and liquidity. As ofJune 30, 2021 , our required regulatory capital of$35 million was primarily invested in European debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets and cash which is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets. Other Capital Requirements We operate several other businesses which are subject to local regulation and are required to maintain certain levels of regulatory capital. As ofJune 30, 2021 , other required regulatory capital was$8 million and was primarily included in restricted cash in the Condensed Consolidated Balance Sheets. * * * * * * Cash Flow Analysis The following table summarizes the changes in cash flows: Six
Months Ended
2021 2020 Percentage Change
Net cash provided by (used in): (in millions)
Operating activities $ 467 $ 821 (43.1) %
Investing activities (2,435) (145) 1,579.3 %
Financing activities (380) (294) 29.3 %
Effect of exchange rate changes on cash and cash
equivalents and restricted cash and cash equivalents (4) (3) 33.3 %
Net increase (decrease) in cash and cash equivalents and restricted cash
(2,352) 379 (720.6) %
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period
2,782 362 668.5 %
Cash and cash equivalents and restricted cash and cash equivalents at end of period
$ 430 $ 741 (42.0) %
Net Cash Provided by Operating Activities
Net cash provided by operating activities primarily consists of net income
adjusted for certain non-cash items such as: depreciation and amortization
expense of property and equipment; amortization expense of acquired finite-lived
intangible assets; expense associated with share-based compensation; and net
income from unconsolidated investees.
Net cash provided by operating activities is also impacted by the effects of
changes in operating assets and liabilities such as: accounts receivable which
is impacted by the timing of customer billings and related collections from our
customers; accounts payable and accrued expenses due to timing of payments;
accrued personnel costs which are impacted by employee performance targets and
the timing of payments related to employee bonus incentives; and Section 31 fees
payable to the SEC , which is impacted by the timing of collections from
customers and payments to the SEC .
Net cash provided by operating activities decreased $354 million for the six
months ended June 30, 2021 compared
with the same period in 2020. The decrease was primarily driven by a cash
payment of an acquisition-related tax obligation on behalf of Verafin of $221
million and a cash payment of $102 million , the release of which is subject to
certain employment-related conditions over three years following the closing of
the acquisition of Verafin , a decrease in Section 31 fees payable to the SEC due
to lower average SEC fee rates and timing of payments. The remaining change was
primarily due to other fluctuations in our working capital.
Net Cash Used in Investing Activities
Net cash used in investing activities for the six months ended June 30, 2021
primarily related to $2,430 million of cash used for acquisitions, net of cash
and cash equivalents acquired of $221 million which was utilized to satisfy an
acquisition-related tax obligation on behalf of Verafin , $81 million of
purchases of property and equipment, other investing activities of $67 million
and payments of $47 million from the net purchases of securities, partially
offset by proceeds from divestiture of business, net of cash divested $190
million .
49--------------------------------------------------------------------------------
Net cash used in investing activities for the six months endedJune 30, 2020 primarily related to$157 million of cash used for acquisitions, net of cash and cash equivalents acquired and$68 million of purchases of property and equipment, partially offset by$85 million of proceeds from the net sales of securities.Net Cash Used in Financing Activities Net cash used in financing activities for the six months endedJune 30, 2021 primarily related to$410 million in repurchases of common stock and$169 million of dividend payments to our shareholders. partially offset by$221 million of proceeds from issuances of commercial paper, net. Net cash used in financing activities for the six months endedJune 30, 2020 primarily related to$1,470 million in repayments of borrowings under our credit commitment and debt obligations,$391 million of net repayments of commercial paper,$158 million of dividend payments to our shareholders,$152 million in repurchases of common stock, and a$36 million payment for debt extinguishment costs, partially offset by$1,928 million of proceeds from issuances of long-term debt and the utilization of our credit commitment. See Note 4, "Acquisitions and Divestiture," to the condensed consolidated financial statements for further discussion of our acquisitions and divestiture. See Note 8, "Debt Obligations," to the condensed consolidated financial statements for further discussion of our debt obligations. See "Share Repurchase Program," and "Cash Dividends on Common Stock," of Note 11, "Nasdaq Stockholders' Equity," to the condensed consolidated financial statements for further discussion of our share repurchase program and cash dividends paid on our common stock. Contractual Obligations and Contingent Commitments For the three months endedJune 30, 2021 , there were no significant changes to our contractual obligations and contingent commitments from those disclosed in "Part I. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recently filed Form 10-Q. Off-Balance Sheet Arrangements For discussion of off-balance sheet arrangements see: • Note 14, "Clearing Operations," to the condensed consolidated financial statements for further discussion of our non-cash default fund contributions and margin deposits received for clearing operations; and • Note 17, "Commitments, Contingencies and Guarantees," to the condensed consolidated financial statements for further discussion of: •Guarantees issued and credit facilities available; •Other guarantees; •Routing brokerage activities; •Legal and regulatory matters; and •Tax audits.
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