Nasdaq Annual Report 2020 Form 10-K (NASDAQ:NDAQ) Published: February 25th, 2020 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 001-38855 ___________________________________ Nasdaq, Inc. (Exact name of registrant as specified in its charter) Delaware 52-1165937 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 151 W. 42nd Street, New York, New York 10036 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: +1 212 401 8700 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share NDAQ The Nasdaq Stock Market 0.875% Senior Notes due 2030 NDAQ30 The Nasdaq Stock Market 1.75% Senior Notes due 2029 NDAQ29 The Nasdaq Stock Market 1.750% Senior Notes due 2023 NDAQ23 The Nasdaq Stock Market 3.875% Senior Notes due 2021 NDAQ21 The Nasdaq Stock Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of June 28, 2019, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately$ 11.1 billion (this amount represents approximately 115.5 million shares of Nasdaq, Inc.’s common stock based on the last reported sales price of$ 96.17 of the common stock on The Nasdaq Stock Market on such date). Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Class Outstanding at February 13, 2020 Common Stock, $0.01 par value per share 165,011,712 shares Documents Incorporated by Reference: Certain portions of the Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. Nasdaq, Inc. Page Part I. Item 1. Business 2 Item 1A. Risk Factors 13 Item 1B. Unresolved Staff Comments 27 Item 2. Properties 27 Item 3. Legal Proceedings 27 Item 4. Mine Safety Disclosures 27 Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. Selected Financial Data 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 53 Item 8. Financial Statements and Supplementary Data 53 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 54 Item 9A. 54 Controls and Procedures Item 9B. Other Information 56 Part III. Item 10. Directors, Executive Officers and Corporate Governance 56 Item 11. Executive Compensation 56 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 56 Item 13. Certain Relationships and Related Transactions, and Director Independence 56 Item 14. Principal Accounting Fees and Services 57 Part IV. Item 15. Exhibits, Financial Statement Schedules 57 Item 16. Form 10-K Summary 59 About this Form 10-K Throughout this Form 10-K, unless otherwise specified: • “Nasdaq,” “we,” “us” and “our” refer to Nasdaq, Inc. • “Nasdaq Baltic” refers to collectively, Nasdaq Tallinn AS, Nasdaq Riga, AS, and AB Nasdaq Vilnius. • “Nasdaq BX” refers to the cash equity exchange operated by Nasdaq BX, Inc. • “Nasdaq BX Options” refers to the options exchange operated by Nasdaq BX, Inc. • “Nasdaq Clearing” refers to the clearing operations conducted by Nasdaq Clearing AB. • “Nasdaq First North” refers to our alternative marketplaces for smaller companies and growth companies in the Nordic and Baltic regions. • “Nasdaq GEMX” refers to the options exchange operated by Nasdaq GEMX, LLC. • “Nasdaq ISE” refers to the options exchange operated by Nasdaq ISE, LLC. • “Nasdaq MRX” refers to the options exchange operated by Nasdaq MRX, LLC. • “Nasdaq Nordic” refers to collectively, Nasdaq Clearing AB, Nasdaq Stockholm AB, Nasdaq Copenhagen A/S, Nasdaq Helsinki Ltd, and Nasdaq Iceland hf. • “Nasdaq PHLX” refers to the options exchange operated by Nasdaq PHLX LLC. • “Nasdaq PSX” refers to the cash equity exchange operated by Nasdaq PHLX LLC. • “The Nasdaq Options Market” refers to the options exchange operated by The Nasdaq Stock Market LLC. • “The Nasdaq Stock Market” refers to the cash equity exchange and listing venue operated by The Nasdaq Stock Market LLC. * * * * * * Nasdaq also provides as a tool for the reader the following list of abbreviations and acronyms that are used throughout this Annual Report on Form 10-K. 401(k) Plan: Voluntary Defined Contribution Savings Plan ASU: Accounting Standards Update 2016 Credit Facility: $400 million senior unsecured term loan facility repaid ATS: Alternative Trading System in full and terminated in June 2019 AUM: Assets Under Management 2017 Credit Facility: $1 billion senior unsecured revolving credit facility CAT: A market-wide consolidated audit trail established by Nasdaq and which matures on April 25, 2022 other exchanges under an SEC approved plan 2019 Notes: $500 million aggregate principal amount of senior unsecured CCP: Central Counterparty floating rate notes repaid in full on maturity in March 2019 CFTC: U.S. Commodity Futures Trading Commission 2020 Notes: $600 million aggregate principal amount of 5.55% senior unsecured notes repaid in full and terminated in May 2019 EMIR: European Market Infrastructure Regulation 2021 Notes: €600 million aggregate principal amount of 3.875% senior Equity Plan: Nasdaq Equity Incentive Plan unsecured notes due June 7, 2021 ESPP: Nasdaq Employee Stock Purchase Plan 2023 Notes: €600 million aggregate principal amount of 1.75% senior unsecured notes due May 19, 2023 ETF: Exchange Traded Fund 2024 Notes: $500 million aggregate principal amount of 4.25% senior ETP: Exchange Traded Product unsecured notes due June 1, 2024 Exchange Act: Securities Exchange Act of 1934, as amended 2026 Notes: $500 million aggregate principal amount of 3.85% senior FASB: Financial Accounting Standards Board unsecured notes due June 30, 2026 FICC: Fixed Income and Commodities Trading and Clearing 2029 Notes: €600 million aggregate principal amount of 1.75% senior unsecured notes due March 28, 2029 FINRA: Financial Industry Regulatory Authority 2030 Notes: €600 million aggregate principal amount of 0.875% senior IPO: Initial Public Offering unsecured notes due February 13, 2030 LIBOR: London Interbank Offered Rate MiFID II: Update to the Markets in Financial Instruments Directive MiFIR: Markets in Financial Instruments Regulation SEC: U.S. Securities and Exchange Commission MTF: Multilateral Trading Facility SERP: Supplemental Executive Retirement Plan NFF: Nasdaq Financial Framework; Nasdaq's end-to-end technology SFSA: Swedish Financial Supervisory Authority solutions for market infrastructure operators, buy-side firms, sell-side firms SI: Systematic Internalizer and other non-financial markets S&P: Standard & Poor’s NFX: Nasdaq Futures, Inc. S&P 500: S&P 500 Stock Index NPM: The NASDAQ Private Market, LLC SRO: Self-regulatory Organization NSCC: National Securities Clearing Corporation SSMA: Swedish Securities Markets Act 2007:528 OCC: The Options Clearing Corporation TSR: Total Shareholder Return OTC: Over-the-Counter U.S. GAAP: U.S. Generally Accepted Accounting Principles Proxy Statement: Nasdaq’s Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders UTP: Unlisted Trading Privileges PSU: Performance Share Unit UTP Plan: Joint SRO Plan Governing the Collection, Consolidation, and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Regulation NMS: Regulation National Market System Securities Traded on Exchanges on a UTP Basis Regulation SCI: Regulation Systems Compliance and Integrity VAT: Value Added Tax SaaS: Software as a Service * * * * * * NASDAQ, the NASDAQ logos, and other brand, service or product names or marks referred to in this report are trademarks or service marks, registered or otherwise, of Nasdaq, Inc.