Nasdaq
Annual Report 2017

Plain-text annual report

NASDAQ, INC. FORM 10-K (Annual Report) Filed 02/28/18 for the Period Ending 12/31/17 Address ONE LIBERTY PLAZA Telephone NEW YORK, NY, 10006 2124018700 CIK 0001120193 Symbol NDAQ SIC Code 6200 - Security and Commodity Brokers, Dealers, Exchanges and Services Industry Financial & Commodity Market Operators Sector Financials Fiscal Year 12/31 http://www.edgar-online.com © Copyright 2018, EDGAR Online, a division of Donnelley Financial Solutions. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, a division of Donnelley Financial Solutions, Terms of Use.  Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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, 2017OR☐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: 000-32651___________________________________Nasdaq, Inc.(Exact name of registrant as specified in its charter)Delaware(State or Other Jurisdiction ofIncorporation or Organization)52-1165937(I.R.S. EmployerIdentification No.) One Liberty Plaza, New York, New York(Address of Principal Executive Offices)10006(Zip Code)Registrant’s telephone number, including area code:+1 212 401 8700Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, $.01 par value per shareThe Nasdaq Stock MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate 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 12months (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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and postedpursuant 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 and post suchfiles). Yes ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to thebest of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒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☐ (Do not check if a smaller reporting company)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 financialaccounting 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 30, 2017, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $8.3 billion (this amount representsapproximately 116.7 million shares of Nasdaq, Inc.’s common stock based on the last reported sales price of $71.49 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 21, 2018Common Stock, $.01 par value per share 166,560,632 shares____________________________________ DOCUMENTS INCORPORATED BY REFERENCEDocumentParts Into Which IncorporatedCertain portions of the Definitive Proxy Statement for the 2018 Annual Meeting ofStockholdersPart III Table of ContentsNasdaq, Inc. Page Part I. Item 1.Business2 Item 1A.Risk Factors14 Item 1B.Unresolved Staff Comments26 Item 2.Properties26 Item 3.Legal Proceedings26 Item 4.Mine Safety Disclosures26 Part II. Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities26 Item 6.Selected Financial Data29 Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations30 Item 7A.Quantitative and Qualitative Disclosures About Market Risk54 Item 8.Financial Statements and Supplementary Data54 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure55 Item 9A.Controls and Procedures55 Item 9B.Other Information58 Part III. Item 10.Directors, Executive Officers and Corporate Governance58 Item 11.Executive Compensation58 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters58 Item 13.Certain Relationships and Related Transactions, and Director Independence58 Item 14.Principal Accountant Fees and Services59 Part IV. Item 15.Exhibits, Financial Statement Schedules 59 Item 16.Form 10-K Summary64 i Table of ContentsAbout This Form 10-KThroughout 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 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 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 Plan2016 Credit Facility: $400 million senior unsecured term loan facility whichmatures on November 25, 20192017 Credit Facility: $1 billion senior unsecured revolving credit facility whichmatures on April 25, 20222019 Notes: $500 million aggregate principal amount of senior unsecuredfloating rate notes due March 22, 2019 with an interest rate equal to the three-month U.S. dollar LIBOR plus 0.39%2020 Notes: $600 million aggregate principal amount of 5.55% seniorunsecured notes due January 15, 20202021 Notes: €600 million aggregate principal amount of 3.875% seniorunsecured notes due June 7, 20212023 Notes: €600 million aggregate principal amount of 1.75% seniorunsecured notes due May 19, 20232024 Notes: $500 million aggregate principal amount of 4.25% seniorunsecured notes due June 1, 20242026 Notes: $500 million aggregate principal amount of 3.85% seniorunsecured notes due June 30, 2026ASU: Accounting Standards UpdateATS: Alternative Trading SystemBWise: BWise Beheer B.V. and its subsidiaries CCP: Central CounterpartyCFTC: U.S. Commodity Futures Trading CommissionDEA: Designated Examining AuthorityDWA: Dorsey, Wright & Associates, LLCEMIR: European Market Infrastructure RegulationEquity Plan: Nasdaq Equity Incentive PlaneSpeed: Certain assets and certain liabilities of the eSpeed business that wereacquired or assumed from BGC Partners, Inc. and certain of its affiliatesESPP: Nasdaq Employee Stock Purchase PlanETF: Exchange Traded FundETP: Exchange Traded ProducteVestment: eVestment, Inc. and its subsidiariesExchange Act: Securities Exchange Act of 1934, as amendedFASB: Financial Accounting Standards BoardFICC: Fixed Income and Commodities Trading and ClearingFINRA: Financial Industry Regulatory AuthorityIPO: Initial Public Offeringii Table of ContentsISE: U.S. Exchange Holdings, Inc. and its subsidiariesLIBOR: London Interbank Offered RateMiFID II: Update to the Markets in Financial Instruments DirectiveMiFIR: Markets in Financial Instruments RegulationMTF: Multilateral Trading FacilityNFX: Nasdaq Futures, Inc.NPM: The Nasdaq Private Market, LLCNSCC: National Securities Clearing CorporationOCC: The Options Clearing CorporationOTC: Over-the-CounterProxy Statement: Nasdaq’s Definitive Proxy Statement for the 2018 AnnualMeeting of StockholdersPSU: Performance Share UnitRegulation NMS: Regulation National Market SystemRegulation SCI: Regulation Systems Compliance and IntegritySEC: U.S. Securities and Exchange Commission SecondMarket: SecondMarket Solutions, Inc.SERP: Supplemental Executive Retirement PlanSFSA: Swedish Financial Supervisory AuthoritySMARTS: SMARTS Group Holdings PtyS&P: Standard & Poor’sS&P 500: S&P 500 Stock IndexSRO: Self-regulatory OrganizationSSMA: Swedish Securities Markets Act 2007:528TSR: Total Shareholder ReturnU.S. GAAP: U.S. Generally Accepted Accounting PrinciplesUTP: Unlisted Trading PrivilegesUTP Plan: Joint SRO Plan Governing the Collection, Consolidation, andDissemination of Quotation and Transaction Information for Nasdaq-ListedSecurities Traded on Exchanges on a UTP BasisVAT: Value Added TaxVSOE: Vendor Specific Objective Evidence of Fair Value* * * * *The following is a non-exclusive list of registered trademarks, registered service marks, or trademarks or service marks of Nasdaq or its subsidiaries, in the UnitedStates and/or other countries or jurisdictions:@TRADE®, ACES®, AT TRADE®, AT-TRADE®, AGGREGATION, TRANSPARENCY, CONTROL®, AUTO WORKUP®, AXE®, BOARDVANTAGE,BWISE®, BWISE BUSINESS IN CONTROL®, BWISE RAPID DEPLOYMENT SOLUTION®, BX VENTURE MARKET®, CANADIAN DIVIDENDACHIEVERS®, CCBN®, CCN®, CCN NEWSNET DESIGN, CCNMATTHEWS®, CLICK XT®, CONDICO®, CYBER SECURITY®, D.A.L.I®, DEFENSEOF INTERNATIONAL MARKETS AND EXCHANGES SYMPOSIUM®, DIMES®, DIRECTORS DESK®, DIRECTORSDESK®, DIVIDENDACHIEVERS®, DORSEY WRIGHT®, DREAM IT. DO IT.®, DWA®, DWA MATRIX®, EQQQ, E (design), E-SPEED®, ESPEED®, ESPEEDOMETER®,EXACTEQUITY®, EXIGO, FINQLOUD®, FINQLOUD REGULATORY RECORDS RETENTION® FIRST NORTH®, FONDSBØRSEN®, FTEN®,GENIUM®, GIDS®, GLOBE NEWSWIRE®, GO! POWERED BY MARKETWIRE®, HACK®, IGNITE YOUR AMBITION®, INET®, INTERNATIONALSECURITIES EXCHANGE®, INVESTOR WORLD®, IPOWORLD®, ISE, ISE BIG DATA®, ISE FX OPTIONS®, ISE GEMINI®, ISE MOBILEPAYMENTS®, ISEE SELECT®, ISSUERWORLD®, ITCH®, KFXAKTIEINDEX®, LONGITUDE®, MARKET INTELLIGENCE DESK®, MARKETLINQUIDITY, MARKET MECHANICS®, MARKETSITE®, MARKETWIRE®, MARKETWIRE BEYOND WORDS®, MARKETWIRE RESONATE®,MARKETWIRE GO! ®, MARKETWIRED RESONATE®, MARKETWIRED®, MW®, MW MARKET WIRED®, MW MARKETWIRED THE POWER OFINFLUENCE®, MY CCBN®, MYMEDIAINFO®, NAREX®, NASDAQ®, NASDAQ 100 INDEX®, NASDAQ - FINANCIAL®, NASDAQBIOTECHNOLOGY INDEX®, NASDAQ CANADA®, NASDAQ CANADA COMPOSITE INDEX®, NASDAQ CANADA INDEX®, NASDAQ CAPITALMARKET®, NASDAQ COMPOSITE®, NASDAQ COMPOSITE INDEX®, NASDAQ COMPUTER INDEX®, NASDAQ DIVIDEND ACHIEVERS®,NASDAQ DUBAI®, NASDAQ DUBAI ACADEMY®, NASDAQ EUROPE®, NASDAQ EUROPE COMPOSITE INDEX®, NASDAQ FINANCIAL-100INDEX®, NASDAQ FUTURES®, NASDAQ FX®, NASDAQ GLOBAL MARKET®, NASDAQ GLOBAL SELECT MARKET®, NASDAQ INDUSTRIALINDEX®, NASDAQ INTERACT®, NASDAQ INTERNET INDEX®, NASDAQ IQ FUND®, NASDAQ IR INSIGHT®, NASDAQ JAPAN®, NASDAQMARKET ANALYTIX®, NASDAQ MARKET CENTER®, NASDAQ MARKET FORCES®, NASDAQ MARKET VELOCITY®, NASDAQMARKETSITE®, NASDAQ MAX®, NASDAQ MAX MARKET ANALYTIX®, NASDAQ OMX®, NASDAQ OMX GREEN ECONOMYiii Table of ContentsINDEX®, NASDAQ OMX NORDIC®, NASDAQ PRIVATE MARKET®, NASDAQ Q-50 INDEX®, NASDAQ TELECOMMUNICATIONS INDEX®,NASDAQ TOTALVIEW®, NASDAQ TRADER®, NASDAQ TRANSPORTATION INDEX®, NASDAQ US ALL MARKET®, NASDAQ WORKSTATION®,NASDAQ WORKSTATION II®, NASDAQ WORLD®, NASDAQ-100®, NASDAQ-100 EUROPEAN FUND®, NASDAQ-100 EUROPEAN TRACKER®,NASDAQ-100 EUROPEAN TRACKER FUND®, NASDAQ-100 INDEX®, NASDAQ-100 INDEX EUROPEAN TRACKER FUND®, NASDAQ-100 INDEXTRACKING STOCK®, NDX®, NEWS RELEASE EXPRESS®, NFX®, NLX®, NOIS®, NORDIX®, NPM®, OMX®, OMX COPENHAGEN 20®, OMXHELSINKI 25®, OMX STIBOR FUTURE®, OMX STOCKHOLM 30®, OMX TECHNOLOGY®, OMXC25®, OMXH25®, OMXS30®, OMXS3FUT®, ONTHE WIRE®, OTW®, PHILADELPHIA STOCK EXCHANGE®, PHLX®, PHLX XL®, PIXL®, PRECISE TRADE®, PRF®, Q THE NEXT GREATTHING®, QQQ®, QTARGET®, QVIEW®, R3®, RISKWAY®, RISKWRAPPER®, RISKXPOSURE®, RX®, S.A.X.E.S®, SECONDMARKET®,SIGNALXPRESS SX®, SMARTS®, SMARTSONLINE®, STINA®, STRUCTURED LIQUIDITY PROGRAM®, THE NASDAQ STOCK MARKET®, THESTOCK MARKET FOR THE NEXT 100 YEARS®, TOTAL EQUITY SOLUTION®, TRADEGUARD®, TX®, ULL®, ULTRA LOW LATENCY®,ULTRAFEED®, VX PROXY®, WIZER®, XDE®, XO DORSEY WRIGHT & ASSOCIATES®, YLIALLE®, ÖVERUNDER®To the extent a name, logo or design does not appear on the above list, such lack of appearance does not constitute a waiver of any intellectual property rights thatNasdaq has established in its product or service names or logos, or in product configurations or designs, all of which rights are expressly reserved.FINRA® and TRADE REPORTING FACILITY® are registered trademarks of FINRA.All other trademarks and service marks used herein are the property of their respective owners.* * * * * *This Annual Report on Form 10-K includes market share and industry data that we obtained from industry publications and surveys, reports of governmentalagencies and internal company surveys. Industry publications and surveys generally state that the information they contain has been obtained from sources believedto be reliable, but we cannot assure you that this information is accurate or complete. We have not independently verified any of the data from third-party sourcesnor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on the most currently availablemarket data. For market comparison purposes, The Nasdaq Stock Market data in this Annual Report on Form 10-K for IPOs is based on data generated internallyby us, which includes best efforts underwritings; therefore, the data may not be comparable to other publicly-available IPO data. Data in this Annual Report onForm 10-K for new listings of equity securities on The Nasdaq Stock Market is based on data generated internally by us, which includes best efforts underwritings,issuers that switched from other listing venues, closed-end funds and ETPs. Data in this Annual Report on Form 10-K for IPOs and new listings of equity securitieson the Nasdaq Nordic and Nasdaq Baltic exchanges also is based on data generated internally by us. IPOs and new listings data is presented as of period end. Whilewe are not aware of any misstatements regarding industry data presented herein, our estimates involve risks and uncertainties and are subject to change based onvarious factors, including those discussed in “Item 1A. Risk Factors” in this Annual Report on Form 10-K. * * * * * *Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and otherdisclosure obligations. These disclosures will be included on Nasdaq’s website under “Investor Relations.” iv Table of ContentsForward-Looking StatementsThe SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informedinvestment decisions. This Annual Report on Form 10-K contains these types of statements. Words such as “may,” “will,” “could,” “should,” “anticipates,”“envisions,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words or terms of similar substance used in connection with any discussionof future expectations as to industry and regulatory developments or business initiatives and strategies, future operating results or financial performance, andother future developments identify forward-looking statements. These include, among others, statements relating to:•our strategy, growth forecasts and 2018 outlook;•the integration of acquired businesses, including accounting decisions relating thereto;•the scope, nature or impact of acquisitions, divestitures, investments, joint ventures or other transactional activities;•the effective dates for, and expected benefits of, ongoing initiatives, including transactional activities and other strategic, restructuring,technology, de-leveraging and capital return initiatives;•our products, order backlog and services;•the impact of pricing changes;•tax matters;•the cost and availability of liquidity and capital; and•any litigation, or any regulatory or government investigation or action, to which we are or could become a party.Forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following:•our operating results may be lower than expected;•our ability to successfully integrate acquired businesses or divest sold businesses or assets, including the fact that any integration may be moredifficult, time consuming or costly than expected, and we may be unable to realize synergies from business combinations, acquisitions,divestitures or other transactional activities;•loss of significant trading and clearing volumes or values, fees, market share, listed companies, data products customers or other customers;•our ability to keep up with rapid technological advances and adequately address cybersecurity risks;•economic, political and market conditions and fluctuations, including interest rate and foreign currency risk, inherent in U.S. and internationaloperations;•the performance and reliability of our technology and technology of third parties;•any significant error in our operational processes;•our ability to continue to generate cash and manage our indebtedness; and•adverse changes that may occur in the litigation or regulatory areas, or in the securities markets generally. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the uncertainty and any risk related to forward-looking statements that we make. These risk factors are discussed under the caption “Item 1A. Risk Factors, ” in this Annual Report on Form 10-K. You arecautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. You should carefully read this entireAnnual Report on Form 10-K, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidatedfinancial statements and the related notes. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statement,release publicly any revisions to any forward-looking statements or report the occurrence of unanticipated events. For any forward-looking statements containedin any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.1 Table of ContentsPART IItem 1. BusinessOverviewNasdaq, Inc. is a leading provider of trading, clearing, marketplace technology,regulatory, securities listing, information and public and private companyservices. Our global offerings are diverse and include trading and clearingacross multiple asset classes, trade management services, data products,financial indexes, capital formation solutions, corporate solutions, and markettechnology products and services. Our technology powers markets across theglobe, supporting equity derivative trading, clearing and settlement, cash equitytrading, fixed income trading, trading surveillance and many other functions.HistoryNasdaq was founded in 1971 as a wholly-owned subsidiary of FINRA.Beginning in 2000, FINRA restructured and broadened ownership in Nasdaq byselling shares to FINRA members, investment companies and issuers listed onThe Nasdaq Stock Market. In connection with this restructuring, FINRA fullydivested its ownership of Nasdaq in 2006, and The Nasdaq Stock Marketbecame fully operational as an independent registered national securitiesexchange in 2007. In 2006, Nasdaq also reorganized its operations into aholding company structure.In February 2008, Nasdaq and OMX AB combined their businesses. Thistransformational combination resulted in the expansion of our business from aU.S.-based exchange operator to a global exchange company offeringtechnology that powers our own exchanges and markets as well as many othermarketplaces around the world. In connection with this acquisition, we changedour corporate name to The NASDAQ OMX Group, Inc. We operated under thisname until we rebranded our business as Nasdaq, Inc. in 2015.Since 2008, in addition to growing organically, we have executed multipleacquisitions that have expanded our operations globally and increasinglydiversified our product and service offerings. Our most recent significantacquisitions include ISE in 2016 and eVestment in 2017.2017 Strategic ReviewIn 2017, Nasdaq completed a review of its strategy for long-term growth. Weexamined key macroeconomic, regulatory and technology trends, consultedwith our clients about short- and long-term trends in their businesses andassessed the competitive landscape. We identified the following key trends thatwe believe will shape our future opportunities.Key Trends•Marketplace Economy . As technology evolves, market trends suggest thatcommerce will increasingly be transacted electronically. Auctions andmechanisms that allow two-sided price negotiations and require high-quality market oversight will be prevalent. This is already true today across many asset classes inside and outside the financialmarkets. In addition, financial institutions are seeking to digitize manyprocesses to gain efficiencies.•Data Explosion . We have seen, and expect to continue to see, aproliferation of data from many new and non-traditional sources thatimpact our clients’ interactions with the capital markets. We expect thatour clients will seek new analytical capabilities, including machineintelligence, to transform raw data into market insights. This, in turn, isexpected to trigger opportunities for those who create data or harness itspower.•Evolution of Investment Management . New competitive dynamics amongall types of asset managers are increasing their need to differentiate inorder to compete for assets. Alternative investment and financing optionsare becoming more accessible. We expect this evolution to translate togreater technology needs, increasing utilization of quantitative data andanalytics to facilitate more advanced investing styles and a growingdemand for compliance and surveillance solutions.•Banks Embrace Change as They Evolve . Before the credit crisis, globalbanks relied heavily on their own proprietary technology. Since then, theseinstitutions have begun to embrace alternative operational constructs,including technology or outsourcing partnerships, especially in market andregulatory technology.Our Vision, Mission and StrategyAs a result of the strategic review, we restated our vision, mission and strategy,with the full review and approval of our board of directors. Our vision, missionand strategy embrace our strengths to focus on our clients and their evolvingneeds.•Our Vision : Reimagining markets to realize the potential of tomorrow.•Our Mission : We bring together ingenuity, integrity and insights todeliver markets that accelerate economic progress and empower people toachieve their greatest ambitions.•Our Strategy : Under our renewed strategic direction, we plan tomaximize the resources, people and capital allocated to our biggest growthopportunities, particularly in our Market Technology and InformationServices businesses. We also commit to sustaining the special marketplaceplatform businesses that are core to Nasdaq, and to reduce capital andresources in areas that are not as strategic to our clients and do not havesignificant growth potential within Nasdaq.◦Increasing Investment in Businesses Where We See the HighestGrowth Opportunity . We intend to increase investment in areas thatwe believe solve our clients’ biggest challenges and generate growthfor our stockholders. These businesses include: our MarketTechnology segment, including our regulatory technology businesses;the data analytics business2 Table of Contentswithin our Information Services segment; and NPM, within ourCorporate Services segment.We have already begun this effort through our 2017acquisitions of eVestment and Sybenetix, which are part of ourInformation Services and Market Technology segments, respectively.We also are investing further in the Market Technology segmentthrough the Nasdaq Financial Framework, the expansion of ourSMARTS products and customers and our efforts to commercializedisruptive technologies, including blockchain, machine intelligenceand the cloud.◦Maintaining Investment in our Core . We intend to maintaininvestments in our core businesses, notably our foundational tradingand listings businesses and related market data business.◦Optimizing Slower Growth Businesses . We intend to review areas thatare not critical to our core. In these areas, we expect to targetresiliency and efficiency versus growth, and thus free up resources toredirect toward greater opportunities.We recently entered into a definitive agreement to sell the public relations(Public Relations Solutions) and webcasting and webhosting (Digital MediaServices) products and services within our Corporate Solutions business toWest Corporation. The closing of this transaction, which is subject to regulatoryapprovals and customary closing conditions, is projected to occur in the secondquarter of 2018.Any additional future cash flow resulting from the implementation of the TaxCuts and Jobs Act enacted in December 2017 will be considered whenevaluating our capital allocation priorities described above.Products and ServicesWe manage, operate and provide our products and services in four businesssegments: Market Services, Corporate Services, Information Services andMarket Technology.See Note 1, “Organization and Nature of Operations,” and Note 20, “BusinessSegments,” to the consolidated financial statements for additional financialinformation about our reportable segments and geographic data.Market ServicesOur Market Services segment includes our Equity Derivative Trading andClearing, Cash Equity Trading, FICC and Trade Management Servicesbusinesses.Equity Derivative Trading and ClearingWe operate six electronic options exchanges in the U.S.: Nasdaq PHLX, TheNasdaq Options Market, Nasdaq BX Options, Nasdaq ISE, Nasdaq GEMX andNasdaq MRX. These exchanges facilitate the trading of equity options, ETFoptions, index options and foreign currency options. Together, our combinedmarket share represented the largest share of the U.S. market for multiply-listedoptions on equities and ETFs. Our options trading platforms provide trading opportunities to both retail investors,algorithmic trading firms and market makers, who tend to prefer electronictrading, and institutional investors, who typically pursue more complex tradingstrategies and often trade on the floor.In Europe, Nasdaq offers trading in derivatives, such as stock options andfutures, index options and futures and fixed-income options and futures. NasdaqClearing offers clearing services for fixed-income options and futures, stockoptions and futures, index options and futures, and interest rate swaps byserving as the CCP. Nasdaq Clearing also operates a clearing service for theresale and repurchase agreement market.Cash Equity TradingIn the U.S., we operate three cash equity exchanges: The Nasdaq Stock Market,Nasdaq BX and Nasdaq PSX. The Nasdaq Stock Market is the largest singlevenue of liquidity for trading U.S.-listed cash equities.Our U.S. cash equity exchanges offer trading of both Nasdaq-listed and non-Nasdaq-listed securities. Market participants include market makers, broker-dealers, ATSs and registered securities exchanges. In addition, we operate threemarkets for the trading of Canadian-listed securities.In Europe, Nasdaq operates exchanges in Stockholm (Sweden), Copenhagen(Denmark), Helsinki (Finland), and Reykjavik (Iceland). We also operateexchanges in Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania).Collectively, the Nasdaq Nordic and Nasdaq Baltic exchanges offer trading incash equities, depository receipts, warrants, convertibles, rights, fund units andETFs. Our platform allows the exchanges to share the same trading system,which enables efficient cross-border trading and settlement, cross membershipand a single source for Nordic data products. Settlement and registration of cashequity trading takes place in Sweden, Finland, Denmark and Iceland via thelocal central securities depositories. In addition, Nasdaq owns two centralsecurities depositories that provide services in the Baltic countries and Iceland.FICCOur FICC business includes the Nasdaq Fixed Income business, NFX andNasdaq Commodities.The U.S. portion of Nasdaq Fixed Income includes an electronic platform fortrading U.S. Treasuries. The electronic trading platform provides real-timeinstitutional trading of benchmark U.S. Treasury securities. Through thisbusiness, we provide trading access to the U.S. Treasury securities market withan array of trading instruments to meet various investment goals across thefixed income spectrum.The European portion of Nasdaq Fixed Income provides a wide range ofproducts and services, such as listing, trading, and clearing, for fixed incomeproducts in Sweden, Denmark, Finland and Iceland. Nasdaq Stockholm is thelargest bond listing venue in the Nordics, with more than 8,000 listed retail andinstitutional bonds. In addition, Nasdaq Nordic facilitates3 Table of Contentsthe trading and clearing of Nordic fixed income derivatives in a unique marketstructure. Buyers and sellers agree to trades in fixed income derivatives throughbilateral negotiations and then report those trades to Nasdaq Clearing for CCPclearing. Nasdaq Clearing acts as the counterparty to both the buyer and seller.Nasdaq Commodities is the brand name for Nasdaq’s worldwide suite ofcommodity-related products and services. Nasdaq Commodities’ offeringsinclude oil, power, natural gas and carbon emission markets, tanker and drycargo freight, seafood derivatives, iron ore, electricity certificates and clearingservices. These products are listed on two of Nasdaq’s derivatives exchanges.Nasdaq Oslo ASA, which is authorized by the Norwegian Ministry of Financeand supervised by the Norwegian Financial Supervisory Authority, is thecommodity derivatives exchange for European products and freight. All tradeswith Nasdaq Oslo ASA are subject to clearing with Nasdaq Clearing, which is aCCP authorized under EMIR by the SFSA to conduct clearing operations.We also operate NFX, which is a U.S. based designated contract marketauthorized by the CFTC. NFX currently lists cash-settled energy derivativesbased on key energy benchmarks including oil, natural gas and U.S. power. Alltrades with NFX are subject to clearing with OCC.Trade Management ServicesWe provide market participants with a wide variety of alternatives forconnecting to and accessing our markets for a fee. Shifting connectivity fromproprietary networks to third-party networks has significantly reducedtechnology and network costs and increased our systems’ scalability whilemaintaining performance and reliability.Our marketplaces may be accessed via a number of different protocols used forquoting, order entry, trade reporting, DROP functionality and connectivity tovarious data feeds. We also offer the Nasdaq Workstation, a browser-based,front-end interface that allows market participants to view data and enter orders,quotes and trade reports. In addition, we offer a variety of add-on compliancetools to help firms comply with regulatory requirements.We provide co-location services to market participants, whereby firms maylease cabinet space and power to house their own equipment and servers withinour data centers. These participants are charged monthly fees for cabinet space,connectivity and support. Additionally, we offer a number of wirelessconnectivity routes between select data centers using millimeter wave andmicrowave technology. We also earn revenues from annual and monthlyexchange membership and registration fees.Our broker services operations offer technology and customized securitiesadministration solutions to financial participants in the Nordic market. Brokerservices provides services through a registered securities company that isregulated by the SFSA. Services primarily consist of flexible back-office systems, which allow customers to entirely or partly outsource theircompany’s back-office functions.We offer customer and account registration, business registration, clearing andsettlement, corporate action handling for reconciliations and reporting toauthorities. Available services also include direct settlement with the Nordiccentral securities depositories, real-time updating and communication via theSociety for Worldwide Interbank Financial Telecommunication (SWIFT) todeposit banks.Corporate ServicesCorporate SolutionsOur Corporate Solutions business serves corporate clients, including companieslisted on our exchanges and private companies. We help organizations managethe two-way flow of information with their key constituents, including theirboard members and investors, and with clients and the public through our suiteof advanced technology, analytics, and consultative services.We currently provide Corporate Solutions products and services in thefollowing key areas:•Investor Relations . We offer investor relations content, analytics, advisoryservices and communications tools, including investor relationswebcasting, press release services, and websites. Our solutions, includingour Nasdaq IR Insight platform, allow investor relations officers to managetheir investor relations programs using a variety of tools and information tounderstand their investor base, manage meetings and read research,consensus estimates and news while meeting corporate governance anddisclosure requirements.•Board & Leadership. We offer secure collaboration platforms for boards ofdirectors or any team collaborating on confidential documents andinitiatives. Our solutions protect sensitive data and facilitate productivecollaboration, so board members and teams can work faster and moreeffectively.•Public Relations Solutions. We offer solutions to help clients identify,reach, monitor and measure their public relations program. We providetraditional and social media contacts databases, backed by our internalresearch analysts. Our press release distribution network allows clients toreach global audiences cost-effectively. Our suite of technology solutionsand expert analysts help clients monitor key news media for their brand,reputation, products, as well as industry competitors, and measure thesuccess of their communications programs.•Digital Media Services. We offer a platform and services which enable ourcustomers to produce webcasts for a wide range of applications, includinginvestor relations, public relations, marketing and internalcommunications. We also provide webhosting services.In connection with our strategic direction and the decision to reorient thecompany, we have entered into a definitive4 Table of Contentsagreement to sell the public relations (Public Relations Solutions) andwebcasting and webhosting (Digital Media Services) products and serviceswithin our Corporate Solutions business to West Corporation. The closing ofthis transaction, which is subject to regulatory approvals and customary closingconditions, is projected to occur in the second quarter of 2018.Listing ServicesWe operate a variety of listing platforms around the world to provide multipleglobal capital raising solutions for private and public companies. Companieslisted on our markets represent a diverse array of industries including, amongothers, health care, consumer products, telecommunication services,information technology, financial services, industrials and energy. Our mainlisting markets are The Nasdaq Stock Market and the Nasdaq Nordic andNasdaq Baltic exchanges.Companies seeking to list securities on The Nasdaq Stock Market must meetminimum listing requirements, including specified financial and corporategovernance criteria. Once listed, companies must meet continued listingstandards. The Nasdaq Stock Market currently has three listing tiers: TheNasdaq Global Select Market, The Nasdaq Global Market and The NasdaqCapital Market. All three market tiers maintain rigorous listing and corporategovernance standards (both initial and ongoing).As of December 31, 2017, a total of 2,949 companies listed securities on TheNasdaq Stock Market, with 1,413 listings on The Nasdaq Global Select Market,819 on The Nasdaq Global Market and 717 on The Nasdaq Capital Market.We aggressively pursue new listings from companies, including thoseundergoing IPOs as well as companies seeking to switch from alternativeexchanges. In 2017, The Nasdaq Stock Market attracted 268 new listings,including 136 IPOs, 63% of U.S. IPOs in 2017. The new listings werecomprised of the following:Switches from the New York Stock Exchange LLC, or NYSE,and NYSE American LLC, or NYSE American11 IPOs136 Upgrades from OTC43 ETPs and Other Listings78 Total268 The 11 NYSE- or NYSE American-listed companies that switched to TheNasdaq Stock Market, represented approximately $217.8 billion in marketcapitalization. Notable switches included PepsiCo, Inc., Principal FinancialGroup, Inc., and Workday, Inc.We also offer listings on the exchanges that comprise Nasdaq Nordic andNasdaq Baltic. For smaller companies and growth companies, we offer accessto the financial markets through the Nasdaq First North alternativemarketplaces. As of December 31, 2017, a total of 984 companies listedsecurities on our Nordic and Baltic exchanges and Nasdaq First North.Our European listing customers include companies, funds and governments.Customers issue securities in the form of cash equities, depository receipts, warrants, ETPs, convertibles, rights, options,bonds or fixed-income related products. In 2017, a total of 108 new companieslisted on our Nordic and Baltic exchanges and Nasdaq First North. In addition,10 companies upgraded their listings from Nasdaq First North to the Nordic andBaltic exchanges.Our Listing Services business also includes NPM, which provides liquiditysolutions for private companies. NPM’s platform helps employees, investors,companies, funds and institutions execute transactions, whether for privatecompanies, private investment funds, or other private asset classes. In addition,NPM now offers Alternatives, which addresses the challenges of liquidity inalternative investments funds.Information ServicesOur Information Services segment includes our Data Products and our IndexLicensing and Services businesses.Data ProductsOur Data Products business sells and distributes historical and real-time quoteand trade information to the sell-side, the buy-side, retail online brokers,proprietary trading shops, other venues, internet portals and data distributors.Our data products enhance transparency of market activity within ourexchanges and provide critical information to professional and non-professionalinvestors globally.We collect, process and create information and earn revenues as a distributor ofour own, as well as select, third-party content. We provide varying levels ofquote and trade information to our customers who in turn provide subscriptionsfor this information. Our systems enable distributors to gain access to ourmarket depth, index values, mutual fund valuation, order imbalances, marketsentiment and other analytical data.We distribute this proprietary market information to both market participantsand non-participants through a number of proprietary products, includingNasdaq TotalView, our flagship market depth quote product. TotalView showssubscribers quotes, orders and total anonymous interest at every displayed pricelevel in The Nasdaq Stock Market for Nasdaq-listed securities and critical datafor the opening, closing, halt and IPO crosses. We also offer TotalViewproducts for our Nasdaq BX, Nasdaq PSX, Nasdaq Fixed Income and otherNordic markets.We operate several other proprietary services and data products to providemarket information, including Nasdaq Basic, a low cost alternative to theindustry Level 1 feed, Ultrafeed, a normalized high speed, and consolidateddata feed offering. We also provide a plethora of other data, including datarelating to our 6 U.S. options exchanges, Nordic and U.S. futures, Nordiccommodities, U.S. Treasuries, global indexes and global mutual funds.Our Data Products business also includes revenues from U.S. tape plans. Theplan administrators sell quotation and last sale information for all transactionsin Nasdaq-listed securities, whether traded on The Nasdaq Stock Market orother exchanges, to market participants and to data distributors, who5 Table of Contentsthen provide the information to subscribers. After deducting costs, the planadministrators distribute the tape revenues to the respective plan participantsbased on a formula required by Regulation NMS that takes into account bothtrading and quoting activity.The Nasdaq Nordic and Nasdaq Baltic exchanges, as well as NasdaqCommodities, also offer data products and services. These data products andservices provide critical market transparency to professional and non-professional investors who participate in European marketplaces and, at thesame time, give investors greater insight into these markets.Much like the U.S. products, European data products and services are based ontrading information from the Nasdaq Nordic and Nasdaq Baltic exchanges, aswell as Nasdaq Commodities, for the following classes of assets: cash equities,bonds, derivatives and commodities. We provide varying levels of quote andtrade information to market participants and to data distributors, who in turnprovide subscriptions for this information. Significant European data productsinclude Nordic Equity TotalView, Nordic Derivative TotalView, and NordicFixed Income TotalView, Level 2, Analytics and Fixings.We also provide index data products based on Nasdaq indexes. Index dataproducts include our Global Index Data Service, which delivers real-time indexvalues throughout the trading day, and Global Index Watch/Global Index FileDelivery Service, which delivers weightings and components data, corporateactions and a breadth of additional data.In 2017, Nasdaq acquired eVestment, a leading content and analytics providerused by asset managers, investment consultants and asset owners to helpfacilitate institutional investment decisions. eVestment provides a flexible suiteof cloud-based solutions to help the institutional investing community identifyand capitalize on global investment trends and select and monitor investmentmanagers. eVestment’s products also enable asset managers to market theirfunds worldwide.Index Licensing and ServicesOur Index Licensing and Services business is a leading index provider thatdevelops and licenses Nasdaq branded indexes, associated derivatives andfinancial products. We also provide custom calculation services for third-partyclients. License fees for our trademark licenses vary by product based on apercentage of underlying assets, dollar value of a product issuance, number ofproducts or number of contracts traded. We also license cash-settled options,futures and options on futures on our indexes.As of December 31, 2017, we had 324 ETPs licensed to Nasdaq’s indexeswhich had $167 billion of assets under management. Our flagship index, theNasdaq-100 Index, includes the top 100 non-financial securities listed on TheNasdaq Stock Market.We also operate the Nasdaq Global Index Family, which includes more than40,000 indexes. The family consists of global securities broken down by market segment, region, country, size andsector. The Nasdaq Global Index Family covers 45 countries and approximately9,000 securities.DWA, a market leader in data analytics, passive indexing and smart betastrategies, provides model-based strategies and analysis to support the financialadvisor community, and strengthens Nasdaq’s position as a leading smart betaindex provider in the U.S. As of December 31, 2017, there are $70 billion inassets under management in ETPs that track Nasdaq smart beta indexes.Market TechnologyPowering more than 90 marketplaces in 50 countries, our Market Technologybusiness is a leading global technology solutions provider and partner toexchanges, clearing organizations, central securities depositories, regulators,banks, brokers and corporate businesses. Our Market Technology business isthe sales channel for our complete global offering to other marketplaces. Ourmarketplace solutions can handle a wide array of assets, including cash equities,equity derivatives, currencies, various interest-bearing securities, commoditiesand energy products.During 2017, we continued to invest in the Nasdaq Financial Framework, whichis our market technology modular architecture that will provide next generationcapital market capabilities, including the integration of blockchain technologyacross the issuance and settlement of securities, as well as cloud-enabledtrading and clearing.Nasdaq’s market technology is utilized by, among others, ASX Limited, Bolsade Valores de Colombia, Borsa İstanbul A.Ş., Borse Dubai Limited, BursaMalaysia Berhad, Egyptian Exchange, Hong Kong Exchanges and ClearingLimited, Japan Exchange Group, Inc., NEX Group plc, SBI Japannext Co.,Ltd., Singapore Exchange Ltd., SIX Swiss Exchange Ltd and TokyoCommodity Exchange, Inc.A central part of many projects is facility management and systems integration.Through our integration services, we can assume responsibility for projectsinvolving migration to a new system and the establishment of entirely newmarketplaces. We also offer operation and support for the applications, systemsplatforms, networks and other components included in a turn-key informationtechnology solution, as well as advisory services.Our Risk & Surveillance solutions include: SMARTS, which is a managedservice designed for brokers and other market participants to assist them incomplying with market rules, regulations and internal market surveillancepolicies; and TradeGuard, which is a suite of products that offer a real-time,multi-tiered risk solution that integrates pre-, at- and on-trade risk management,including margining. In 2017, we acquired Sybenetix, a leading surveillanceprovider that combines behavioral analytics and cognitive computing withfinancial markets expertise. We expect the addition of Sybenetix to our Risk &Surveillance suite of solutions to allow us to bring6 Table of Contentsdeeper technology savviness and expertise to buy-side compliance officersacross the global capital markets.Finally, through BWise, we offer enterprise governance, risk management andcompliance software and services to help companies track, measure andmanage key organizational risks.TechnologyTechnology plays a key role in ensuring the growth, reliability and regulation offinancial markets. We have established a technology risk program to considerthe resiliency of critical systems, including risks associated with cybersecurity.This program is focused on (i) identifying areas for improvement in systemsand (ii) implementing changes and upgrades to technology and processes tominimize future risk. We have continued our focus on improving the security ofour technology with an emphasis on employee awareness through training,targeted phishing campaigns, and new tool deployment for our securitiesoperations team. See “Item 1A. Risk Factors,” in this Annual Report on Form10-K for further discussion.Core Technology. The Nasdaq Financial Framework is Nasdaq’s approach todelivering end-to-end solutions for market infrastructure operators, buy-sidefirms, sell-side firms and other non-financial markets. The framework consistsof a single operational core platform that ties together Nasdaq’s portfolio offunctionality across the trade lifecycle, in an open framework wherebyexchanges, clearinghouses, CSDs and other entities can easily integrateNasdaq’s business applications with each other, as well as other third-partysolutions. In addition to being able to integrate a broad range of businessfunctions, the Nasdaq Financial Framework enables end users to leveragerecent technology developments, such as blockchain and machine learning.Data Centers. Nasdaq utilizes data center facilities in key global regions tosupport our markets, technology services, disaster recovery capabilities andoperations centers. In 2017, we continued to migrate systems to our facility inChicago, as well as added and consolidated locations as a result of acquisitionsand product enhancements.Technology Initiatives . During 2017, our blockchain initiative began movingfrom technology validation to commercialization. Blockchain capabilities arenow incorporated in the Nasdaq Financial Framework, and a number ofapplications leveraging blockchain (e.g., for voting, issuance and settlement)are available. Market Technology also entered into certain client agreements forblockchain-based solutions, including with the SIX Swiss Exchange Ltd,NYIAX, Inc. and Strate (Pty) Ltd, the South African CSD.CompetitionMarket ServicesWe face intense competition in North America and Europe in businesses thatcomprise our Market Services segment. We seek to provide market participantswith greater functionality, trading system stability, speed of execution, highlevels of customer service, and efficient pricing. In both North America and Europe, our competitors include other exchange operators, operators ofnon-exchange (less-heavily regulated) trading systems and banks andbrokerages that operate their own internal trading pools and platforms.Registered exchanges that compete with our options markets in the U.S. includeexchanges operated by: Cboe Global Markets, Inc., or CBOE; MiamiInternational Holdings, Inc., or Miami; and Intercontinental Exchange, Inc., orICE. Registered exchanges competing with our cash equities markets in theU.S. include exchanges operated by CBOE and ICE. In addition to competitionfrom these exchanges in equities, we face competition from ATSs and otherless-heavily regulated broker-owned systems, some of which are also known as“dark pools,” and from other types of OTC trading.Registered exchanges that compete with our cash equities markets in Europeinclude exchanges operated by: CBOE; Euronext N.V.; Deutsche Börse A.G.;and London Stock Exchange Group plc, or LSE. We also intensely competewith MTFs, such as that operated by Turquoise Global Holdings Limited. Ourcompetitors in the trading and clearing of options and futures on Europeanequities include: the Eurex Group companies, or Eurex; ICE Futures Europe;and the MTF operated by Turquoise Global Holdings Limited. In addition tocompetition from these exchanges and MTFs in equities, we face competitionfrom other broker-owned systems, some of which are also known as SystematicInternalizers, and from other types of OTC trading. Competition amongexchanges for trading European equity derivatives tends to occur where there iscompetition in the trading of the underlying equities. In addition to exchange-based competition, we face competition from OTC derivative markets.The implementation of MiFID II and MiFIR over the next several years isexpected to lead to further competitive pressure on our European tradingbusiness. MTFs are already attracting a significant share of electronicallymatched volume. With the regulatory environment likely to become morefavorable to alternative trading venues, we expect such venues to competeaggressively for the trading of equity securities listed on our Nordic exchanges.Electronic trading systems pursuing block business will also remain active inEurope. We also expect trading on Systematic Internalizers to increasemarkedly as volume migrates from other types of trading venues. In respondingto current and potential competition, we constantly review our pricing andproduct offerings.Registered exchanges that compete with our cash equities markets in Canadainclude: Aequitas NEO Exchange; Canadian Securities Exchange; TorontoStock Exchange, or TSX; TSX Venture Exchange; and TSX Alpha Exchange.We also compete with ATSs, such as the Omega ATS. Competition is intense,and we also face competition from markets in the U.S.Our FICC business also operates in an intensely competitive environment. Ourtrading platform for benchmark U.S. treasuries faces competition from bothlong-established competitors, such as Brokertec, and newly emerging electronicand voice brokerages, and the operating environment remains extremelychallenging. Our European fixed income products7 Table of Contentsand services are subject to relentless competitive pressure from OTC dealers aswell as exchanges. Our suite of commodity-related products and services is inmany cases designed to challenge the more established players.Our Trade Management Services business competes with other exchangeoperators, extranet providers, and data center providers.Corporate ServicesIn our Corporate Solutions business, competition is varied and can befragmented. For our Investor Relations services business, there are manyregional competitors and relatively few global providers. Other exchangeoperators are partnering with firms that have capabilities in this area andseeking to acquire relevant assets in order to provide investor relations servicesto customers alongside listing services. The competitive landscape for ourBoard & Leadership business varies by customer sector and geography. Mostparticipants offer software-as-a-service solutions that are supported by a datacenter strategy. Some firms offer specialized services that focus on a singleniche sector. The larger players often offer additional services. Customersfrequently seek single-source providers that are able to address a broad range ofneeds within a single platform. The competitive landscape for our PublicRelations Solutions business includes large providers of traditional wireservices, full-service providers, which offer wire distribution along withaudience targeting, monitoring and analytics services, and a large number ofregional and niche providers. In our Digital Media Services business,competition is fragmented and includes firms that address enterprise buyers,offering them either managed or self-service capabilities.Our Listing Services business in both the U.S. and Europe provides a means offacilitating capital formation through public capital markets. There arecompeting ways of raising capital, and we seek to demonstrate the benefits oflisting shares on an exchange. Our primary competitor for larger company stockshare listings in the U.S. is NYSE. The Nasdaq Stock Market also competeswith NYSE American for listing of shares of smaller companies. Bats BZXExchange, Inc. competes for ETP listings. The Nasdaq Stock Market competeswith local and international markets located outside the U.S. for listings ofequity securities of both U.S. and non-U.S. companies that choose to list (ordual-list) outside of their home country. For example, The Nasdaq StockMarket competes for listings with exchanges in Europe and Asia, such as LSEand The Stock Exchange of Hong Kong Limited.The Listings Services business in Europe is characterized by a large number ofexchanges competing for new or secondary listings. Each country has one ormore national exchanges, which are often the first choice of companies in eachrespective country. For those considering an alternative, competing Europeanexchanges that frequently attract many listings from outside their respectivehome countries include LSE, Euronext N.V. and Deutsche Börse A.G. Inaddition to the larger exchanges, companies seeking capital or liquidity frompublic capital markets are able to raise capital without a regulated market listing and can consider trading their shares on smaller markets andquoting facilities.Information ServicesOur Data Products business in the U.S. includes both proprietary andconsolidated data products. Proprietary data products are made up exclusivelyof data derived from each exchange’s systems. Consolidated data products aredistributed by SEC-mandated consolidators (one for Nasdaq-listed stocks andanother for NYSE and other-listed stocks) that share the revenue among theexchanges that contribute data. In Europe, all data products are proprietary asthere is no official data consolidator. Competition in the data business is intenseand is influenced by rapidly changing technology and the creation of newproduct and service offerings.The sale of our proprietary data products in both the U.S. and Europe is undercompetitive threat from alternative exchanges and trading venues that offersimilar products. Our data business competes with other exchanges and thirdparty vendors to provide information to market participants. Examples of ourcompetitors in proprietary data products are ICE, CBOE, TSX, S&P Global Inc.and Dow Jones & Company.The consolidated data business is under competitive pressure from othersecurities exchanges that trade Nasdaq-listed securities. In addition, TheNasdaq Stock Market similarly competes for the tape fees from the sale ofinformation on securities listed on other markets.Our Index Licensing and Services business faces competition from providers ofvarious competing financial indexes. For example, there are a number ofindexes that aim to track the technology sector and thereby compete with theNasdaq-100 Index and the Nasdaq Composite Index. We face competition frominvestment banks, dedicated index providers, markets and other productdevelopers.Market TechnologyThe traditional model, where each exchange or exchange-related businessdeveloped its own technology internally, sometimes aided by consultants, haschanged, as many operators have recognized the cost-savings made possible bybuying technology from third parties. As a result, two types of competitors haveemerged in our Market Technology segment: exchange operators andtechnology providers unaffiliated with exchanges. These organizations makeavailable a range of off-the-shelf technology, including trading, clearing,market surveillance, settlement, depository and information dissemination, andoffer customization and operation expertise.There is a wide range of providers that compete with us in surveillance, as wellas governance, risk and compliance solutions. In surveillance, standardizationof products and budget pressures drive customers to focus on pricing. Ingovernance, risk and compliance, our products must compete with solutionsthat are often part of larger suites, such as those related to informationtechnology management or general business management.8 Table of ContentsMarket conditions in this segment are evolving rapidly, which makescontinuous investment and innovation a necessity.Intellectual PropertyWe believe that our intellectual property assets are important for maintainingthe competitive differentiation of our products, systems, software and services,enhancing our ability to access technology of third parties and maximizing ourreturn on research and development investments.To support our business objectives and benefit from our investments in researchand development, we actively create and maintain a wide array of intellectualproperty assets, including patents and patent applications related to ourinnovations, products and services; trademarks related to our brands, productsand services; copyrights in software and creative content; trade secrets; andthrough other intellectual property rights, licenses of various kinds andcontractual provisions. We enter into confidentiality and invention assignmentagreements with our employees and contractors, and utilize non-disclosureagreements with third parties with whom we conduct business in order to secureand protect our proprietary rights and to limit access to, and disclosure of, ourproprietary information.We own, or have licensed, rights to trade names, trademarks, domain namesand service marks that we use in conjunction with our operations and services.We have registered many of our most important trademarks in the U.S. and inforeign countries. For example, our primary “Nasdaq” mark is a registeredtrademark that we actively seek to protect in the U.S. and in over 50 othercountries worldwide.Over time, we have accumulated a robust portfolio of issued patents in the U.S.and in many other jurisdictions across the world. We currently hold rights topatents relating to certain aspects of our products, systems, software andservices, but we primarily rely on the innovative skills, technical competenceand marketing abilities of our personnel. No single patent is in itself core to theoperations of Nasdaq or any of its principal business areas.Corporate Venture PracticeIn 2017, Nasdaq established a corporate venture practice to invest primarily infinancial technology companies. Nasdaq envisions that investments madethrough the venture practice will further our organic research and developmentefforts, and accelerate our path to commercial viability, in the same wayprevious investments have supported our blockchain and machine intelligenceinitiatives. Nasdaq expects that the capital invested will be modest and will nothave a material impact on our consolidated financial statements or existingcapital return or deployment priorities.RegulationWe are subject to extensive regulation in the U.S., Canada and Europe. U.S. RegulationU.S. federal securities laws establish a system of cooperative regulation ofsecurities markets, market participants and listed companies. SROs conduct theday-to-day administration and regulation of the nation’s securities marketsunder the close supervision of, and subject to extensive regulation, oversightand enforcement by, the SEC. SROs, such as national securities exchanges, areregistered with the SEC.This regulatory framework applies to our U.S. business in the following ways:•regulation of our registered national securities exchanges; and•regulation of our U.S. broker-dealer subsidiaries.The rules and regulations that apply to our business are focused primarily onsafeguarding the integrity of the securities markets and of market participantsand investors generally. Accordingly, our board of directors, officers, andemployees must give due regard to the preservation of the independence of theself-regulatory function of each of our SROs and to their obligations toinvestors and the general public, and may not take any actions that wouldinterfere with the effectuation of decisions by the boards of directors of any ofour SROs relating to their regulatory functions, or that would interfere with theability of any of our SROs to carry out their responsibilities under the ExchangeAct. Although the rules and regulations that apply to our business are notfocused on the protection of our stockholders, we believe that regulationimproves the quality of exchanges and, therefore, our company. U.S. federalsecurities laws and the rules that govern our operations are subject to frequentchange.National Securities Exchanges. SROs in the securities industry are an essentialcomponent of the regulatory scheme of the Exchange Act for providing fair andorderly markets and protecting investors. The Exchange Act and the rulesthereunder, as well as each SRO’s own rules, impose on the SROs manyregulatory and operational responsibilities, including the day-to-dayresponsibilities for market and broker-dealer oversight. Before it may permitthe registration of a national securities exchange as an SRO, the SEC mustdetermine, among other things, that the exchange has a set of rules that isconsistent with the requirements of the Exchange Act. Moreover, an SRO isresponsible for enforcing compliance by its members, and persons associatedwith its members, with the provisions of the Exchange Act, the rules andregulations thereunder, and the rules of the SRO, including rules andregulations governing the business conduct of its members.Nasdaq currently operates three cash equity and six options markets in the U.S.We operate The Nasdaq Stock Market and The Nasdaq Options Marketpursuant to The Nasdaq Stock Market’s SRO license; Nasdaq BX and NasdaqBX Options pursuant to Nasdaq BX’s SRO license; Nasdaq PSX and NasdaqPHLX pursuant to Nasdaq PHLX’s SRO license; and Nasdaq ISE, NasdaqGEMX and Nasdaq MRX, each under their own SRO license. As SROs, eachentity has separate rules pertaining9 Table of Contentsto its broker-dealer members and listed companies. Broker-dealers that chooseto become members of our exchanges are subject to the rules of thoseexchanges.All of our U.S. national securities exchanges are subject to SEC oversight, asprescribed by the Exchange Act, including periodic and special examinationsby the SEC. Our exchanges also are potentially subject to regulatory or legalaction by the SEC or other interested parties at any time in connection withalleged regulatory violations. We also are subject to Section 17 of the ExchangeAct, which imposes record-keeping requirements, including the requirement tomake records available to the SEC for examination. We have been subject to anumber of routine reviews and inspections by the SEC or external auditors inthe ordinary course, and we have been and may in the future be subject to SECenforcement proceedings. To the extent such actions or reviews and inspectionsresult in regulatory or other changes, we may be required to modify the mannerin which we conduct our business, which may adversely affect our business.Section 19 of the Exchange Act provides that our exchanges must submit to theSEC proposed changes to any of the SROs’ rules, practices and procedures,including revisions to provisions of our certificate of incorporation and by-lawsthat constitute SRO rules. The SEC will typically publish such proposedchanges for public comment, following which the SEC may approve ordisapprove the proposal, as it deems appropriate. SEC approval requires afinding by the SEC that the proposal is consistent with the requirements of theExchange Act and the rules and regulations thereunder. Pursuant to therequirements of the Exchange Act, our exchanges must file with the SEC,among other things, all proposals to change their pricing structure.Pursuant to regulatory services agreements between FINRA and our SROs,FINRA provides certain regulatory services to our markets, including theregulation of trading activity and surveillance and investigative functions.Nevertheless, we have a direct regulatory role in conducting certain real-timemarket monitoring, certain equity surveillance not involving cross-marketactivity, most options surveillance, most rulemaking and some membershipfunctions through our MarketWatch department. We refer suspicious tradingbehavior discovered by our regulatory staff to FINRA for further investigation.Our SROs retain ultimate regulatory responsibility for all regulatory activitiesperformed under regulatory agreements by FINRA, and for fulfilling allregulatory obligations for which FINRA does not have responsibility under theregulatory services agreements.In addition to its other SRO responsibilities, The Nasdaq Stock Market, as alisting market, also is responsible for overseeing each listed company’scompliance with The Nasdaq Stock Market’s financial and corporategovernance standards. Our listing qualifications department evaluatesapplications submitted by issuers interested in listing their securities on TheNasdaq Stock Market to determine whether the quantitative and qualitativelisting standards have been satisfied. Once securities are listed, the listingqualifications department monitors each issuer’s on-going compliance with The Nasdaq Stock Market’s continuedlisting standards.Broker-dealer regulation. Nasdaq’s broker-dealer subsidiaries are subject toregulation by the SEC, the SROs and the various state securities regulators.Nasdaq Execution Services, LLC, or Nasdaq Execution Services, currentlyoperates as our routing broker for sending orders from Nasdaq’s U.S. cashequity and options exchanges to other venues for execution. Execution AccessLLC, or Execution Access, operates as the broker-dealer for our fixed incomebusiness, including Nasdaq Fixed Income’s registered ATS for U.S. Treasurysecurities. NPM Securities, LLC operates an ATS involving primary andsecondary transactions in unregistered securities (i.e., securities not listed on aregistered securities exchange and not registered under Section 12 of theExchange Act), including acting as the buyer’s and seller’s agent to facilitateprivate placement and mutual funds’ (including closed-end and interval funds’)transactions on the ATS. SMTX, LLC, or SMTX, also operates as a broker-dealer for NPM and acts as intermediary in connection with private non-capitalraising transactions. Finally, Nasdaq Capital Markets Advisory LLC, or NasdaqCapital Markets Advisory, acts as a third-party advisor to privately-held orpublicly-traded companies during IPOs and various other offerings.Nasdaq Execution Services is registered as a broker-dealer with the SEC and inall 50 states, the District of Columbia and Puerto Rico. It is also a member ofFINRA and most of the registered national securities exchanges in the U.S.Execution Access is registered as a broker-dealer with the SEC and in 22 statesand the U.S. Virgin Islands based on business requirements. Additionally,Execution Access is a FINRA member organization. Execution Access operatesan SEC registered ATS, which is part of Nasdaq Fixed Income, to trade in U.S.Treasury securities. Execution Access is an introducing broker for tradesmatched on this ATS. The trades, once matched, are submitted to our fullydisclosed clearing broker for clearance and settlement.NPM Securities is registered as a broker-dealer with the SEC and in all 50states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.Additionally, NPM Securities is a FINRA member organization. NPMSecurities does not hold funds or securities. Funds may be delivered by thebuyer to the issuer directly or wired into an escrow account, depending on therequirements of the offering. The issuer or its transfer agent (or other corporaterecordkeeper) will provide the buyer with a stock certificate in either physicalor book entry form.SMTX is registered as a broker-dealer with the SEC and in 50 states and theDistrict of Columbia based on business requirements. Additionally, SMTX is aFINRA member organization. NPM provides the technological tools andwebsite hosting on a platform that issuers may use for administrative purposes,document execution, handling and storage, and to facilitate communicationswith participants of tender offers and merger and acquisition transactions.SMTX’s role in these transactions is to act as depository agent to receive andpromptly transmit tenders of securities and transaction10 Table of Contentsclosing funds, and a paying agent to wire funds to participants at the closing.Nasdaq Capital Markets Advisory is registered as a broker-dealer with the SECand the State of New York based on business requirements. Additionally,Nasdaq Capital Markets Advisory is a FINRA member organization. NasdaqCapital Markets Advisory acts as a third-party advisor to privately-held orpublicly-traded companies during their initial public offerings, follow-on equityofferings, at-the-market equity offerings, private placement offerings andRegulation A equity offerings. Nasdaq Capital Markets Advisory’s role islimited to providing a company, or an investment bank on behalf of a company,with reports, profiles and other pertinent advisory information. Nasdaq CapitalMarkets Advisory does not act as an underwriter, syndicate group member orplacement agent for any company, select underwriters or syndicate groupmembers, hold funds or securities, accept investor indications of interest, solicitinvestors or decide which investors receive securities on behalf of a company.The SEC, FINRA and the exchanges adopt rules and examine broker-dealersand require strict compliance with their rules and regulations. The SEC, SROsand state securities commissions may conduct administrative proceedingswhich can result in censures, fines, the issuance of cease-and-desist orders orthe suspension or expulsion of a broker-dealer, its officers or employees. TheSEC and state regulators may also institute proceedings against broker-dealersseeking an injunction or other sanction. The SEC and SRO rules cover manyaspects of a broker-dealer’s business, including capital structure andwithdrawals, sales methods, trade practices among broker-dealers, use andsafekeeping of customers’ funds and securities, record-keeping, the financing ofcustomers’ purchases, broker-dealer and employee registration and the conductof directors, officers and employees. All broker-dealers have an SRO that isassigned by the SEC as the broker-dealer’s DEA. The DEA is responsible forexamining a broker-dealer for compliance with the SEC’s financialresponsibility rules. FINRA is the current DEA for Nasdaq Execution Services,Execution Access, NPM Securities, SMTX and Nasdaq Capital MarketsAdvisory.As registered broker-dealers, Nasdaq Execution Services, Execution Access,NPM Securities, SMTX and Nasdaq Capital Markets Advisory are subject toregulatory requirements intended to ensure their general financial soundnessand liquidity, which require that they comply with certain minimum capitalrequirements. The SEC and FINRA impose rules that require notification whennet capital falls below certain predefined criteria, dictate the ratio of debt toequity in the regulatory capital composition of a broker-dealer and constrain theability of a broker-dealer to expand its business under certain circumstances.Additionally, the SEC’s Uniform Net Capital Rule and FINRA rules imposecertain requirements that may have the effect of prohibiting a broker-dealerfrom distributing or withdrawing capital and requiring prior notice to the SECand FINRA for certain withdrawals of capital.As of December 31, 2017, Nasdaq Execution Services, Execution Access, NPMSecurities, SMTX and Nasdaq Capital Markets Advisory were in compliance with all of the applicable capitalrequirements.Regulatory contractual relationships with FINRA . Our SROs have signed aseries of regulatory service agreements covering the services FINRA providesto the respective SROs. Under these agreements, FINRA personnel act as ouragents in performing the regulatory functions outlined above, and FINRA billsus a fee for these services. These agreements have enabled us to reduce ourheadcount while ensuring that the markets for which we are responsible areproperly regulated. However, our SROs retain ultimate regulatory responsibilityfor all regulatory activities performed under these agreements by FINRA.Exchange Act Rule 17d-2 permits SROs to enter into agreements, commonlycalled Rule 17d-2 agreements, approved by the SEC with respect toenforcement of common rules relating to common members. Our SROs haveentered into several such agreements under which FINRA assumes regulatoryresponsibility for specifics covered by the agreement, including:•agreements with FINRA covering the enforcement of common rules, themajority of which relate to the regulation of our SROs and their members;•joint industry agreements with FINRA covering responsibility forenforcement of insider trading rules;•joint industry agreement with FINRA covering enforcement of rulesrelated to cash equity sales practices and certain other non-market relatedrules; and•joint industry agreement covering enforcement of rules related to optionssales practices.Regulation NMS and Options Intermarket Linkage Plan. We are subject toRegulation NMS for our cash equity markets, and our options markets havejoined the Options Intermarket Linkage Plan. These are designed to facilitatethe routing of orders among exchanges to create a national market system asmandated by the Exchange Act. One of the principal purposes of a nationalmarket system is to assure that brokers may execute investors’ orders at the bestmarket price. Both Regulation NMS and the Options Intermarket Linkage Planrequire that exchanges avoid trade-throughs, locking or crossing of markets andprovide market participants with electronic access to the best prices among themarkets for the applicable cash equity or options order.In addition, Regulation NMS requires that every national securities exchangeon which an NMS stock is traded and every national securities association actjointly pursuant to one or more national market system plans to disseminateconsolidated information, including a national best bid and national best offer,on quotations for transactions in NMS stocks, and that such plan or plansprovide for the dissemination of all consolidated information for an individualNMS stock through a single plan processor.The UTP Plan was filed with and approved by the SEC as a national marketsystem plan in accordance with the Exchange Act and Regulation NMS toprovide for the collection,11 Table of Contentsconsolidation and dissemination of such information for Nasdaq-listedsecurities. The Nasdaq Stock Market serves as the processor for the UTP Planpursuant to a contract that was extended for a five-year term beginning inOctober 2015. The Nasdaq Stock Market also serves as the administrator for theUTP Plan. As the processor, The Nasdaq Stock Market performs and dischargesregulatory functions and responsibilities that are necessary for the members ofthe UTP Plan to discharge the regulatory functions related to the operation of anational market system that have been delegated to them under the ExchangeAct and Regulation NMS. To fulfill its obligations as the processor, TheNasdaq Stock Market has designed, implemented, maintained, and operated adata processing and communications system, hardware, and software andcommunications infrastructure to provide processing for the UTP Plan. As theadministrator, The Nasdaq Stock Market manages the distribution of marketdata, the collection of the resulting market data revenue, and the disseminationof that revenue to plan members.Regulation SCI. Regulation SCI is a set of rules designed to strengthen thetechnology infrastructure of the U.S. securities markets. Regulation SCI appliesto national securities exchanges, operators of certain ATSs, market datainformation providers and clearing agencies, subjecting these entities toextensive new compliance obligations, with the goals of reducing theoccurrence of technical issues that disrupt the securities markets and improvingrecovery time when disruptions occur. We implemented an inter-disciplinaryprogram to ensure compliance with Regulation SCI. New Regulation SCIpolicies and procedures were created, internal policies and procedures wereupdated, and an information technology governance program was rolled out toensure compliance.Regulation of Registered Investment Advisor Subsidiary. Our subsidiary DWAis an investment advisor registered with the SEC under the Investment AdvisorsAct of 1940. In this capacity, DWA is subject to oversight and inspections bythe SEC. Among other things, registered investment advisors like DWA mustcomply with certain disclosure obligations, advertising and fee restrictions andrequirements relating to client suitability and custody of funds and securities.Registered investment advisors are also subject to anti-fraud provisions underboth federal and state law.CFTC Regulation. We also operate NFX, a designated contract market underthe Commodity Exchange Act that is subject to regulatory oversight by theCFTC, an independent agency with the mandate to regulate commodity futuresand options markets in the U.S. The National Futures Association providesregulatory services to NFX pursuant to a regulatory services agreement.As a designated contract market, NFX is required to comply on an ongoingbasis with 23 Core Principles set forth in Section 5(d) of the CommodityExchange Act and with Part 38 of the CFTC’s regulations. NFX is also subjectto the requirements of Part 40 of the CFTC’s regulations with respect to theadoption of new rules or rule amendments and the listing of new products. NFX is subject to CFTC rule enforcement reviews conducted by the CFTC’sDivision of Market Oversight. Rule enforcement reviews may examine adesignated contract market’s audit trail, trade practice surveillance, disciplinaryand dispute resolution programs for compliance with the relevant CorePrinciples.The Dodd-Frank Wall Street Reform and Consumer Protection Act also hasresulted in increased CFTC regulation of our use of certain regulatedderivatives products, as well as the operations of some of our subsidiariesoutside the U.S. and their customers.Canadian RegulationRegulation of Nasdaq Canada and its three markets is performed by theCanadian Securities Administrators, an umbrella organization of Canada’sprovincial and territorial securities regulators. Operating in Ontario, NasdaqCanada’s lead regulator is the Ontario Securities Commission. As an approvedATS, Nasdaq Canada is subject to the Marketplace Rules (National Instrument21-101 and National Instrument 23-101), which include requirements for fairaccess, transparency of operations, systems and confidentiality of tradinginformation. As an ATS, Nasdaq Canada is also a member of the InvestmentIndustry Regulatory Organization of Canada and must comply with its dealermember rules. In December 2017, Nasdaq Canada received approval from theOntario Securities Commission to become recognized as an exchange under theSecurities Act of Ontario effective on March 1, 2018.European RegulationRegulation of our markets in the European Union and European Economic Areafocuses on issues relating to financial services, listing and trading of securities,clearing and market abuse. In mid-2012, EMIR, a regulation relating to CCPservices and OTC derivatives transactions, was adopted. As a consequence ofEMIR, Nasdaq Clearing, like other European CCPs, applied to reauthorize itsCCP operations. Nasdaq Clearing was the first European CCP to be authorizedas EMIR-compliant when the SFSA approved its application as a CCP underEMIR in 2014.In July 2016, the European Union’s Market Abuse Regulation, which isintended to prevent market abuse, entered into force. MiFID II and MiFIRentered into force in January 2018 and primarily affect our European tradingbusinesses. Many of the provisions of MiFID II and MiFIR are implementedthrough technical standards drafted by the European Securities and MarketsAuthority and approved by the European Commission. In addition, in 2016, theEuropean Union adopted legislation on governance and control of theproduction and use of benchmark indexes. The Benchmark Regulation appliesin the European Union from early 2018. However, due to transitional clauses inthe Benchmark Regulation, Nasdaq as a benchmark provider, does not need tobe in compliance with the Benchmark Regulation until January 1, 2020. As theregulatory environment continues to change and related opportunities arise, weintend to continue product development and ensure that the exchanges andclearinghouses that comprise Nasdaq12 Table of ContentsNordic and Nasdaq Baltic maintain favorable liquidity and offer efficienttrading.The entities that operate trading venues in the Nordic and Baltic countries areeach subject to local regulations. In Sweden, general supervision of the NasdaqStockholm exchange is carried out by the SFSA, while Nasdaq Clearing’s roleas CCP in the clearing of derivatives is overseen by the SFSA and the Swedishcentral bank (Riksbanken). Additionally, as a function of the Swedish two-tiersupervisory model, certain surveillance in relation to the exchange market iscarried out by us, acting through our surveillance division.Nasdaq Stockholm’s exchange activities are regulated primarily by the SSMA,which implements MiFID II into Swedish law and which sets up basicrequirements regarding the board of the exchange and its share capital, andwhich also outlines the conditions on which exchange licenses are issued. TheSSMA also provides that any changes to the exchange’s articles of associationfollowing initial registration must be approved by the SFSA. Nasdaq Clearingholds the license as a CCP under EMIR.With respect to ongoing operations, the SSMA requires exchanges to conducttheir activities in an honest, fair and professional manner, and in such a way asto maintain public confidence in the securities markets. When operating aregulated market, an exchange must apply the principles of free access (i.e., thateach person which meets the requirements established by law and by theexchange may participate in trading), neutrality (i.e., that the exchange’s rulesfor the regulated market are applied in a consistent manner to all those whoparticipate in trading) and transparency (i.e., that the participants must be givenspeedy, simultaneous and correct information concerning trading and that thegeneral public must be given the opportunity to access this information).Additionally, the exchange operator must identify and manage the risks thatmay arise in its operations, use secure technical systems and identify and handlethe conflicts of interest that may arise between the exchange or its owners’interests and the interest in safeguarding effective risk management and securetechnical systems. Similar requirements are set up by EMIR in relation toclearing operations.The SSMA also contains the framework for both the SFSA’s supervisory workin relation to exchanges and clearinghouses and the surveillance to be carriedout by the exchanges themselves. The latter includes the requirement that anexchange should have “an independent surveillance function with sufficientresources and powers to meet the exchange’s obligations.” That requires theexchange to, among other things, supervise trading and price information,compliance with laws, regulations and good market practice, participantcompliance with trading participation rules, financial instrument compliancewith relevant listing rules and the extent to which issuers meet their obligationto submit regular financial information to relevant authorities.The regulatory environment in the other Nordic and Baltic countries in which aNasdaq entity has a trading venue is broadly similar to the regulatory environment in Sweden. Since 2005, there has beencooperation between the SFSA and the main supervisory authorities in Iceland,Denmark and Finland, which looks to safeguard effective and comprehensivesupervision of the exchanges comprising Nasdaq Nordic and the systemsoperated by it, and to ensure a common supervisory approach.Confidence in capital markets is paramount for trading to function properly.Nasdaq Nordic carries out market surveillance through an independent unit thatis separate from the business operations. The surveillance work is organizedinto two functions: one for the listing of instruments and surveillance ofcompanies (issuer surveillance) and one for surveillance of trading (tradingsurveillance). The real-time trading surveillance for the Finnish, Icelandic,Danish and Swedish markets has been centralized to Stockholm. In addition,there are special personnel who carry out surveillance activities at each of thethree Baltic exchanges. In Finland and Sweden, decisions to list new companiesare made by independent listing committees and in the other countries thedecision is made by the respective president of the exchanges.If there is suspicion that a listed company or member has acted in breach ofexchange regulations, the matter is dealt with by the respective surveillancedepartment. Serious breaches are considered by the respective disciplinarycommittee in Denmark, Finland, Iceland and Sweden. Suspected insider tradingis reported to the appropriate authorities in the respective country.EmployeesAs of December 31, 2017, Nasdaq had 4,734 employees.Nasdaq Website and Availability of SEC FilingsWe file periodic reports, proxy statements and other information with the SEC.The public may read and copy any materials we file with the SEC at the SEC’sPublic Reference Room at 100 F Street, NE, Washington, DC 20549. Thepublic may obtain information on the operation of the Public Reference Roomby calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site thatcontains reports, proxy and information statements, and other informationregarding issuers that file electronically with the SEC (such as us). The addressof that site is http://www.sec.gov.Our website is www.business.nasdaq.com. Information on our website is not apart of this Form 10-K. We make available free of charge on our website, orprovide a link to, our Forms 10-K, Forms 10-Q and Forms 8-K and anyamendments to these documents, that are filed or furnished pursuant toSection 13(a) or 15(d) of the Exchange Act as soon as reasonably practicableafter we electronically file such material with, or furnish it to, the SEC. Toaccess these filings, go to Nasdaq’s website and click on “Investor Relations,”then under “Financials” click on “SEC Filings.”13 Table of ContentsItem 1A. Risk Factors.The risks and uncertainties described below are not the only ones facing us.Additional risks and uncertainties not presently known to us or that wecurrently believe to be immaterial may also adversely affect our business. If anyof the following risks actually occur, our business, financial condition, oroperating results could be adversely affected.Economic conditions and market factors, which are beyond our control, mayadversely affect our business and financial condition.Our business performance is impacted by a number of factors, including generaleconomic conditions in both the U.S. and Europe, market volatility, changes ininvestment patterns and priorities, and other factors that are generally beyondour control. To the extent that global or national economic conditions weaken,our business is likely to be negatively impacted. Adverse market conditionscould reduce customer demand for our services and the ability of ourcustomers, lenders and other counterparties to meet their obligations to us. Pooreconomic conditions may result in a decline in trading volumes or values,deterioration of the economic welfare of our listed companies and a reduction inthe demand for our products, including our data, index, corporate solutions andmarket technology products. Trading volumes and values are driven primarilyby general market conditions and declines in trading volumes or values mayaffect our market share and impact our pricing. In addition, our Market Servicesbusinesses receive revenues from a relatively small number of customersconcentrated in the financial industry, so any event that impacts one or morecustomers or the financial industry in general could impact our revenues.The number of listings on our markets is primarily influenced by factors such asinvestor demand, the global economy, available sources of financing, and taxand regulatory policies. Adverse conditions may jeopardize the ability of ourlisted companies to comply with the continued listing requirements of ourexchanges.Information Services revenues also may be significantly affected by globaleconomic conditions. Professional subscriptions to our data products are at riskif staff reductions occur in financial services companies, which could result insignificant reductions in our professional user revenue. In addition, adversemarket conditions may cause reductions in the number of non-professionalinvestors with investments in the market and in ETP assets under managementtracking Nasdaq indexes.Finally, there may be less demand for our Corporate Solutions or MarketTechnology products if global economic conditions are weak. Our customershistorically cut back on purchases of new services and technology when growthrates decline, thereby reducing our opportunities to sell new products andservices or upgrade existing products and services.A reduction in trading volumes or values, market share of trading, the numberof our listed companies, or demand for Information Services, Corporate Solutions or Market Technology products dueto economic conditions or other market factors could adversely affect ourbusiness, financial condition and operating results.Our industry is highly competitive.We face intense competition from other exchanges and markets for marketshare of trading activity and listings. In addition, our Data Products, IndexLicensing and Services, Corporate Solutions and Market Technologybusinesses face significant competition from other market participants. Thiscompetition includes both product and price competition. Increased competitionmay result in a decline in our share of trading activity, listings and demand forthe products we offer, thereby adversely affecting our operating results.The liberalization and globalization of world markets has resulted in greatermobility of capital, greater international participation in local markets and morecompetition. As a result, both in the U.S. and in other countries, the competitionamong exchanges and other execution venues has become more intense.Marketplaces in both Europe and the U.S. have also merged to achieve greatereconomies of scale and scope.Regulatory changes also have facilitated the entry of new participants in theEuropean Union that compete with our European markets. The regulatoryenvironment, both in the U.S. and in Europe, is structured to maintain thisenvironment of intense competition. In addition, a high proportion of businessin the securities markets is becoming concentrated in a smaller number ofinstitutions and our revenue may therefore become concentrated in a smallernumber of customers.We also compete globally with other regulated exchanges and markets, ATSs,MTFs and other traditional and non-traditional execution venues. Some of thesecompetitors also are our customers. Competitors may develop market tradingplatforms that are more competitive than ours. Competitors may enter intostrategic partnerships, mergers or acquisitions that could make their trading,listings, clearing, data or technology businesses more competitive than ours.If we are unable to compete successfully in this environment, our business,financial condition and operating results will be adversely affected.Price competition has affected and could continue to affect our business.We face intense price competition in all areas of our business. In particular, thetrading industry is characterized by intense price competition. We have in thepast lowered prices, and in the U.S., increased rebates for trade executions toattempt to gain or maintain market share. These strategies have not always beensuccessful and have at times hurt operating performance. Additionally, we havealso been, and may once again be, required to adjust pricing to respond toactions by competitors, which could adversely impact operating results. We arealso subject to potential price competition from new competitors and from newand existing competitors. We also compete with14 Table of Contentsrespect to the pricing of data products and with respect to products for pre-tradebook data and for post-trade last sale data. In the future, our competitors mayoffer rebates for quotes and trades on their systems. In addition, pricing in ourCorporate Services, Index Licensing and Services and Market Technologybusinesses is subject to competitive pressures. If we are unable to competesuccessfully in respect to the pricing of our services and products, our business,financial condition and operating results may be adversely affected.System limitations or failures could harm our business.Our businesses depend on the integrity and performance of the technology,computer and communications systems supporting them. If our systems cannotexpand to cope with increased demand or otherwise fail to perform, we couldexperience unanticipated disruptions in service, slower response times anddelays in the introduction of new products and services. These consequencescould result in service outages, lower trading volumes or values, financiallosses, decreased customer satisfaction and regulatory sanctions. Our marketsand the markets that rely on our technology have experienced systems failuresand delays in the past and could experience future systems failures and delays.Although we currently maintain and expect to maintain multiple computerfacilities that are designed to provide redundancy and back-up to reduce the riskof system disruptions and have facilities in place that are expected to maintainservice during a system disruption, such systems and facilities may proveinadequate. If trading volumes increase unexpectedly or other unanticipatedevents occur, we may need to expand and upgrade our technology, transactionprocessing systems and network infrastructure. We do not know whether wewill be able to accurately project the rate, timing or cost of any volumeincreases, or expand and upgrade our systems and infrastructure toaccommodate any increases in a timely manner.While we have programs in place to identify and minimize our exposure tovulnerabilities and work in collaboration with the technology industry to sharecorrective measures with our business partners, we cannot guarantee that suchevents will not occur in the future. Any system issue that causes an interruptionin services, decreases the responsiveness of our services or otherwise affectsour services could impair our reputation, damage our brand name andnegatively impact our business, financial condition and operating results.We must continue to introduce new products, initiatives and enhancements tomaintain our competitive position.We intend to launch new products and initiatives and continue to explore andpursue opportunities to strengthen our business and grow our company. Wemay spend substantial time and money developing new products and initiatives.If these products and initiatives are not successful, we may not be able to offsettheir costs, which could have an adverse effect on our business, financialcondition and operating results.In our technology operations, we have invested substantial amounts in thedevelopment of system platforms, the rollout of our platforms and the adoption of new technologies, such as blockchain,machine intelligence and the cloud. Although investments are carefullyplanned, there can be no assurance that the demand for such platforms ortechnologies will justify the related investments. If we fail to generate adequaterevenue from planned system platforms or the adoption of new technologies, orif we fail to do so within the envisioned timeframe, it could have an adverseeffect on our results of operations and financial condition. In addition, clientsmay delay purchases in anticipation of new products or enhancements.A decline in trading and clearing volumes or values or market share willdecrease our trading and clearing revenues.Trading and clearing volumes and values are directly affected by economic,political and market conditions, broad trends in business and finance,unforeseen market closures or other disruptions in trading, the level andvolatility of interest rates, inflation, changes in price levels of securities and theoverall level of investor confidence. In recent years, trading and clearingvolumes and values across our markets have fluctuated significantly dependingon market conditions and other factors beyond our control. Current initiativesbeing considered by regulators and governments could have a material adverseeffect on overall trading and clearing volumes or values. Because a significantpercentage of our revenues is tied directly to the volume or value of securitiestraded and cleared on our markets, it is likely that a general decline in tradingand clearing volumes or values would lower revenues and may adversely affectour operating results if we are unable to offset falling volumes or valuesthrough pricing changes. Declines in trading and clearing volumes or valuesmay also impact our market share or pricing structures and adversely affect ourbusiness and financial condition.If our total market share in securities decreases relative to our competitors, ourvenues may be viewed as less attractive sources of liquidity. If our exchangesare perceived to be less liquid, then our business, financial condition andoperating results could be adversely affected.Since some of our exchanges offer clearing services in addition to tradingservices, a decline in market share of trading could lead to a decline in clearingrevenues. Declines in market share also could result in issuers viewing thevalue of a listing on our exchanges as less attractive, thereby adverselyaffecting our listing business. Finally, declines in market share of Nasdaq-listedsecurities could lower The Nasdaq Stock Market’s share of tape pool revenuesunder the consolidated data plans, thereby reducing the revenues of our DataProducts business.Our role in the global marketplace may place us at greater risk for acyberattack.Our systems and operations are vulnerable to damage or interruption fromsecurity breaches. Some of these threats include attacks from foreigngovernments, hacktivists, insiders and criminal organizations. Foreigngovernments may seek to obtain a foothold in U.S. critical infrastructure,hacktivists may15 Table of Contentsseek to deploy denial of service attacks to bring attention to their cause, insidersmay pose a risk by human error or malicious activity and criminal organizationsmay seek to profit from stolen data. Computer viruses and worms also continueto be a threat with ransomware increasingly being used by criminals to extortmoney. Given our position in the global securities industry, we may be morelikely than other companies to be a direct target, or an indirect casualty, of suchevents.While we continue to employ resources to monitor our systems and protect ourinfrastructure, these measures may prove insufficient depending upon the attackor threat posed. Any system issue, whether as a result of an intentional breach,collateral damage from a new virus or a non-malicious act, could damage ourreputation and cause us to lose customers, experience lower trading volumes orvalues, incur significant liabilities or otherwise have a negative impact on ourbusiness, financial condition and operating results. Any system breach may goundetected for an extended period of time. We also could incur significantexpense in addressing any of these problems and in addressing related datasecurity and privacy concerns.The success of our business depends on our ability to keep up with rapidtechnological and other competitive changes affecting our industry.Specifically, we must complete development of, successfully implement andmaintain platforms that have the functionality, performance, capacity,reliability and speed required by our business and our regulators, as well asby our customers.The markets in which we compete are characterized by rapidly changingtechnology, evolving industry and regulatory standards, frequent enhancementsto existing products and services, the adoption of new services and products andchanging customer demands. We may not be able to keep up with rapidtechnological and other competitive changes affecting our industry. Forexample, we must continue to enhance our platforms to remain competitive aswell as to address our regulatory responsibilities, and our business will benegatively affected if our platforms or the technology solutions we sell to ourcustomers fail to function as expected. If we are unable to develop ourplatforms to include other products and markets, or if our platforms do not havethe required functionality, performance, capacity, reliability and speed requiredby our business and our regulators, as well as by our customers, we may not beable to compete successfully. Further, our failure to anticipate or respondadequately to changes in technology and customer preferences or anysignificant delays in product development efforts, could have a material adverseeffect on our business, financial condition and operating results.We may not be able to successfully integrate acquired businesses, which mayresult in an inability to realize the anticipated benefits of our acquisitions.We must rationalize, coordinate and integrate the operations of our acquiredbusinesses, including eVestment and Sybenetix. This process involves complextechnological, operational and personnel-related challenges, which are time-consuming and expensive andmay disrupt our business. The difficulties, costs and delays that could beencountered may include:•difficulties, costs or complications in combining the companies’operations, including technology platforms, which could lead to us notachieving the synergies we anticipate or customers not renewing theircontracts with us as we migrate platforms;•incompatibility of systems and operating methods;•reliance on, or provision of, transition services;•inability to use capital assets efficiently to develop the business of thecombined company;•difficulties of complying with government-imposed regulations in the U.S.and abroad, which may be conflicting;•resolving possible inconsistencies in standards, controls, procedures andpolicies, business cultures and compensation structures;•the diversion of management’s attention from ongoing business concernsand other strategic opportunities;•difficulties in operating businesses we have not operated before;•difficulties of integrating multiple acquired businesses simultaneously;•the retention of key employees and management;•the implementation of disclosure controls, internal controls and financialreporting systems at non-U.S. subsidiaries to enable us to comply with U.S.GAAP and U.S. securities laws and regulations, including the SarbanesOxley Act of 2002, required as a result of our status as a reportingcompany under the Exchange Act;•the coordination of geographically separate organizations;•the coordination and consolidation of ongoing and future research anddevelopment efforts;•possible tax costs or inefficiencies associated with integrating theoperations of a combined company;•pre-tax restructuring and revenue investment costs;•the retention of strategic partners and attracting new strategic partners; and•negative impacts on employee morale and performance as a result of jobchanges and reassignments.For these reasons, we may not achieve the anticipated financial and strategicbenefits from our acquisitions and initiatives. Any actual cost savings andsynergies may be lower than we expect and may take a longer time to achievethan we anticipate, and we may fail to realize the anticipated benefits ofacquisitions.16 Table of ContentsWe will need to invest in our operations to maintain and grow our businessand to integrate acquisitions, and we may need additional funds, which maynot be readily available.We depend on the availability of adequate capital to maintain and develop ourbusiness. Although we believe that we can meet our current capitalrequirements from internally generated funds, cash on hand and borrowingsunder our revolving credit facility and commercial paper program, if the capitaland credit markets experience volatility, access to capital or credit may not beavailable on terms acceptable to us or at all. Limited access to capital or creditin the future could have an impact on our ability to refinance debt, maintain ourcredit rating, meet our regulatory capital requirements, engage in strategicinitiatives, make acquisitions or strategic investments in other companies, paydividends, repurchase our stock or react to changing economic and businessconditions. If we are unable to fund our capital or credit requirements, it couldhave an adverse effect on our business, financial condition and operatingresults.In addition to our debt obligations, we will need to continue to invest in ouroperations for the foreseeable future to integrate acquired businesses and tofund new initiatives. If we do not achieve the expected operating results, wewill need to reallocate our cash resources. This may include borrowingadditional funds to service debt payments, which may impair our ability tomake investments in our business or to integrate acquired businesses.Should we need to raise funds through issuing additional equity, our equityholders will suffer dilution. Should we need to raise funds through incurringadditional debt, we may become subject to covenants even more restrictive thanthose contained in our credit facilities, the indentures governing our notes andour other debt instruments. Furthermore, if adverse economic conditions occur,we could experience decreased revenues from our operations which could affectour ability to satisfy financial and other restrictive covenants to which we aresubject under our existing indebtedness.We operate in a highly regulated industry and may be subject to censures,fines and enforcement proceedings if we fail to comply with regulatoryobligations that can be ambiguous and can change unexpectedly.We operate in a highly regulated industry and are subject to extensiveregulation in the U.S., Europe and Canada. The securities trading industry issubject to significant regulatory oversight and could be subject to increasedgovernmental and public scrutiny in the future that can change in response toglobal conditions and events.Our ability to comply with complex and changing regulation is largelydependent on our establishment and maintenance of compliance, audit andreporting systems that can quickly adapt and respond, as well as our ability toattract and retain qualified compliance and other risk management personnel.While we have policies and procedures to identify, monitor and manage ourrisks and regulatory obligations, we cannot assure you that our policies andprocedures will always be effective or that we will always be successful in monitoring or evaluating the risks to which we areor may be exposed.Our regulated markets are subject to audits, investigations, administrativeproceedings and enforcement actions relating to compliance with applicablerules and regulations. Regulators have broad powers to impose fines, penaltiesor censure, issue cease-and-desist orders, prohibit operations, revoke licenses orregistrations and impose other sanctions on our exchanges, broker-dealers andmarkets for violations of applicable requirements.For example, during 2016, the SFSA and the other Nordic financial supervisoryauthorities conducted investigations of cybersecurity processes at our Nordicexchanges and clearinghouse. In December 2016, we were issued a $6 millionfine by the SFSA as a result of findings in connection with its investigation.The SFSA’s conclusions related to governance issues rather than systems andplatform security. We have appealed the SFSA’s decision, including the amountof the fine. The court has not yet reached a decision on our appeal.In the future, we could be subject to SEC or other regulatory investigations orenforcement proceedings that could result in substantial sanctions, includingrevocation of our operating licenses. Any such investigations or proceedings,whether successful or unsuccessful, could result in substantial costs, thediversion of resources, including management time, and potential harm to ourreputation, which could have a material adverse effect on our business, resultsof operations or financial condition. In addition, our exchanges could berequired to modify or restructure their regulatory functions in response to anychanges in the regulatory environment, or they may be required to rely on thirdparties to perform regulatory and oversight functions, each of which mayrequire us to incur substantial expenses and may harm our reputation if ourregulatory services are deemed inadequate.The regulatory framework under which we operate and new regulatoryrequirements or new interpretations of existing regulatory requirements couldrequire substantial time and resources for compliance, which could make itdifficult and costly for us to operate our business.Under current U.S. federal securities laws, changes in the rules and operationsof our securities markets, including our pricing structure, must be reviewed andin many cases explicitly approved by the SEC. The SEC may approve,disapprove, or recommend changes to proposals that we submit. In addition, theSEC may delay either the approval process or the initiation of the publiccomment process. In addition, favorable SEC rulings and interpretations can bechallenged in and reversed by federal courts of appeals, reducing or eliminatingthe value of such prior interpretations. Any delay in approving changes, or thealtering of any proposed change, could have an adverse effect on our business,financial condition and operating results.We must compete not only with ATSs that are not subject to the same SECapproval process but also with other exchanges that may have lower regulationand surveillance costs than us. There is a risk that trading will shift toexchanges that charge lower17 Table of Contentsfees because, among other reasons, they spend significantly less on regulation.In 2016, the SEC approved a plan to establish a market-wide consolidated audittrail (CAT) to improve regulators’ ability to monitor trading activity. Inaddition to increased regulatory obligations, implementation of a consolidatedaudit trail could result in significant additional expenditures, including toimplement any new technology to meet any plan’s requirements.In addition, our registered broker-dealer subsidiaries are subject to regulationby the SEC, FINRA and other SROs. These subsidiaries are subject toregulatory requirements intended to ensure their general financial soundnessand liquidity, which require that they comply with certain minimum capitalrequirements. The SEC and FINRA impose rules that require notification whena broker-dealer’s net capital falls below certain predefined criteria, dictate theratio of debt to equity in the regulatory capital composition of a broker-dealerand constrain the ability of a broker-dealer to expand its business under certaincircumstances. Additionally, the SEC’s Uniform Net Capital Rule and FINRArules impose certain requirements that may have the effect of prohibiting abroker-dealer from distributing or withdrawing capital and requiring priornotice to the SEC and FINRA for certain withdrawals of capital. Any failure tocomply with these broker-dealer regulations could have a material adverseeffect on the operation of our business, financial condition and operatingresults.Our non-U.S. business is subject to regulatory oversight in all the countries inwhich we operate regulated businesses, such as exchanges, clearinghouses orcentral securities depositories. In these countries, we have receivedauthorization from the relevant authorities to conduct our regulated businessactivities. The authorities may revoke this authorization if we do not suitablycarry out our regulated business activities. The authorities are also entitled torequest that we adopt measures in order to ensure that we continue to fulfill theauthorities’ requirements.Furthermore, certain of our customers operate in a highly regulated industry.Regulatory authorities could impose regulatory changes that could impact theability of our customers to use our exchanges. The loss of a significant numberof customers or a reduction in trading activity on any of our exchanges as aresult of such changes could have a material adverse effect on our business,financial condition and operating results.Regulatory changes and changes in market structure could have a materialadverse effect on our business.Regulatory changes adopted by the SEC or other regulators of our markets, andregulatory changes that our markets may adopt in fulfillment of their regulatoryobligations, could materially affect our business operations. In recent years,there has been increased regulatory and governmental focus on issues affectingthe securities markets, including market structure and technological oversight.The SEC, FINRA and the national securities exchanges have introduced several initiatives to ensure the oversight,integrity and resilience of markets.Industry responses to the MiFID II and MiFIR rules or other applicable rulescould affect our operations in Europe. Changes to the rules themselves couldalso affect our operations in Europe. In addition, actions on any of the specificregulatory issues currently under review in the U.S. and Europe could have amaterial impact on our business.While we support regulatory efforts to review and improve the structure,resilience and integrity of the markets, the adoption of these proposedregulatory changes and future reforms could impose significant costs andobligations on the operation of our exchanges and processor systems and haveother impacts on our business.Regulatory changes or future court rulings may have an adverse impact onour revenue from proprietary data products.Regulatory and legal developments could reduce the amount of revenue that weearn from our proprietary data products. In the U.S., we generally are requiredto file with the SEC to establish or modify the fees that we charge for our dataproducts. In recent years, certain industry groups have objected to the ability ofexchanges to charge for certain data products. We have defeated two challengesin federal appeals court and an additional challenge at the administrative levelwithin the SEC. The decision defeating the challenge was reaffirmed at theadministrative level in early 2018. However, the industry challengers havesought additional review of that administrative decision by the full SEC. ThatSEC review remains pending and, when resolved, it may be appealed to afederal court of appeals. If the results of the full SEC review and anysubsequent appeal are detrimental to our U.S. exchanges’ ability to charge fordata products, there could be a negative impact on our revenues. We cannotpredict whether, or in what form, any regulatory changes will be implemented,or their potential impact on our business. A determination by the SEC, forexample, to link data fees to marginal costs, to take a more active role in thedata rate-setting process, or to reduce the current levels of data fees could havean adverse effect on our Data Products revenues.In Canada, all new marketplace fees and changes to existing fees, includingtrading and data fees, must be filed with and approved by the Ontario SecuritiesCommission. In 2016, the Canadian Securities Administrators approvedamendments adopting a Data Fees Methodology that restricts the total amountof fees that can be charged by all marketplaces to a reference level that is notyet defined. When a reference is established, all marketplaces will be subject toannual reviews of their market data fees tying market data revenues to marketshare.Our European exchanges currently offer data products to customers on a non-discriminatory and reasonable commercial basis. The new MiFID II/MiFIRrules entail that the price for regulated data such as pre- and post-trade datashall be based18 Table of Contentson cost plus a reasonable margin. However, what constitutes “reasonablemargin” is not clearly defined. There is a risk that a different interpretation ofthis term may influence the fees for European data products adversely. Inaddition, any future actions by the European Commission or European courtdecisions could affect our ability to offer data products in the same manner astoday, thereby causing an adverse effect on our Data Products revenues.Technology issues relating to our role as exclusive processor for Nasdaq-listed stocks could affect our business.In 2013, we experienced an outage in the exclusive processor system wemaintain and operate on behalf of all exchanges that trade Nasdaq-listed stocksthat resulted in a market-wide trading halt lasting approximately three hours.Following this system outage, the SEC and others evaluated all infrastructurethat is critical to the national market system, including the processor systems.Nasdaq, as technology provider to the UTP Operating Committee, proposed,received approval for, and implemented measures to enhance the resiliency ofthe existing processor system. Additionally, the UTP Operating Committeeapproved Nasdaq’s proposal to transfer the processor technology from itscurrent enhanced platform to Nasdaq’s INET platform. The migration, whichwas completed in late 2016, further enhanced the resiliency of the processorsystems. If, despite these improvement measures, future outages occur or theprocessor systems fail to function properly while we are operating the systems,it could have an adverse effect on our business, reputation, financial conditionor operating results.Our operational processes are subject to the risk of error, which may result infinancial loss or reputational damage.We have instituted extensive controls to reduce the risk of error inherent in ouroperations; however, such risk cannot completely be eliminated.Our businesses are highly dependent on our ability to process and report, on adaily basis, a large number of transactions across numerous and diversemarkets. Some of our operations require complex processes, and theintroduction of new products or services or changes in processes or reportingdue to regulatory requirements may result in an increased risk of errors for aperiod after implementation.Data, other content or information that we distribute may contain errors or bedelayed, causing reputational harm. Use of our products and services as part ofthe investment process creates the risk that clients, or the parties whose assetsare managed by our clients, may pursue claims against us in the event of suchdelay or error. Even with a favorable outcome, significant litigation against usmight unduly burden management, personnel, financial and other resources.In addition, the sophisticated software we sell to our customers may containundetected errors or vulnerabilities, some of which may be discovered onlyafter delivery. These errors may result in negative customer experiences thatcould damage our reputation, thereby causing loss of customers, loss ofrevenues and liability for damages, thereby adversely affecting our business and financialresults.Laws and regulations regarding the handling of personal data andinformation may affect our services or result in increased costs, legal claimsor fines against us.Our business relies on the processing of data in many jurisdictions and themovement of data across national borders. Legal and contractual requirementsrelating to the collection, storage, handling, use, disclosure, transfer andsecurity of personal data continue to evolve; regulatory scrutiny in this area isincreasing around the world. Significant uncertainty exists as privacy and dataprotection laws may be interpreted and applied differently across jurisdictionsand may create inconsistent or conflicting requirements.The European Union General Data Protection Regulation, or GDPR, whichbecomes effective in May 2018, extends the scope of the European Union dataprotection law and requires companies to meet new requirements regarding thehandling of personal data. In addition to directly applying to certain Nasdaqbusiness activities, we expect that this regulation may impact many of ourcustomers, which may affect their requirements and decisions related toservices that we offer. Although we have a program underway to address GDPRrequirements, our efforts to comply with GDPR and other privacy and dataprotection laws may entail substantial expenses, may divert resources fromother initiatives and projects, and could impact the services that we offer.Furthermore, enforcement actions and investigations by regulatory authoritiesrelated to data security incidents and privacy violations continue to increase.The enactment of more restrictive laws, rules or regulations or futureenforcement actions or investigations could impact us through increased costsor restrictions on our business, and noncompliance could result in regulatorypenalties and significant legal liability.Stagnation or decline in the listings market could have an adverse effect onour revenues.The market for listings is dependent on the prosperity of companies and theavailability of risk capital. A stagnation or decline in the number of new listingson The Nasdaq Stock Market and the Nasdaq Nordic and Nasdaq Balticexchanges will impact our revenues. Through December 31, 2017, werecognized revenue from new listings on The Nasdaq Stock Market on astraight-line basis over an estimated six-year service period. As of January 1,2018, we adopted ASU 2014-09; see “Recent Accounting Pronouncements,” ofNote 2 “Summary of Significant Accounting Policies,” for further discussion.Both before and after the adoption of this new accounting standard, a stagnantmarket for listings could cause a decrease in revenues for future years.Furthermore, a prolonged decrease in the number of listings could negativelyimpact the growth of our transactions revenues. Our Corporate Solutionsbusiness is also impacted by declines in the listings market or increases inacquisitions activity as there will be fewer publicly-traded customers that needour products.19 Table of ContentsAny reduction in our credit rating could increase the cost of our fundingfrom the capital markets.Our long-term debt is currently rated investment grade by two of the majorrating agencies. These rating agencies regularly evaluate us, and their ratings ofour long-term debt and commercial paper are based on a number of factors,including our financial strength and corporate development activity, as well asfactors not entirely within our control, including conditions affecting ourindustry generally. There can be no assurance that we will maintain our currentratings. Our failure to maintain those ratings could reduce or eliminate ourability to issue commercial paper and adversely affect the cost and other termsupon which we are able to obtain funding and increase our cost of capital. Areduction in credit ratings would also result in increases in the cost of ourcommercial paper and other outstanding debt as the interest rate on theoutstanding amounts under our credit facilities and most tranches of our seniornotes fluctuates based on our credit ratings.Damage to our reputation or brand name could have a material adverse effecton our businesses.One of our competitive strengths is our strong reputation and brand name.Various issues may give rise to reputational risk, including issues relating to:•our ability to maintain the security of our data and systems;•the quality and reliability of our technology platforms and systems;•the ability to fulfill our regulatory obligations;•the ability to execute our business plan, key initiatives or new businessventures and the ability to keep up with changing customer demand;•the representation of our business in the media;•the accuracy of our financial statements and other financial and statisticalinformation;•the accuracy of our financial guidance or other information provided to ourinvestors;•the quality of our corporate governance structure;•the quality of our products, including the reliability of our transaction-based, Corporate Solutions and Market Technology products, the accuracyof the quote and trade information provided by our Data Products businessand the accuracy of calculations used by our Index Licensing and Servicesbusiness for indexes and unit investment trusts;•the quality of our disclosure controls or internal controls over financialreporting, including any failures in supervision;•extreme price volatility on our markets;•any negative publicity surrounding our listed companies; and•any misconduct, fraudulent activity or theft by our employees or otherpersons formerly or currently associated with us. Damage to our reputation could cause some issuers not to list their securities onour exchanges, as well as reduce the trading volumes or values on ourexchanges or cause us to lose customers in our Data Products, Index Licensingand Services, Corporate Solutions or Market Technology businesses. This, inturn, may have a material adverse effect on our business, financial conditionand operating results.We may be required to recognize impairments of our goodwill, intangibleassets or other long-lived assets in the future.Our business acquisitions typically result in the recording of goodwill andintangible assets, and the recorded values of those assets may become impairedin the future. As of December 31, 2017, goodwill totaled approximately $6.6billion and intangible assets, net of accumulated amortization, totaledapproximately $2.5 billion . The determination of the value of such goodwilland intangible assets requires management to make estimates and assumptionsthat affect our consolidated financial statements.We assess goodwill and intangible assets, as well as other long-lived assets,including equity and cost method investments and property and equipment, forimpairment on an annual basis or more frequently if indicators of impairmentarise. We estimate the fair value of such assets by assessing many factors,including historical performance, capital requirements and projected cash flows.Considerable management judgment is necessary to project future cash flowsand evaluate the impact of expected operating and macroeconomic changes onthese cash flows. The estimates and assumptions we use are consistent with ourinternal planning process. However, there are inherent uncertainties in theseestimates.There was no impairment of goodwill for the years ended December 31, 2017,2016 and 2015, and there were no indefinite-lived intangible asset impairmentcharges in 2017. As discussed in “Intangible Asset Impairment Charges,” ofNote 6, “Goodwill and Acquired Intangible Assets,” to the consolidatedfinancial statements, we recorded an indefinite-lived intangible assetimpairment charge of $578 million in 2016 and $119 million in 2015.We may experience future events that may result in asset impairments. Futuredisruptions to our business, prolonged economic weakness or significantdeclines in operating results at any of our reporting units or businesses, mayresult in impairment charges to goodwill, intangible assets or other long-livedassets. A significant impairment charge in the future could have a materialadverse effect on our operating results.For additional discussion of our goodwill, indefinite-lived intangible assets andother long-lived assets, including related impairment, see “Goodwill andRelated Impairment,” “Indefinite-Lived Intangible Assets and RelatedImpairment,” and “Other Long-Lived Assets and Related Impairment,” of“Critical Accounting Policies and Estimates,” of Item 7. “Management’sDiscussion and Analysis of Financial Condition and Results of Operations,”and “Goodwill and Indefinite-Lived Intangible Assets,” and “Valuation ofOther20 Table of ContentsLong-Lived Assets,” of Note 2, “Summary of Significant Accounting Policies,”and Note 6, “Goodwill and Acquired Intangible Assets,” to the consolidatedfinancial statements.We may experience fluctuations in our operating results, which mayadversely affect the market price of our common stock.Our industry is risky and unpredictable and is directly affected by manynational and international factors beyond our control, including:•economic, political and geopolitical market conditions;•natural disasters, terrorism, war or other catastrophes;•broad trends in finance and technology;•changes in price levels and volatility in the stock markets;•the level and volatility of interest rates;•changes in government monetary or tax policy;•the perceived attractiveness of the U.S. or European capital markets; and•inflation.Any one of these factors could have a material adverse effect on our business,financial condition and operating results by causing a substantial decline in thefinancial services markets and reducing trading volumes or values.Additionally, since borrowings under our credit facilities bear interest atvariable rates, any increase in interest rates on debt that we have not fixed usinginterest rate hedges will increase our interest expense, reduce our cash flow orincrease the cost of future borrowings or refinancings. Other than variable ratedebt, we believe our business has relatively large fixed costs and low variablecosts, which magnifies the impact of revenue fluctuations on our operatingresults. As a result, a decline in our revenue may lead to a relatively largerimpact on operating results. A substantial portion of our operating expenses isrelated to personnel costs, regulation and corporate overhead, none of whichcan be adjusted quickly and some of which cannot be adjusted at all. Ouroperating expense levels are based on our expectations for future revenue. Ifactual revenue is below management’s expectations, or if our expenses increasebefore revenues do, both revenues less transaction-based expenses andoperating results would be materially and adversely affected. Because of thesefactors, it is possible that our operating results or other operating metrics mayfail to meet the expectations of stock market analysts and investors. If thishappens, the market price of our common stock may be adversely affected.We are exposed to credit risk from third parties, including customers,counterparties and clearing agents.We are exposed to credit risk from third parties, including customers,counterparties and clearing agents. These parties may default on theirobligations to us due to bankruptcy, lack of liquidity, operational failure orother reasons. We clear or stand as riskless principal to a range of equity-related and fixed-income-related derivative products, commodities and resale and repurchaseagreements. We assume the counterparty risk for all transactions that arecleared through our markets and guarantee that our cleared contracts will behonored. We enforce minimum financial and operational criteria formembership eligibility, require members and investors to provide collateral,and maintain established risk policies and procedures to ensure that thecounterparty risks are properly monitored and proactively managed; however,none of these measures provides absolute assurance against experiencingfinancial losses from defaults by our counterparties on their obligations. Noguarantee can be given that the collateral provided will at all times be sufficient.Although we maintain clearing capital resources to serve as an additional layerof protection to help ensure that we are able to meet our obligations, theseresources may not be sufficient.In addition, one of our broker-dealer subsidiaries, Execution Access, has aclearing arrangement with Cantor Fitzgerald & Co., or Cantor Fitzgerald. As ofDecember 31, 2017, we have contributed $19 million of clearing deposits toCantor Fitzgerald in connection with this clearing arrangement. This clearingagreement will end on July 31, 2018, and will be replaced by a clearingagreement with the Industrial and Commercial Bank of China FinancialServices LLC, or ICBC. Some of the trading activity in Execution Access iscleared by Cantor Fitzgerald (and similarly will be by ICBC after July 31,2018) through the Fixed Income Clearing Corporation. Execution Accessassumes the counterparty risk of clients that do not clear through the FixedIncome Clearing Corporation. Counterparty risk of clients exists for ExecutionAccess between the trade date and settlement date of the individualtransactions, which is at least one business day (or more, if specified by theU.S. Treasury issuance calendar). All of Execution Access’ obligations underthe clearing arrangement with Cantor Fitzgerald are guaranteed by Nasdaq.Counterparties that do not clear through the Fixed Income Clearing Corporationare subject to a credit due diligence process and may be required to postcollateral, provide principal letters, or provide other forms of creditenhancement to Execution Access for the purpose of mitigating counterpartyrisk. Daily position trading limits are also enforced for such counterparties.Although we believe that the potential for us to be required to make paymentsunder these arrangements is mitigated through the pledged collateral and ourrisk management policies, no guarantee can be provided that thesearrangements will at all times be sufficient.We also have credit risk related to transaction and subscription-based revenuesthat are billed to customers on a monthly or quarterly basis, in arrears.Credit losses such as those described above could adversely affect ourconsolidated financial position and results of operations.21 Table of ContentsOur leverage limits our financial flexibility, increases our exposure toweakening economic conditions and may adversely affect our ability to obtainadditional financing.Our indebtedness as of December 31, 2017 was approximately $4.2 billion . Wemay borrow additional amounts by utilizing available liquidity under ourexisting credit facilities or issuing short-term, unsecured commercial papernotes through our commercial paper program.Our leverage could:•reduce funds available to us for operations and general corporate purposesor for capital expenditures as a result of the dedication of a substantialportion of our consolidated cash flow from operations to the payment ofprincipal and interest on our indebtedness;•increase our exposure to a continued downturn in general economicconditions;•place us at a competitive disadvantage compared with our competitors withless debt;•affect our ability to obtain additional financing in the future for refinancingindebtedness, acquisitions, working capital, capital expenditures or otherpurposes; and•increase our cost of debt and reduce or eliminate our ability to issuecommercial paper.In addition, we must comply with the covenants in our credit facilities. Amongother things, these covenants restrict our ability to incur additionalindebtedness, grant liens on assets, dispose of assets and pay dividends(although we are permitted to pay cash dividends on our common stock).Failure to meet any of the covenant terms of our credit facilities could result inan event of default. If an event of default occurs, and we are unable to receive awaiver of default, our lenders may increase our borrowing costs, restrict ourability to obtain additional borrowings and accelerate all amounts outstanding.We are subject to litigation risks and other liabilities.Many aspects of our business potentially involve substantial liability risks.Although under current law we are immune from private suits arising fromconduct within our regulatory authority and from acts and forbearances incidentto the exercise of our regulatory authority, this immunity only covers certain ofour activities in the U.S., and we could be exposed to liability under nationaland local laws, court decisions and rules and regulations promulgated byregulatory agencies.Some of our other liability risks arise under the laws and regulations relating tothe tax, employment, intellectual property, anti-money laundering, technologyexport, foreign asset controls and foreign corrupt practices areas. Liability couldalso result from disputes over the terms of a trade, claims that a system failureor delay cost a customer money, claims we entered into an unauthorizedtransaction or claims that we provided materially false or misleading statementsin connection with a securities transaction. As we intend to defend any suchlitigation actively, significant legal expenses could be incurred. Although we carry insurance that may limit our risk of damages insome cases, we still may sustain uncovered losses or losses in excess ofavailable insurance that would affect our financial condition and results ofoperations.We have self-regulatory obligations and also operate for-profit businesses,and these two roles may create conflicts of interest.We have obligations to regulate and monitor activities on our markets andensure compliance with applicable law and the rules of our markets by marketparticipants and listed companies. In the U.S., some have expressed concernabout potential conflicts of interest of “for-profit” markets performing theregulatory functions of an SRO. Although our U.S. cash equity and optionsexchanges outsource a portion of their market regulation functions to FINRA,we do perform regulatory functions and bear regulatory responsibility related toour listed companies and our markets. Any failure by us to diligently and fairlyregulate our markets or to otherwise fulfill our regulatory obligations couldsignificantly harm our reputation, prompt SEC scrutiny and adversely affect ourbusiness and reputation.Our Nordic and Baltic exchanges monitor trading and compliance with listingstandards in accordance with the European Union’s Market Abuse Regulationand other applicable laws. The prime objective of such monitoring activities isto promote confidence in the exchanges among the general public and to ensurefair and orderly functioning markets. The monitoring functions within theNasdaq Nordic and Nasdaq Baltic exchanges are the responsibility of thesurveillance departments or other surveillance personnel. The surveillancedepartments or personnel are intended to strengthen the integrity of andconfidence in these exchanges and to avoid conflicts of interest. Any failure todiligently and fairly regulate the Nordic and Baltic exchanges couldsignificantly harm our reputation, prompt scrutiny from regulators andadversely affect our business and reputation.Failure to protect our intellectual property rights, or allegations that we haveinfringed on the intellectual property rights of others, could harm our brand-building efforts and ability to compete effectively.To protect our intellectual property rights, we rely on a combination oftrademark laws, copyright laws, patent laws, trade secret protection,confidentiality agreements and other contractual arrangements with ouraffiliates, clients, strategic partners, employees and others. However, the effortswe have taken to protect our intellectual property and proprietary rights mightnot be sufficient, or effective, at stopping unauthorized use of those rights. Wemay be unable to detect the unauthorized use of, or take appropriate steps toenforce, our intellectual property rights.We have registered, or applied to register, our trademarks in the United Statesand in over 50 foreign jurisdictions and have pending U.S. and foreignapplications for other trademarks. We also maintain copyright protection on ourbranded materials22 Table of Contentsand pursue patent protection for software products, inventions and otherprocesses developed by us. We also hold a number of patents, patentapplications and licenses in the United States and other foreign jurisdictions.However, effective trademark, copyright, patent and trade secret protectionmight not be available or cost-effective in every country in which our servicesand products are offered. Moreover, changes in patent law, such as changes inthe law regarding patentable subject matter, could also impact our ability toobtain patent protection for our innovations. In particular, recent amendments tothe U.S. patent law may affect our ability to protect and defend our innovations.There is also a risk that the scope of protection under our patents may not besufficient in some cases, or that existing patents may be deemed invalid orunenforceable. Failure to protect our intellectual property adequately couldharm our brand and affect our ability to compete effectively. Further, defendingour intellectual property rights could result in the expenditure of significantfinancial and managerial resources.Third parties may assert intellectual property rights claims against us, whichmay be costly to defend, could require the payment of damages and could limitour ability to use certain technologies, trademarks or other intellectual property.Any intellectual property claims, with or without merit, could be expensive tolitigate or settle and could divert management resources and attention.Successful challenges against us could require us to modify or discontinue ouruse of technology or business processes where such use is found to infringe orviolate the rights of others, or require us to purchase licenses from third parties,any of which could adversely affect our business, financial condition andoperating results.We rely on third parties to perform certain functions, and our business couldbe adversely affected if these third parties fail to perform as expected.We rely on third parties for regulatory, data center, data storage, data content,clearing and other services. To the extent that any of our vendors or other third-party service providers experiences difficulties, materially changes theirbusiness relationship with us or is unable for any reason to perform theirobligations, our business or our reputation may be materially adverselyaffected.We also rely on members of our trading community to maintain markets andadd liquidity. To the extent that any of our largest members experiencesdifficulties, materially changes its business relationship with us or is unable forany reason to perform market making activities, our business or our reputationmay be materially adversely affected.We are a holding company that depends on cash flow from our subsidiaries tomeet our obligations, and any restrictions on our subsidiaries’ ability to paydividends or make other payments to us may have a material adverse effect onour results of operations and financial condition.As a holding company, we require dividends and other payments from oursubsidiaries to meet cash requirements. Minimum capital requirements mandated by regulatory authorities havingjurisdiction over some of our regulated subsidiaries indirectly restrict theamount of dividends paid upstream.In addition, unremitted earnings of subsidiaries outside of the U.S. are used tofinance our international operations and are generally considered to beindefinitely reinvested. It is not our current intent to change this position.However, the majority of cash held outside the U.S. is available for repatriation,but under current law in certain jurisdictions, could subject us to additionalincome taxes, less applicable foreign tax credits.If our subsidiaries are unable to pay dividends and make other payments to uswhen needed, we may be unable to satisfy our obligations, which would have amaterial adverse effect on our business, financial condition and operatingresults.Future acquisitions, dispositions, investments, joint ventures and othertransactional activities may require significant resources and/or result insignificant unanticipated losses, costs or liabilities.Over the past several years, acquisitions have been significant factors in ourgrowth. In addition, we are in the process of divesting certain assets, and wemay divest additional businesses or assets in the future. Although we cannotpredict our transactional activities with complete accuracy, we believe thatadditional acquisitions, divestments, investments, joint ventures and othertransactional activities will be important to our strategy. Such transactions maybe material in size and scope. Many of the other potential purchasers of assetsin our industry have greater financial resources than we have. Therefore, wecannot be sure that we will be able to complete future transactions on termsfavorable to us.We may finance future transactions by issuing additional equity and/or debt.The issuance of additional equity in connection with any such transaction couldbe substantially dilutive to existing shareholders. In addition, announcement orimplementation of future transactions by us or others could have a materialeffect on the price of our common stock. The issuance of additional debt couldincrease our leverage substantially. We could face financial risks associatedwith incurring additional debt, particularly if the debt results in significantincremental leverage. Additional debt may reduce our liquidity, curtail ouraccess to financing markets, impact our standing with credit rating agencies andincrease the cash flow required for debt service. Any incremental debt incurredto finance a transaction could also place significant constraints on the operationof our business.Furthermore, any future transactions could entail a number of additional risks,including:•problems with effective integration of operations;•the inability to maintain key pre-transaction business relationships;•reliance on, or provision of, transition services;•increased operating costs;23 Table of Contents•the diversion of our management team from other operations;•problems with regulatory bodies;•risks associated with divesting employees, customers or vendors whendivesting businesses or assets;•declines in the value of investments;•exposure to unanticipated liabilities;•difficulties in realizing projected efficiencies, synergies and cost savings;and•changes in our credit rating and financing costs.Changes in tax laws, regulations or policies could have a material adverseeffect on our financial results.Like other corporations, we are subject to taxes at the federal, state and locallevels, as well as in non-U.S. jurisdictions. Changes in tax laws, regulations orpolicies could result in us having to pay higher taxes, which would in turnreduce our net income.In addition, some of our subsidiaries are subject to tax in the jurisdictions inwhich they are organized or operate. In computing our tax obligation in thesejurisdictions, we take various tax positions. We cannot assure you that uponreview of these positions the applicable authorities will agree with ourpositions. A successful challenge by a tax authority could result in additionaltax imposed on our subsidiaries.Failure to attract and retain key personnel may adversely affect our ability toconduct our business.Our future success depends, in large part, upon our ability to attract and retainhighly qualified professional personnel. Competition for key personnel in thevarious localities and business segments in which we operate is intense. Ourability to attract and retain key personnel, in particular senior officers, will bedependent on a number of factors, including prevailing market conditions andcompensation packages offered by companies competing for the same talent.There is no guarantee that we will have the continued service of key employeeswho we rely upon to execute our business strategy and identify and pursuestrategic opportunities and initiatives. In particular, we may have to incur coststo replace senior officers or other key employees who leave, and our ability toexecute our business strategy could be impaired if we are unable to replace suchpersons in a timely manner.Our non-U.S. business operates in various international markets, particularlyemerging markets that are subject to greater political, economic and socialuncertainties than developed countries.Our non-U.S. business operates in various international markets, including butnot limited to Northern Europe, the Baltics, the Middle East, Africa and Asia.Therefore, our non-U.S. operations are subject to the risk inherent in theinternational environment. Political, economic or social events or developmentsin one or more of our non-U.S. locations could adversely affect our operations and financial results. Some locations, such asLithuania, India and the Philippines, may increase risk. Some of theseeconomies may be subject to greater political, economic and socialuncertainties than countries with more developed institutional structures.Unforeseen or catastrophic events could interrupt our critical businessfunctions. In addition, our U.S. and European businesses are heavilyconcentrated in particular areas and may be adversely affected by events inthose areas.We may incur losses as a result of unforeseen or catastrophic events, such asterrorist attacks, natural disasters, extreme weather, fire, power loss,telecommunications failures, human error, theft, sabotage and vandalism. Givenour position in the global capital markets, we may be more likely than othercompanies to be a target of such activities.In addition, our U.S. business operations are heavily concentrated on the EastCoast, and our European business operations are heavily concentrated inStockholm. Any event that affects either of those geographic areas couldpotentially affect our ability to operate our businesses.We have business continuity plans for critical business functions to mitigate therisk of an interruption. However, any interruption in our critical businessfunctions could negatively impact our financial condition and operating results.Because we have operations in numerous countries, we are exposed tocurrency risk.We have operations in the U.S., the Nordic and Baltic countries, the U.K.,Australia and many other foreign countries. We therefore have significantexposure to exchange rate movements between the Euro, Swedish Krona andother foreign currencies towards the U.S. dollar. Significant inflation ordisproportionate changes in foreign exchange rates with respect to one or moreof these currencies could occur as a result of general economic conditions, actsof war or terrorism, changes in governmental monetary or tax policy, changesin local interest rates or other factors. These exchange rate differences willaffect the translation of our non-U.S. results of operations and financialcondition into U.S. dollars as part of the preparation of our consolidatedfinancial statements and could adversely affect our financial results.If our risk management methods are not effective, our business, reputationand financial results may be adversely affected.We have methods to identify, assess, monitor and manage our risks, includingoversight of risk management by Nasdaq’s Global Risk ManagementCommittee, which is comprised of senior executives and is responsible forregularly reviewing risks and referring significant risks to the board of directorsor specific board committees. However, these methods may not be fullyeffective. Some of our risk management methods may depend upon subjectiveevaluation of information regarding markets, customers or other matters. Thatinformation may not in all cases be accurate, complete, up-to-date or properly24 Table of Contentsevaluated. If our methods are not effective or we are not successful inmonitoring or evaluating the risks to which we are or may be exposed, ourbusiness, reputation, financial condition and operating results could bematerially adversely affected.Charges to earnings resulting from acquisition, integration and restructuringcosts may materially adversely affect the market value of our common stock.In accordance with U.S. GAAP, we are accounting for the completion of ouracquisitions using the acquisition method of accounting. We are allocating thetotal estimated purchase prices to net tangible assets, amortizable intangibleassets and indefinite-lived intangible assets, and based on their fair values as ofthe date of completion of the acquisitions, recording the excess of the purchaseprice over those fair values as goodwill. Our financial results, includingearnings per share, could be adversely affected by a number of financialadjustments including the following:•we may incur additional amortization expense over the estimated usefullives of certain of the intangible assets acquired in connection withacquisitions during such estimated useful lives;•we may have additional depreciation expense as a result of recordingacquired tangible assets at fair value, in accordance with U.S. GAAP, ascompared to book value as recorded;•to the extent the value of goodwill or intangible assets becomes impaired,we may be required to incur material charges relating to the impairment ofthose assets;•we may incur additional costs from integrating our acquisitions. Thesuccess of our acquisitions depends, in part, on our ability to integrate thesebusinesses into our existing operations and realize anticipated cost savings,revenue synergies and growth opportunities; and•we may incur restructuring costs in connection with the reorganization ofany of our businesses.Decisions to declare future dividends on our common stock will be at thediscretion of our board of directors based upon a review of relevantconsiderations. Accordingly, there can be no guarantee that we will payfuture dividends to our stockholders.Since 2013, our board of directors has declared quarterly cash dividendpayments on our outstanding common stock. Future declarations of quarterlydividends and the establishment of future record and payment dates are subjectto approval by Nasdaq’s board of directors. The board’s determination todeclare dividends will depend upon our profitability and financial condition,contractual restrictions, restrictions imposed by applicable law and other factorsthat the board deems relevant. Based on an evaluation of these factors, theboard of directors may determine not to declare future dividends at all or todeclare future dividends at a reduced amount. Accordingly, there can be noguarantee that we will pay future dividends to our stockholders. Provisions of our certificate of incorporation, by-laws, exchange rules(including provisions included to address SEC concerns) and governing lawrestrict the ownership and voting of our common stock. In addition, suchprovisions could delay or prevent a change in control of us and entrenchcurrent management.Our organizational documents place restrictions on the voting rights of certainstockholders. The holders of our common stock are entitled to one vote pershare on all matters to be voted upon by the stockholders except that no personmay exercise voting rights in respect of any shares in excess of 5% of the thenoutstanding shares of our common stock. Any change to the 5% votinglimitation would require SEC approval.In response to the SEC’s concern about a concentration of our ownership, therules of some of our exchange subsidiaries include a prohibition on any memberor any person associated with a member of the exchange from beneficiallyowning more than 20% of our outstanding voting interests. SEC consent wouldbe required before any investor could obtain more than a 20% voting interest inus. The rules of some of our exchange subsidiaries also require the SEC’sapproval of any business ventures with exchange members, subject toexceptions.Our organizational documents contain provisions that may be deemed to havean anti-takeover effect and may delay, deter or prevent a change of control ofus, such as a tender offer or takeover proposal that might result in a premiumover the market price for our common stock. Additionally, certain of theseprovisions make it more difficult to bring about a change in the composition ofour board of directors, which could result in entrenchment of currentmanagement.Our certificate of incorporation and by-laws:•do not permit stockholders to act by written consent;•require certain advance notice for director nominations and actions to betaken at annual meetings; and•authorize the issuance of undesignated preferred stock, or “blank check”preferred stock, which could be issued by our board of directors withoutstockholder approval.Section 203 of the Delaware General Corporation Law imposes restrictions onmergers and other business combinations between us and any holder of 15% ormore (or, in some cases, a holder who previously held 15% or more) of ourcommon stock. In general, Delaware law prohibits a publicly held corporationfrom engaging in a “business combination” with an “interested stockholder” forthree years after the stockholder becomes an interested stockholder, unless thecorporation’s board of directors and stockholders approve the businesscombination in a prescribed manner.Finally, many of the European countries where we operate regulated entitiesrequire prior governmental approval before an investor acquires 10% or greaterof our common stock.25 Table of ContentsItem 1B. Unresolved Staff Comments.None.Item 2. Properties. The following is a description of our principal properties.Location Use Size(approximate,in square feet)Stockholm, Sweden European headquarters 294,000 New York, New York U.S. headquarters 113,000 Philadelphia, Pennsylvania General office space 75,000 Atlanta, Georgia General office space 68,000 New York, New York General office space 64,000 Bengaluru, India General office space 63,000 New York, New York General office space 53,000 Vilnius, Lithuania General office space 51,000 Rockville, Maryland General office space 48,000 Manila, Philippines General office space 36,000 London, England General office space 31,000 Shelton, Connecticut General office space 29,000 Sydney, Australia General office space 29,000 Toronto, Canada General office space 27,000 Philadelphia, Pennsylvania General office space 26,000 New York, New York Location of MarketSite 25,000 Outside the U.S., we also maintain leased locations in Belgium, China,Denmark, Estonia, Finland, France, Germany, Hong Kong, Iceland, Italy,Japan, Latvia, Netherlands, Norway, Singapore, South Korea, Spain, Turkey,Ukraine and the United Arab Emirates. In some countries, we maintain multiplelocations.Within the U.S., we also maintain leased locations in California, Colorado,Illinois, Massachusetts, Missouri, New Jersey, Oregon, Texas, Virginia andWashington, DC. In some states, we maintain multiple locations.Generally, our properties are not earmarked for use by a particular segment.Instead, most of our properties are used by two or more segments. We believethe facilities we occupy are adequate for the purposes for which they arecurrently used and are well-maintained.Item 3. Legal Proceedings.See “Legal and Regulatory Matters,” of Note 19, “Commitments,Contingencies and Guarantees,” to the consolidated financial statements, whichis incorporated herein by reference.Item 4. Mine Safety Disclosures.Not applicable.PART II Item 5. Market for Registrant’s Common Equity, Related StockholderMatters and Issuer Purchases of Equity Securities.Market InformationOur common stock has been listed on The Nasdaq Stock Market sinceFebruary 10, 2005, under the ticker symbol “NDAQ.”The following chart lists the quarterly high and low sales prices for shares ofour common stock for fiscal years 2017 and 2016. These prices are betweendealers and do not include retail markups, markdowns or other fees andcommissions and may not represent actual transactions. High LowFiscal 2017 Fourth quarter$78.88 $71.62Third quarter77.25 70.36Second quarter70.92 65.72First quarter70.76 65.37Fiscal 2016 Fourth quarter$68.94 $63.23Third quarter71.01 63.99Second quarter65.16 60.84First quarter66.09 54.7326 Table of ContentsAs of February 21, 2018 , we had approximately 276 holders of record of ourcommon stock. As of February 21, 2018 , the closing price of our commonstock was $79.12. Cash Dividends on Common StockThe following table shows quarterly cash dividends declared per common shareon our outstanding common stock: December 31, 2017 2016First quarter$0.32 $0.25Second quarter0.38 0.32Third quarter0.38 0.32Fourth quarter0.38 0.32Total$1.46 $1.21See “Cash Dividends on Common Stock,” of Note 14, “Nasdaq Stockholders’Equity,” to the consolidated financial statements for further discussion of thedividends. Issuer Purchases of Equity SecuritiesShare Repurchase ProgramSee “Share Repurchase Program,” of Note 14, “Nasdaq Stockholders’ Equity,”to the consolidated financial statements for further discussion of our sharerepurchase program.Employee TransactionsDuring the fiscal quarter ended December 31, 2017, we purchased shares fromemployees in connection with the settlement of employee tax withholdingobligations arising from the vesting of restricted stock and PSUs. * * * * * *The table below represents repurchases made by or on behalf of us or any “affiliated purchaser” of our common stock during the fiscal quarter ended December 31,2017:Period (a) Total Number ofShares Purchased (b) Average Price PaidPer Share (c) Total Number ofShares Purchased as Partof Publicly AnnouncedPlans or Programs (d) Maximum Dollar Valueof Shares that May Yet BePurchased Under the Plansor Programs(in millions)October 2017 Share repurchase program 377,516 $74.14 377,516 $227Employee transactions 1,850 $74.94 N/A N/A November 2017 Share repurchase program 9,732 $74.63 9,732 $226Employee transactions 304 $72.40 N/A N/A December 2017 Share repurchase program 1,100 $74.97 1,100 $226Employee transactions 70,763 $78.69 N/A N/A Total Quarter Ended December 31, 2017 Share repurchase program 388,348 $74.15 388,348 $226Employee transactions 72,917 $78.57 N/A N/A27 Table of ContentsPERFORMANCE GRAPHThe following graph compares the total return of our common stock to the Nasdaq Composite Stock Index, the S&P 500 and a selected peer group for the past fiveyears. The peer group includes ASX Limited, CBOE, CME Group Inc., Deutsche Börse A.G., ICE, LSE, and TMX Group Limited. Information for the indices andthe peer group is provided from December 31, 2012 through December 31, 2017. The figures represented below assume an initial investment of $100 in thecommon stock or index at the closing price on December 31, 2012 and the reinvestment of all dividends. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN**$100 invested on 12/31/12 in stock or index, including reinvestment of dividends.Fiscal year ending December 31. 2012 2013 2014 2015 2016 2017Nasdaq, Inc.$100.00 $161.79 $197.73 $244.01 $286.68 $334.72Nasdaq Composite100.00 141.63 162.09 173.33 187.19 242.29S&P 500100.00 132.39 150.51 152.59 170.84 208.14Peer Group100.00 153.73 164.34 185.98 212.88 287.34Copyright© 2018 Standard & Poor’s, a division of S&P Global. All rights reserved.28 Table of ContentsItem 6. Selected Financial Data.The following table sets forth selected financial data on a historical basis for Nasdaq. The following information should be read in conjunction with theconsolidated financial statements and notes thereto of Nasdaq included elsewhere in this Form 10-K. We completed several acquisitions during the years endedDecember 31, 2017, 2016, 2015 and 2013 and included the financial results of such acquisitions in our consolidated financial statements from the respectiveacquisition dates.Selected Financial Data Year Ended December 31, 2017 2016 2015 2014 2013 (in millions, except share and per share amounts)Statements of Income Data: Total revenues $3,965 $3,705 $3,403 $3,500 $3,211Transaction-based expenses (1,537) (1,428) (1,313) (1,433) (1,316)Revenues less transaction-based expenses 2,428 2,277 2,090 2,067 1,895Total operating expenses 1,429 1,438 1,370 1,313 1,207Operating income 999 839 720 754 688Net income attributable to Nasdaq 734 108 428 414 385Per share information: Basic earnings per share $4.41 $0.65 $2.56 $2.45 $2.30Diluted earnings per share $4.33 $0.64 $2.50 $2.39 $2.25 Cash dividends declared per common share $1.46 $1.21 $0.90 $0.58 $0.52Weighted-average common shares outstanding forearnings per share: Basic 166,364,299 165,182,290 167,285,450 168,926,733 166,932,103Diluted 169,585,031 168,800,997 171,283,271 173,018,849 171,266,146 December 31, 2017 2016 2015 2014 2013 (in millions)Balance Sheets Data: Cash and cash equivalents and financial investments $612 $648 $502 $601 $587Total assets 15,786 14,150 11,861 12,071 12,563Total long-term liabilities 4,637 4,638 3,332 3,297 3,579Total Nasdaq stockholders' equity 5,887 5,430 5,609 5,794 6,184 Total assets increased $1.6 billion as of December 31, 2017 compared with December 31, 2016 primarily due to an increase in default funds and margin deposits(with a corresponding increase in current liabilities), reflecting an increase in cash margin deposits pledged by members of our Nasdaq Clearing business due to anincrease in clearing volume. Also contributing to the increase is an increase in goodwill and intangible assets associated with our 2017 acquisitions, partially offsetby a decrease in deferred tax assets primarily due to the impact of the Tax Cuts and Jobs Act. See Note 11, “Income Taxes,” to the consolidated financialstatements for further discussion. Total assets increased $2.3 billion as of December 31, 2016 compared with December 31, 2015 primarily due to an increase indefault funds and margin deposits (with a corresponding increase in current liabilities) as new regulatory rules in 2016 required all collateral pledged by membersof our Nasdaq Clearing business to be recorded on the balance sheet. Also contributing to the increase was an increase in goodwill and intangible assets associatedwith our 2016 acquisitions, partially offset by a pre-tax, non-cash intangible asset impairment charge of $578 million to write off the full value of a trade name.29 Table of ContentsItem 7. Management’s Discussion and Analysis of Financial Condition andResults of Operations.The following discussion and analysis of the financial condition and results ofoperations of Nasdaq should be read in conjunction with our consolidatedfinancial statements and related notes included in this Form 10-K, as well as thediscussion under “Item 1A. Risk Factors.”Business OverviewWe are a leading provider of trading, clearing, marketplace technology,regulatory, securities listing, information and public and private companyservices. Our global offerings are diverse and include trading and clearingacross multiple asset classes, trade management services, data products,financial indexes, capital formation solutions, corporate solutions, and markettechnology products and services. Our technology powers markets across theglobe, supporting equity derivative trading, clearing and settlement, cash equitytrading, fixed income trading, trading surveillance and many other functions.For further discussion of our business, see “Item 1. Business.”Business EnvironmentOur non-transactional businesses provide technology to exchanges, clearingorganizations and central securities depositories around the world. We alsooffer companies and other organizations access to innovative products, softwaresolutions and services that increase transparency, mitigate risk, improve boardefficiency and facilitate better corporate governance. In our transactionalbusiness, we serve listed companies, market participants and investors byproviding derivative, commodities, cash equity, and fixed income markets, aswell as clearing services, thereby facilitating economic growth and corporateentrepreneurship. In broad terms, our business performance is impacted by anumber of drivers including macroeconomic events affecting the risk and returnof financial assets, investor sentiment, government and private sector demandsfor capital, the regulatory environment for capital markets, changingtechnology, particularly in the financial services industry, and changes ininvestment patterns and priorities. Our future revenues and net income willcontinue to be influenced by a number of domestic and international economictrends including, among others:•the demand by companies and other organizations for the products sold byour Corporate Solutions business, which is largely driven by the overallstate of the economy and the attractiveness of our offerings;•the challenges created by the automation of market data consumption,including competition and the quickly evolving nature of the data business;•the outlook of our technology customers for capital market activity;•technological advances and members’ and customers’ demand for speed,efficiency, and reliability; •the acceptance of cloud-based services and advanced analytics by ourcustomers and global regulators;•trading volumes and values in equity derivative, cash equity and FICC,which are driven primarily by overall macroeconomic conditions;•the number of companies seeking equity financing, which is affected byfactors such as investor demand, the global economy, and availability ofdiverse sources of financing, as well as tax and regulatory policies;•the demand for information about, or access to, our markets, which isdependent on the products we trade, our importance as a liquidity center,and the quality and pricing of our data and trade management services;•the demand for licensed ETPs, enhanced analytics and other financialproducts based on our indexes as well as changes to the underlying assetsassociated with existing licensed financial products;•continuing pressure in transaction fee pricing due to intense competition inthe U.S. and Europe;•competition related to pricing, product features and service offerings; and•regulatory changes relating to market structure or affecting certain types ofinstruments, transactions, pricing structures or capital market participants.The current consensus forecast for gross domestic product growth for the U.S.is 2.3% in 2017 and 2.5% in 2018 and the Eurozone is 2.3% in 2017 and 2.1%in 2018. U.S. growth forecasts for 2018 remained relatively consistent throughthe first half of 2017, but have been climbing upwards since then and arecurrently 0.2 percentage points higher than forecasted at the start of the year.Growth forecasts for the Eurozone in 2018 have steadily risen since an estimateof 1.5% at the start of 2017. While growth is accelerating, there are a number ofsignificant structural and political issues continuing to impact the globaleconomy. Consequently, sustained instability could return at any time, resultingin an increased level of market volatility, oscillating trading volumes, and amore cautious outlook by the clients of our non-trading segments. Volatilitywas low throughout 2017; however, in early February 2018, volatility levelshave increased.Following weakness in 2016 and early 2017, IPO activity has picked upsomewhat over the past three quarters particularly in our Nordics market.Additional impacts on our business drivers include the international enactmentand implementation of new legislative and regulatory initiatives, notably MiFIDII in Europe, the evolution of market participants’ trading and investmentstrategies, and the continued rapid progression and deployment of newtechnology in the financial services industry. The business environment thatinfluences our financial performance in 2018 may be characterized as follows:•rapidly evolving technology for our non-transactional businesses and theirclients;30 Table of Contents•increased demand for applications using emerging technologies andsophisticated analytics by both new entrants and industry incumbents;•the expansion of the number of industries and emergence of new industries,seeking to use advanced market technology;•intense competition among U.S. exchanges and dealer-owned systems forcash equity trading and strong competition between MTFs and exchangesin Europe for cash equity trading; and•globalization of exchanges, customers and competitors extending thecompetitive horizon beyond national markets.2018 OutlookFor key trends that may influence our business, see “Item 1. Business—2017Strategic Review.” Our strategy consists of leveraging our market technologyand information analytics expertise across our global capital markets. The focusfor both our non-transactional and transactional businesses continues to includeidentifying organic growth and developing adjacent opportunities to ourexisting businesses. In addition, our strategy includes identifying acquisitionsthat both complement our strengths and extend our capabilities, and offeropportunities for revenue and expense synergies and increased shareholdervalue.Our non-transactional businesses seek to provide increased transparency andanalytics to the investment community and to expand our market technologyofferings that power trading, post-trade and surveillance. New competitors willarise from both startups and existing firms and some existing competitors willfade as continued rapid technological change dominates the competitiveenvironment in 2018. We expect regulation to also evolve as governments andregulators respond to emerging technologies. The growth of a market placeeconomy in financial services and beyond, the need for new analyticcapabilities to process the data explosion, the evolution of the investmentmanagement industry, and our existing clients continued outsourcing of non-differentiating capabilities and processes create opportunities for our non-transactional businesses in 2018 and beyond.During 2018, we expect changes in both the competitive and regulatoryenvironments in our transactional businesses. In the U.S., in 2017, CBOEcompleted its acquisition of BATS, trading commenced on Miami's secondoption exchange, NYSE announced plans to begin trading Tape B and Tape Cstocks on its floor and to launch a fourth equities exchange, and CBOE andCME began trading bitcoin futures. We expect intense competition among U.S.equity and options marketplaces to continue and new entrants may also becomepart of our competitive environment. While the willingness of new entrants tocommence operations can be taken as a positive sign of good health in thetrading industry, as these organizations implement their strategies, they have thepotential to affect the competitive environment we face. European regulators are currently moving forward on a number of new policiesaffecting the operation and infrastructure of the financial markets. Theimplementation of EMIR is changing the way we structure and operate theNordic clearinghouse. MiFID II, as well as the new regulations in MiFIR, willchange the way our trading business operates and will create both challenges inour existing businesses, as well as new opportunities for growth. Industryresponse to the implementation of MiFID II in early 2018 is still unfolding,particularly the anticipated increase in the number of Systematic Internalizertrading systems operated by large financial service firms and electronicmarkets. Consequently, 2018 is an uncertain environment for our Europeantransactional businesses.The following summarizes our 2018 outlook for each of our segments:Market ServicesEconomic and political uncertainty continue to weigh on the global economyand the debate over future fiscal and monetary policy in the U.S. and Europecontinues. We believe that our diversified businesses position us well tocompete in an uncertain market environment. If the increased levels of marketvolatility seen in early February 2018 persist into the balance of 2018, thenmany of the asset classes within our Market Services segment and our DataProducts business will continue to benefit.NFX continues to expand its offering in its energy derivative products. Weenter 2018 with plans to increase the number of clients running on the NFXplatform, and we continue to identify additional products to bring to market.We expect global markets to be influenced by significant change in 2018,driven by economic factors and regulatory initiatives in the U.S. and Europe asrecently adopted regulations and legislation continue to be implemented. Thesechanges could result in the continued fragmentation of U.S. equity derivativeand cash equity markets, and trading could continue to migrate from exchangesto OTC systems, particularly in the U.S. We anticipate that trading volumeswill move to new types of broker-operated systems in Europe and potentiallyfrom exchanges to broker-operated systems as the industry responds toEuropean Union regulatory changes.Information ServicesAs we look toward the future, we continue to make progress in leveragingemerging technologies to expand the ways we serve clients, with our launch ofthe trading and analytics product suite, Analytics Hub, which leveragesmachine intelligence in its logic to serve investors.We also continue to make strides in expanding our Index Licensing andServices business, in particular in our smart beta products, which make up astrong portion of our growing total assets under management. The 2017acquisition of eVestment added the strong network effects of a leading analyticsprovider to our product offerings.31 Table of ContentsThe performance of our market data products offerings reflect overall marketconditions as well as our ability to offer market participants superiorperformance and efficiency relative to our competitors’ products. Our marketdata products also face pressure from our customers’ desire to minimize theircosts and from regulatory changes in the regions where we operate.In addition, we continue to look for opportunities to expand product salesthrough additional geographic expansion and new opportunities such aseVestment.Corporate ServicesOverall, we made significant progress in 2017 to enhance the client experience.In 2017, we combined our two board portal platforms. In addition, we createdan architectural foundation for our next generation corporate solutions productsusing the cloud and machine learning to offer enhanced surveillance tools.2017 was a record year for Nordic IPOs, while the IPO market was moresubdued in the U.S. Nasdaq led U.S. exchanges for IPOs for the fifthconsecutive year. There was strong momentum in U.S. listing switches with thelargest issuer ever to switch their exchange listing to Nasdaq in 2017. Growth in2018 for our Corporate Services segment will depend on a continued positiveeconomic outlook, a lower level of merger and acquisition transactions and areasonable level of volatility.As part of our strategic review, we identified the areas of our CorporateSolutions business that were of greatest importance to our customer base, thatdemonstrated significant growth opportunities, and where we could apply ourtechnology to enhance customer value and drive future growth. We determinedthat our Investor Relations and Board & Leadership Services would be our areaof focus and we commenced a process to evaluate strategic alternatives for thePublic Relations Solutions and Digital Media Services businesses within ourCorporate Solutions business and in January 2018, we announced the sale ofthese businesses. See “Definitive Agreement to Sell our Public RelationsSolutions and Digital Media Services Businesses,” of Note 21, “SubsequentEvents,” to the consolidated financial statements for further discussion.Market TechnologyDuring 2017, we continued to invest in the Nasdaq Financial Framework, whichis our market technology modular architecture that will provide next generationcapital market capabilities, including the integration of blockchain technology across theissuance and settlement of securities, as well as cloud-enabled trading andclearing. Based on customer interest and sales during 2017, we expect this nextgeneration platform to contribute meaningfully to our order intake in 2018 andbeyond.In addition, during 2017, we enhanced our SMARTS product and acquireddeeper surveillance and behavioral capabilities through Sybenetix. Our servicedelivery model continues to evolve as we move from deployed software to aPlatform-as-a-Service approach as cloud capabilities and market acceptancemature.SummaryWe believe that our future will continue to be determined by our ability tosatisfy our customer's evolving needs and to allocate resources in strategic areaswhich will yield attractive returns.Consistent with our long-term strategy, we expect to leverage our technologystrengths to offer new products that expand and strengthen our relationshipswith existing and new customers.We believe that our continued focus on meeting our cost, revenue andtechnology objectives will enable us to benefit from any improving economicconditions in the future. We will continue to look for opportunities to furtherexpand our business with enhanced product offerings and/or acquisitions thatare complementary to our existing businesses. Business SegmentsWe manage, operate and provide our products and services in four businesssegments: Market Services, Corporate Services, Information Services andMarket Technology. See Note 1, “Organization and Nature of Operations,” andNote 20, “Business Segments,” to the consolidated financial statements forfurther discussion of our reportable segments, as well as how managementallocates resources, assesses performance and manages these businesses as fourseparate segments.Sources of Revenues and Transaction-Based ExpensesSee “Revenue Recognition and Transaction-Based Expenses,” of Note 2,“Summary of Significant Accounting Policies,” to the consolidated financialstatements for further discussion of our sources of revenues and transaction-based expenses.32 Table of ContentsNasdaq’s Operating ResultsKey DriversThe following table includes key drivers for our Market Services, Corporate Services, Information Services and Market Technology segments. In evaluating theperformance of our business, our senior management closely evaluates these key drivers. Year Ended December 31, 2017 2016 2015Market Services Equity Derivative Trading and Clearing U.S. equity options Total industry average daily volume (in millions) 14.7 14.4 14.8Nasdaq PHLX matched market share 17.3% 16.0% 16.7%The Nasdaq Options Market matched market share 9.2% 7.8% 7.7%Nasdaq BX Options matched market share 0.7% 0.8% 0.8%Nasdaq ISE Options matched market share (1) 9.1% 5.8% —%Nasdaq GEMX Options matched market share (1) 5.2% 1.1% —%Nasdaq MRX Options matched market share (1) 0.1% 0.1% —%Total matched market share executed on Nasdaq’s exchanges 41.6% 31.6% 25.2%Nasdaq Nordic and Nasdaq Baltic options and futures Total average daily volume of options and futures contracts (2) 330,218 376,730 380,725Cash Equity Trading Total U.S.-listed securities Total industry average daily share volume (in billions) 6.53 7.35 6.91Matched share volume (in billions) 295.9 321.6 327.7The Nasdaq Stock Market matched market share 14.2% 14.0% 15.8%Nasdaq BX matched market share 3.1% 2.4% 2.0%Nasdaq PSX matched market share 0.8% 1.0% 1.0%Total matched market share executed on Nasdaq’s exchanges 18.1% 17.4% 18.8%Market share reported to the FINRA/Nasdaq Trade Reporting Facility 34.5% 33.1% 31.8%Total market share (3) 52.6% 50.5% 50.6%Nasdaq Nordic and Nasdaq Baltic securities Average daily number of equity trades executed on Nasdaq’s exchanges 552,104 472,428 438,864Total average daily value of shares traded (in billions) $5.3 $5.1 $5.1Total market share executed on Nasdaq’s exchanges 67.5% 62.5% 68.0%FICC Fixed Income U.S. fixed income notional trading volume (in billions) $17,800 $21,504 $29,234Total average daily volume of Nasdaq Nordic and Nasdaq Baltic fixed income contracts 115,185 89,252 108,708Commodities Power contracts cleared (TWh) (4) 1,199 1,658 1,496Corporate Services Initial public offerings The Nasdaq Stock Market 136 91 143Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic 88 62 78Total new listings The Nasdaq Stock Market (5) 268 283 274Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic (6) 108 88 91Number of listed companies The Nasdaq Stock Market (7) 2,949 2,897 2,859Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic (8) 984 900 852Information Services Number of licensed ETPs 324 298 222ETP assets under management tracking Nasdaq indexes (in billions) $167 $124 $114Market Technology Order intake (in millions) (9) $292 $276 $271Total order value (in millions) (10) $847 $777 $78833 Table of Contents____________(1) For the year ended December 31, 2016, Nasdaq ISE, Nasdaq GEMX and Nasdaq MRX matched market share represents trading volume which commenced onJune 30, 2016.(2) Includes Finnish option contracts traded on Eurex.(3) Includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the FINRA/NasdaqTrade Reporting Facility.(4) Transactions executed on Nasdaq Commodities or OTC and reported for clearing to Nasdaq Commodities measured by Terawatt hours (TWh).(5) New listings include IPOs, including those completed on a best efforts basis, issuers that switched from other listing venues, closed-end funds and separatelylisted ETPs.(6) New listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets ofNasdaq First North.(7) Number of total listings on The Nasdaq Stock Market at period end, including 373 ETPs as of December 31, 2017 and 328 as of December 31, 2016 .(8) Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North at periodend.(9) Total contract value of orders signed during the period.(10) Represents total contract value of signed orders that are yet to be recognized as revenue. Market technology deferred revenue, as discussed in Note 9,“Deferred Revenue,” to the consolidated financial statements, represents consideration received that is yet to be recognized as revenue for these signed orders.* * * * * *Financial SummaryThe following table summarizes our financial performance for the year ended December 31, 2017 when compared with the same period in 2016 and for the yearended December 31, 2016 when compared with the same period in 2015. The comparability of our results of operations between reported periods is impacted bythe acquisitions of: eVestment in October 2017, Nasdaq Canada and Marketwired in February 2016, Boardvantage in May 2016, ISE in June 2016 and DWA inJanuary 2015. See Note 4, “Acquisitions,” to the consolidated financial statements for further discussion of the above acquisitions. For a detailed discussion of ourresults of operations, see “Segment Operating Results” below. Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions, except per share amounts) Revenues less transaction-based expenses $2,428 $2,277 $2,090 6.6 % 8.9 %Operating expenses 1,429 1,438 1,370 (0.6)% 5.0 %Operating income 999 839 720 19.1 % 16.5 %Interest expense (143) (135) (111) 5.9 % 21.6 %Asset impairment charge — (578) — (100.0)% N/MIncome before income taxes 880 136 630 547.1 % (78.4)%Income tax provision 146 28 203 421.4 % (86.2)%Net income attributable to Nasdaq $734 $108 $428 579.6 % (74.8)%Diluted earnings per share $4.33 $0.64 $2.50 576.6 % (74.4)%Cash dividends declared per common share $1.46 $1.21 $0.90 20.7 % 34.4 %____________N/M Not meaningful.In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Impacts on our revenues lesstransaction-based expenses and operating income associated with fluctuations in foreign currency are discussed in more detail under “Item 7A. Quantitative andQualitative Disclosures about Market Risk.”34 Table of ContentsSegment Operating ResultsThe following table shows our revenues by segment, transaction-based expenses for our Market Services segment and total revenues less transaction-basedexpenses: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Market Services $2,418 $2,255 $2,084 7.2% 8.2%Transaction-based expenses (1,537) (1,428) (1,313) 7.6% 8.8%Market Services revenues less transaction-based expenses 881 827 771 6.5% 7.3%Corporate Services 656 635 562 3.3% 13.0%Information Services 588 540 512 8.9% 5.5%Market Technology 303 275 245 10.2% 12.2%Total revenues less transaction-based expenses $2,428 $2,277 $2,090 6.6% 8.9%The following charts show our Market Services, Corporate Services, Information Services and Market Technology segments as a percentage of our total revenuesless transaction-based expenses of $2,428 million in 2017, $2,277 million in 2016 and $2,090 million in 2015: 35 Table of Contents 36 Table of ContentsMARKET SERVICESThe following table shows total revenues, transaction-based expenses, and total revenues less transaction-based expenses from our Market Services segment: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Market Services Revenues: Equity Derivative Trading and Clearing Revenues (1) $752 $541 $432 39.0 % 25.2 %Transaction-based expenses: Transaction rebates (450) (288) (223) 56.3 % 29.1 %Brokerage, clearance and exchange fees (1) (43) (25) (21) 72.0 % 19.0 %Equity derivative trading and clearing revenues less transaction-basedexpenses 259 228 188 13.6 % 21.3 %Cash Equity Trading Revenues (2) 1,279 1,349 1,315 (5.2)% 2.6 %Transaction-based expenses: Transaction rebates (692) (785) (756) (11.8)% 3.8 %Brokerage, clearance and exchange fees (2) (334) (309) (306) 8.1 % 1.0 %Cash equity trading revenues less transaction-based expenses 253 255 253 (0.8)% 0.8 %FICC Revenues 96 99 98 (3.0)% 1.0 %Transaction-based expenses: Transaction rebates (16) (19) (4) (15.8)% 375.0 %Brokerage, clearance and exchange fees (2) (2) (3) — % (33.3)%FICC revenues less transaction-based expenses 78 78 91 — % (14.3)%Trade Management Services Revenues 291 266 239 9.4 % 11.3 %Total Market Services revenues less transaction-based expenses $881 $827 $771 6.5 % 7.3 %____________(1) Includes Section 31 fees of $40 million in 2017, $24 million in 2016 and $19 million in 2015. Section 31 fees are recorded as equity derivative trading andclearing revenues with a corresponding amount recorded in transaction-based expenses. (2) Includes Section 31 fees of $319 million in 2017, $290 million in 2016 and $282 million in 2015. Section 31 fees are recorded as cash equity tradingrevenues with a corresponding amount recorded in transaction-based expenses. Equity Derivative Trading and Clearing RevenuesEquity derivative trading and clearing revenues and equity derivative tradingand clearing revenues less transaction-based expenses increased in both 2017compared with 2016 and 2016 compared with 2015. The increases in 2017 were primarily due to the inclusion of a full year ofrevenues from our acquisition of ISE compared with six months in 2016, higherU.S. industry trading volumes and an increase in our overall U.S. matchedmarket share. Further impacting the increase in equity derivative tradingrevenues was higher Section 31 pass-through fee revenue.The increases in 2016 were primarily due to:•the inclusion of revenues from our acquisition of ISE, partially offset by;•lower U.S. industry trading volumes; and•lower market share at Nasdaq PHLX. Section 31 fees are recorded as equity derivative trading and clearing revenueswith a corresponding amount recorded as transaction-based expenses. In theU.S., we are assessed these fees from the SEC and pass them through to ourcustomers in the form of incremental fees. Pass-through fees can increase ordecrease due to rate changes by the SEC, our percentage of the overall industryvolumes processed on our systems, and differences in actual dollar value ofshares traded. Since the amount recorded in revenues is equal to the amountrecorded as transaction-based expenses, there is no impact on our revenues lesstransaction-based expenses. The increase in 2017 compared with 2016 isprimarily due to the inclusion of a full year of Section 31 fees from ouracquisition of ISE compared with six months in 2016. The increase in 2016compared with 2015 is primarily due to the inclusion of six months of Section31 fees from our acquisition of ISE.Transaction rebates, in which we credit a portion of the per share executioncharge to the market participant, increased in both37 Table of Contents2017 compared with 2016 and 2016 compared to 2015. The increase in 2017was primarily due to the inclusion of a full year of rebates associated with ouracquisition of ISE compared with six months in 2016, increases in rebatecapture, higher U.S. industry trading volumes, and an increase in our overallU.S. matched market share. The increase in 2016 was primarily due to theinclusion of six months of rebates associated with our acquisition of ISE,partially offset by lower U.S. industry trading volumes and lower market shareat Nasdaq PHLX.Brokerage, clearance and exchange fees increased in both 2017 compared with2016 and 2016 compared with 2015. The increase in both 2017 and 2016 wasprimarily due to higher Section 31 pass-through fees associated with ouracquisition of ISE, as discussed above.Cash Equity Trading RevenuesCash equity trading revenues and cash equity trading revenues less transaction-based expenses decreased in 2017 compared with 2016 and increased in 2016compared with 2015.The decreases in 2017 were primarily due to:•lower U.S. industry trading volumes, partially offset by;•higher European industry trading volumes; and•an increase in our overall U.S. matched market share and European marketshare executed on Nasdaq's exchanges.The decrease in cash equity trading revenues in 2017 was also partially offsetby an increase in Section 31 pass-through fee revenue.The increases in 2016 were primarily due to:•the inclusion of revenues associated with our acquisition of NasdaqCanada; and•higher U.S. and European industry trading volumes, partially offset by a;•decrease in our overall U.S. and European matched market share executedon Nasdaq’s exchanges.The increase in cash equity trading revenues less transaction-based expenses in2016 was also unfavorably impacted by a decrease in the U.S. average netcapture rate.Similar to equity derivative trading and clearing, in the U.S. we recordSection 31 fees as cash equity trading revenues with a corresponding amountrecorded as transaction-based expenses. We are assessed these fees from theSEC 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 astransaction-based expenses, there is no impact on our revenues less transaction-based expenses. The increases in Section 31 fees in 2017 compared with 2016and 2016 compared with 2015 were primarily due to higher dollar value tradedon Nasdaq’s exchanges and higher SEC fee rates.Transaction rebates decreased in 2017 compared with 2016 and increased in2016 compared with 2015. For The Nasdaq Stock Market, Nasdaq PSX andNasdaq Canada, we credit a portion of the per share execution charge to themarket participant that provides the liquidity, and for Nasdaq BX, we credit a portion of the per shareexecution charge to the market participant that takes the liquidity.The decrease in 2017 was primarily due to:•lower U.S. industry trading volumes, partially offset by;•an increase in our overall U.S. matched market share executed on Nasdaq’sexchanges.The increase in 2016 was primarily due to:•higher U.S. industry trading volumes; and•the inclusion of rebates associated with our acquisition of Nasdaq Canada,partially offset by a;•decrease in our overall U.S. matched market share executed on Nasdaq’sexchanges.Brokerage, clearance and exchange fees increased in both 2017 compared with2016 and 2016 when compared with 2015. The increase in 2017 was primarilydue to higher Section 31 pass-through fees, as discussed above, partially offsetby a decline in routing fees. The increase in 2016 was primarily due to anincrease in Section 31 pass-through fees.FICC RevenuesFICC revenues decreased in 2017 compared with the same period in 2016primarily due to volume declines in European commodities products and U.S.fixed income products, partially offset by higher volumes and pricing changesat NFX. FICC revenues less transaction-based expenses were flat in 2017compared with 2016 as declines in European commodities products and U.S.fixed income products were offset by higher volumes and pricing changes atNFX.FICC revenues increased slightly in 2016 compared with 2015 and FICCrevenues less transaction-based expenses decreased in 2016 compared with2015. The decrease in FICC revenues less transaction-based expenses in 2016was primarily due to the impact of NFX trading incentives and a decline in U.S.fixed income revenues, partially offset by higher commodities revenues.Trade Management Services RevenuesTrade management services revenues increased in both 2017 compared with2016 and 2016 compared with 2015. The increase in 2017 was primarily due toan increase in customer demand for third party connectivity, co-location, andtest facilities and the inclusion of a full year of revenues from our acquisition ofISE compared with six months in 2016. The increase in 2016 was primarily dueto an increase in customer demand for network connectivity and the inclusionof six months of revenues from our acquisition of ISE.38 Table of ContentsCORPORATE SERVICESThe following table shows revenues from our Corporate Services segment: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Corporate Services: CorporateSolutions $386 $363 $298 6.3 % 21.8%Listing Services 270 272 264 (0.7)% 3.0%Total CorporateServices $656 $635 $562 3.3 % 13.0%Corporate Solutions RevenuesCorporate solutions revenues increased in both 2017 compared with 2016 and2016 compared with 2015. The increase was primarily due to the inclusion ofrevenues associated with the acquisitions of Boardvantage and Marketwired.See “Acquisition of Boardvantage,” and “Acquisition of Marketwired,” of Note4, “Acquisitions,” to the consolidated financial statements for further discussionof the Boardvantage and Marketwired acquisitions.Listing Services RevenuesListing services revenues decreased in 2017 compared with 2016 and increasedin 2016 compared with 2015. The decrease in 2017 was primarily due to adecrease in U.S. listing of additional share fees as a result of our all-inclusiveannual listing fee program, partially offset by an increase in European listingservices revenues due to new company listings. The increase in 2016 wasprimarily due to an increase in European revenues due to new company listings.INFORMATION SERVICESThe following table shows revenues from our Information Services segment: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs.2015 (in millions) Information Services: Data Products $454 $427 $399 6.3% 7.0%Index Licensing andServices 134 113 113 18.6% —%Total InformationServices $588 $540 $512 8.9% 5.5%Data Products RevenuesData products revenues increased in both 2017 compared with 2016 and 2016compared with 2015. The increase in 2017 was primarily due to growth inproprietary data products revenues and the inclusion of revenues associatedwith the acquisition of eVestment. The increase in 2016 was primarily due togrowth in proprietary data products revenues, the inclusion of revenues associated with the acquisitions of ISE and Nasdaq Canada, and higher indexdata products revenues.Index Licensing and Services RevenuesIndex licensing and services revenues increased in 2017 compared with 2016and was flat in 2016 compared with 2015. The increase in 2017 was primarilydue to higher assets under management in ETPs linked to Nasdaq indexes.Index licensing and services revenues were flat in 2016 as an increase inrevenues associated with the acquisition of ISE was offset by a decrease inaverage fees on ETPs tracking to Nasdaq indexes and a decrease in the value ofunderlying assets associated with non-ETP Nasdaq-licensed products.MARKET TECHNOLOGYThe following table shows revenues from our Market Technology segment: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Market Technology $303 $275 $245 10.2% 12.2%Market Technology RevenuesMarket technology revenues increased in both 2017 compared with 2016 and2016 compared with 2015. The increase in 2017 was primarily due to higherchange request revenues and an increase in revenues from software as a service.The increase in 2016 was primarily due to an increase in revenues fromsoftware, licensing and support as well as surveillance products.Total Order ValueTotal order value, which represents the total contract value of orders signed thatare yet to be recognized as revenues, was $847 million as of December 31,2017 and $777 million as of December 31, 2016 . As of December 31, 2017 ,market technology deferred revenue of $173 million represents considerationreceived that is yet to be recognized as revenue for these signed orders. SeeNote 9, “Deferred Revenue,” to the consolidated financial statements for furtherdiscussion. The recognition and timing of these revenues depend on manyfactors, including those that are not within our control. As such, the followingtable of market technology revenues to be recognized in the future representsour best estimate: Total Order Value (in millions)Fiscal year ended: 2018$2632019204202013720211022022622023 and thereafter79Total$84739 Table of ContentsOn January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts withCustomers.” As a result, a portion of revenues that were previously deferredwere recognized either in prior period revenues, through restatement, or as anadjustment to retained earnings upon adoption of the new standard. See “Recent AccountingPronouncements,” of Note 2, “Summary of Significant Accounting Policies,”for further discussion and the impact to the deferred revenue balance.* * * * * *ExpensesOperating ExpensesThe following table shows our operating expenses: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Compensation and benefits $675 $664 $590 1.7 % 12.5 %Professional and contract services 156 153 148 2.0 % 3.4 %Computer operations and data communications 125 111 107 12.6 % 3.7 %Occupancy 95 86 85 10.5 % 1.2 %General, administrative and other 82 72 65 13.9 % 10.8 %Marketing and advertising 31 30 28 3.3 % 7.1 %Depreciation and amortization 188 170 138 10.6 % 23.2 %Regulatory 33 35 27 (5.7)% 29.6 %Merger and strategic initiatives 44 76 10 (42.1)% 660.0 %Restructuring charges — 41 172 (100.0)% (76.2)%Total operating expenses $1,429 $1,438 $1,370 (0.6)% 5.0 %The increase in compensation and benefits expense in 2017 was primarily dueto overall higher compensation costs resulting from our 2017 and 2016acquisitions and an unfavorable impact from foreign exchange of $2 million,partially offset by lower compensation expense reflecting lower performanceincentives. Also impacting the change in compensation expense in 2017 wasaccelerated expense recorded in 2016 due to the retirement of the company'sformer CEO for equity awards previously granted. The increase in 2016 wasprimarily due to overall higher compensation costs resulting from our 2016acquisitions and accelerated expense due to the retirement of the company’sformer CEO discussed above. Partially offsetting the 2016 increases was lowercompensation expense reflecting lower performance incentives and a favorableimpact from foreign exchange of $3 million.Headcount increased to 4,734 employees as of December 31, 2017 from 4,325as of December 31, 2016 primarily due to our acquisition of eVestment.The increase in professional and contract services expense in 2017 wasprimarily associated with our 2017 and 2016 acquisitions and the increase in2016 was primarily associated with our 2016 acquisitions.The increase in computer operations and data communications expense in 2017and 2016 was primarily due to higher hardware and license costs. The increasein 2017 was associated with our 2017 and 2016 acquisitions and the increase in2016 was primarily associated with our 2016 acquisitions. The increase in occupancy expense in 2017 and 2016 primarily reflectsadditional facility and rent costs. The increase in 2017 was associated with our2017 and 2016 acquisitions and the increase in 2016 was associated with our2016 acquisitions. The increase in 2016 is partially offset by lower facility andrent costs as a result of our restructuring activities.The increase in general, administrative and other expense in 2017 was primarilydue to a pre-tax charge of $10 million which primarily included a make-wholeredemption price premium paid on the early extinguishment of our $370 millionaggregate principal amount of 5.25% senior unsecured notes, or the 2018 Notes,and lower regulatory fine collections. The increase in 2016 is primarilyassociated with our 2016 acquisitions.Marketing and advertising expense increased in both 2017 and 2016 primarilydue to an increase in advertising spend.The increase in depreciation and amortization expense in 2017 and 2016 wasprimarily due to additional amortization expense associated with acquiredintangible assets. The increase in 2017 was associated with our 2017 and 2016acquisitions and the increase in 2016 was primarily associated with our 2016acquisitions. The increase in 2016 was also due to additional amortizationexpense associated with software assets placed in service.The decrease in regulatory expense in 2017 was primarily due to costs incurredin 2016 related to the investigations of cybersecurity processes at our Nordicexchanges and clearinghouse, which are discussed below, partially offset by arate increase for regulatory services and trade surveillance. The40 Table of Contentsincrease in 2016 was due to investigations of cybersecurity processes at ourNordic exchanges and clearinghouse. In December 2016, we were issued a $6million fine by the SFSA as a result of findings in connection with itsinvestigation. The SFSA’s conclusions related to governance issues rather thansystems and platform security. We have appealed the SFSA’s decision,including the amount of the fine. The court has not yet reached a decision onour appeal.Merger and strategic initiatives expense for 2017 was primarily related to ouracquisitions of eVestment and ISE as well as costs associated with our reviewof strategic alternatives for our Public Relations Solutions and Digital Media Services businesses within ourCorporate Solutions business. Merger and strategic initiatives expense for 2016was primarily related to our acquisitions of ISE, Boardvantage, andMarketwired. Merger and strategic initiatives expense for 2015 was primarilyrelated to certain strategic initiatives and our acquisition of DWA.See Note 3, “Restructuring Charges,” to the consolidated financial statementsfor a discussion of our restructuring charges recorded during 2016 and 2015.* * * * * *Non-operating Income and ExpensesThe following table shows our non-operating income and expenses: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Interest income $7 $5 $4 40.0 % 25.0 %Interest expense (143) (135) (111) 5.9 % 21.6 %Net interest expense (136) (130) (107) 4.6 % 21.5 %Asset impairment charge — (578) — (100.0)% N/MOther investment income 2 3 — (33.3)% N/MNet income from unconsolidated investees 15 2 17 650.0 % (88.2)%Total non-operating expenses $(119) $(703) $(90) (83.1)% 681.1 %_______N/M Not meaningful.Interest IncomeInterest income increased in both 2017 and 2016 primarily due to an increase in interest rates.Interest Expense The following table shows our interest expense: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Interest expense on debt $135 $129 $106 4.7% 21.7%Accretion of debt issuance costs and debt discount 6 5 4 20.0% 25.0%Other bank and investment-related fees 2 1 1 100.0% —%Interest expense $143 $135 $111 5.9% 21.6%Interest expense increased in 2017 and 2016 primarily due to debt issuancesrelated to our acquisitions, partially offset by refinancing to lower cost debt.The increase in 2017 was primarily associated with our 2017 and 2016acquisitions and the increase in 2016 was primarily associated with our 2016acquisitions.See Note 10, “Debt Obligations,” to the consolidated financial statements forfurther discussion. Asset Impairment ChargeThe asset impairment charge in 2016 relates to a pre-tax, non-cash intangibleasset impairment charge related to the full write-off of the eSpeed trade namedue to a continued decline in the operating performance of the eSpeed businessduring 2016 and a rebranding of our Fixed Income business under a singlebrand called Nasdaq Fixed Income.See “Intangible Asset Impairment Charges,” of Note 6, “Goodwill andAcquired Intangible Assets,” to the consolidated financial statements for furtherdiscussion of the intangible asset impairment charge in 2016.41 Table of ContentsNet Income from Unconsolidated InvesteesNet income from unconsolidated investees in 2017 and 2015 primarily relatesto income recognized from our equity method investment in OCC. Net incomefrom unconsolidated investees in 2016 includes income recognized from ourequity method investments in OCC and EuroCCP N.V. , partially offset by thewrite-off of an equity method investment. See “Equity MethodInvestments,” of Note 7, “Investments,” to the consolidated financial statementsfor further discussion of our equity method investments. Tax MattersThe Tax Cuts and Jobs Act was enacted on December 22, 2017 and is effectiveJanuary 1, 2018. The new legislation contains several key provisions, includinga reduction of the U.S. corporate income tax rate from 35% to 21%. We arerequired to remeasure all our U.S. deferred tax assets and liabilities as ofDecember 22, 2017 and record the impact of such remeasurement in our 2017financial statements. For the year ended December 31, 2017, we recorded adecrease to tax expense of $87 million , substantially all of which reflects theestimated impact associated with the remeasurement of our net U.S. deferredtax liability at the lower U.S. federal corporate income tax rate. The Tax Cutsand Jobs Act also imposes a transition tax on unremitted aggregate accumulatedearnings of non-U.S. subsidiaries, which did not impact us.The following table shows our income tax provision and effective tax rate: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 ($ in millions) Income taxprovision $146 $28 $203 421.4% (86.2)%Effective taxrate 16.6% 20.6% 32.2% The lower effective tax rate in 2017 when compared to 2016 is primarily due toa decrease to tax expense associated with the remeasurement of our net U.S.deferred tax liability as a result of enactment of the Tax Cuts and Jobs Act. Thedecrease in the effective tax rate in 2017 is also due to the recognition of excesstax benefits associated with the vesting of employee share-based compensationarrangements. The lower effective tax rate in 2016 when compared to 2015 isprimarily due to a shift in the geographic mix of earnings, largely driven by thewrite-off of the eSpeed trade name, partially offset by an unfavorable rulingfrom the Finnish Supreme Administrative Court.The effective tax rate may also vary from period to period depending on, amongother factors, the geographic and business mix of earnings and losses. Thesesame and other factors, including history of pre-tax earnings and losses, aretaken into account in assessing the ability to realize deferred tax assets.For further discussion of our tax matters, see “Tax Matters,” and “RecentAccounting Pronouncements,” of Note 2, “Summary of Significant AccountingPolicies,” and Note 11, “Income Taxes,” to the consolidated financialstatements.* * * * * *Non-GAAP Financial MeasuresIn addition to disclosing results determined in accordance with U.S. GAAP, wealso have provided non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share. Management uses this non-GAAPinformation internally, along with U.S. GAAP information, in evaluating ourperformance and in making financial and operational decisions. We believe ourpresentation of these measures provides investors with greater transparency andsupplemental data relating to our financial condition and results of operations.In addition, we believe the presentation of these measures is useful to investorsfor period-to-period comparisons of results as the items described below do notreflect 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.Investors should not rely on any single financial measure when evaluating ourbusiness. We recommend investors review the U.S. GAAP financial measures included inthis Annual Report on Form 10-K, including our consolidated financialstatements and the notes thereto. When viewed in conjunction with our U.S.GAAP results and the accompanying reconciliation, we believe these non-GAAP measures provide greater transparency and a more completeunderstanding of factors affecting our business than U.S. GAAP measuresalone.We understand that analysts and investors regularly rely on non-GAAPfinancial measures, such as non-GAAP net income attributable to Nasdaq andnon-GAAP diluted earnings per share, to assess operating performance. We usenon-GAAP net income attributable to Nasdaq and non-GAAP diluted earningsper share because they highlight trends more clearly in our business that maynot otherwise be apparent when relying solely on U.S. GAAP financialmeasures, since these measures eliminate from our results specific financialitems that have less bearing on our ongoing operating performance. Non-GAAPnet42 Table of Contentsincome attributable to Nasdaq for the periods presented below is calculated byadjusting for the following items:Amortization expense of acquired intangible assets: We amortize intangibleassets acquired in connection with various acquisitions. Intangible assetamortization expense can vary from period to period due to episodicacquisitions completed, rather than from our ongoing business operations. Assuch, if intangible asset amortization is included in performance measures, it ismore difficult to assess the day-to-day operating performance of the businesses,the relative operating performance of the businesses between periods, and theearnings power of Nasdaq. Performance measures excluding intangible assetamortization therefore provide investors with a more useful representation ofour businesses’ ongoing activity in each period.Merger and strategic initiatives expense: We have pursued various strategicinitiatives and completed a number of acquisitions in recent years which haveresulted in expenses which would not have otherwise been incurred. Theseexpenses generally include integration costs, as well as legal, due diligence andother third party transaction costs. The frequency and the amount of suchexpenses vary significantly based on the size, timing and complexity of thetransaction. Accordingly, we exclude these costs for purposes of calculatingnon-GAAP measures which provide a more meaningful analysis of Nasdaq’songoing operating performance or comparison in Nasdaq’s performancebetween periods.Restructuring charges: Restructuring charges are associated with our 2015restructuring plan to improve performance, cut costs and reduce spending andwere primarily related to (i) severance and other termination benefits, (ii) assetimpairment charges, and (iii) other charges. We exclude these restructuringcosts because these costs do not reflect future operating expenses and do notcontribute to a meaningful evaluation of Nasdaq’s ongoing operatingperformance or comparison of Nasdaq’s performance between periods.Asset impairment charge: Intangible assets that have indefinite lives arereviewed for impairment at least annually, or when indicators of impairment arepresent. In December 2 016, we recorded a pre-tax, non-cash intangible assetimpairment charge of $578 million related to the full write-off of the eSpeedtrade name. The impairment charge was the result of a decline in operatingperformance and the rebranding of our Fixed Income business. We excludeasset impairment charges because they do not reflect future operating expensesand do not contribute to a meaningful evaluation of Nasdaq’s ongoing operatingperformance or comparison of 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 tomeasure operating performance. We believe the exclusion of such amountsallows management and investors to better understand the ongoing financialresults of Nasdaq. For 2017 , other significant items primarily include a make-whole redemption price premium paid on the early extinguishment of our 2018 Notes, a sublease loss reserve charge recorded onspace we currently occupy due to excess capacity, and wind down costsassociated with an equity method investment that was previously written off.For 2016, other significant items primarily include accelerated expense forequity awards previously granted due to the retirement of the company’s formerCEO, a regulatory fine received by our Nordic exchanges and clearinghouse,the release of a sublease loss reserve due to the early exit of a facility, and theimpact of the write-off of an equity method investment, partially offset by again resulting from the sale of a percentage of a separate equity methodinvestment. For 2015, other significant items include income from our equityinvestment in OCC where we were not able to determine what our share ofOCC’s income was for the year ended December 31, 2014 until the first quarterof 2015, when financial statements were made available to us. As a result, werecorded other income in the first quarter of 2015 relating to our share ofOCC’s income for the year ended December 31, 2014. For 2015, othersignificant adjustments also included the reversal of a VAT refund.Significant tax items: The adjustment to the income tax provision includes thetax impact of each non-GAAP adjustment in addition to the following items:•The recognition of previously unrecognized tax benefits of $12 millionassociated with positions taken in prior years for the year ended December31, 2017.•We recorded a $27 million tax expense for the year ended December 31,2016, due to an unfavorable tax ruling received during the second quarterof 2016, the impact of which is related to prior periods.•The impact of newly enacted U.S. tax legislation is related to the Tax Cutsand Jobs Act which was enacted on December 22, 2017. For the yearended December 31, 2017, we recorded a decrease to tax expense of $87million, which reflects the estimated impact associated with the enactmentof this act. The decrease in tax expense primarily relates to theremeasurement of our net U.S. deferred tax liability at the lower U.S.federal corporate income tax rate. The estimate may be refined in the futureas new information becomes available.•Excess tax benefits related to employee share-based compensation of $40million for the year ended December 31, 2017 was recorded as a result ofthe adoption of new accounting guidance on January 1, 2017. Thisguidance requires all income tax effects of share-based awards to berecognized as income tax expense or benefit in the income statement whenthe awards vest or are settled on a prospective basis, as opposed tostockholders’ equity where it was previously recorded, and will be arecurring item going forward. This item is subject to volatility and willvary based on the timing of the vesting of employee share-basedcompensation arrangements and fluctuation in our stock price.43 Table of ContentsThe following table represents reconciliations between U.S. GAAP net income attributable to Nasdaq and diluted earnings per share and non-GAAP net incomeattributable to Nasdaq and diluted earnings per share: Year Ended December 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 Net Income Diluted Earnings PerShare Net Income Diluted Earnings PerShare Net Income Diluted Earnings PerShare (in millions, except share and per share amounts)U.S. GAAP net income attributable to Nasdaqand diluted earnings per share $734 $4.33 $108 $0.64 $428 $2.50Non-GAAP adjustments: Amortization expense of acquired intangibleassets 92 0.54 82 0.49 62 0.36Merger and strategic initiatives 44 0.26 76 0.45 10 0.06Extinguishment of debt 10 0.06 — — — —Restructuring charges — — 41 0.24 172 1.00Asset impairment charge — — 578 3.42 — —Executive compensation — — 12 0.07 — —Regulatory matter 1 0.01 6 0.04 — —Income from OCC equity investment — — — — (13) (0.08)Reversal VAT refund — — — — 12 0.07Sublease loss reserve 2 0.01 (1) (0.01) — —Other 2 0.01 6 0.04 — —Adjustment to the income tax provision toreflect non-GAAP adjustments and othertax items (70) (0.41) (287) (1.70) (90) (0.52)Impact of newly enacted U.S. tax legislation (87) (0.51) — — — —Excess tax benefits related to employeeshare-based compensation (40) (0.24) — — — —Total non-GAAP adjustments, net of tax (46) (0.27) 513 3.04 153 0.89 Non-GAAP net income attributable to Nasdaqand diluted earnings per share $688 $4.06 $621 $3.68 $581 $3.39Weighted-average common shares outstanding fordiluted earnings per share 169,585,031 168,800,997 171,283,271 * * * * * *Liquidity and Capital ResourcesHistorically, we have funded our operating activities and met our commitmentsthrough cash generated by operations, augmented by the periodic issuance ofour common stock and debt. See Note 10, “Debt Obligations,” to theconsolidated financial statements for further discussion. Currently, our cost andavailability of funding remain healthy.As part of the purchase price consideration of a prior acquisition, Nasdaq hascontingent future obligations to issue 992,247 shares of Nasdaq common stockannually which approximated certain tax benefits associated with thetransaction of $484 million. Such contingent future issuances of Nasdaqcommon stock will be paid ratably through 2027 if Nasdaq’s total grossrevenues equal or exceed $25 million in each such year. The contingent future issuances of Nasdaq common stock aresubject to anti-dilution protections and acceleration upon certain events.In April 2017, we entered into the 2017 Credit Facility which replaced ourexisting 2014 credit facility. We also entered into a commercial paper programwhich enables us to borrow efficiently at reasonable short-term interest ratesand is supported by our 2017 Credit Facility. See “Commercial PaperProgram,” “2017 Credit Facility,” and “2014 Credit Facility,” of Note 10,“Debt Obligations,” to the consolidated financial statements for furtherdiscussion.As of December 31, 2017 , the balance of $110 million outstanding on the 2017Credit Facility reflects the outstanding44 Table of Contentsamount, less unamortized debt issuance costs of $5 million . Of the $885million that is available for borrowing, $480 million provides liquidity supportfor the principal amount outstanding under the commercial paper program as ofDecember 31, 2017 and $1 million has been utilized for a letter of credit. As ofDecember 31, 2017 , the total remaining amount available under the 2017Credit Facility was $404 million .In May 2017, we used a combination of cash on hand and net proceeds from thesale of commercial paper to redeem all of our 2018 Notes. In addition, in June2017, we used net proceeds from the sale of commercial paper to repay $300million of the amount outstanding on the 2016 Credit Facility. As ofDecember 31, 2017 , the outstanding balance of $100 million on the 2016Credit Facility reflects the aggregate principal amount, less the unamortizeddebt issuance costs. See “Early Extinguishment of 2018 Notes,” and “2016Credit Facility,” of Note 10, “Debt Obligations,” to the consolidated financialstatements for further discussion.In September 2017, we announced an agreement to acquire eVestment andissued the 2019 Notes. Since the proposed acquisition of eVestment was notimmediately expected to close, $276 million of the net proceeds from the 2019Notes was used to partially pay down our outstanding commercial paperbalance and the remainder of the net proceeds was held in cash and used inOctober 2017 to partially fund our acquisition of eVestment. See “Acquisitionof eVestment,” of Note 4, “Acquisitions,” for further discussion.In May 2016, Nasdaq issued the 2023 Notes and in June 2016, Nasdaq issuedthe 2026 Notes. We used the majority of the net proceeds from the 2023 Notesof $664 million and the 2026 Notes of $495 million to fund the acquisition ofISE and related expenses. See “3.85% Senior Unsecured Notes,” and “1.75%Senior Unsecured Notes,” of Note 10, “Debt Obligations,” and “Acquisition ofISE,” of Note 4, “Acquisitions,” to the consolidated financial statements forfurther discussion.In the near term, we expect that our operations and the availability under ourrevolving credit commitment and commercial paper program will providesufficient cash to fund our operating expenses, capital expenditures, debtrepayments, any share repurchases, and any dividends.Various assets and liabilities, including cash and cash equivalents, receivables,accounts payable and accrued expenses, and commercial paper can fluctuatefrom month to month. Working capital (calculated as current assets less currentliabilities) was $ 267 million as of December 31, 2017 , compared with $ 478million as of December 31, 2016 , a decrease of $ 211 million . Current assetbalance changes increased working capital by $969 million, with increases indefault funds and margin deposits, assets held for sale, other current assets andrestricted cash, partially offset by decreases in cash and cash equivalents,financial investments, at fair value, and receivables, net. Current liabilitybalance changes decreased working capital by $1,180 million, due to increasesin default funds and margin deposits, short-term debt, liabilities held for sale,deferred revenue, Section 31 fees payable to the SEC, and accounts payable andaccrued expenses, partially offset by decreases in other current liabilities and accrued personnel costs.Principal factors that could affect the availability of our internally-generatedfunds 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 externalsources include:•operating covenants contained in our credit facilities that limit our totalborrowing 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; and•volatility or disruption in the public debt and equity markets.The following sections discuss the effects of changes in our financial assets,debt obligations, clearing and broker-dealer net capital requirements, and cashflows on our liquidity and capital resources.Financial AssetsThe following table summarizes our financial assets: December 31, 2017 December 31, 2016 (in millions)Cash and cash equivalents $377 $403Restricted cash 22 15Financial investments, at fair value 235 245Total financial assets $634 $663Cash and Cash Equivalents and Restricted CashCash and cash equivalents includes all non-restricted cash in banks and highlyliquid investments with original maturities of 90 days or less at the time ofpurchase. The balance retained in cash and cash equivalents is a function ofanticipated or possible short-term cash needs, prevailing interest rates, ourinvestment policy, and alternative investment choices. As of December 31,2017 , our cash and cash equivalents of $377 million were primarily invested inbank deposits, money market funds and commercial paper. In the long-term, wemay use both internally generated funds and external sources to satisfy our debtobligations and other long-term liabilities. Cash and cash equivalents as ofDecember 31, 2017 decreased $26 million from December 31, 2016 , primarilydue to:•cash paid for acquisitions, net of cash and cash equivalents acquired;•repayments of long-term debt;45 Table of Contents•cash dividends paid on our common stock;•repurchases of our common stock; and•purchases of property and equipment, partially offset by;•net cash provided by operating activities;•net proceeds received from the issuance of the 2019 Notes;•net proceeds received from commercial paper, net; and•proceeds received from utilization of credit commitment, net of debtissuance costs.See “Cash Flow Analysis” below for further discussion.As of December 31, 2017 and December 31, 2016, restricted cash is restrictedfrom withdrawal due to a contractual or regulatory requirement or is notavailable for general use. Restricted cash was $22 million as of December 31,2017 and $15 million as of December 31, 2016, an increase of $7 million . Theincrease relates to an increase in regulatory capital required. Restricted cash isclassified as restricted cash in the Consolidated Balance Sheets.Repatriation of CashOur cash and cash equivalents held outside of the U.S. in various foreignsubsidiaries totaled $138 million as of December 31, 2017 and $102 million asof December 31, 2016. The remaining balance held in the U.S. totaled $239million as of December 31, 2017 and $301 million as of December 31, 2016.Unremitted earnings of subsidiaries outside of the U.S. are used to finance ourinternational operations and are generally considered to be indefinitelyreinvested. It is not our current intent to change this position. However, themajority of cash held outside the U.S. is available for repatriation, but undercurrent law in certain jurisdictions, could subject us to additional income taxes,less applicable foreign tax credits. Share Repurchase ProgramSee “Share Repurchase Program,” of Note 14, “Nasdaq Stockholders’ Equity,”to the consolidated financial statements for further discussion of our sharerepurchase program.Cash Dividends on Common StockThe following table shows quarterly cash dividends paid per common share onour outstanding common stock: 2017 2016First quarter$0.32 $0.25Second quarter0.38 0.32Third quarter0.38 0.32Fourth quarter0.38 0.32Total$1.46 $1.21See “Cash Dividends on Common Stock,” of Note 14, “Nasdaq Stockholders’Equity,” to the consolidated financial statements for further discussion of thedividends.Financial Investments, at Fair ValueOur financial investments, at fair value totaled $235 million as of December 31,2017 and $245 million as of December 31, 2016 and are primarily comprised oftrading securities, mainly highly rated European government debt securities. Ofthese securities, $160 million as of December 31, 2017 and $172 million as ofDecember 31, 2016 are assets utilized to meet regulatory capital requirements,primarily for our clearing operations at Nasdaq Clearing. See Note 7,“Investments,” to the consolidated financial statements for further discussion ofour trading investment securities.46 Table of ContentsDebt ObligationsThe following table summarizes our debt obligations by contractual maturity: Maturity Date December 31, 2017 December 31, 2016 (in millions)Short-term debt - commercial paper Weighted-average maturityof 22 days $480 $—Long-term debt: 5.25% senior unsecured notes Repaid May 2017 — 369Senior unsecured floating rate notes March 2019 498 —$400 million senior unsecured term loan facility November 2019 100 3995.55% senior unsecured notes January 2020 599 5983.875% senior unsecured notes June 2021 716 625$1 billion revolving credit commitment April 2022 110 —1.75% senior unsecured notes May 2023 712 6224.25% senior unsecured notes June 2024 496 4953.85% senior unsecured notes June 2026 496 495Total long-term debt 3,727 3,603Total debt obligations $4,207 $3,603In addition to the $1 billion revolving credit commitment and $400 million term loan facility, we also have other credit facilities related to our Nasdaq Clearingoperations in order to provide further liquidity. Other credit facilities, which are available in multiple currencies, totaled $187 million as of December 31, 2017 and$170 million as of December 31, 2016 , in available liquidity, none of which was utilized.* * * * * *As of December 31, 2017 , we were in compliance with the covenants of all ofour debt obligations.See Note 10, “Debt Obligations,” to the consolidated financial statements forfurther discussion of our debt obligations.Clearing and Broker-Dealer Net Capital RequirementsClearing Operations Regulatory Capital RequirementsWe are required to maintain minimum levels of regulatory capital for theclearing operations of Nasdaq Clearing. The level of regulatory capital requiredto be maintained is dependent upon many factors, including market conditionsand creditworthiness of the counterparty. As of December 31, 2017 , ourrequired regulatory capital of $160 million is primarily comprised of highlyrated European government debt securities that are included in financialinvestments, at fair value in the Consolidated Balance Sheets.Broker-Dealer Net Capital RequirementsOur broker-dealer subsidiaries, Nasdaq Execution Services, Execution Access,NPM Securities, SMTX, and Nasdaq Capital Markets Advisory are subject toregulatory requirements intended to ensure their general financial soundnessand liquidity. These requirements obligate these subsidiaries to comply withminimum net capital requirements. The following table summarizes the netcapital requirements for our broker-dealer subsidiaries as of December 31, 2017: Broker-Dealer Subsidiaries Total NetCapital RequiredMinimum NetCapital Excess Capital (in millions)Nasdaq Execution Services $7.3 $0.3 $7.0Execution Access 47.7 0.4 47.3NPM Securities 0.2 — 0.2SMTX 1.5 0.3 1.2Nasdaq Capital Markets Advisory 0.5 0.3 0.2Other Capital RequirementsNasdaq Execution ServicesNasdaq Execution Services also is required to maintain a $2 million minimumlevel of net capital under our clearing arrangement with OCC.Nasdaq CanadaAs a member of the Investment Industry Regulatory Organization of Canada,Nasdaq Canada must comply with its dealer member rules which are intendedto ensure general financial soundness and liquidity. Under these rules, NasdaqCanada is required to comply with minimum net capital requirements. As ofDecember 31, 2017 , Nasdaq Canada was required to maintain minimum netcapital of $0.2 million and47 Table of Contentshad total net capital of approximately $7.8 million, or $7.6 million in excess ofthe minimum amount required.* * * * * *Cash Flow AnalysisThe following table summarizes the changes in cash flows: Year Ended December 31, Percentage Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in millions) Net cash provided by (used in): Operating activities $909 $776 $727 17.1 % 6.7 %Investing activities (890) (1,657) (435) (46.3)% 280.9 %Financing activities (53) 948 (400) (105.6)% (337.0)%Effect of exchange rate changes on cash and cash equivalents and restricted cash 15 (6) (11) (350.0)% (45.5)%Net increase (decrease) in cash and cash equivalents and restricted cash (19) 61 (119) (131.1)% (151.3)%Cash and cash equivalents and restricted cash at beginning of period 418 357 476 17.1 % (25.0)%Cash and cash equivalents and restricted cash at end of period $399 $418 $357 (4.5)% 17.1 %Net Cash Provided by Operating ActivitiesNet cash provided by operating activities increased $133 million in 2017compared with 2016 and increased $49 million in 2016 compared with 2015.The increase in 2017 was primarily due to higher net income, mainly due to theinclusion of a full year of cash flows from our 2016 acquisitions, partially offsetby higher compensation payments driven by our 2016 acquisitions. Theincrease in 2016 was primarily due to additional cash flows from our 2016acquisitions, partially offset by an increase in cash payments related to mergerand strategic initiatives expense associated with our 2016 acquisitions.Net Cash Used in Investing ActivitiesNet cash used in investing activities decreased $767 million in 2017 comparedwith 2016 and increased $1,222 million in 2016 compared with 2015. Thedecrease in 2017 was primarily due to cash paid for our 2016 acquisitions, netof cash and cash equivalents acquired of $1,460 million partially offset by cashpaid for our 2017 acquisitions, net of cash and cash equivalents acquired of$776 million .Net Cash (Used in) Provided by Financing ActivitiesNet cash used in financing activities for the year ended December 31, 2017primarily consisted of repayment of long-term debt of $708 million, $ 243million related to cash dividends paid on our common stock, and $ 203 millionrelated to the repurchase of our common stock, partially offset by net proceedsof $ 498 million from the issuance of the 2019 Notes and commercial paper, net of $ 480 million , and proceeds received from theutilization of our credit commitment of $150 million.Net cash provided by financing activities for the year ended December 31, 2016primarily consisted of net proceeds of $2,456 million, of which $1,159 millionrelated to the issuances of our 2023 Notes and 2026 Notes to fund ouracquisition of ISE, $399 million related to net proceeds from our 2016 CreditFacility and $898 million related to proceeds from utilization of the revolvingcredit commitment under our 2014 credit facility to partially fund ouracquisitions of Boardvantage, Marketwired and Nasdaq Canada, and othergeneral corporate purposes. These proceeds were partially offset by therepayment of $1,156 million on the revolving credit commitment under our2014 credit facility. We also used $200 million of cash to pay cash dividends onour common stock and $100 million of cash to repurchase our common stock.See Note 4, “Acquisitions,” to the consolidated financial statements for furtherdiscussion of our acquisitions.See Note 10, Debt Obligations,” to the consolidated financial statements forfurther discussion of our debt obligations.See “Share Repurchase Program,” and “Cash Dividends on Common Stock,” ofNote 14, “Nasdaq Stockholders’ Equity,” to the consolidated financialstatements for further discussion of our share repurchase program and cashdividends paid on our common stock.48 Table of ContentsContractual Obligations and Contingent CommitmentsNasdaq has contractual obligations to make future payments under debt obligations by contract maturity, minimum rental commitments under non-cancelableoperating leases, net and other obligations. The following table shows these contractual obligations as of December 31, 2017 : Payments Due by PeriodContractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years (in millions)Debt obligations by contract maturity (1) $4,844 $612 $1,324 $1,076 $1,832Minimum rental commitments under non-cancelableoperating leases, net (2) 439 87 140 102 110Other obligations (3) 18 14 4 — —Total $5,301 $713 $1,468 $1,178 $1,942____________(1) Our debt obligations include both principal and interest obligations. As of December 31, 2017 , an interest rate of 3.09% was used to compute the amount ofthe contractual obligations for interest on the 2017 Credit Facility, 3.25% was used to compute the amount of the contractual obligations for interest on the2016 Credit Facility, and 2.15% was used to compute the amount of the contractual obligations for interest on the 2019 Notes. All other debt obligations wereprimarily calculated on a 360-day basis at the contractual fixed rate multiplied by the aggregate principal amount as of December 31, 2017 . See Note 10,“Debt Obligations,” to the consolidated financial statements for further discussion.(2) We lease some of our office space under non-cancelable operating leases with third parties and sublease office space to third parties. Some of our leasescontain renewal options and escalation clauses based on increases in property taxes and building operating costs.(3) Other obligations primarily consist of potential future escrow agreement payments related to prior acquisitions.* * * * * *No n-Cash Contingent ConsiderationAs part of the purchase price consideration of a prior acquisition, we haveagreed to future annual issuances of 992,247 shares of Nasdaq common stockwhich approximated certain tax benefits associated with the transaction. Suchcontingent future issuances of Nasdaq common stock will be paid ratablythrough 2027 if Nasdaq’s total gross revenues equal or exceed $25 million ineach such year. The contingent future issuances of Nasdaq common stock aresubject to anti-dilution protections and acceleration upon certain events.Off-Balance Sheet ArrangementsFor discussion of off-balance sheet arrangements see:•Note 17, “Clearing Operations,” to the consolidated financial statementsfor further discussion of our non-cash default fund contributions andmargin deposits received for clearing operations; and•Note 19, “Commitments, Contingencies and Guarantees,” to theconsolidated financial statements for further discussion of:•Guarantees issued and credit facilities available;•Lease commitments;•Other guarantees;•Non-cash contingent consideration;•Escrow agreements;•Routing brokerage activities; •Legal and regulatory matters; and•Tax audits.Quantitative and Qualitative Disclosures About Market RiskMarket risk represents the potential for losses that may result from changes inthe market value of a financial instrument due to changes in market conditions.As a result of our operating, investing and financing activities, we are exposedto market risks such as interest rate risk and foreign currency exchange raterisk. We are also exposed to credit risk as a result of our normal businessactivities.We have implemented policies and procedures to measure, manage, monitorand report risk exposures, which are reviewed regularly by management and theboard of directors. We identify risk exposures and monitor and manage suchrisks on a daily basis.We perform sensitivity analyses to determine the effects of market riskexposures. We may use derivative instruments solely to hedge financial risksrelated to our financial positions or risks that are incurred during the normalcourse of business. We do not use derivative instruments for speculativepurposes.Interest Rate RiskWe are subject to the risk of fluctuating interest rates in the normal course ofbusiness. Our exposure to market risk for changes in interest rates relatesprimarily to our financial investments and debt obligations which are discussedbelow.49 Table of ContentsFinancial InvestmentsAs of December 31, 2017 , our investment portfolio was primarily comprised oftrading securities, mainly highly rated European government debt securities,which pay a fixed rate of interest. These securities are subject to interest raterisk and will decrease in value if market interest rates increase. If marketinterest rates were to increase immediately and uniformly by 100 basis pointsfrom levels as of December 31, 2017 , the fair value of this portfolio wouldhave declined by $5 million .Debt ObligationsAs of December 31, 2017 , substantially all of our debt obligations are fixed-rate obligations. While changes in interest rates will have no impact on theinterest we pay on fixed-rate obligations, we are exposed to changes in interest rates as a result of theissuance of our 2019 Notes, borrowings under our 2017 Credit Facility and2016 Credit Facility, and amounts outstanding from the sale of commercialpaper under our commercial paper program, all of which have variable interestrates. As of December 31, 2017 , we had principal amounts outstanding of $500million on the 2019 Notes, $115 million under the 2017 Credit Facility, $100million under the 2016 Credit Facility and $480 million of commercial paper. Ahypothetical 100 basis points increase in interest rates on our outstanding 2019Notes, the 2017 Credit Facility, the 2016 Credit Facility and our outstandingcommercial paper would increase interest expense by approximately $12million based on borrowings as of December 31, 2017 .* * * * * *Foreign Currency Exchange Rate RiskAs a leading global exchange group, we are subject to foreign currency transaction risk. Our primary exposure to foreign currency denominated revenues lesstransaction-based expenses and operating income for years ended December 31, 2017 and 2016 is presented in the following table: Euro Swedish Krona Other ForeignCurrencies U.S. Dollar Total (in millions, except currency rate)Year Ended December 31, 2017 Average foreign currency rate to the U.S. dollar 1.1273 0.1170 # N/A N/APercentage of revenues less transaction-based expenses 9.7% 8.8% 6.0 % 75.5% 100.0%Percentage of operating income 15.4% 3.2% (4.9)% 86.3% 100.0%Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses $(24) $(21) $(14) $— $(59)Impact of a 10% adverse currency fluctuation on operating income $(15) $(3) $(5) $— $(23) Euro Swedish Krona Other ForeignCurrencies U.S. Dollar Total (in millions, except currency rate)Year Ended December 31, 2016 Average foreign currency rate to the U.S. dollar 1.1064 0.1168 # N/A N/APercentage of revenues less transaction-based expenses 10.0% 8.5% 5.9 % 75.6% 100.0%Percentage of operating income 18.3% 1.0% (5.9)% 86.6% 100.0%Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses $(23) $(19) $(14) $— $(56)Impact of a 10% adverse currency fluctuation on operating income $(15) $(1) $(5) $— $(21)____________#Represents multiple foreign currency rates.N/ANot applicable.Our investments in foreign subsidiaries are exposed to volatility in currencyexchange rates through translation of the foreign subsidiaries’ net assets orequity to U.S. dollars. Substantially all of our foreign subsidiaries operate infunctional currencies other than the U.S. dollar. Fluctuations in currencyexchange rates may create volatility in our results of operations as we are required to translate the balance sheets and operational results of these foreigncurrency denominated subsidiaries into U.S. dollars for consolidated reporting.The translation of foreign subsidiaries’ non-U.S. dollar balance sheets into U.S.dollars for consolidated reporting results in a cumulative translation adjustmentwhich is recorded in accumulated other50 Table of Contentscomprehensive loss within stockholders’ equity in the Consolidated BalanceSheets.Our primary exposure to net assets in foreign currencies as of December 31,2017 is presented in the following table: Net Assets Impact of a 10% AdverseCurrency Fluctuation (in millions)Swedish Krona (1) $3,541 $(354)Norwegian Krone 200 (20)Canadian Dollar 193 (19)British Pound 202 (20)Euro 144 (14)Australian Dollar 104 (10)____________(1) Includes goodwill of $2,662 million and intangible assets, net of $638million .Credit RiskCredit risk is the potential loss due to the default or deterioration in creditquality of customers or counterparties. We are exposed to credit risk from thirdparties, including customers, counterparties and clearing agents. These partiesmay default on their obligations to us due to bankruptcy, lack of liquidity,operational failure or other reasons. We limit our exposure to credit risk byrigorously evaluating the counterparties with which we make investments andexecute agreements. The financial investment portfolio objective is to invest insecurities to preserve principal while maximizing yields, without significantlyincreasing risk. Credit risk associated with investments is minimizedsubstantially by ensuring that these financial assets are placed withgovernments which have investment grade ratings, well-capitalized financialinstitutions and other creditworthy counterparties.Our subsidiary, Nasdaq Execution Services, may be exposed to credit risk, dueto the default of trading counterparties, in connection with the routing servicesit provides for our trading customers. System trades in cash equities routed toother market centers for members of our cash equity exchanges are routed byNasdaq Execution Services for clearing to the NSCC. In this function, NasdaqExecution Services is to be neutral by the end of the trading day, but may beexposed to intraday risk if a trade extends beyond the trading day and into thenext day, thereby leaving Nasdaq Execution Services susceptible tocounterparty risk in the period between accepting the trade and routing it to theclearinghouse. In this interim period, Nasdaq Execution Services is notnovating like a clearing broker but instead is subject to the short-term risk ofcounterparty failure before the clearinghouse enters the transaction. Once theclearinghouse officially accepts the trade for novation, Nasdaq ExecutionServices is legally removed from trade execution risk. However, Nasdaq hasmembership obligations to NSCC independent of Nasdaq Execution Services’arrangements.Pursuant to the rules of the NSCC and Nasdaq Execution Services’ clearingagreement, Nasdaq Execution Services is liable for any losses incurred due to acounterparty or a clearing agent’s failure to satisfy its contractual obligations, either by making paymentor delivering securities. Adverse movements in the prices of securities that aresubject to these transactions can increase our credit risk. However, we believethat the risk of material loss is limited, as Nasdaq Execution Services’customers are not permitted to trade on margin and NSCC rules limitcounterparty risk on self-cleared transactions by establishing credit limits andcapital deposit requirements for all brokers that clear with NSCC. Historically,Nasdaq Execution Services has never incurred a liability due to a customer’sfailure to satisfy its contractual obligations as counterparty to a system trade.Credit difficulties or insolvency, or the perceived possibility of creditdifficulties or insolvency, of one or more larger or visible market participantscould also result in market-wide credit difficulties or other market disruptions.Execution Access is an introducing broker which operates the trading platformfor our Nasdaq Fixed Income business to trade in U.S. Treasury securities.Execution Access has a clearing arrangement with Cantor Fitzgerald. As ofDecember 31, 2017 , we have contributed $19 million of clearing deposits toCantor Fitzgerald in connection with this clearing arrangement. These depositsare recorded in other current assets in our Consolidated Balance Sheets. Thisclearing agreement will end on July 31, 2018, and will be replaced by a clearingagreement with ICBC. Some of the trading activity in Execution Access iscleared by Cantor Fitzgerald (and similarly will be by ICBC after July 31,2018) through the Fixed Income Clearing Corporation. Execution Accessassumes the counterparty risk of clients that do not clear through the FixedIncome Clearing Corporation. Counterparty risk of clients exists for ExecutionAccess between the trade date and settlement date of the individualtransactions, which is at least one business day (or more, if specified by theU.S. Treasury issuance calendar). All of Execution Access’ obligations underthe clearing arrangement with Cantor Fitzgerald are guaranteed by Nasdaq.Counterparties that do not clear through the Fixed Income Clearing Corporationare subject to a credit due diligence process and may be required to postcollateral, provide principal letters, or provide other forms of creditenhancement to Execution Access for the purpose of mitigating counterpartyrisk.We are exposed to credit risk through our clearing operations with NasdaqClearing. See Note 17, “Clearing Operations,” to the consolidated financialstatements for further discussion.We also have credit risk related to transaction and subscription-based revenuesthat are billed to customers on a monthly or quarterly basis, in arrears. Ourpotential exposure to credit losses on these transactions is represented by thereceivable balances in our Consolidated Balance Sheets. On an ongoing basis,we review and evaluate changes in the status of our counterparties’creditworthiness. Credit losses such as those described above could adverselyaffect our consolidated financial position and results of operations.51 Table of ContentsCritical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformitywith U.S. GAAP requires management to make judgments, assumptions, andestimates that affect the amounts reported in the consolidated financialstatements and accompanying notes. Note 2, “Summary of SignificantAccounting Policies,” to the consolidated financial statements describes thesignificant accounting policies and methods used in the preparation of theconsolidated financial statements. The accounting policies described below aresignificantly affected by critical accounting estimates. Such accounting policiesrequire significant judgments, assumptions, and estimates used in thepreparation of the consolidated financial statements, and actual results coulddiffer materially from the amounts reported based on these policies .Revenue RecognitionCorporate Services RevenuesListing Services RevenuesListing services revenues primarily include annual renewal fees, initial listingfees, and listing of additional shares fees. Annual renewal fees do not requireany judgments or assumptions by management as these amounts are recognizedratably over the following 12-month period. However, listing of additionalshares fees and initial listing fees are recognized on a straight-line basis overestimated service periods, which are four and six years, respectively, based onour historical listing experience and projected future listing duration.Unamortized balances are recorded as deferred revenue in the ConsolidatedBalance Sheets.Revenue recognition for our Listing Services business was impacted due to theadoption of ASU 2014-09, “Revenue from Contracts with Customers.” See“Recent Accounting Pronouncements,” of Note 2, “Summary of SignificantAccounting Policies,” to the consolidated financial statements for furtherdiscussion.Goodwill and Related ImpairmentGoodwill represents the excess of purchase price over the value assigned to thenet assets, including identifiable intangible assets, of a business acquired.Goodwill is allocated to our reporting units based on the assignment of the fairvalues of each reporting unit of the acquired company. We test goodwill forimpairment at the reporting unit level annually, or in interim periods if certainevents occur indicating that the carrying amount may be impaired, such aschanges in the business climate, poor indicators of operating performance or thesale or disposition of a significant portion of a reporting unit. For purposes ofperforming our goodwill impairment test, our five reporting units are theMarket Services segment, the two businesses comprising the CorporateServices segment: Corporate Solutions and Listing Services, the InformationServices segment, and the Market Technology segment. We test for impairmentduring the fourth quarter of our fiscal year using an October 1 measurementdate. When testing goodwill for impairment, we have the option of firstperforming a qualitative assessment to determine whether it is more likely than not that the fair value ofa reporting unit is less than its carrying amount as the basis to determine if it isnecessary to perform a quantitative goodwill impairment test. In performing aqualitative assessment, we consider the extent to which unfavorable events orcircumstances identified, such as changes in economic conditions, industry andmarket conditions or company specific events, could affect the comparison ofthe reporting unit’s fair value with its carrying amount. If we choose not tocomplete a qualitative assessment for a given reporting unit, or if the initialassessment indicates that it is more likely than not that the carrying amount of areporting unit exceeds its estimated fair value, a quantitative test is required.When assessing goodwill for impairment, our decision to perform a qualitativeimpairment assessment for a reporting unit in a given year is influenced by anumber of factors, including but not limited to, the size of the reporting unit’sgoodwill, the significance of the excess of the reporting unit’s estimated fairvalue over its carrying amount at the last quantitative assessment date, and theamount of time in between quantitative fair value assessments.The quantitative goodwill impairment test consists of two steps performed atthe reporting unit level.•The first step compares the estimated fair value of each reporting unit to itscorresponding carrying amount, including goodwill. The fair value of eachreporting unit is estimated using a combination of discounted cash flowvaluation, which incorporates assumptions regarding future growth rates,terminal values, and discount rates, as well as guideline public companyvaluations, incorporating relevant trading multiples of comparablecompanies and other factors. The estimates and assumptions used considerhistorical performance and are consistent with the assumptions used indetermining future profit plans for each reporting unit, which are approvedby our board of directors. If the reporting unit’s estimated fair valueexceeds its estimated carrying amount, goodwill is not impaired.•If the first step results in the carrying amount exceeding the fair value ofthe reporting unit, then a second step must be completed in order todetermine the amount of goodwill impairment that should be recorded, ifany. In the second step, the implied fair value of the reporting unit’sgoodwill is determined by allocating the reporting unit’s fair value to all ofits assets and liabilities other than goodwill in a manner similar to apurchase price allocation. The implied fair value of the goodwill thatresults from the application of this second step is then compared to thecarrying amount of the goodwill and an impairment charge is recorded forany difference.52 Table of ContentsThe following table presents the balances of goodwill for our reportablesegments at the time of our 2017 annual impairment test: October 1, 2017 (in millions)Market Services$3,560Corporate Services491Information Services1,915Market Technology188 $6,154In 2017, we performed a quantitative test for our annual impairment test forgoodwill as several years had elapsed since the date of certain of ourquantitative valuations. The last quantitative tests were in 2013 for the ListingServices, Information Services and Market Technology reporting units and in2015 for the Market Services reporting unit. We also performed a quantitativegoodwill impairment test on the remaining businesses in our CorporateSolutions reporting unit since our Public Relations Solutions and Digital MediaServices businesses have been classified as held for sale. See Note 5, “Assetsand Liabilities Held for Sale,” to the consolidated financial statements forfurther discussion.We performed step one of the quantitative goodwill impairment test for allreporting units and determined that fair value substantially exceeded carryingvalue for each of our reporting units. As a result, no goodwill impairment wasrecorded in 2017. No goodwill impairment was recorded in 2016 and 2015.Although we believe our estimates of fair value are reasonable, thedetermination of certain valuation inputs is subject to management’s judgment.Changes in these inputs could materially affect the results of our impairmentreview. If our forecasts of cash flows or other key inputs are negatively revisedin the future, the estimated fair value of each reporting unit would be adverselyimpacted, potentially leading to an impairment in the future that couldmaterially affect our operating results.Subsequent to our annual impairment test, no indications of impairment wereidentified.Indefinite-Lived Intangible Assets and Related ImpairmentIntangible assets deemed to have indefinite useful lives, primarily exchange andclearing registrations, are not amortized but instead are tested for impairment atleast annually and more frequently whenever events or changes incircumstances indicate that the fair value of the asset may be less than itscarrying amount. Similar to goodwill impairment testing, we test forimpairment of indefinite-lived intangible assets during the fourth quarter of ourfiscal year using an October 1 measurement date and may first perform aqualitative assessment, considering similar factors as discussed above in thegoodwill impairment discussion, to determine if it is more likely than not thatthe fair value of the indefinite-lived intangible asset is less than its carryingamount. If we elect to perform or are required to perform a quantitativeassessment, the test consists of a comparison of the fair value of the indefinite-livedintangible asset to its carrying amount as of the impairment testing date. If thecarrying amount of the indefinite-lived intangible asset exceeds its fair value, animpairment charge is recorded for the difference. The fair value of indefinite-lived intangible assets is primarily determined on the basis of estimateddiscounted value, using the Greenfield Approach for exchange and clearingregistrations and licenses and the relief from royalty approach or excessearnings approach for trade names, both of which incorporate assumptionsregarding future revenue projections and discount rates. During our annualindefinite-lived intangible asset impairment test during the fourth quarter of2017, we performed a quantitative test as several years had elapsed since thedate of our previous quantitative valuations.There were no indefinite-lived intangible asset impairment charges in 2017.Subsequent to our annual indefinite-lived impairment test, no indications ofimpairment were identified.As discussed in “Intangible Asset Impairment Charges,” of Note 6, “Goodwilland Acquired Intangible Assets,” to the consolidated financial statements, werecorded the following pre-tax, non-cash indefinite-lived asset impairmentcharges during 2016 and 2015:•December 2016: $578 million to write off the full value of the eSpeed tradename; and•March 2015: $119 million to write off the full value of the OMX tradename. In connection with our global rebranding initiative, we decided tochange our company name from The NASDAQ OMX Group, Inc. toNasdaq, Inc., which became effective in the third quarter of 2015. Inconnection with this action, we decided to discontinue the use of the OMXtrade name.These charges did not impact the company’s consolidated cash flows, liquidity,or capital resources. The write off of the eSpeed trade name is recorded in assetimpairment charge in the Consolidated Statements of Income for 2016 and thewrite off of the OMX trade name is recorded in restructuring charges in theConsolidated Statements of Income for 2015.There were no other impairments of indefinite-lived intangible assets for theyears ended December 31, 2016 and 2015.Other Long-Lived Assets and Related ImpairmentWe review our other long-lived assets, such as finite-lived intangible assets,equity and cost method investments, as well as property and equipment forpotential impairment when there is evidence that events or changes incircumstances indicate that the carrying amount of an asset may not berecoverable. The carrying amount of an asset is not recoverable if it exceeds thesum of the undiscounted cash flows expected to result from the use andeventual disposition of the asset. We evaluate our equity and cost methodinvestments for other-than-temporary declines in value by considering a varietyof factors such as the earnings capacity of the investment and the fair value ofthe investment compared to its carrying amount. In addition, for investmentswhere the market value is readily determinable, we53 Table of Contentsconsider the underlying stock price as an additional factor. Any requiredimpairment loss is measured as the amount by which the carrying amount of theasset exceeds its fair value and is recorded as a reduction in the carrying amountof the related asset and a charge to operating results.We recorded pre-tax, non-cash property and equipment asset impairmentcharges of $9 million for the year ended December 31, 2017, $8 million for2016 and $18 million for 2015. See Note 8, “Property and Equipment, net,” tothe consolidated financial statements for further discussion. The impairmentcharge in 2017 is included in merger and strategic initiatives expense in theConsolidated Statements of Income and the 2016 and 2015 impairment chargesare included in restructuring charges in the Consolidated Statements of Incomeduring the respective period.There were no other impairments of property and equipment recorded in 2017,2016 or 2015.In December 31, 2016, we recorded a pre-tax, non-cash impairment charge of$7 million to write off the full value of an equity method investment.See “Equity Method Investments,” of Note 7, “Investments,” to theconsolidated financial statements for further discussion. No other impairmentsof equity method investments were recorded in 2017, 2016 or 2015.Income TaxesEstimates and judgments are required in the calculation of certain tax liabilitiesand in the determination of the recoverability of certain deferred tax assets,which arise from net operating loss carryforwards, tax credit carryforwards andtemporary differences between the tax and financial statement recognition ofrevenue and expense. Our deferred tax assets are reduced by a valuationallowance if it is more likely than not that some portion or all of the recordeddeferred tax assets will not be realized in future periods. Management isrequired to determine whether a tax position is more likely than not to besustained upon examination, including resolution of any related appeals orlitigation processes, based on the technical merits of the position. Once it isdetermined that a position meets the recognition thresholds, the position ismeasured to determine the amount of benefit to be recognized in theconsolidated financial statements. Interest and/or penalties related to income taxmatters are recognized in income tax expense.In assessing the need for a valuation allowance, we consider all availableevidence including past operating results, the existence of cumulative losses inthe most recent fiscal years, estimates of future taxable income and thefeasibility of tax planning strategies. In the event that we change ourdetermination as to the amount of deferred tax assets that can be realized, wewill adjust our valuation allowance with a corresponding impact to theprovision for income taxes in the period in which such determination is made.In addition, the calculation of our tax liabilities involves uncertainties in theapplication of tax regulations in the U.S. and other tax jurisdictions. Werecognize potential liabilities for anticipated tax audit issues in suchjurisdictions based on our estimate of whether, and the extent to which, additional taxes and interest maybe due. While we believe that our tax liabilities reflect the probable outcome ofidentified tax uncertainties, it is reasonably possible that the ultimate resolutionof any tax matter may be greater or less than the amount accrued. If eventsoccur and the payment of these amounts ultimately proves unnecessary, thereversal of the liabilities would result in tax benefits being recognized in theperiod when we determine the liabilities are no longer necessary. If our estimateof tax liabilities proves to be less than the ultimate assessment, a further chargeto expense would result.The Tax Cuts and Jobs Act was enacted on December 22, 2017. We arerequired to recognize the effect of the tax law changes in the period ofenactment, such as remeasuring our U.S. deferred tax assets and liabilities,reassessing the net realizability of deferred tax assets and liabilities, anddetermining the applicability of the one-time mandatory transition tax onaccumulated foreign earnings. SEC Staff Accounting Bulletin No. 118,“Income Tax Accounting Implications of the Tax Cuts and Jobs Act,” or SAB118, has provided guidance which allows us to record provisional amountsduring a measurement period not to extend beyond one year of the enactmentdate. As of December 31, 2017, we have recorded a provisional estimate of theeffects of the new legislation. We will continue to analyze the Tax Cuts andJobs Act and related accounting guidance and interpretations in order to finalizeany impacts within the measurement period.Recent Accounting PronouncementsSee “Recent Accounting Pronouncements,” of Note 2, “Summary of SignificantAccounting Policies,” to the consolidated financial statements for furtherdiscussion of recently adopted and recently issued accounting pronouncementsthat are applicable to Nasdaq.Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Information about quantitative and qualitative disclosures about market risk isincorporated herein by reference from “Item 7. Management’s Discussion andAnalysis of Financial Condition and Results of Operations—Quantitative andQualitative Disclosures About Market Risk.”Item 8. Financial Statements and Supplementary Data.Nasdaq’s consolidated financial statements, including Consolidated BalanceSheets as of December 31, 2017 and 2016, Consolidated Statements of Incomefor the years ended December 31, 2017 , 2016 and 2015, ConsolidatedStatements of Comprehensive Income (Loss) for the years ended December 31,2017 , 2016 and 2015, Consolidated Statements of Changes in Equity for theyears ended December 31, 2017 , 2016 and 2015, Consolidated Statements ofCash Flows for the years ended December 31, 2017 , 2016 and 2015 and notesto our consolidated financial statements, together with a report thereon ofErnst & Young LLP, dated February 28, 2018 , are attached hereto as pages F-1through F-52 and incorporated by reference herein.54 Table of ContentsSummarized Quarterly Financial Data (Unaudited) 1st Qtr 2017 2nd Qtr 2017 3rd Qtr 2017 4th Qtr 2017 (in millions, except per share amounts)Total revenues $971 $1,000 $969 $1,024Transaction-based expenses (388) (398) (362) (389)Revenues less transaction-based expenses 583 602 607 635Total operating expenses 335 358 343 392Operating income 248 244 264 243Net income attributable to Nasdaq $169 $147 $171 $246Basic earnings per share $1.02 $0.89 $1.03 $1.47Diluted earnings per share $0.99 $0.87 $1.01 $1.45Cash dividends declared per common share $0.32 $0.38 $0.38 $0.38 1st Qtr 2016 2nd Qtr 2016 3rd Qtr 2016 4th Qtr 2016 (in millions, except per share amounts)Total revenues $905 $897 $929 $973Transaction-based expenses (371) (338) (344) (374)Revenues less transaction-based expenses 534 559 585 599Total operating expenses 315 385 352 386Operating income 219 174 233 213Net income (loss) attributable to Nasdaq $132 $70 $131 $(224)Basic earnings (loss) per share $0.80 $0.42 $0.79 $(1.35)Diluted earnings (loss) per share $0.78 $0.42 $0.77 $(1.35)Cash dividends declared per common share $0.57 $— $0.32 $0.32Item 9. Changes in and Disagreements with Accountants on Accountingand Financial Disclosure.None.Item 9A. Controls and Procedures.(a) Disclosure controls and procedures. Nasdaq’s management, with theparticipation of Nasdaq’s President and Chief Executive Officer, and ExecutiveVice President, Corporate Strategy and Chief Financial Officer, has evaluatedthe effectiveness of Nasdaq’s disclosure controls and procedures (as defined inRule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end ofthe period covered by this report. Based upon that evaluation, Nasdaq’sPresident and Chief Executive Officer and Executive Vice President, CorporateStrategy and Chief Financial Officer, have concluded that, as of the end of suchperiod, Nasdaq’s disclosure controls and procedures are effective.(b). Internal control over financial reporting . In October 2017, we acquiredeVestment. Management has considered this transaction material to the resultsof operations, cash flows and financial position from the date of the acquisition through December 31, 2017,and believes that the internal controls and procedures of this acquisition have amaterial effect on internal control over financial reporting. We are currently inthe process of incorporating the internal controls and procedures of eVestmentinto the internal control over financial reporting for our assessment of andreport on internal control over financial reporting for December 31, 2018.However, in accordance with SEC guidance, management has elected toexclude eVestment from its December 31, 2017 assessment of and report oninternal control over financial reporting. We are currently in the process ofincorporating the internal controls and procedures of eVestment into theinternal control over financial reporting for our assessment of and report oninternal control over financial reporting for December 31, 2018. There havebeen no other changes in Nasdaq’s internal control over financial reporting (asdefined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) thatoccurred during the quarter ended December 31, 2017 that have materiallyaffected, or are reasonably likely to materially affect, Nasdaq’s internal controlover financial reporting. 55 Table of ContentsManagement’s Report on Internal Control Over Financial ReportingManagement is responsible for the preparation and integrity of the consolidated financial statements appearing in the reports that we file with the SEC. Theconsolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles and include amounts based on management’sestimates and judgments.Management is also responsible for establishing and maintaining adequate internal control over Nasdaq’s financial reporting. Although there are inherentlimitations in the effectiveness of any system of internal control over financial reporting, we maintain a system of internal control that is designed to providereasonable assurance as to the fair and reliable preparation and presentation of the consolidated financial statements, as well as to safeguard assets fromunauthorized use or disposition that could have a material effect on the financial statements.Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2017, based on criteria established in InternalControl—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 framework). This evaluationincluded review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and aconclusion on this evaluation. Based on its assessment, our management believes that, as of December 31, 2017, our internal control over financial reporting iseffective.Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include, in accordance with SEC guidance, theinternal controls of eVestment, Inc. and its subsidiaries which are included in the 2017 consolidated financial statements and in 2017 reflect total assets constituting6% of consolidated total assets, which includes 9% of goodwill and intangible assets, net and 0.3% of the total revenues less transaction-based expenses, ofconsolidated results.Ernst & Young LLP, an independent registered public accounting firm, has issued an attestation report on Nasdaq’s internal control over financial reporting, whichis included herein. 56 Table of ContentsReport of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Nasdaq, Inc.Opinion on Internal Control over Financial ReportingWe have audited Nasdaq, Inc.’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Nasdaq,Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and the conclusion on theeffectiveness of internal control over financial reporting did not include the internal controls of eVestment Inc. and its subsidiaries which is included in the 2017consolidated financial statements of the Company and constituted 6% of consolidated total assets as of December 31, 2017, which include 9% of goodwill andintangible assets, net and 0.3% of the total revenues less transaction-based expenses for the year then ended. Our audit of internal control over financial reporting ofthe Company also did not include an evaluation of eVestment Inc. and its subsidiaries.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balancesheets of the Company as of December 31, 2017 and 2016, and the related consolidated statements of income, comprehensive income (loss), changes in equity andcash flows for each of the three years in the period ended December 31, 2017, and the related notes and our report dated February 28, 2018 expressed anunqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internalcontrol over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to expressan opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and arerequired to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internalcontrol over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonablebasis for our opinion. Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate./s/ Ernst & Young LLPNew York, New YorkFebruary 28, 201857 Table of ContentsItem 9B. Other Information.None.PART IIIItem 10. Directors, Executive Officers and Corporate Governance.Information about Nasdaq’s directors, as required by Item 401 of Regulation S-K, is incorporated by reference from the discussion under the caption “Board ofDirectors—Proposal I: Election of Directors” in Nasdaq’s Proxy Statement.Information about Nasdaq’s executive officers, as required by Item 401 ofRegulation S-K, is incorporated by reference from the discussion under thecaption “Other Items—Executive Officers” in the Proxy Statement. Informationabout Section 16 reports, as required by Item 405 of Regulation S-K, isincorporated by reference from the discussion under the caption “Section 16(a)Beneficial Ownership Reporting Compliance” in the Proxy Statement.Information about Nasdaq’s code of ethics, as required by Item 406 ofRegulation S-K, is incorporated by reference from the discussion under thecaption “Other Items—Corporate Governance” in the Proxy Statement.Information about Nasdaq’s nomination procedures, audit committee and auditcommittee financial experts, as required by Items 407(c)(3), 407(d)(4) and407(d)(5) of Regulation S-K, is incorporated by reference from the discussionsunder the headings “Board of Directors—Proposal I: Election of Directors” and“Board of Directors—Board Committees” in the Proxy Statement. Item 11. Executive Compensation.Information about Nasdaq’s director and executive compensation, as requiredby Items 402, 407(e)(4) and 407(e)(5) of Regulation S-K, is incorporated byreference from the discussions under the headings “Board of Directors—Director Compensation” and “Named Executive Officer Compensation” in theProxy Statement.Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters.Information about security ownership of certain beneficial owners andmanagement, as required by Item 403 of Regulation S-K, is incorporated byreference from the discussion under the heading “Other Items—SecurityOwnership of Certain Beneficial Owners and Management” in the ProxyStatement.Equity Compensation Plan InformationNasdaq’s Equity Plan provides for the issuance of our equity securities to ourofficers and other employees, directors and consultants. In addition, mostemployees of Nasdaq and its subsidiaries are eligible to participate in the ESPP,at 85.0% of the fair market value of our common stock on the price calculationdate. The Equity Plan and the ESPP have been approved previously by ourstockholders. The following table sets forth information regarding outstandingoptions and shares reserved for future issuance under all of Nasdaq’scompensation plans as of December 31, 2017 .Plan Category Number of sharesto be issued uponexercise ofoutstanding options,warrants and rights(a) (1) Weighted-averageexercise price ofoutstanding options,warrants and rights(b) Number of sharesremaining availablefor future issuanceunder equitycompensation plans(excluding sharesreflected in column(a))(c) Equity compensation plans approved by stockholders 571,380 $43.84 7,891,426(2) Equity compensation plans not approved by stockholders — $— — Total 571,380 $43.84 7,891,426(2) ____________(1) The amounts in this column include only the number of shares to be issued upon exercise of outstanding options, warrants and rights. As of December 31,2017, we also had 3,331,462 shares to be issued upon vesting of outstanding restricted stock and PSUs.(2) This amount includes 5,801,663 shares of common stock that may be awarded pursuant to the Equity Plan and 2,089,763 shares of common stock that may beissued pursuant to the ESPP.Item 13. Certain Relationships and Related Transactions, and Director Independence.Information about certain relationships and related transactions, as required by Item 404 of Regulation S-K, is incorporated herein by reference from the discussionunder the heading “Other Items—Certain Relationships and Related Transactions” in the Proxy Statement. Information about director independence, as required byItem 407(a) of Regulation S-K, is incorporated herein by reference from the discussion under the heading “Board of Directors—Proposal I: Election of Directors”in the Proxy Statement.58 Table of ContentsItem 14. Principal Accountant Fees and Services.Information about principal accountant fees and services, as required by Item 9(e) of Schedule 14A, is incorporated herein by reference from the discussion underthe heading “Audit Committee Matters—Annual Evaluation and 2018 Selection of Independent Auditors” in the Proxy Statement.PART IVItem 15. Exhibits, Financial Statement Schedules.(a)(1) Financial StatementsSee “Index to Consolidated Financial Statements.”(a)(2) Financial Statement SchedulesAll schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes.(a)(3) Exhibits59 Table of ContentsExhibit IndexExhibit Number 2.1 Purchase Agreement, dated as of April 1, 2013, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), BGC Partners, Inc., BGCHoldings, L.P., BGC Partners, L.P., and, solely for purposes of certain sections thereof, Cantor Fitzgerald, L.P. (incorporated herein byreference to Exhibit 2.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed on August 8, 2013). 2.2 Stock Purchase Agreement, dated as of March 9, 2016, by and among Deutsche Börse AG and Eurex Frankfurt AG and Nasdaq, Inc.(incorporated herein by reference to the Current Report on Form 8-K filed on March 15, 2016). 2.3 Agreement and Plan of Merger, dated as of September 4, 2017, by and among eVestment, Inc., Nasdaq, Inc., Echo Holding Company andInsight Venture Partners, LLC (solely in its capacity as representative for eVestment’s securityholders) (incorporated herein by reference toExhibit 2.1 to the Current Report on Form 8-K filed on September 8, 2017).† 3.1 Amended and Restated Certificate of Incorporation of Nasdaq (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form8-K filed on January 28, 2014). 3.1.1 Certificate of Elimination of Nasdaq’s Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1.1 to the CurrentReport on Form 8-K filed on January 28, 2014). 3.1.2 Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 tothe Current Report on Form 8-K filed on November 19, 2014). 3.1.3 Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 tothe Current Report on Form 8-K filed on September 8, 2015). 3.2 Nasdaq’s By-Laws (incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on November 21, 2016). 4.1 Form of Common Stock certificate (incorporated herein by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarterended September 30, 2015 filed on November 4, 2015). 4.2 Stockholders’ Agreement, dated as of February 27, 2008, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Borse DubaiLimited (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 3, 2008). 4.2.1 First Amendment to Stockholders’ Agreement, dated as of February 19, 2009, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.)and Borse Dubai Limited (incorporated herein by reference to Exhibit 4.10.1 to the Annual Report on Form 10-K for the year ended December31, 2008 filed on February 27, 2009). 4.3 Registration Rights Agreement, dated as of February 27, 2008, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Borse DubaiLimited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed onMarch 3, 2008). 4.3.1 First Amendment to Registration Rights Agreement, dated as of February 19, 2009, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group,Inc.), Borse Dubai Limited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 4.11.1 to the Annual Report onForm 10-K for the year ended December 31, 2008 filed on February 27, 2009). 60 Table of Contents4.4 Indenture, dated as of January 15, 2010, between Nasdaq (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, NationalAssociation, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on January 19, 2010). 4.5 First Supplemental Indenture, dated as of January 15, 2010, among Nasdaq (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank,National Association, as Trustee (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on January 19,2010). 4.6 Second Supplemental Indenture, dated as of December 21, 2010, among Nasdaq (f/k/a The NASDAQ OMX Group, Inc.) and Wells FargoBank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December21, 2010). 4.7 Stockholders’ Agreement, dated as of December 16, 2010, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Investor AB(incorporated herein by reference to Exhibit 4.12 to the Annual Report on Form 10-K for the year ended December 31, 2010 filed onFebruary 24, 2011). 4.8 Indenture, dated as of June 7, 2013, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, NationalAssociation, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on June 10, 2013). 4.9 First Supplemental Indenture, dated as of June 7, 2013, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Wells Fargo Bank,National Association, as Trustee, Deutsche Bank AG, London Branch, as paying agent, and Deutsche Bank Luxembourg S.A., as registrar andtransfer agent (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on June 10, 2013). 4.10 Second Supplemental Indenture, dated as of May 29, 2014, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells FargoBank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on May 30,2014). 4.11 Third Supplemental Indenture, dated as of May 20, 2016, among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee, and HSBCBank USA, National Association, as paying agent and as registrar and transfer agent (incorporated herein by reference to the Current Report onForm 8-K filed on May 23, 2016). 4.12 Fourth Supplemental Indenture, dated as of June 7, 2016, among Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee(incorporated herein by reference to the Current Report on Form 8-K filed on June 7, 2016). 4.13 Fifth Supplemental Indenture, dated as of September 22, 2017, among Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee(incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on September 22, 2017). 4.14 Registration Rights Agreement, dated as of June 28, 2013, by and among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), BGC Partners,Inc., BGC Holdings, L.P. and BGC Partners, L.P. (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed onJuly 1, 2013). 10.1 Amended and Restated Board Compensation Policy, effective on May 10, 2017 (incorporated herein by reference to Exhibit 10.4 to theQuarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed on August 2, 2017).* 10.2 Nasdaq Executive Corporate Incentive Plan, effective as of January 1, 2015 (incorporated herein by reference to Exhibit 10.1 to the CurrentReport on Form 8-K filed on May 11, 2015).* 10.3 Form of Nasdaq Non-Qualified Stock Option Award Certificate (incorporated herein by reference to Exhibit 10.3 to the Annual Report onForm 10-K for the year ended December 31, 2010 filed on February 24, 2011).* 61 Table of Contents10.4 Form of Nasdaq Restricted Stock Unit Award Certificate (employees) (incorporated herein by reference to Exhibit 10.5 to the Quarterly Reporton Form 10-Q for the quarter ended June 30, 2017 filed on August 2, 2017).* 10.5 Form of Nasdaq Restricted Stock Unit Award Certificate (directors) (incorporated herein by reference to Exhibit 10.6 to the Quarterly Reporton Form 10-Q for the quarter ended June 30, 2017 filed on August 2, 2017).* 10.6 Form of Nasdaq One-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.7 to the Quarterly Report onForm 10-Q for the quarter ended June 30, 2017 filed on August 2, 2017).* 10.7 Form of Nasdaq Three-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.8 to the Quarterly Report onForm 10-Q for the quarter ended June 30, 2017 filed on August 2, 2017).* 10.8 Form of Nasdaq Continuing Obligations Agreement (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Qfor the quarter ended March 31, 2017 filed on May 10, 2017).* 10.9 Amended and Restated Supplemental Executive Retirement Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit10.6 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* 10.9.1 Amendment No. 1 to Amended and Restated Supplemental Executive Retirement Plan, effective as of December 31, 2008 (incorporated hereinby reference to Exhibit 10.6.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* 10.10 Nasdaq Supplemental Employer Retirement Contribution Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit10.7 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* 10.11 Employment Agreement between Nasdaq and Adena Friedman, made and entered into on November 14, 2016 and effective as of January 1,2017 (incorporated herein by reference to Exhibit 10.10.1 to the Annual Report on Form 10-K for the year ended December 31, 2012 filed onFebruary 21, 2013).* 10.12 Nonqualified Stock Option Award Certificate to Adena T. Friedman from Nasdaq, Inc. in connection with grant made on January 3, 2017(incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed onNovember 7, 2017).* 10.13 Employment Offer Letter, dated as of May 10, 2016, between Nasdaq, Inc. and Michael Ptasznik (incorporated herein by reference to Exhibit10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 10, 2017).* 10.14 Employment Agreement between Nasdaq and Edward Knight, effective as of December 29, 2000 (incorporated herein by reference to Exhibit10.14 to the Annual Report on Form 10-K for the year ended December 31, 2002 filed on March 31, 2003).* 10.14.1 First Amendment to Employment Agreement between Nasdaq and Edward Knight, effective February 1, 2002 (incorporated herein byreference to Exhibit 10.14.1 to the Annual Report on Form 10-K for the year endedDecember 31, 2002 filed on March 31, 2003).* 10.14.2 Second Amendment to Employment Agreement between Nasdaq and Edward Knight, effective as of December 31, 2008 (incorporated hereinby reference to Exhibit 10.13.2 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).* 10.14.3 Third Amendment to Employment Agreement between Nasdaq and Edward Knight, effective as of February 22, 2012 (incorporated herein byreference to Exhibit 10.2 to the Current Report on Form 8-K filed on February 28, 2012).* 62 Table of Contents10.14.4 Fourth Amendment to Employment Agreement between Nasdaq and Edward Knight, entered into and effective as of October 24, 2016(incorporated herein by reference to Exhibit 10.14.4 to the Annual Report on Form 10-K for the year ended December 31, 2016 filed on March1, 2017).* 10.15 Employment Agreement between Nasdaq and Bradley J. Peterson, dated August 1, 2016 (incorporated herein by reference to Exhibit 10.1 tothe Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed on November 8, 2016).* 10.16 Nasdaq Change in Control Severance Plan for Executive Vice Presidents and Senior Vice Presidents, effective November 26, 2013(incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 29, 2013).* 10.17 Credit Agreement, dated as of April 25, 2017, among Nasdaq, Inc., the various lenders from time to time party thereto, Bank of America, N.A.,as administrative agent and an issuing bank, and the other financial institutions party thereto (incorporated herein by reference to Exhibit 10.1to the Current Report on Form 8-K filed on April 26, 2017). 10.18 Credit Agreement, dated March 17, 2016, among Nasdaq, Inc., the various lenders party thereto and Bank of America, N.A., as AdministrativeAgent (incorporated herein by reference to the Current Report on Form 8-K filed on March 22, 2016). 10.18.1 Amendment No. 1 to Credit Agreement, dated as of April 25, 2017, among Nasdaq, Inc., the lenders party thereto and Bank of America, N.A.,as administrative agent (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on April 26, 2017). 10.19 Form of Commercial Paper Dealer Agreement between Nasdaq, Inc., as Issuer, and the Dealer party thereto (incorporated herein by referenceto Exhibit 10.3 to the Current Report on Form 8-K filed on April 26, 2017). 11 Statement regarding computation of per share earnings (incorporated herein by reference from Note 15 to the consolidated financial statementsunder Part II, Item 8 of this Form 10-K). 12.1 Computation of Ratio of Earnings to Fixed Charges. 21.1 List of all subsidiaries. 23.1 Consent of Ernst & Young LLP. 24.1 Powers of Attorney. 31.1 Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). 31.2 Certification of Executive Vice President, Corporate Strategy and Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley. 32.1 Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley. 101.INS XBRL Instance Document.** 101.SCH XBRL Taxonomy Extension Schema. 101.CAL XBRL Taxonomy Extension Calculation Linkbase.63 Table of Contents 101.DEF Taxonomy Extension Definition Linkbase. 101.LAB XBRL Taxonomy Extension Label Linkbase. 101.PRE XBRL Taxonomy Extension Presentation Linkbase.____________*Management contract or compensatory plan or arrangement.**The following materials from the Nasdaq, Inc. Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible BusinessReporting Language): (i) Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016; (ii) Consolidated Statements of Income for the yearsended December 31, 2017, 2016 and 2015; (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and2015; (iv) Consolidated Statements of Changes in Equity for the years ended December 31, 2017, 2016 and 2015; (v) Consolidated Statements of Cash Flowsfor the years ended December 31, 2017, 2016 and 2015; and (vi) notes to consolidated financial statements.†Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Nasdaq hereby undertakes to furnish supplementally copies of any of the omittedschedules upon request by the SEC.(b)Exhibits:See Item 15(a)(3) above.(c)Financial Statement Schedules:All schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes.Item 16. Form 10-K Summary.None.64 Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized, on February 28, 2018 . Nasdaq, Inc. By:/s/ Adena T. Friedman Name:Adena T. Friedman Title:President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and inthe capacities indicated as of February 28, 2018 .Name Title /s/ Adena T. Friedman President and Chief Executive Officer and Director Adena T. Friedman (Principal Executive Officer) /s/ Michael Ptasznik Executive Vice President, Corporate Strategy and Chief Financial Officer Michael Ptasznik (Principal Financial Officer) /s/ Ann M. Dennison Senior Vice President and Controller Ann M. Dennison (Principal Accounting Officer) * Chairman of the Board Michael R. Splinter * Director Melissa M. Arnoldi * Director Charlene T. Begley * Director Steven D. Black * Director Essa Kazim * Director Thomas A. Kloet * Director John D. Rainey * Director Lars R. Wedenborn *Pursuant to Power of Attorney By:/s/ Edward S. Knight Edward S. Knight Attorney-in-Fact 65 Table of ContentsNasdaq, Inc.INDEX TO CONSOLIDATED FINANCIAL STATEMENTSThe following consolidated financial statements of Nasdaq, Inc. and its subsidiaries are presented herein on the page indicated: Report of Independent Registered Public Accounting Firm F- 2Consolidated Balance Sheets F- 3Consolidated Statements of Income F- 4Consolidated Statements of Comprehensive Income (Loss) F- 5Consolidated Statements of Changes in Equity F- 6Consolidated Statements of Cash Flows F- 7Notes to Consolidated Financial Statements F- 8 F- 1 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Nasdaq, Inc. Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Nasdaq, Inc. (the Company) as of December 31, 2017 and 2016, and the related consolidatedstatements of income, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2017 and therelated notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all materialrespects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in theperiod ended December 31, 2017, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internalcontrol over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2018 expressed an unqualified opinion thereon.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statementsbased on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordancewith the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures toassess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Suchprocedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating theaccounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believethat our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 1986.New York, New YorkFebruary 28, 2018F- 2 Table of ContentsNasdaq, Inc.Consolidated Balance Sheets(in millions, except share and par value amounts) December 31, 2017 December 31, 2016 Assets Current assets: Cash and cash equivalents$377 $403Restricted cash22 15Financial investments, at fair value235 245Receivables, net423 429Default funds and margin deposits3,988 3,301Other current assets187 167Assets held for sale297 —Total current assets5,529 4,560Property and equipment, net400 362Deferred tax assets391 717Goodwill6,586 6,027Intangible assets, net2,468 2,094Other non-current assets412 390Total assets$15,786 $14,150Liabilities Current liabilities: Accounts payable and accrued expenses$177 $175Section 31 fees payable to SEC128 108Accrued personnel costs170 207Deferred revenue189 162Other current liabilities85 129Default funds and margin deposits3,988 3,301Short-term debt480 —Liabilities held for sale45 —Total current liabilities5,262 4,082Long-term debt3,727 3,603Deferred tax liabilities602 720Non-current deferred revenue146 171Other non-current liabilities162 144Total liabilities9,899 8,720Commitments and contingencies Equity Nasdaq stockholders’ equity: Common stock, $0.01 par value, 300,000,000 shares authorized, shares issued: 172,373,432 at December 31,2017 and 170,501,186 at December 31, 2016; shares outstanding: 167,441,030 at December 31, 2017 and166,579,468 at December 31, 20162 2Additional paid-in capital3,024 3,104Common stock in treasury, at cost: 4,932,402 shares at December 31, 2017 and 3,921,718 shares at December 31,2016(247) (176)Accumulated other comprehensive loss(862) (979)Retained earnings3,970 3,479Total Nasdaq stockholders’ equity5,887 5,430Total liabilities and equity$15,786 $14,150 See accompanying notes to consolidated financial statements.F- 3 Table of ContentsNasdaq, Inc.Consolidated Statements of Income(in millions, except per share amounts) Year Ended December 31, 2017 2016 2015Revenues: Market Services $2,418 $2,255 $2,084Corporate Services 656 635 562Information Services 588 540 512Market Technology 303 275 245Total revenues 3,965 3,705 3,403Transaction-based expenses: Transaction rebates (1,158) (1,092) (983)Brokerage, clearance and exchange fees (379) (336) (330)Revenues less transaction-based expenses 2,428 2,277 2,090Operating expenses: Compensation and benefits 675 664 590Professional and contract services 156 153 148Computer operations and data communications 125 111 107Occupancy 95 86 85General, administrative and other 82 72 65Marketing and advertising 31 30 28Depreciation and amortization 188 170 138Regulatory 33 35 27Merger and strategic initiatives 44 76 10Restructuring charges — 41 172Total operating expenses 1,429 1,438 1,370Operating income 999 839 720Interest income 7 5 4Interest expense (143) (135) (111)Asset impairment charge — (578) —Other investment income 2 3 —Net income from unconsolidated investees 15 2 17Income before income taxes 880 136 630Income tax provision 146 28 203Net income 734 108 427Net loss attributable to noncontrolling interests — — 1Net income attributable to Nasdaq $734 $108 $428Per share information: Basic earnings per share $4.41 $0.65 $2.56Diluted earnings per share $4.33 $0.64 $2.50Cash dividends declared per common share $1.46 $1.21 $0.90See accompanying notes to consolidated financial statements.F- 4 Table of ContentsNasdaq, Inc.Consolidated Statements of Comprehensive Income (Loss)(in millions) Year Ended December 31, 2017 2016 2015Net income $734 $108 $427Other comprehensive income (loss): Foreign currency translation gains (losses): Net foreign currency translation gains (losses) 214 (183) (283)Income tax benefit (expense) (96) 68 100Total 118 (115) (183)Employee benefit plan gains (losses): Employee benefit plan adjustment gains (losses) (2) — 2Income tax benefit (expense) 1 — (1)Total (1) — 1Total other comprehensive income (loss), net of tax 117 (115) (182)Comprehensive income (loss) 851 (7) 245Comprehensive loss attributable to noncontrolling interests — — 1Comprehensive income (loss) attributable to Nasdaq $851 $(7) $246 See accompanying notes to consolidated financial statements.F- 5 Table of ContentsNasdaq, Inc. Consolidated Statements of Changes in Equity(in millions, except share amounts) Number ofCommonSharesOutstanding Common Stockat Par Value AdditionalPaid-inCapital CommonStock InTreasury, atCost Accumulated OtherComprehensive Loss RetainedEarnings Non- controllingInterests TotalBalance at December 31, 2014168,795,263 $2 $3,222 $(41) $(682) $3,292 $1 $5,794Net income (loss)— — ——— — 428 (1) 427Foreign currency translation, net of tax of $100— — — — (183) — — (183)Employee benefit plan adjustments, net of tax of $1— — — — 1 — — 1Cash dividends declared per common share— — — — — (149) — (149)Share repurchase program(7,191,685) — (340) (37) — — — (377)Share-based compensation1,455,380 — 68 — — — — 68Stock option exercises, net682,054 — 18 — — — — 18Other issuances of common stock, net(408,989) — 55 (33) — — — 22Purchase of subsidiary shares to noncontrollinginterests and other adjustments— — (12) — — — — (12)Issuance of Nasdaq common stock related to a prioracquisition992,247 — — — — — — —Balance at December 31, 2015164,324,270 $2 $3,011 $(111) $(864) $3,571 $— $5,609Net income— — — — — 108 — 108Foreign currency translation, net of tax of $68— — — — (115) — — (115)Cash dividends declared per common share— — — — — (200) — (200)Share repurchase program(1,547,778) — (100) — — — — (100)Share-based compensation2,361,699 — 86 — — — — 86Stock option exercises, net1,219,820 — 41 — — — — 41Other issuances of common stock, net(770,790) — 66 (65) — — — 1Issuance of Nasdaq common stock related to a prioracquisition992,247 — — — — — — —Balance at December 31, 2016166,579,468 $2 $3,104 $(176) $(979) $3,479 $— $5,430Net income— — — — — 734 — 734Foreign currency translation, net of tax of $96— — — — 118 — — 118Employee benefit plan adjustments, net of tax of $1— — — — (1) — — (1)Cash dividends declared per common share— — — — — (243) — (243)Share repurchase program(2,843,519) — (203) — — — — (203)Share-based compensation2,384,821 — 70 — — — — 70Stock option exercises, net1,102,830 — 24 — — — — 24Other issuances of common stock, net(774,817) — 29 (71) — — — (42)Issuance of Nasdaq common stock related to a prioracquisition992,247 — — — — — — —Balance at December 31, 2017167,441,030 $2 $3,024 $(247) $(862) $3,970 $— $5,887 See accompanying notes to consolidated financial statements.F- 6 Table of ContentsNasdaq, Inc.Consolidated Statements of Cash Flows(in millions) Year Ended December 31, 2017 2016 2015Cash flows from operating activities: Net income$734 $108 $427Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization188 170 138Share-based compensation70 86 68Deferred income taxes10 (136) (14)Non-cash restructuring charges— 8 136Asset impairment charge— 578 —Net income from unconsolidated investees(15) (2) (17)Other reconciling items included in net income25 9 7Net change in operating assets and liabilities, net of effects of acquisitions: Receivables, net25 (24) 55Other assets261 (18) (41)Accounts payable and accrued expenses(12) 5 (38)Section 31 fees payable to SEC20 5 (26)Accrued personnel costs(41) 27 33Deferred revenue(43) (15) (49)Other liabilities(61) (25) 48Net assets held for sale(252) — —Net cash provided by operating activities909 776 727Cash flows from investing activities: Purchases of trading securities(366) (443) (346)Proceeds from sales and redemptions of trading securities394 392 319Purchases of available-for-sale investment securities(26) (25) (38)Proceeds from maturities of available-for-sale investment securities30 19 29Capital contribution in equity method investment— — (30)Acquisition of businesses, net of cash and cash equivalents acquired(776) (1,460) (226)Purchases of property and equipment(144) (134) (133)Other investment activities(2) (6) (10)Net cash used in investing activities(890) (1,657) (435)Cash flows from financing activities: Proceeds from commercial paper, net480 — —Repayments of long-term debt(708) (1,156) (369)Payment of debt extinguishment cost(9) — —Proceeds from utilization of credit commitment, net of debt issuance costs150 898 506Proceeds from issuances of senior unsecured notes, net of debt issuance costs498 1,159 —Proceeds from issuance of term loan facility— 399 —Cash paid for repurchase of common stock(203) (100) (377)Cash dividends(243) (200) (149)Proceeds received from employee stock activity53 54 29Payments related to employee shares withheld for taxes(71) (65) (34)Proceeds (disbursements) of customer funds— (38) 13Other financing activities— (3) (19)Net cash (used in) provided by financing activities(53) 948 (400)Effect of exchange rate changes on cash and cash equivalents and restricted cash15 (6) (11)Net increase (decrease) in cash and cash equivalents and restricted cash(19) 61 (119)Cash and cash equivalents and restricted cash at beginning of period418 357 476Cash and cash equivalents and restricted cash at end of period$399 $418 $357Supplemental Disclosure Cash Flow Information Cash paid for: Interest$129 $119 $103Income taxes, net of refund$154 $191 $202See accompanying notes to consolidated financial statements.F- 7 Table of ContentsNasdaq, Inc.Notes to Consolidated Financial Statements1. Organization and Nature of OperationsNasdaq, Inc. is a leading provider of trading, clearing, marketplace technology,regulatory, securities listing, information and public and private companyservices. Our global offerings are diverse and include trading and clearingacross multiple asset classes, trade management services, data products,financial indexes, capital formation solutions, corporate solutions, and markettechnology products and services. Our technology powers markets across theglobe, supporting equity derivative trading, clearing and settlement, cash equitytrading, fixed income trading, trading surveillance and many other functions.We manage, operate and provide our products and services in four businesssegments: Market Services, Corporate Services, Information Services andMarket Technology.Market ServicesOur Market Services segment includes our Equity Derivative Trading andClearing, Cash Equity Trading, FICC and Trade Management Servicesbusinesses. We operate multiple exchanges and other marketplace facilitiesacross several asset classes, including derivatives, commodities, cash equity,debt, structured products and ETPs. In addition, in some countries where weoperate exchanges, we also provide broker services, clearing, settlement andcentral depository services. Our transaction-based platforms provide marketparticipants with the ability to access, process, display and integrate orders andquotes. The platforms allow the routing and execution of buy and sell orders aswell as the reporting of transactions, providing fee-based revenues.In the U.S., we operate six electronic options exchanges and three cash equityexchanges. The Nasdaq Stock Market, the largest of our cash equitiesexchanges, is the largest single venue of liquidity for trading U.S.-listed cashequities. We also operate an electronic platform for trading of U.S. Treasuriesand NFX, a U.S. based designated contract market which lists cash-settledenergy derivatives based on key energy benchmarks including oil, natural gasand U.S. power. In addition, we also operate three Canadian markets for thetrading of Canadian-listed securities.In Europe, we operate exchanges in Stockholm (Sweden), Copenhagen(Denmark), Helsinki (Finland), and Reykjavik (Iceland), as well as the clearingoperations of Nasdaq Clearing. We also operate exchanges in Tallinn (Estonia),Riga (Latvia) and Vilnius (Lithuania) as Nasdaq Baltic. Collectively, NasdaqNordic and Nasdaq Baltic offer trading in cash equities, depository receipts,warrants, convertibles, rights, fund units and ETFs, as well as trading andclearing of derivatives and clearing of resale and repurchase agreements.Nasdaq Commodities is the brand name for Nasdaq’s worldwide suite ofcommodity-related products and services. Nasdaq Commodities’ offeringsinclude oil, power, natural gas and carbon emission markets, tanker and dry cargo freight, seafood derivatives,iron ore, electricity certificates and clearing services. These products are listedon two of Nasdaq’s derivatives exchanges, Nasdaq Oslo ASA and NFX.Through our Trade Management Services business, we provide marketparticipants with a wide variety of alternatives for connecting to and accessingour markets via a number of different protocols used for quoting, order entry,trade reporting, DROP functionality and connectivity to various data feeds. Wealso provide co-location services to market participants, whereby firms maylease cabinet space and power to house their own equipment and servers withinour data centers. Our broker services operations offer technology andcustomized securities administration solutions to financial participants in theNordic market.Corporate ServicesOur Corporate Services segment includes our Corporate Solutions and ListingServices businesses.Our Corporate Solutions business serves corporate clients, including companieslisted on our exchanges and private companies. We help organizations managethe two-way flow of information with their key constituents, including theirboard members and investors, and with clients and the public through our suiteof advanced technology, analytics, and consultative services. Our CorporateSolutions business currently offers products to serve the following key areas:investor relations, board & leadership, public relations solutions, and digitalmedia services. As of September 30, 2017, our Public Relations Solutions andDigital Media Services businesses have been classified as held for sale. SeeNote 5, “Assets and Liabilities Held for Sale,” for further discussion. In January2018, we announced that we entered into a definitive agreement to sell thesebusinesses. See “Definitive Agreement to Sell our Public Relations Solutionsand Digital Media Services Businesses,” of Note 21, “Subsequent Events,” forfurther discussion.Our Listing Services business includes our U.S. and European Listing Servicesbusinesses. We operate a variety of listing platforms around the world toprovide multiple global capital raising solutions for private and publiccompanies. Our main listing markets are The Nasdaq Stock Market and theNasdaq Nordic and Nasdaq Baltic exchanges. Through Nasdaq First North, ourNordic and Baltic operations also offer alternative marketplaces for smallercompanies and growth companies. Our Listing Services business also includesNPM, which provides liquidity solutions for private companies.As of December 31, 2017 , there were 2,949 total listings on The Nasdaq StockMarket, including 373 ETPs. The combined market capitalization wasapproximately $11.6 trillion . In Europe, the Nasdaq Nordic and Nasdaq Balticexchanges, together with Nasdaq First North, were home to 984 listedcompanies with a combined market capitalization of approximately $1.5 trillion.F- 8 Table of ContentsInformation ServicesOur Information Services segment includes our Data Products and our IndexLicensing and Services businesses. Our Data Products business sells anddistributes historical and real-time quote and trade information to the sell-side,the buy-side, retail online brokers, proprietary trading shops, other venues,internet portals and data distributors. Our data products enhance transparency ofmarket activity within our exchanges and provide critical information toprofessional and non-professional investors globally.Our Index Licensing and Services business develops and licenses Nasdaqbranded indexes, associated derivatives, and financial products and alsoprovides custom calculation services for third-party clients. As of December 31,2017 , we had 324 ETPs licensed to Nasdaq’s indexes which had $167 billionof assets under management.Market TechnologyOur Market Technology segment is a leading global technology solutionsprovider and partner to exchanges, clearing organizations, central securitiesdepositories, regulators, banks, brokers and corporate businesses. Our MarketTechnology business is the sales channel for our complete global offering toother marketplaces.Market Technology provides technology solutions for trading, clearing,settlement, surveillance and information dissemination to markets with wide-ranging requirements, from the leading markets in the U.S., Europe and Asia toemerging markets in the Middle East, Latin America, and Africa. Ourmarketplace solutions can handle a wide array of assets, including cash equities,equity derivatives, currencies, various interest-bearing securities, commoditiesand energy products, and are currently powering more than 90 marketplaces in50 countries. Market Technology also provides market surveillance services tobroker-dealer firms worldwide, as well as enterprise governance, riskmanagement and compliance software solutions.2. Summary of Significant Accounting PoliciesBasis of Presentation and Principles of ConsolidationThe consolidated financial statements are prepared in accordance with U.S.GAAP and include the accounts of Nasdaq, its wholly-owned subsidiaries andother entities in which Nasdaq has a controlling financial interest. When we donot have a controlling interest in an entity but exercise significant influenceover the entity’s operating and financial policies, such investment is accountedfor under the equity method of accounting. We recognize our share of earningsor losses of an equity method investee based on our ownership percentage. See“Equity Method Investments,” of Note 7, “Investments,” for further discussionof our equity method investments.The accompanying consolidated financial statements reflect all adjustmentswhich are, in the opinion of management, necessary for a fair statement of theresults. These adjustments are of a normal recurring nature. All significant intercompany accounts andtransactions have been eliminated in consolidation.Certain prior year amounts have been reclassified to conform to the current yearpresentation.Use of EstimatesThe preparation of consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect thereported amounts and the disclosure of contingent amounts in the consolidatedfinancial statements and accompanying notes. Actual results could differ fromthose estimates.Foreign Currency Foreign denominated assets and liabilities are remeasured into the functionalcurrency at exchange rates in effect at the balance sheet date and recordedthrough the income statement. Gains or losses resulting from foreign currencytransactions are remeasured using the rates on the dates on which thoseelements are recognized during the period, and are included in general,administrative and other expense in the Consolidated Statements of Income.Translation gains or losses resulting from translating our subsidiaries’ financialstatements from the local functional currency to the reporting currency, net oftax, are included in accumulated other comprehensive loss within stockholders’equity in the Consolidated Balance Sheets. Assets and liabilities are translatedat the balance sheet date while revenues and expenses are translated at the datethe transaction occurs or at an applicable average rate.Deferred taxes are not recorded on cumulative translation adjustments wherewe expect earnings of a foreign subsidiary to be indefinitely reinvested. Theincome tax effect of currency translation adjustments related to foreignsubsidiaries that are not considered indefinitely reinvested is recorded as acomponent of deferred taxes with an offset to accumulated other comprehensiveloss within stockholders’ equity in the Consolidated Balance Sheets.Cash and Cash EquivalentsCash and cash equivalents include all non-restricted cash in banks and highlyliquid investments with original maturities of 90 days or less at the time ofpurchase. Such equivalent investments included in cash and cash equivalents inthe Consolidated Balance Sheets were $183 million as of December 31, 2017and $251 million as of December 31, 2016 . Cash equivalents are carried at costplus accrued interest, which approximates fair value due to the short maturitiesof these investments.Restricted CashCurrent restricted cash, which was $22 million as of December 31, 2017 and$15 million as of December 31, 2016 , is restricted from withdrawal due to acontractual or regulatoryF- 9 Table of Contentsrequirement or not available for general use and is classified as restricted cashin the Consolidated Balance Sheets. As of December 31, 2017 and 2016 ,current restricted cash primarily includes restricted cash held for our tradingand clearing businesses.Financial InvestmentsFinancial investments, at fair value are primarily comprised of tradingsecurities, mainly highly rated European government debt securities. Tradingsecurities are bought principally to meet regulatory capital requirements forNasdaq Clearing’s operations and are generally sold in the near term. Changesin fair value of trading securities are included in dividend and investmentincome. Financial investments that are classified as available-for-saleinvestment securities are carried at fair value with unrealized gains and losses,net of tax, reported in accumulated other comprehensive loss withinstockholders’ equity in the Consolidated Balance Sheets. Realized gains andlosses on these securities are included in earnings upon disposition of thesecurities using the specific identification method. In addition, realized lossesare recognized when management determines that a decline in value is otherthan temporary, which requires judgment regarding the amount and timing ofrecovery. For financial investments that are classified as available-for-salesecurities, we also consider the extent to which cost exceeds fair value, theduration of that difference, management’s judgment about the issuer’s currentand prospective financial condition, as well as our intent and ability to hold thesecurity until recovery of the unrealized losses.Fair value of both trading and available-for-sale investment securities isgenerally obtained from third party pricing sources. When available, quotedmarket prices are used to determine fair value. If quoted market prices are notavailable, fair values are estimated using pricing models with observablemarket inputs. The inputs to the valuation models vary by the type of securitybeing priced but are typically benchmark yields, reported trades, broker-dealerquotes, and prices of similar assets. Pricing models generally do not entailmaterial subjectivity because the methodologies employed use inputs observedfrom active markets. See “Fair Value Measurements,” below for furtherdiscussion of fair value measures.Receivables, netOur receivables are concentrated with our member firms, market datadistributors, listed companies, corporate solutions and market technologycustomers. Receivables are shown net of a reserve for uncollectible accounts.The reserve for bad debts is maintained at a level that management believes tobe sufficient to absorb estimated losses in the accounts receivable portfolio. Thereserve is increased by the provision for bad debts which is charged againstoperating results and decreased by the amount of charge-offs, net of recoveries.The provision for bad debts is included in general, administrative and otherexpense in the Consolidated Statements of Income. The amount charged againstoperating results is based on several factors including, but not limited to, acontinuous assessment of the collectability of each account, the length of time areceivable is past due and our historical experience with the particular customer. In circumstances where aspecific customer’s inability to meet its financial obligations is known (i.e.,bankruptcy filings), we record a specific provision for bad debts againstamounts due to reduce the receivable to the amount we reasonably believe willbe collected. Due to changing economic, business and market conditions, wereview the reserve for bad debts monthly and make changes to the reservethrough the provision for bad debts as appropriate. If circumstances change(i.e., higher than expected defaults or an unexpected material adverse change ina major customer’s ability to pay), our estimates of recoverability could bereduced by a material amount. The total reserve netted against receivables inthe Consolidated Balance Sheets was $9 million as of December 31, 2017 , $13million as of December 31, 2016 and $14 million as of December 31, 2015 .The changes in the balance between periods was immaterial.Default Funds and Margin DepositsNasdaq Clearing members’ cash contributions are included in default funds andmargin deposits in the Consolidated Balance Sheets as both a current asset anda current liability. These balances may fluctuate over time due to changes in theamount of deposits required and whether members choose to provide cash ornon-cash contributions. Non-cash contributions include highly ratedgovernment debt securities that must meet specific criteria approved by NasdaqClearing. Non-cash contributions are pledged assets that are not recorded in theConsolidated Balance Sheets as Nasdaq Clearing does not take legal ownershipof these assets and the risks and rewards remain with the clearing members.Derivative Financial Instruments and Hedging ActivitiesNon-Designated DerivativesWe use derivatives as economic hedges that are not designed as accountinghedges or do not qualify for hedge accounting treatment. For such derivativefinancial instruments, changes in fair value are reported in current periodearnings.We use foreign exchange forward contracts to manage foreign currencyexposure of intercompany loans. These contracts are not designated as hedgesfor financial reporting purposes. The change in fair value of these contracts isrecognized in general, administrative and other expense in the ConsolidatedStatements of Income and offsets the foreign currency impact recognized on theintercompany loans.As of December 31, 2017 and 2016 , the fair value amounts of our derivativeinstruments were immaterial.Net Investment HedgesNet assets of our foreign subsidiaries are exposed to volatility in foreigncurrency exchange rates. We may utilize net investment hedges to offset thetranslation adjustment arising from re-measuring our investment in foreignsubsidiaries.Our 2021 and 2023 Notes have been designated as a hedge of our netinvestment in certain foreign subsidiaries to mitigateF- 10 Table of Contentsthe foreign exchange risk associated with certain investments in thesesubsidiaries. Any increase or decrease related to the remeasurement of the 2021and 2023 Notes into U.S. dollars is recorded within accumulated othercomprehensive loss in the Consolidated Balance Sheets. See “3.875% SeniorUnsecured Notes,” and “1.75% Senior Unsecured Notes,” of Note 10, “DebtObligations,” for further discussion.Property and Equipment, netProperty and equipment, including leasehold improvements, are carried at costless accumulated depreciation and amortization. Depreciation and amortizationare recognized using the straight-line method over the estimated useful lives ofthe related assets, which range from 10 to 40 years for buildings andimprovements, 2 to 5 years for data processing equipment, and 5 to 10 years forfurniture and equipment.We develop systems solutions for both internal and external use. Certain costsincurred in connection with developing or obtaining internal use software arecapitalized. In addition, certain costs of computer software to be sold, leased, orotherwise marketed as a separate product or as part of a product or process arecapitalized beginning when a product’s technological feasibility has beenestablished and ending when a product is available for general release.Technological feasibility is established upon completion of a detailed programdesign or, in its absence, completion. Prior to reaching technological feasibility,all costs are charged to expense. Unamortized capitalized costs are included indata processing equipment and software, within property and equipment, net inthe Consolidated Balance Sheets. Capitalized software costs are amortized on astraight-line basis over the estimated useful lives of the software, generally 3 to5 years. Amortization of these costs is included in depreciation andamortization expense in the Consolidated Statements of Income.Leasehold improvements are amortized using the straight-line method over theshorter of their estimated useful lives or the remaining term of the related lease.See Note 8, “Property and Equipment, net,” for further discussion.Goodwill and Indefinite-Lived Intangible AssetsGoodwill represents the excess of purchase price over the value assigned to thenet assets, including identifiable intangible assets, of a business acquired.Goodwill is assessed for impairment annually in the fourth quarter of our fiscalyear using an October 1 measurement date, or more frequently if conditionsexist that indicate that the asset may be impaired, such as changes in thebusiness climate, poor indicators of operating performance or the sale ordisposition of a significant portion of a reporting unit. When testing goodwillfor impairment, we have the option of first performing a qualitative assessmentto determine whether it is more likely than not that the fair value of a reportingunit is less than its carrying amount as the basis to determine if it is necessary toperform a quantitative goodwill impairment test. In performing a qualitativeassessment, we consider the extent to which unfavorable events or circumstances identified, such as changes in economicconditions, industry and market conditions or company specific events, couldaffect the comparison of the reporting unit’s fair value with its carrying amount.If we choose not to complete a qualitative assessment for a given reporting unit,or if the initial assessment indicates that it is more likely than not that thecarrying amount of a reporting unit exceeds its estimated fair value, aquantitative test is required.When assessing goodwill for impairment, our decision to perform a qualitativeimpairment assessment for a reporting unit in a given year is influenced by anumber of factors, including but not limited to, the size of the reporting unit’sgoodwill, the significance of the excess of the reporting unit’s estimated fairvalue over its carrying amount at the last quantitative assessment date, and theamount of time in between quantitative fair value assessments.The quantitative goodwill test consists of two steps:•The first step compares the fair value of each reporting unit with itscarrying amount, including goodwill. If the reporting unit’s fair valueexceeds its carrying amount, goodwill is not impaired.•If the fair value of a reporting unit is less than its carrying amount, thesecond step of the goodwill test is performed to measure the amount ofimpairment, if any. An impairment is equal to the excess of the carryingamount of goodwill over its fair value.We also evaluate indefinite-lived intangible assets for impairment annually inthe fourth quarter of our fiscal year using an October 1 measurement date, ormore frequently whenever events or changes in circumstances indicate that thefair value of the asset may be less than its carrying amount. Such evaluationincludes determining the fair value of the asset and comparing the fair value ofthe asset with its carrying amount . If the fair value of the indefinite-livedintangible asset is less than its carrying amount , an impairment charge isrecognized in an amount equal to the difference.For indefinite-lived intangible assets impairment testing, we also have theoption to first perform a qualitative assessment to determine whether it is morelikely than not that the fair value of an indefinite-lived intangible asset is lessthan the carrying amount. If, after assessing the totality of events orcircumstances, we determine that it is more likely than not that the fair value ofan indefinite-lived intangible asset is less than its carrying amount, then wemust perform additional testing of the asset. Otherwise, we conclude that noimpairment is indicated and further testing is not performed.There was no impairment of goodwill for the years ended December 31, 2017 ,2016 and 2015 and there were no indefinite-lived intangible asset impairmentcharges in 2017. As discussed in “Intangible Asset Impairment Charges,” ofNote 6, “Goodwill and Acquired Intangible Assets,” we recorded pre-tax, non-cash indefinite-lived intangible asset impairment charges of $578 million in2016 and $119 million in 2015. There was no other impairment of indefinite-lived intangible assets for the years ended December 31, 2016 andF- 11 Table of Contents2015. Disruptions to our business and events, such as economic weakness orunexpected significant declines in the operating results of any of our reportingunits or businesses, may result in goodwill or indefinite-lived intangible assetimpairment charges in the future.Valuation of Other Long-Lived AssetsWe review our other long-lived assets, such as finite-lived intangible assets andproperty and equipment, for potential impairment when there is evidence thatevents or changes in circumstances indicate that the carrying amount of an assetmay not be recoverable. The carrying amount of an asset is not recoverable if itexceeds the sum of the undiscounted cash flows expected to result from the useand eventual disposition of the asset. Any required impairment loss is measuredas the amount by which the carrying amount of the asset exceeds its fair valueand is recorded as a reduction in the carrying amount of the related asset and acharge to operating results. See Note 8, “Property and Equipment, net,” forfurther discussion of property and equipment asset impairment chargesrecorded in 2017, 2016 and 2015.Equity Method InvestmentsIn general, the equity method of accounting is used when we own 20% to 50%of the outstanding voting stock of a company and when we are able to exercisesignificant influence over the operating and financial policies of a company. Wehave certain investments in which we have determined that we have significantinfluence and as such account for the investments under the equity method ofaccounting. We record our pro-rata share of earnings or losses each period andrecord any dividends as a reduction in the investment balance. We evaluate ourequity method investments for other-than-temporary declines in value byconsidering a variety of factors such as the earnings capacity of the investmentand the fair value of the investment compared to its carrying amount. Inaddition, for investments where the market value is readily determinable, weconsider the underlying stock price. If the estimated fair value of the investmentis less than the carrying amount and management considers the decline in valueto be other than temporary, the excess of the carrying amount over theestimated fair value is recognized in the financial statements as an impairment.See “Equity Method Investments,” of Note 7, “Investments,” for furtherdiscussion of an other-than-temporary charge recorded in 2016 on an equitymethod investment.Cost Method InvestmentsIn general, the cost method of accounting is used when we own less than 20%of the outstanding voting stock of a company which does not have a readilydeterminable fair value and when we are not able to exercise significantinfluence over the operating and financial policies of a company. Under the costmethod of accounting, investments are carried at cost and are adjusted only forother-than-temporary declines in fair value, certain distributions, and additionalinvestments. We evaluate our cost method investments for other-than-temporary declines in value by considering a variety of factors such as theearnings capacity of the investment. Revenue Recognition and Transaction-Based Expenses Market Services RevenuesMarket services revenues include equity derivative trading and clearingrevenues, cash equity trading revenues, FICC revenues, and trade managementservices revenues.Equity Derivative Trading and Clearing and Cash Equity Trading RevenuesEquity Derivative Trading and Clearing RevenuesIn our equity derivative markets, we earn trading and clearing revenues whichare variable. In the U.S., trading revenues are based on traded volumes, andrecognized when executed. The principal types of equity derivative contractstraded are equity options, ETF options, index options and foreign currencyoptions. In the U.S., we record execution revenues from transactions on a grossbasis as revenues and record related expenses as transaction-based expenses, aswe have certain risk associated with trade execution. See “Equity DerivativeTrading and Clearing and Cash Equity Trading Transaction-Based Expenses”below for further discussion.In Europe, equity derivative trading and clearing revenues are based on thevolume and value of traded and cleared contracts, and recognized whenexecuted or when contracts are cleared. The principal types of equity derivativecontracts traded and cleared are stock options and futures and index options andfutures.Cash Equity Trading RevenuesU.S. cash equity trading revenues are variable, based on individual customershare volumes, and recognized as transactions occur. We charge transactionfees for executing cash equity trades in Nasdaq-listed and other listed securitieson our U.S. cash equity exchanges, as well as on orders that are routed to andexecuted on other market venues for execution. Similar to U.S. equityderivative trading and clearing, we record cash equity trading revenues fromtransactions on a gross basis as revenues and record related expenses astransaction-based expenses, as we have certain risk associated with tradeexecution. For further discussion see “Equity Derivative Trading and Clearingand Cash Equity Trading Transaction-Based Expenses” below.In our European cash equity markets, we charge transaction fees for executingtrades on the exchanges that comprise Nasdaq Nordic and Nasdaq Baltic. Thesetransaction fees are charged per executed order and as per value traded.Equity Derivative Trading and Clearing and Cash Equity Trading Transaction-Based ExpensesFor U.S. equity derivative trading, we credit a portion of the per share executioncharge to the market participant that provides the liquidity. For U.S. cash equitytrading, for Nasdaq and Nasdaq PSX, we credit a portion of the per shareexecution charge to the market participant that provides the liquidity and forNasdaq BX, we credit a portion of the per share execution charge to the marketparticipant that takes the liquidity. WeF- 12 Table of Contentsrecord these credits as transaction rebates that are included in transaction-basedexpense in the Consolidated Statements of Income. These transaction rebatesare paid on a monthly basis and the amounts due are included in accountspayable and accrued expenses in the Consolidated Balance Sheets.In the U.S., we pay Section 31 fees to the SEC for supervision and regulation ofsecurities markets. We pass these costs along to our customers through ourequity derivative trading and clearing fees and our cash equity trading fees. Wecollect the fees as a pass-through charge from organizations executing eligibletrades on our options exchanges and our cash equity platforms and werecognize these amounts in transaction-based expenses when incurred.Section 31 fees received are included in cash and cash equivalents in theConsolidated Balance Sheets at the time of receipt and, as required by law, theamount due to the SEC is remitted semiannually and recorded as Section 31fees payable to the SEC in the Consolidated Balance Sheets until paid. Sincethe amount recorded as revenues is equal to the amount recorded as transaction-based expenses, there is no impact on our revenues less transaction-basedexpenses. As we hold the cash received until payment to the SEC, we earninterest income on the related cash balances.Under our Limitation of Liability Rule and procedures, we may, subject tocertain caps, provide compensation for losses directly resulting from thesystems’ actual failure to correctly process an order, quote, message or otherdata into our platform. We do not record a liability for any potential claims thatmay be submitted under the Limitation of Liability Rule unless they meet theprovisions required in accordance with U.S. GAAP. As such, losses arising as aresult of the rule are accrued and charged to expense only if the loss is probableand estimable.The exchanges that comprise Nasdaq Nordic and Nasdaq Baltic do not have anyrevenue sharing agreements or transaction-based expenses, such as transactionrebates and brokerage, clearance and exchange fees.FICC RevenuesFixed income trading revenues are primarily earned from trading of U.S.Treasury securities and other fixed income products. Customer contracts maybe on a fixed or variable rate basis. Revenues from customer contracts with afixed rate basis are recognized ratably over the contract period. Revenues fromcustomer contracts with a variable rate basis are based upon individualcustomer share volume and are recognized as revenues as the transactionoccurs. Commodities trading and clearing revenues are primarily earned fromtrading and clearing of energy, emission allowance, freight, seafood and othercommodity products. Trading and clearing revenues are based on the volumeand value of traded and cleared contracts, and recognized when executed orwhen contracts are cleared. In addition, Nasdaq Commodities members arebilled an annual fee which is recognized ratably over the following 12-monthperiod.We also generate clearing revenues for OTC traded derivatives, interest rateswaps, and resale and repurchase agreements. These clearing revenues arebased on the value and length of the contract and are recognized when cleared. In connection with our collateralmanagement process in our Nasdaq Clearing operations, we recognize interestincome on cash contributions that we manage when earned.Trade Management Services Revenues Access ServicesWe generate revenues by providing market participants with severalalternatives for connecting to and accessing our markets for a fee. The type ofconnectivity is determined by the level of functionality a customer needs. As aresult, access services revenues vary depending on the type of connectionprovided to customers. We provide co-location services to market participants,whereby firms may lease cabinet space and power to house their ownequipment and servers within our data centers. These participants are chargedmonthly fees for cabinet space, connectivity and support. Additionally, we offera number of wireless connectivity routes between select data centers usingmillimeter wave and microwave technology. We also earn revenues fromannual and monthly exchange membership and registration fees. Revenues forproviding access to our markets, co-location services and monthly exchangemembership and registration fees are recognized on a monthly basis as theservice is provided. Revenues from annual fees for exchange membership andregistration fees are recognized ratably over the following 12-month period.Broker ServicesOur broker services operations offer technology and customized securitiesadministration solutions to financial participants in the Nordic market. Theprimary services offered are flexible back-office systems, which allowcustomers to entirely or partly outsource their company’s back-office functions.Revenues from broker services are based on a fixed basic fee for administrationor licensing, maintenance and operations, and a variable portion that dependson the number of transactions completed. Broker services revenues arerecognized on a continuous basis as services are rendered.Corporate Services RevenuesCorporate services revenues include corporate solutions revenues and listingservices revenues.Corporate Solutions RevenuesCorporate solutions revenues primarily include subscription and transaction-based income from our investor relations, board & leadership, public relationssolutions, and digital media services products. Subscription-based revenuesearned are recognized ratably over the contract period, generally one to twoyears in length. As part of the subscription agreements, customers can also becharged usage fees based upon actual usage of the services provided. Revenuesfrom usage fees and other services are recognized when earned. Revenues fromtransaction-based services, such as webcasting and wire distribution, arerecorded as the services are provided and delivered.F- 13 Table of ContentsListing Services RevenuesListing services revenues primarily include annual renewal fees, initial listingfees and listing of additional shares fees.Annual Renewal FeesIn the U.S., annual renewal fees are charged based on the number ofoutstanding shares of companies listed in the U.S. at the end of the prior yearand are recognized ratably over the following 12-month period. Europeanannual renewal fees, which are received from companies listed on our NasdaqNordic and Nasdaq Baltic exchanges and Nasdaq First North, are directlyrelated to the listed companies’ market capitalization on a trailing 12-monthbasis.Initial Listing FeesInitial listing fees are generally based on the number of shares that a companyinitially lists and are recognized on a straight-line basis over estimated serviceperiods of six years, based on our historical listing experience and projectedfuture listing duration.Listing of Additional Shares FeesListing of additional shares fees are paid by listed companies in connection withcorporate actions involving the issuance of new shares to be listed, such asstock splits and sales of additional securities. These fees are recognized on astraight-line basis over estimated service periods of four years, based on ourhistorical listing experience and projected future listing duration.Listing of additional share fees have been phased out effective January 2018 asa result of our all-inclusive annual listing fee program for our U.S. markets. See“All-Inclusive Annual Listing Fee Program” below for further discussion. All-Inclusive Annual Listing Fee ProgramNasdaq announced an all-inclusive annual listing fee program for companieslisted in the U.S. which became effective in 2015. Under this program, listedcompanies pay an annual fee which includes all listing-related activities,including listing of additional shares. All listed companies are subject to the all-inclusive program effective January 2018. These revenues are recognizedratably over the following 12-month period.Revenue recognition for our Listing Services business was impacted due to theadoption of ASU 2014-09, “Revenue from Contracts with Customers.” See“Recent Accounting Pronouncements,” of Note 2, “Summary of SignificantAccounting Policies,” for further discussion.Information Services RevenuesInformation services revenues include data products revenues and indexlicensing and services revenues. Data Products RevenuesData products revenues are earned from U.S. and European proprietary dataproducts and index data products. In the U.S., we also earn revenues from U.S.tape plans.We collect, process and create information from our exchanges and earnrevenues as a distributor of our own data, as well as select, third-party content.We provide varying levels of quote and trade information to our customers,who in turn sell subscriptions for this information. In 2017, we expanded ouroffering through the acquisition of eVestment, a leading data and analyticsprovider to the asset management industry. We earn revenues primarily basedon the number of data subscribers and distributors of our data. Data productsrevenues are subscription-based and are recognized on a monthly basis net ofamounts due under revenue sharing arrangements with market participants.We also generate revenues from our Nasdaq indexes that consist of GlobalIndex Data Services, which delivers real-time index values throughout thetrading day, and Global Index Watch/Global Index File Delivery Service, whichdelivers weightings and components data, corporate actions and a breadth ofadditional data. We earn revenues primarily based on the number of datasubscribers and distributors of our data. These revenues, which are subscriptionbased, are recognized on a monthly basis.Revenues from U.S. tape plans include eligible UTP Plan revenues that areshared among UTP Plan participants and are presented on a net basis. TheNasdaq Stock Market acts as the processor and administrator for the UTP Plan.The UTP Plan administrator sells quotation and last sale information for alltransactions in Nasdaq-listed securities, whether traded on The Nasdaq StockMarket or other exchanges, to market participants and to data distributors, whothen provide the information to subscribers. After deducting costs, as permittedunder the revenue sharing provision of the UTP Plan, the UTP Planadministrator distributes the tape revenues to the respective UTP Planparticipants, including The Nasdaq Stock Market, Nasdaq BX and Nasdaq PSX,based on a formula required by Regulation NMS that takes into account bothtrading and quoting activity. In addition, much like Nasdaq-listed securities, allquotes and trades in NYSE- and NYSE American-listed securities are reportedand disseminated in real-time, and as such, we share in the tape revenues forinformation on NYSE- and NYSE American-listed securities. Revenues fromnet U.S. tape plans are recognized on a monthly basis.Data Products Revenue SharingThe most significant component of data products revenues recorded on a netbasis is the UTP Plan revenue sharing in the U.S. All indicators of gross versusnet reporting under U.S. GAAP have been considered in analyzing theappropriate presentation of UTP Plan revenue sharing. However, the followingare the primary indicators of net reporting:•Primary Obligor: We are the administrator for the UTP Plan, in addition tobeing a participant in the UTP Plan. InF- 14 Table of Contentsour unique role as administrator, we facilitate the collection anddissemination of revenues on behalf of the UTP Plan participants. As aparticipant, we share in the net distribution of revenues according to theplan on the same terms as all other plan participants.•Risk of Loss/Credit Risk: Risk of loss on the revenue is shared equallyamong plan participants according to the UTP Plan.•Price Latitude: The operating committee of the UTP Plan, which iscomprised of representatives from each of the participants, including ussolely in our capacity as a UTP Plan participant, is responsible for settingthe level of fees to be paid by distributors and subscribers and taking actionin accordance with the provisions of the UTP Plan, subject to SECapproval.The exchanges that comprise Nasdaq Nordic and Nasdaq Baltic do not have anydata products revenue sharing agreements.Index Licensing and Services Revenues We develop and license Nasdaq branded indexes, associated derivatives andfinancial products as part of our Global Index Family. We also provide customcalculation services for third-party clients. Revenues primarily include licensefees from these branded indexes, associated derivatives and financial productsin the U.S. and abroad. We primarily have two types of license agreements:transaction-based licenses and asset-based licenses. Transaction-based licensesare generally renewable long-term agreements. Customers are charged based ontransaction volume or a minimum contract amount, or both. If a customer ischarged based on transaction volume, we recognize revenue when thetransaction occurs. If a customer is charged based on a minimum contractamount, we recognize revenue on a pro-rata basis over the licensingterm. Asset-based licenses are also generally long-term agreements. Customersare charged based on a percentage of assets under management for licensedproducts, per the agreement, on a monthly or quarterly basis. These revenuesare recognized over the term of the license agreement.Market Technology Revenues Market Technology provides technology solutions for trading, clearing,settlement, surveillance and information dissemination, as well as enterprisegovernance, risk management and compliance software solutions. Revenuesprimarily consist of software, license and support revenues, change request andadvisory revenues, and software as a service revenues.For most solutions, we enter into multiple-element sales arrangements todevelop technology solutions, license the right to use software, and providepost-contract support and other services to our customers. In order to recognizerevenues associated with each individual element of a multiple-element salesarrangement separately, we are required to establish the existence of VSOE offair value for each element. When VSOE for individual elements of anarrangement cannot be established, revenue is generally deferred andrecognized over either the final element of the arrangement or the entire term of the arrangementfor which the services will be delivered.We enter into agreements to modify the system solutions sold by Nasdaq afterdelivery has occurred. These revenues are recognized when earned.In addition, we enter into revolving subscription agreements which allowcustomers to connect to our servers to access certain services. These revenuesare recognized ratably over the subscription term.Revenue recognition for our Market Technology business was impacted due tothe adoption of ASU 2014-09, “Revenue from Contracts with Customers.” See“Recent Accounting Pronouncements,” of Note 2, “Summary of SignificantAccounting Policies,” for further discussion.Earnings Per ShareWe present both basic and diluted earnings per share. Basic earnings per shareis computed by dividing net income attributable to Nasdaq by the weighted-average number of common shares outstanding for the period. Diluted earningsper share is computed by dividing net income attributable to Nasdaq by theweighted-average number of common shares and common share equivalentsoutstanding during the period and reflects the assumed conversion of alldilutive securities, which primarily consist of employee stock options, restrictedstock, and PSUs. Common share equivalents are excluded from thecomputation in periods for which they have an anti-dilutive effect. Stockoptions for which the exercise price exceeds the average market price over theperiod are anti-dilutive and, accordingly, are excluded from the calculation. SeeNote 15, “Earnings Per Share,” for further discussion.Pension and Post-Retirement BenefitsPension and other post-retirement benefit plan information for financialreporting purposes is developed using actuarial valuations. We assess ourpension and other post-retirement benefit plan assumptions on a regular basis.In evaluating these assumptions, we consider many factors, includingevaluation of the discount rate, expected rate of return on plan assets, mortalityrate, healthcare cost trend rate, retirement age assumption, our historicalassumptions compared with actual results and analysis of current marketconditions and asset allocations. See Note 12, “Retirement Plans,” for furtherdiscussion.Discount rates used for pension and other post-retirement benefit plancalculations are evaluated annually and modified to reflect the prevailingmarket rates at the measurement date of a high-quality fixed-income debtinstrument portfolio that would provide the future cash flows needed to pay thebenefits included in the benefit obligations as they come due. Actuarialassumptions are based upon management’s best estimates and judgment.The expected rate of return on plan assets for our U.S. pension plans representsour long-term assessment of return expectations which may change based onsignificant shifts in economic and financial market conditions. The long-termrateF- 15 Table of Contentsof return on plan assets is derived from return assumptions based on targetedallocations for various asset classes. While we consider the pension plans’recent performance and other economic growth and inflation factors, which aresupported by long-term historical data, the return expectations for the targetedasset categories represent a long-term prospective return.Share-Based CompensationNasdaq uses the fair value method of accounting for share-based awards. Share-based awards, or equity awards, include stock options, restricted stock, andPSUs. The fair value of stock options are estimated using the Black-Scholesoption-pricing model. The fair value of restricted stock awards and PSUs, otherthan PSUs granted with market conditions, is determined based on the grantdate closing stock price less the present value of future cash dividends. Weestimate the fair value of PSUs granted with market conditions using a MonteCarlo simulation model at the date of grant.We generally recognize compensation expense for equity awards on a straight-line basis over the requisite service period of the award, taking into account anestimated forfeiture rate.Excess tax benefits or expense related to employee share-based payments, ifany, are recognized as income tax benefit or expense in the ConsolidatedStatements of Income when the awards vest or are settled.Nasdaq also has an ESPP that allows eligible employees to purchase a limitednumber of shares of our common stock at six-month intervals, called offeringperiods, at 85.0% of the lower of the fair market value on the first or the lastday of each offering period. The 15.0% discount given to our employees isincluded in compensation and benefits expense in the Consolidated Statementsof Income.See Note 13, “Share-Based Compensation,” for further discussion of our share-based compensation plans.LeasesWe expense rent from non-cancellable operating leases, net of sublease income,on a straight line basis, based on future minimum lease payments. The net costsare included in occupancy expense in the Consolidated Statements of Income.See Note 18, “Leases,” for further discussion.Fair Value MeasurementsFair value is defined as the price that would be received from selling an asset orpaid to transfer a liability, or the exit price, in an orderly transaction betweenmarket participants at the measurement date. When determining the fair valuemeasurements for assets and liabilities required or permitted to be eitherrecorded or disclosed at fair value, we consider the principal or mostadvantageous market in which we would transact, and we also considerassumptions that market participants would use when pricing the asset orliability. Fair value measurement establishes a hierarchy of valuation techniquesbased on whether the inputs to those valuation techniques are observable orunobservable. Observable inputs reflect market data obtained from independent sources, while unobservableinputs reflect Nasdaq’s market assumptions. These two types of inputs createthe following fair value hierarchy:•Level 1—Quoted prices for identical instruments in active markets.•Level 2—Quoted prices for similar instruments in active markets; quotedprices for identical or similar instruments in markets that are not active;and model-derived valuations whose inputs are observable or whosesignificant value drivers are observable.•Level 3—Instruments whose significant value drivers are unobservable.This hierarchy requires the use of observable market data when available.See Note 16, “Fair Value of Financial Instruments,” for further discussion.Tax MattersWe use the asset and liability method to determine income taxes on alltransactions recorded in the consolidated financial statements. Deferred taxassets and liabilities are determined based on differences between the financialstatement carrying amounts and the tax basis of existing assets and liabilities(i.e., temporary differences) and are measured at the enacted rates that will be ineffect when these differences are realized. If necessary, a valuation allowance isestablished to reduce deferred tax assets to the amount that is more likely thannot to be realized.In order to recognize and measure our unrecognized tax benefits, managementdetermines whether a tax position is more likely than not to be sustained uponexamination, including resolution of any related appeals or litigation processes,based on the technical merits of the position. Once it is determined that aposition meets the recognition thresholds, the position is measured to determinethe amount of benefit to be recognized in the consolidated financial statements.Interest and/or penalties related to income tax matters are recognized in incometax expense.The Tax Cuts and Jobs Act was enacted on December 22, 2017. We arerequired to recognize the effect of the tax law changes in the period ofenactment, such as remeasuring our U.S. deferred tax assets and liabilities,reassessing the net realizability of deferred tax assets and liabilities, anddetermining the applicability of the one-time mandatory transition tax onaccumulated foreign earnings. SAB 118 has provided guidance which allows usto record provisional amounts during a measurement period not to extendbeyond one year of the enactment date. As of December 31, 2017, we haverecorded a provisional estimate of the effects of the new legislation. We willcontinue to analyze the Tax Cuts and Jobs Act and related accounting guidanceand interpretations in order to finalize any impacts within the measurementperiod.See Note 11, “Income Taxes,” for further discussion.F- 16 Table of ContentsRecent Accounting PronouncementsAccounting StandardDescriptionEffective DateEffect on the FinancialStatements or OtherSignificant MattersCompensation - StockCompensation In March 2016, the FASBissued ASU 2016-09,“Improvements toEmployee Share-BasedPayment Accounting.”This ASU involves several aspects of the accounting for share-based paymenttransactions, including the income tax consequences, classification of awards as eitherequity or liabilities, and classification on the statement of cash flows. This guidancerequires all income tax effects of awards to be recognized as income tax expense orbenefit in the income statement when the awards vest or are settled, as opposed toadditional paid-in-capital where it was previously recorded. This guidance impacts thecalculation of our total diluted share count for the earnings per share calculation, ascalculated under the treasury stock method. It also allows an employer to repurchasemore of an employee’s shares for tax withholding purposes without triggering liabilityaccounting. All tax-related cash flows resulting from share-based payments arereported as operating activities on the statement of cash flows. In regards to forfeitures,a policy election is required to either estimate the number of awards that are expectedto vest or account for forfeitures as they occur.We adopted thisstandard on January1, 2017 on aprospective basisfor the impacts onthe accounting forincome taxes andthe effect onearnings per share.We adopted thechanges for the cashflow statementclassificationretrospectively.The adoption resulted inthe recognition of excesstax benefits in ourprovision for incometaxes rather thanadditional paid-in capitalof $40 million for theyear ended December31, 2017.Compensation - StockCompensation In May 2017, the FASBissued ASU 2017-09,“Scope of ModificationAccounting.”This ASU clarifies when changes to the terms or conditions of a share-based paymentaward must be accounted for as modifications. Under the new guidance, modificationaccounting is required only if the fair value, the vesting conditions, or the classificationof the award (as equity or liability) change as a result of the change in terms orconditions.We adopted thisstandard on June30, 2017 on aprospective basis.Adopting this standardhad no impact on ourconsolidated financialstatements. The futureimpact will depend onthe extent and nature offuture changes to theterms of our share-basedpayment awards.Historically, we have nothad significant changesto our share-basedpayment awards andtherefore do not expectadoption of thisguidance to have amaterial impact on ourconsolidated financialstatements.Business CombinationIn January 2017, theFASB issued ASU 2017-01, “Clarifying theDefinition of a Business.”This ASU clarifies the definition of a business with the objective of adding guidance toassist companies with evaluating whether transactions should be accounted for asacquisitions (or disposals) of assets or businesses. The new guidance is expected toreduce the number of transactions that need to be further evaluated as businesses. Earlyadoption is permitted for certain types of transactions .We adopted thisstandard on January1, 2018 on aprospective basis.None. However, thisstandard may impacthow we account forfuture acquisitions.F- 17 Table of ContentsAccounting StandardDescriptionEffective DateEffect on the FinancialStatements or OtherSignificant MattersGoodwillIn January 2017, theFASB issued ASU 2017-04, “Simplifying the Testfor Goodwill Impairment.”This ASU simplifies how an entity is required to test goodwill for impairment andremoves the second step of the goodwill impairment test, which required a hypotheticalpurchase price allocation if the fair value of a reporting unit is less than its carryingamount. Goodwill impairment will now be measured using the difference between thecarrying amount and the fair value of the reporting unit and the loss recognized shouldnot exceed the total amount of goodwill allocated to that reporting unit. Theamendments in this ASU should be applied on a prospective basis. Early adoption ispermitted for interim or annual goodwill impairment tests performed on testing datesafter January 1, 2017.January 1, 2020,with early adoptionas of January 1,2017 permitted .We do not anticipate amaterial impact on ourconsolidated financialstatements at the time ofadoption of this newstandard as the carryingamounts of our reportingunits have been less thantheir corresponding fairvalues in recent years.Therefore, the secondstep of the goodwillimpairment test was notrequired. However,changes in futureprojections, marketconditions and otherfactors may cause achange in the excess offair value of ourreporting units over theircorresponding carryingamounts. We do notanticipate early adoptionof this standard.Financial Instruments -Credit Losses In June 2016, the FASBissued ASU 2016-13,“Measurement of CreditLosses on FinancialInstruments.”This ASU changes the impairment model for certain financial instruments. The newmodel is a forward looking expected loss model and will apply to financial assetssubject to credit losses and measured at amortized cost and certain off-balance sheetcredit exposures. This includes loans, held-to-maturity debt securities, loancommitments, financial guarantees and net investments in leases, as well as tradereceivables. For available-for-sale debt securities with unrealized losses, credit losseswill be measured in a manner similar to today, except that the losses will be recognizedas allowances rather than reductions in the amortized cost of the securities.January 1, 2020,with early adoptionpermitted as ofJanuary 1, 2019.We are currentlyassessing the impact thatthis standard will haveon our consolidatedfinancial statements. Wedo not anticipate earlyadoption of thisstandard.F- 18 Table of ContentsAccounting StandardDescriptionEffective DateEffect on the FinancialStatements or OtherSignificant MattersLeases In February 2016, theFASB issued ASU 2016-02, “Leases.”Under this ASU, at the commencement date, lessees will be required to recognize alease liability, which is a lessee’s obligation to make lease payments arising from alease, measured on a discounted basis; and a right-of-use asset, which is an asset thatrepresents the lessee’s right to use, or control the use of, a specified asset for the leaseterm. This guidance is not applicable for leases with a term of 12 months or less.Lessor accounting is largely unchanged.January 1, 2019,with early adoptionpermitted.When adopted, ASU2016-02 will result in anincrease in the assets andliabilities reflected onour consolidated balancesheets. In addition, wewill be required todisclose key informationabout our leases. We arecurrently assessing thesignificance that thisstandard will have onour consolidatedfinancial statements. Wedo not anticipate earlyadoption of thisstandard.Financial Instruments -Overall In January 2016, theFASB issued ASU 2016-01, “Recognition andMeasurement of FinancialAssets and FinancialLiabilities.”This ASU requires that most equity investments be measured at fair value, withsubsequent changes in fair value recognized in net income. Under this new guidance,Nasdaq will no longer be able to recognize unrealized holding gains and losses onequity securities classified today as available-for-sale in accumulated othercomprehensive income within stockholders’ equity. For certain equity investments thatdo not have readily determinable fair values, there is a new measurement alternativewhere those investments are measured at cost, less any impairment, plus or minuschanges resulting from observable price changes in orderly transactions for theidentical or a similar investment of the same issuer. This new standard does not changethe guidance for classifying and measuring investments in debt securities and loans.This new guidance also impacts financial liabilities accounted for under the fair valueoption and affects the presentation and disclosure requirements for financial assets andliabilities.We adopted thisstandard on January1, 2018 on aprospective basis.Since we do not have asignificant investment infinancial instrumentsimpacted by thisstandard at the time ofadoption, there was nomaterial impact on ourconsolidated financialstatements. We haveelected the measurementalternative for equityinvestments which werehistorically accountedfor under the costmethod of accounting.This could result involatility in earnings.F- 19 Table of ContentsAccounting StandardDescriptionEffective DateEffect on the FinancialStatements or OtherSignificant MattersIncome Statement -Reporting ComprehensiveIncome In February 2018, theFASB issued ASU 2018-02, “Reclassification ofCertain Tax Effects fromAccumulated OtherComprehensive Income.”This ASU provides an election to reclassify tax effects that are stranded in accumulatedother comprehensive income as a result of tax reform to retained earnings. An electionis also available to reclassify other stranded tax effects that relate to the Tax Cuts andJobs Act but do not directly relate to the change in the federal rate. Tax effects that arestranded in accumulated other comprehensive income for other reasons (e.g., priorchanges in tax law, a change in valuation allowance) may not be reclassified.Previously, the effects of changes in tax rates and laws on deferred tax balances wererequired to be recorded as a component of tax expense related to continuing operationsfor the period in which the law was enacted, even if the assets and liabilities related toitems of accumulated other comprehensive income. In other words, backward tracingof the income tax effects of items originally recognized through accumulated othercomprehensive income was prohibited.January 1, 2019,with early adoptionpermitted.We are currentlyassessing the impact thatthis standard will haveon our consolidatedfinancial statements.Revenue From ContractsWith Customers In May 2014, the FASBissued ASU 2014-09,“Revenue from Contractswith Customers (Topic606),” which supersedesthe revenue recognitionguidance in AccountingStandards Codification,“Revenue Recognition.”The new revenue recognition standard sets forth a five-step revenue recognition modelto determine when and how revenue is recognized. The core principle of the guidanceis that an entity should recognize revenue to depict the transfer of promised goods orservices to customers in an amount that reflects the consideration it expects to receivein exchange for those goods or services. The standard also requires more detaileddisclosures. The standard provides alternative methods of initial adoption.We adopted thisstandard on January1, 2018 using thefull retrospectivemethod.See discussion below.Revenue From Contracts With CustomersRevenue and expense recognition for our Market Technology business and revenue recognition for our Listing Services business were impacted due to the adoptionof Topic 606; however, the impact on our consolidated financial statements at the time of adoption was not material. There was no impact to revenue and expenserecognition for our other businesses.Market Technology. In our Market Technology business, we enter into contracts with customers to develop technology solutions, license the right to use software,and provide post-contract support and other services to our customers. Under accountingpolicies prior to the adoption of Topic 606, we did not recognize revenue or expense until we began the final stage of the contract as we are not able to establishVSOE for individual elements of the contract. Under Topic 606, we no longer defer recognition of revenue and expense until the final stage of the contract. Foreach of our contracts, we have identified multiple performance obligations, allocated the transaction price to these obligations and are recognizing revenue for eachof these obligations as they are satisfied. Expenses are no longer deferred, with the exception of certain commission expense, but are recognized as incurred. Sincerevenue and expense are recognized in earlier stages of the contract, the balance sheet accounts for deferred revenue and costs have declined upon adoption ofTopic 606. Due to the complexity of certain contracts, the revenue recognition treatment under Topic 606 is dependent on contract-specific terms and may vary insome instances.Listing Services. Under accounting policies prior to the adoption of Topic 606, amounts received for initial listing fees and listing of additional shares fees weregenerally deferred and revenue was recognized over estimated service periods of six and four years, respectively. Under Topic 606, we have identified theperformance obligations associated with these services and are recording revenue upon satisfaction of each performance obligation. Under Topic 606, we recognizeinitial listing fees over a shorter period on average than the prior estimated service period. Since we recognize revenues earlier under Topic 606, the balance sheetaccount for deferred revenue has declined upon adoption.The following are key items to note regarding the accounting for our Market Technology and Listing Services businesses under Topic 606:•revenue recognition for existing and new contracts is recognized in earlier stages under the new standard;F- 20 Table of Contents•expense recognition for Market Technology contracts is recognized in earlier stages under the new standard;•a portion of revenues and expenses that were previously deferred were recognized either in prior period revenues, through restatement, or as an adjustmentto retained earnings upon adoption of the new standard; and•the overall value of our contracts and the timing of cash flows from customers did not change.The following tables present the expected effect of the adoption of Topic 606 on our Consolidated Statements of Income for the years ended December 31, 2017and 2016: Year Ended December 31, 2017 Year Ended December 31, 2016 As Reported Adjustment toReflect Adoptionof Topic 606 As Adjusted As Reported Adjustment toReflect Adoptionof Topic 606 As Adjusted (in millions) (in millions)Revenues less transaction-based expenses: Market Services$881 $— $881 $827 $— $827Corporate Services656 (3) 653 635 (3) 632Information Services588 — 588 540 — 540Market Technology303 (14) 289 275 2 277Total revenues less transaction-based expenses2,428 (17) 2,411 2,277 (1) 2,276 Total operating expenses (1)1,429 (9) 1,420 1,438 2 1,440 Income before income taxes880 (8) 872 136 (3) 133Income tax provision (benefit)146 (3) 143 28 (1) 27Net income attributable to Nasdaq$734 $(5) $729 $108 $(2) $106Diluted earnings per share$4.33 $(0.03) $4.30 $0.64 $(0.01) $0.63____________(1) Adjustment to reflect the adoption of Topic 606 for the year ended December 31, 2017 and 2016 primarily pertains to our Market Technology business.As of January 1, 2016, as the result of the adoption of Topic 606, the impact to retained earnings was immaterial. The following table presents the effect of theadoption on our Consolidated Balance Sheets as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 As Reported Adjustment toReflect Adoption ofTopic 606 As Adjusted As Reported Adjustment toReflect Adoption ofTopic 606 As Adjusted (in millions) (in millions)Assets: Other current assets$187 $(19) $168 $167 $(15) $152Other non-current assets412 (38) 374 390 (46) 344Deferred tax assets391 2 393 717 (1) 716Total assets$15,786 $(55) $15,731 $14,150 $(62) $14,088 Liabilities: Deferred revenue$189 $(28) $161 $162 $(24) $138Non-current deferred revenue146 (20) 126 171 (36) 135Total liabilities$9,899 $(48) $9,851 $8,720 $(60) $8,660 Nasdaq stockholders' equity: Retained earnings$3,970 $(7) $3,963 $3,479 $(2) $3,477Total Nasdaq stockholders' equity5,887 (7) 5,880 5,430 (2) 5,428Total liabilities and equity$15,786 $(55) $15,731 $14,150 $(62) $14,088 F- 21 Table of Contents3. Restructuring Charges2015 Restructuring PlanDuring the first quarter of 2015, we performed a comprehensive review of ourprocesses, businesses and systems in a company-wide effort to improveperformance, cut costs, and reduce spending. In June 2016, we completed our2015 restructuring plan and recognized total net pre-tax charges of $213million for the period March 2015 through June 2016.The following table presents a summary of restructuring plan charges in theConsolidated Statements of Income: Year Ended December 31, 2016 2015 (in millions)Rebranding of trade name$— $119Severance22 25Facilities-related1 —Asset impairments8 18Other10 10Total restructuring charges$41 $172 For the year ended December 31, 2016 , we recognized restructuring chargestotaling $41 million , including severance costs of $22 million related toworkforce reductions of 201 positions across our organization, $8 million forasset impairments, primarily related to fixed assets and capitalized softwarethat were retired, and $10 million of other charges. For the year endedDecember 31, 2015, we recorded restructuring charges totaling $172 million ,including rebranding of our trade name of $119 million , severance costs of$25 million related to workforce reductions of 230 positions across ourorganization, $18 million for asset impairments, primarily related to fixedassets and capitalized software that were retired, and $10 million of othercharges.Restructuring ReserveSeveranceAs of December 31, 2016 , an accrued severance balance of $17 million wasincluded in other current liabilities in the Consolidated Balance Sheets andwas paid during 2017.* * * * * *4. AcquisitionsWe completed the following acquisitions in 2017, 2016 and 2015 . Financial results of each transaction are included in our Consolidated Statements of Incomefrom the date of each acquisition.2017 Acquisitions PurchaseConsideration Total Net LiabilitiesAcquired Total Net Deferred TaxLiability Acquired Intangible Assets Goodwill (in millions)eVestment$744 $(10) $(104) $405 $453The amounts in the table above represent the preliminary allocation of purchaseprice as of December 31, 2017 and are subject to revision during the remainderof the measurement period, a period not to exceed 12 months from theacquisition date. Adjustments to the provisional values, which may include taxand other estimates, during the measurement period will be recorded in thereporting period in which the adjustment amounts are determined. Changes toamounts recorded as assets and liabilities may result in a correspondingadjustment to goodwill.See “Intangible Assets” below for further discussion of intangible assetsacquired in the eVestment acquisition.Acquisition of eVestmentIn October 2017, we acquired eVestment for $705 million . The aggregate cashconsideration of $744 million , which is net of cash acquired of $22 million , included $39 million of estimated tax benefitsassociated with the transaction. We acquired net liabilities, at fair value, totaling$10 million and we recorded a net deferred tax liability of $104 million , whichis net of the $39 million in estimated tax benefits associated with thetransaction. The deferred tax liability recorded of $143 million relates todifferences in the U.S. GAAP and tax basis of our investment in eVestment.eVestment is part of our Information Services segment.Nasdaq used cash on hand and issuances of commercial paper to fund thisacquisition.Acquisition of SybenetixIn September 2017, we acquired Sybenetix for an immaterial amount.Sybenetix is part of our Market Technology segment.F- 22 Table of Contents2016 Acquisitions Purchase Consideration Total Net Assets(Liabilities) Acquired Total Net Deferred TaxLiability Acquired Intangible Assets Goodwill (in millions)ISE$1,070 $83 $(185) $623 $549Boardvantage242 28 (38) 111 141Marketwired111 (1) (5) 31 86Nasdaq Canada116 6 (20) 76 54 The amounts in the table above represent the final allocation of purchase pricefor each acquisition. The allocations of the purchase price were subject torevision during the measurement period, a period not to exceed 12 months fromthe acquisition date. Adjustments to the provisional values, which may includetax and other estimates, during the measurement period are recorded in thereporting period in which the adjustment amounts are determined. We finalizedthe allocation of the purchase price for Marketwired and Nasdaq Canada inFebruary 2017. In the second quarter of 2017, we finalized the allocation of thepurchase price for Boardvantage and ISE. There were no adjustments to theprovisional values during the 12-month measurement period for Nasdaq Canadaand ISE. In the second quarter of 2016, we recorded a measurement periodadjustment of $5 million related to our acquisition of Marketwired which isdiscussed below under “Acquisition of Marketwired.” In the second quarter of2017, we recorded a measurement period adjustment of $7 million related toour acquisition of Boardvantage which is discussed below under “Acquisitionof Boardvantage.”See “Intangible Assets” below for further discussion of intangible assetsacquired through our 2016 acquisitions.Acquisition of ISEIn June 2016, we acquired ISE for $1,070 million . We acquired net assets, atfair value, totaling $83 million and recorded a net deferred tax liability of $185million , comprised of a deferred tax liability of $266 million and a deferred taxasset of $81 million , related to differences in the U.S. GAAP and tax basis ofour investment in ISE. ISE is part of our Market Services, Information Servicesand Market Technology segments.In May 2016, we issued the 2023 Notes and in June 2016, we issued the 2026Notes to fund this acquisition. See “1.75% Senior Unsecured Notes,” and“3.85% Senior Unsecured Notes,” of Note 10, “Debt Obligations,” for furtherdiscussion.Acquisition of BoardvantageIn May 2016, we acquired Boardvantage for $242 million ( $197 million incash paid plus $45 million in working capital adjustments, which primarilyincludes cash acquired). We acquired net assets, at fair value, totaling $28million and recorded a net deferred tax liability of $45 million , comprised of adeferred tax liability of $46 million and a deferred tax asset of $1 million ,related to differences in the U.S. GAAP and tax basis of our investment in Boardvantage. In the second quarter of 2017, werecorded a measurement period adjustment of $7 million to the estimated fairvalue of deferred tax assets to reflect a revised assessment following the receiptof new information. The adjustment resulted in an increase to deferred taxassets recorded and a decrease to goodwill. The adjustment did not result in animpact to our Consolidated Statements of Income. Boardvantage is part of ourCorporate Solutions business within our Corporate Services segment.Nasdaq borrowed $197 million under the revolving credit commitment of aprevious credit facility to fund this acquisition.Acquisition of MarketwiredIn February 2016, we acquired Marketwired for $111 million ( $109 million incash paid plus $2 million in working capital adjustments). We acquired netliabilities, at fair value, totaling $1 million and recorded a deferred tax liabilityof $10 million related to differences in the U.S. GAAP and tax basis of ourinvestment in Marketwired. In the second quarter of 2016, we recorded ameasurement period adjustment of $5 million to the estimated fair value ofdeferred tax liabilities to reflect a revised assessment following the receipt ofnew information. The adjustment resulted in a decrease to both deferred taxliabilities recorded and goodwill. The adjustment did not result in an impact toour Consolidated Statements of Income. Marketwired is part of our CorporateSolutions business within our Corporate Services segment.Nasdaq borrowed $109 million under the revolving credit commitment of aprevious credit facility to fund this acquisition.Acquisition of Nasdaq CanadaIn February 2016, we acquired Nasdaq Canada for $116 million ( $115 millionin cash paid plus $1 million in working capital adjustments). We acquired netassets, at fair value, totaling $6 million and recorded a deferred tax liability of$20 million related to differences in the U.S. GAAP and tax basis of ourinvestment in Nasdaq Canada. Nasdaq Canada is part of our Market Servicessegment and our Data Products business within our Information Servicessegment.Nasdaq used cash on hand and borrowed $55 million under the revolving creditcommitment of a previous credit facility to fund this acquisition.F- 23 Table of Contents2015 Acquisitions PurchaseConsideration Total Net AssetsAcquired Total Net DeferredTax Liability Acquired Intangible Assets Goodwill (in millions)DWA$226 $8 $(34) $141 $111We finalized the allocation of the purchase price for DWA in January 2016. There were no adjustments to the provisional values for this acquisition during the 12-month measurement period.See “Intangible Assets” below for further discussion of intangible assets acquired in the DWA acquisition.Acquisition of DWAIn January 2015, we completed the acquisition of DWA for $226 million ( $225million cash paid plus $1 million in working capital adjustments). We acquirednet assets, at fair value, totaling $8 million and recorded a deferred tax liabilityof $34 million related to differences in the U.S. GAAP and tax basis of ourinvestment in DWA. DWA is part of our Data Products and Index Licensingand Services businesses within our Information Services segment.Nasdaq used cash on hand and borrowed $100 million under the revolvingcredit commitment of a previous credit facility to fund this acquisition. Acquisition of Full Ownership of NPM and Acquisition of SecondMarketIn October 2015, we acquired full ownership of NPM following the acquisitionof the minority stake that was previously held by a third party. In addition,through NPM, we acquired SecondMarket. The additional ownership interest inNPM and SecondMarket were purchased for an immaterial amount. NPM andSecondMarket are part of our Listing Services business within our CorporateServices segment.* * * * * *Intangible AssetsThe following table presents the details of acquired intangible assets at the date of each acquisition. All acquired intangible assets with finite lives are amortizedusing the straight-line method. 2017 2016 2015 eVestment ISE Boardvantage Marketwired NasdaqCanada DWA ($ in millions) Intangible Assets Exchange registrations$— $467 $— $— $— $—Discount rate used— 8.6% — — — —Estimated average useful life— Indefinite — — — —Customer relationships$378 $148 $103 $29 $76 $29Discount rate used9.3% 9.1% 15.5% 16.4% 10.3% 17.5%Estimated average useful life14years 13 years 14 years 6 years 17 years 15 yearsTrade name$13 $8 $2 $2 $— $108Discount rate used9.2% 8.6% 15.0% 15.8% — 17.0%Estimated average useful life8 years Indefinite 1 year 2 years — IndefiniteTechnology$14 $— $6 $— $— $4Discount rate used9.2% — 15.5% — — 17.0%Estimated average useful life8 years — 5 years — — 5 yearsTotal intangible assets$405 $623 $111 $31 $76 $141 Exchange RegistrationsAs part of our acquisition of ISE we acquired exchange registrations. Theexchange registrations represent licenses that provide ISE with the ability tooperate its options exchanges. Nasdaq views these intangible assets as a perpetual license to operate theexchanges so long as ISE meets its regulatory requirements. Nasdaq selected avariation of the income approach called the Greenfield Approach to value theexchangeF- 24 Table of Contentsregistrations. The Greenfield Approach refers to a discounted cash flowanalysis that assumes the buyer is building the exchange from a start-upbusiness to a normalized level of operations as of the acquisition date. Thisdiscounted cash flow model considers the required resources and eventualreturns from the build-out of operational exchanges and the acquisition ofcustomers, once the exchange registrations are obtained. The advantage of thisapproach is that it reflects the actual expectations that will arise from aninvestment in the registrations and it directly values the registrations. TheGreenfield Approach relies on assumptions regarding projected revenues,margins, capital expenditures, depreciation, and working capital during the twoyear pre-trade phase, the 10 year ramp-up period, as well as the terminal period.In developing a discount rate for the exchange registrations, we estimated aweighted-average cost of capital for the overall business and we employed thisrate when discounting the cash flows. The resulting discounted cash flows werethen tax-effected at the applicable statutory rate.Customer RelationshipsAs part of all of our 2017, 2016 and 2015 acquisitions, we acquired customerrelationships. Customer relationships represent the non-contractual andcontractual relationships with customers.MethodologyFor our acquisitions of eVestment, ISE, Boardvantage, Marketwired andNasdaq Canada, customer relationships were valued using the incomeapproach, specifically an excess earnings method. The excess earnings methodexamines the economic returns contributed by the identified tangible andintangible assets of a company, and then isolates the excess return that isattributable to the intangible asset being valued.The DWA customer relationships were valued individually for each of DWA’sbusinesses using the income approach, specifically the with-and-withoutmethod. The with-and-without method is commonly used when the cash flowsof a business can be estimated with and without the asset in place. The premiseassociated with this valuation technique is that the value of an asset isrepresented by the differences in the subject business’ cash flows underscenarios where (a) the asset is present and is used in operations (with); and (b)the asset is absent and not used in operations (without). Cash flow differentialsare then discounted to present value to arrive at an estimate of fair value for theasset.We estimated that without current customer relationships, it would takeapproximately 3 - 6 years, depending on the business, for the customer base togrow to 100.0% of current projected revenues. We also made estimates relatedto compensation levels and other expenses such as sales and marketing thatwould be incurred as the business was ramped up through the year in which thecustomer base would be expected to reach the level that currently exists. Discount rateThe discount rates used reflect the amount of risk associated with thehypothetical cash flows for the customer relationships relative to the overallbusiness. In developing a discount rate for the customer relationships, weestimated a weighted-average cost of capital for the overall business and weemployed this rate when discounting the cash flows. The resulting discountedcash flows were then tax-effected at the applicable statutory rate.For our acquisitions of eVestment, Marketwired, Nasdaq Canada, and DWA adiscounted tax amortization benefit was added to the fair value of the assetsunder the assumption that the customer relationships would be amortized fortax purposes over a period of 15 years .Estimated Useful LifeWe estimate the useful life based on the historical behavior of the customersand a parallel analysis of the customers using the excess earnings method.Trade NamesAs part of our acquisitions of eVestment, ISE, and DWA, we acquired tradenames. These trade names are recognized in their respective industries andcarry a reputation for quality. As such, the reputation and positive recognitionembodied in these trade names are valuable assets to Nasdaq.eVestment and ISE Trade NamesThe eVestment and ISE trade names were valued using the income approach,specifically the relief-from-royalty method, or RFRM. The RFRM is used to estimate the cost savings that accrue to the owner of an intangible asset whowould otherwise have to pay royalties or license fees on revenues earnedthrough the use of the asset. The royalty rate is applied to the projected revenueover the expected remaining life of the intangible asset to estimate royaltysavings. The net after-tax royalty savings are calculated for each year in theremaining economic life of the trade name and discounted to present value.The discount rates used reflect the amount of risk associated with thehypothetical cash flows for each trade name relative to the overall business asdiscussed above in “Customer Relationships.”We have estimated the useful life of the eVestment trade name to be 8 yearsand the estimated useful life of the ISE trade name to be indefinite based on thenumber of years the name has been in service, its popularity within the industry,and our intention to continue to use it in the branding of products.DWA Trade NameThe DWA trade name was considered the primary asset acquired in the DWAtransaction. In valuing the acquired trade name, we used the income approach,specifically the excess earnings method. The excess earnings method examinesthe economic returns contributed by the identified tangible and intangible assetsof a company, and then isolates the excess return that is attributable to theintangible asset being valued.F- 25 Table of ContentsThe discount rate used reflects the amount of risk associated with thehypothetical cash flows generated by the DWA trade name in the future. Indeveloping a discount rate for the trade name, we estimated a weighted averagecost of capital for the overall business and we employed this rate whendiscounting the cash flows. The resulting discounted cash flows were then tax-effected at the applicable statutory rate, and a discounted tax amortizationbenefit was added to the fair value of the asset under the assumption that thetrade name would be amortized for tax purposes over a period of 15 years.We estimated the useful life of the trade name to be indefinite. The useful lifewas based on several factors including the number of years the name has beenin service, its popularity within the industry, and our intention to continue itsuse in the branding of products.TechnologyAs part of our acquisitions of eVestment, Boardvantage, and DWA, weacquired developed technology.MethodologyThe developed technologies were valued using the income approach,specifically the RFRM as discussed above in “Trade Names.”Discount rateThe discount rates used reflect the amount of risk associated with thehypothetical cash flows for each developed technology relative to the overallbusiness as discussed above in “Customer Relationships.”Estimated Useful LifeWe have estimated the useful life of the eVestment technology to be 8 yearsand the estimated useful life of the Boardvantage technology and DWAtechnology to be 5 years.Pro Forma Results and Acquisition-related CostsThe consolidated financial statements for the years ended December 31, 2017 ,2016 and 2015 include the financial results of the above 2017 , 2016 and 2015acquisitions from the date of each acquisition. Pro forma financial results foracquisitions completed in 2017 , 2016 and 2015 have not been presented sincethese acquisitions both individually and in the aggregate were not material toour financial results.Acquisition-related costs for the transactions described above were expensed asincurred and are included in merger and strategic initiatives expense in theConsolidated Statements of Income.5. Assets and Liabilities Held For SaleWe classify assets and liabilities as held for sale (disposal group) whenmanagement, having the authority to approve the action, commits to a plan tosell the disposal group, the sale is probable within one year, and the disposalgroup is available for immediate sale in its present condition. We also considerwhether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that isreasonable in relation to its current fair value, and whether actions required tocomplete the plan indicate that it is unlikely that significant changes to the planwill be made or that the plan will be withdrawn. We initially measure a disposalgroup that is classified as held for sale at the lower of its carrying amount or fairvalue less costs to sell. Any loss resulting from this measurement is recognizedin the period in which the held for sale criteria are met. Conversely, gains arenot recognized until the date of sale. We assess the fair value of a disposalgroup less costs to sell each reporting period it remains classified as held forsale and report any subsequent changes as an adjustment to the carrying amountof the disposal group, as long as the new carrying amount does not exceed thecarrying amount of the disposal group at the time it was initially classified asheld for sale. Assets are not depreciated or amortized while they are classifiedas held for sale. Upon determining that a disposal group meets the criteria to beclassified as held for sale, we report the assets and liabilities of the disposalgroup as assets held for sale and liabilities held for sale in our ConsolidatedBalance Sheets.In September 2017, we commenced a process to evaluate strategic alternativesfor our Public Relations Solutions and Digital Media Services businesses withinour Corporate Solutions business as part of our strategic refinement. TheCorporate Solutions business is part of our Corporate Services segment. ThePublic Relations Solutions and Digital Media Services businesses include thefollowing products and services:•Nasdaq GlobeNewswire;•Nasdaq Influencers;•Nasdaq Media Intelligence;•Nasdaq IR Websites and Newsrooms; and•Nasdaq Webcasts.As a result of the above, we determined that we met all of the criteria to classifythe assets and liabilities of these businesses as held for sale as of September 30,2017. The disposal of these businesses did not represent a strategic shift thatwould have a major effect on our operations and financial results and is,therefore, not classified as discontinued operations. No impairment charge wasrecorded for the year ended December 31, 2017 as the carrying amount of thenet assets was less than the fair value less costs to sell. Fair value wasdetermined based upon the anticipated sales price of these businesses based oncurrent market conditions and assumptions made by management, which maydiffer from actual results and may result in an impairment if market conditionsdeteriorate. In January 2018, we announced that we entered into a definitiveagreement to sell our Public Relations Solutions and Digital Media Servicesbusinesses. Based on the sales price in the agreement, no impairment chargewas recorded. See “Definitive Agreement to Sell our Public Relations Solutionsand Digital Media Services Businesses,” of Note 21, “Subsequent Events,” forfurther discussion.F- 26 Table of ContentsThe following table presents the carrying amounts of the major classes of assetsand liabilities classified as held for sale in the Consolidated Balance Sheets: December 31, 2017 (in millions)Receivables, net $27Property and equipment, net 21Goodwill (1) 202Intangible assets, net 38Other assets 9Total assets held for sale $297 Deferred tax liabilities $16Other current liabilities 29Total liabilities held for sale $45____________(1) The assignment of goodwill was based on the relative fair value of the disposal group and the portion of the remaining reporting unit.* * * * * *6. Goodwill and Acquired Intangible AssetsGoodwillThe following table presents the changes in goodwill by business segment during the year ended December 31, 2017 : MarketServices Corporate Services Information Services Market Technology Total (in millions)Balance at December 31, 2016$3,390 $674 $1,806 $157 $6,027Goodwill acquired— — 453 13 466Measurement period adjustment— (7) — — (7)Foreign currency translation adjustment156 25 103 18 302Goodwill reclassified as held for sale (1)— (202) — — (202)Balance at December 31, 2017$3,546 $490 $2,362 $188 $6,586____________(1) See Note 5, “Assets and Liabilities Held for Sale,” for further discussion.The goodwill acquired for Information Services shown above relates to ouracquisition of eVestment, and the goodwill acquired for Market Technologyshown above relates to our acquisition of Sybenetix. See “2017 Acquisitions,”of Note 4, “Acquisitions,” for further discussion.In the second quarter of 2017, we recorded a measurement period adjustment of$7 million to the estimated fair value of deferred tax assets related to ouracquisition of Boardvantage. See “Acquisition of Boardvantage,” of Note 4,“Acquisitions,” for further discussion of the Boardvantage acquisition. Theadjustment was made to reflect a revised assessment of deferred tax assetsfollowing the receipt of new information. The adjustment resulted in anincrease to deferred tax assets recorded and a decrease to goodwill and isreflected in the above table. The measurement period adjustment is included inour Consolidated Balance Sheets as of December 31, 2017 . The adjustment didnot result in an impact to our Consolidated Statements of Income. As of December 31, 2017 , the amount of goodwill that is expected to bedeductible for tax purposes in future periods is $864 million .Goodwill represents the excess of purchase price over the value assigned to thenet assets, including identifiable intangible assets, of a business acquired.Goodwill is allocated to our reporting units based on the assignment of the fairvalues of each reporting unit of the acquired company. We test goodwill forimpairment at the reporting unit level annually, or in interim periods if certainevents occur indicating that the carrying amount may be impaired, such aschanges in the business climate, poor indicators of operating performance or thesale or disposition of a significant portion of a reporting unit. There was noimpairment of goodwill for the years ended December 31, 2017 , 2016 and2015 ; however, events such as extended economic weakness or unexpectedsignificant declines in operating results of a reporting unit may result ingoodwill impairment charges in the future.F- 27 Table of ContentsAcquired Intangible AssetsThe following table presents details of our total acquired intangible assets, both finite- and indefinite-lived: December 31, 2017 December 31, 2016 Gross Amount AccumulatedAmortization Net Amount Weighted-AverageUseful Life (inYears) Gross Amount AccumulatedAmortization Net Amount Weighted-AverageUseful Life (inYears) (in millions) (in millions) Finite-Lived Intangible Assets Technology$65 $(22) $43 8 $38 $(24) $14 5Customer relationships1,708 (526) 1,182 18 1,394 (464) 930 18Other17 (4) 13 8 7 (6) 1 6Foreign currency translationadjustment(111) 46 (65) (160) 58 (102) Total finite-lived intangibleassets$1,679 $(506) $1,173 $1,279 $(436) $843 Indefinite-Lived IntangibleAssets Exchange and clearingregistrations$1,257 $— $1,257 $1,257 $— $1,257 Trade names129 — 129 130 — 130 Licenses52 — 52 52 — 52 Foreign currency translationadjustment(143) — (143) (188) — (188) Total indefinite-lived intangibleassets$1,295 $— $1,295 $1,251 $— $1,251 Total intangible assets$2,974 $(506) $2,468 $2,530 $(436) $2,094 As a result of our decision to evaluate strategic alternatives for our PublicRelations Solutions and Digital Media Services businesses within our CorporateSolutions business, we reclassified certain intangibles assets to held for sale.The following table presents the gross amount, accumulated amortization andnet amount of finite-lived and indefinite-lived intangible assets that have beenreclassified as assets held for sale as of December 31, 2017 . See Note 5,“Assets and Liabilities Held for Sale,” for further discussion. GrossAmount AccumulatedAmortization NetAmount (in millions)Finite-lived intangible assetsreclassified as held for sale: Customer relationships$54 $(17) $37Other2 (1) 1Total finite-lived intangibleassets held for sale$56 $(18) $38In January 2018, we announced that we entered into a definitive agreement tosell our Public Relations Solutions and Digital Media Services businesses. See“Definitive Agreement to Sell our Public Relations Solutions and Digital MediaServices Businesses,” of Note 21, “Subsequent Events,” for further discussion. Amortization expense for acquired finite-lived intangible assets was $92million for the year ended December 31, 2017 , $82 million for the year endedDecember 31, 2016 , and $62 million for the year ended December 31, 2015 .Amortization expense increased in 2017 and 2016 primarily due to additionalamortization expense associated with acquired intangible assets. The increase in2017 was associated with our 2017 and 2016 acquisitions and the increase in2016 was primarily associated with our 2016 acquisitions. These amounts areincluded in depreciation and amortization expense in the ConsolidatedStatements of Income.F- 28 Table of ContentsThe estimated future amortization expense (excluding the impact of foreigncurrency translation adjustments of $65 million as of December 31, 2017 ) ofacquired finite-lived intangible assets as of December 31, 2017 is as follows: (in millions)2018$1142019992020992021972022942023 and thereafter735Total$1,238Intangible Asset Impairment ChargesWe recorded pre-tax, non-cash intangible asset impairment charges describedbelow during 2016 and 2015.During 2016, the eSpeed business operated in a challenging environment and,as a result, experienced a decline in operating performance. In late 2016, themanagement team conducted an extensive business review of the eSpeedbusiness. Based upon this review, management changed the strategic directionof our Fixed Income business and more closely integrated the U.S. andEuropean Fixed Income businesses under a single brand called Nasdaq FixedIncome. As part of this effort, we decided to no longer utilize the eSpeed tradename. In connection with these triggering events, following board approval inJanuary 2017, we recorded a pre-tax, non-cash intangible asset impairmentcharge of $578 million to write off the full value of the eSpeed trade name aswe no longer attributed any material value to the trade name. This charge isrecorded in asset impairment charge in the Consolidated Statements of Incomefor 2016. In 2015 , in connection with our global rebranding initiative, we decided tochange our company name from The NASDAQ OMX Group, Inc. to Nasdaq,Inc., which became effective in the third quarter of 2015. In connection withthis action, we decided to discontinue the use of the OMX trade name andrecorded a pre-tax, non-cash impairment charge of $119 million because we nolonger attributed any material value to the trade name. This charge is recordedin restructuring charges in the Consolidated Statements of Income for 2015 .These intangible asset impairment charges did not impact the company’sconsolidated cash flows, liquidity, or capital resources and related primarily toour Market Services segment. However, for segment reporting purposes, thesecharges were allocated to corporate items based on the decision that thesecharges should not be used to evaluate any particular segment’s operatingperformance.Significant judgments and unobservable inputs categorized as Level III in thefair value hierarchy are inherent in impairment tests performed and includeassumptions about the amount and timing of expected future cash flows, growthrates and the determination of appropriate discount rates. We believe that the assumptions used in our impairment tests are reasonable, but variations in anyof the assumptions could result in different calculations of fair value.7. InvestmentsThe following table presents the details of our investments: December 31, 2017 December 31, 2016 (in millions)Trading securities$221 $228Available-for-sale investmentsecurities14 17Equity method investments131 124Cost method investments$152 $144Trading SecuritiesTrading securities, which are included in financial investments, at fair value inthe Consolidated Balance Sheets, are primarily comprised of highly ratedEuropean government debt securities, of which $160 million as ofDecember 31, 2017 and $172 million as of December 31, 2016 , are assetsutilized to meet regulatory capital requirements, primarily for our clearingoperations at Nasdaq Clearing.Available-for-Sale Investment Securities As of December 31, 2017 , available-for-sale investment securities, which areincluded in financial investments, at fair value in the Consolidated BalanceSheets, are primarily comprised of commercial paper. As of December 31, 2016, available-for-sale investment securities were primarily comprised of short-term certificates of deposit and commercial paper. As of December 31, 2017and December 31, 2016 , the cumulative unrealized gains and losses on thesesecurities were immaterial.Equity Method InvestmentsAs of December 31, 2017 and December 31, 2016, our equity methodinvestments primarily included equity interests in OCC and EuroCCP N.V.The carrying amounts of our equity method investments are included in othernon-current assets in the Consolidated Balance Sheets.Net income recognized from our equity interest in the earnings and losses ofthese equity method investments was $15 million for the year endedDecember 31, 2017 , $2 million for the year ended December 31, 2016 and $17million for the year ended December 31, 2015 . The change in the year endedDecember 31, 2017 compared with the same period in 2016 relates to ouradditional 20.0% ownership interest in OCC, which we acquired in connectionwith our acquisition of ISE in June 2016, bringing our total ownership interestin OCC to 40.0% , partially offset by $2 million of wind down costs associatedwith an equity method investment that was previously written off. The changein the year ended December 31, 2016 compared with the same period in 2015 isprimarily due to income recognizedF- 29 Table of Contentsfrom our equity method investment in OCC, partially offset by the write-off ofour equity method investment in The Order Machine. We were not able todetermine what our share of OCC’s income was for the year ended December31, 2014 until the first quarter of 2015, when financial statements were madeavailable to us. As a result, we recorded other income of $13 million in the firstquarter of 2015 relating to our share of OCC’s income for the year endedDecember 31, 2014.As of December 31, 2016, the estimated fair value of our investment in TheOrder Machine was less than the carrying value and management consideredthe decline in value to be other-than-temporary. As a result, we recorded a pre-tax, non-cash impairment charge of $7 million to write off the full value of thisinvestment. This charge is partially offset by a gain resulting from the sale of apercentage of a separate equity method investment and is recorded in netincome from unconsolidated investees in the Consolidated Statements ofIncome for 2016. No other impairments of equity method investments wererecorded in 2017, 2016 or 2015.Capital Contribution to OCC In March 2015, in connection with being designated systemically important bythe Financial Stability Oversight Council, OCC implemented a capital planunder which the options exchanges that are OCC’s stockholders made newcapital contributions to OCC, committed to make further capital contributionsin the future under certain specified circumstances, and received certaincommitments from OCC with respect to future dividend payments and relatedmatters. Under the OCC capital plan, OCC’s existing exchange stockholders,including Nasdaq and ISE, each contributed a pro-rata share of $150 million innew equity capital. Nasdaq’s and ISE’s capital contributions were each $30million . OCC’s exchange stockholders also committed to provide, as maybecome necessary from time to time, additional replenishment capital on a pro-rata basis if certain capital thresholds are triggered. For its part, OCC adoptedspecific policies with respect to fees, customer refunds and stockholderdividends, which envision an annual dividend payment to its stockholders equalto the portion of OCC’s after-tax income that exceeds OCC’s capitalrequirements after payment of refunds to OCC’s clearing members (with suchcustomer refunds generally to constitute 50% of the portion of OCC’s pre-taxincome that exceeds OCC’s capital requirements). After the SEC staff approved the OCC capital plan and the stockholders madetheir capital contributions, the plan’s further effectiveness was suspended underthe applicable SEC rules because certain parties petitioned the full Commissionto reconsider the capital plan’s approval. This stay was lifted by the SEC inSeptember 2015, allowing OCC to implement the plan and in February 2016,the SEC issued an order approving the OCC capital plan as previouslyimplemented and dismissed the petitions challenging that plan. The petitionersfiled for a stay of the SEC’s order, which would have blocked OCC frompaying a dividend under the OCC capital plan. The Federal Court of Appealsfor the District of Columbia Circuit, or the Court of Appeals, denied the requested stay, permitting OCC to pay a dividendwhich Nasdaq received in February 2016.The petitioners also appealed the SEC’s order to the Court of Appeals. TheCourt of Appeals heard arguments on the case in March 2017 and decided thecase in August 2017. The Court of Appeals remanded the case to the SEC forfurther examination of the record and an independent assessment by the SEC ofthe evidence OCC submitted. The Court directed that the SEC approval of theOCC capital plan remain in place during the SEC’s examination unless the SECdetermined not to preserve it. The SEC has allowed OCC to preserve the capitalplan, and in September 2017, OCC disbursed an annual dividend of $5 millionper ownership share. Nasdaq, as the owner of two shares, received $10 million .The SEC provided OCC and the appellants with an opportunity to submitfurther briefs and evidence for the administrative record. It appears from publicfilings that the SEC record is complete and that the matter is now underconsideration by the agency. There has been no ruling at this time, and there isno deadline for the SEC to issue its ruling.Cost Method Investments The carrying amounts of our cost method investments are included in othernon-current assets in the Consolidated Balance Sheets. As of December 31,2017 and December 31, 2016 , our cost method investments primarilyrepresented our 5% ownership interest in Borsa İstanbul, and our 5% ownershipinterest in LCH.Clearnet Group Limited. The Borsa Istanbul shares, which were issued to us in the first quarter of 2014,are part of the consideration received under a market technology agreement.This investment has a cost basis of $75 million which is guaranteed to us via aput option negotiated as part of the market technology agreement.8. Property and Equipment, netThe following table presents our major categories of property and equipment,net: Year Ended December 31, 2017 2016 (in millions)Data processing equipment and software$626 $665Furniture, equipment and leaseholdimprovements279 254Total property and equipment905 919Less: accumulated depreciation andamortization(505) (557)Total property and equipment, net$400 $362Depreciation and amortization expense for property and equipment was $96million for the year ended December 31, 2017 , $88 million for the year endedDecember 31, 2016 and $76 million for the year ended December 31, 2015 .The increase in depreciation and amortization expense in 2017 and 2016 wasprimarily due to additional expense associated with assets andF- 30 Table of Contentssoftware placed in service. These amounts are included in depreciation andamortization expense in the Consolidated Statements of Income.We recorded asset impairment charges of $9 million for the year endedDecember 31, 2017, $8 million for the year ended December 31, 2016 and $18million for the year ended December 31, 2015. The asset impairment charge in2017 primarily related to the write-off of capitalized software and hardwareequipment associated with our 2017 and 2016 acquisitions and is included inmerger and strategic initiatives expense in the Consolidated Statements ofIncome. The asset impairment charges in 2016 and 2015 primarily related to fixed assets andcapitalized software that were retired. The 2016 and 2015 asset impairmentcharges are included in restructuring charges in the Consolidated Statements ofIncome for the respective periods.As of December 31, 2017 and 2016, we did not own any real estate properties.* * * * * *9. Deferred Revenue Deferred revenue represents consideration received that is yet to be recognized as revenue. The changes in our deferred revenue during the year endedDecember 31, 2017 and 2016 are reflected in the following table: Initial ListingRevenues Listing of AdditionalShares Revenues Annual Renewal andOther Revenues Market TechnologyRevenues Total (in millions)Balance at January 1, 2017$54 $37 $57 $185 $333Additions18 11 569 208 806Revenue recognized(17) (22) (544) (240) (823)Translation adjustment— — 1 20 21Deferred revenue reclassified as held for sale (1)— — (2) — (2)Balance at December 31, 2017$55 $26 $81 $173 $335 Balance at January 1, 2016$59 $53 $28 $187 $327Additions13 12 606 233 864Revenue recognized(18) (28) (576) (227) (849)Translation adjustment— — (1) (8) (9)Balance at December 31, 2016$54 $37 $57 $185 $333 ____________(1) See Note 5, “Assets and Liabilities Held for Sale,” for further discussion.The additions and revenue recognized for initial listing revenues, listing ofadditional shares revenues and annual renewal and other revenues primarilyreflect revenues from our Listing Services business within our CorporateServices segment.For our market technology contracts, total revenues, as well as costs incurred,are deferred until significant customizations are completed and delivered. Oncedelivered, deferred revenue and the related deferred costs are recognized overthe post-contract support period. For these market technology contracts, wehave included the deferral of costs in other current assets and other non-currentassets in the Consolidated Balance Sheets. As of December 31, 2017 , we estimate that our deferred revenue, which isprimarily corporate services and market technology revenues, will berecognized in the following years: Initial ListingRevenues Listing ofAdditionalSharesRevenues AnnualRenewal andOtherRevenues MarketTechnologyRevenues Total (in millions)Fiscal year ended: 2018$17 $13 $79 $80 $189201915 7 2 35 59202011 5 — 33 4920217 1 — 15 2320224 — — 3 72023 andthereafter1 — — 7 8 $55 $26 $81 $173 $335 The timing of recognition of our deferred market technology revenues isprimarily dependent upon the completion of customization and any significantmodifications made pursuant to existing market technology contracts. As such,as it relatesF- 31 Table of Contentsto market technology revenues, the timing represents our best estimate. On January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts withCustomers.” As a result, a portion of revenues that were previously deferredwere recognized either in prior period revenues, through restatement, or as anadjustment to retained earnings upon adoption of the new standard. See “RecentAccounting Pronouncements,” of Note 2, “Summary of Significant AccountingPolicies,” for further discussion and the impact to the deferred revenue balance.* * * * * *10. Debt ObligationsThe following table presents the changes in the carrying amount of our debt obligations during the year ended December 31, 2017 : December 31, 2016 Additions Payments, Accretionand Other December 31, 2017 (in millions)Short-term debt - commercial paper$— $2,514 $(2,034) $480Long-term debt: 5.55% senior unsecured notes due January 15, 2020598 — 1 5995.25% senior unsecured notes repaid on May 26, 2017369 — (369) —3.875% senior unsecured notes due June 7, 2021625 — 91 7164.25% senior unsecured notes due June 1, 2024495 — 1 4961.75% senior unsecured notes due May 19, 2023622 — 90 7123.85% senior unsecured notes due June 30, 2026495 — 1 496Senior unsecured floating rate notes due March 22, 2019— 498 — 498$400 million senior unsecured term loan facility due November 25, 2019 (averageinterest rate of 2.47% for the period January 1, 2017 through December 31,2017)399 — (299) 100$1 billion revolving credit commitment due April 25, 2022 (average interest rate of2.66% for the period April 25, 2017 through December 31, 2017)— 155 (45) 110Total long-term debt3,603 653 (529) 3,727Total debt obligations$3,603 $3,167 $(2,563) $4,207Commercial Paper ProgramIn April 2017, we entered into a U.S. dollar commercial paper program. Thecommercial paper program is supported by our 2017 Credit Facility whichprovides liquidity support for the repayment of commercial paper issuedthrough the commercial paper program. See “2017 Credit Facility” below forfurther discussion of our 2017 Credit Facility. The effective interest rate ofcommercial paper issuances fluctuate as short term interest rates and demandfluctuate. The fluctuation of these rates due to market conditions may impactour interest expense.In May 2017, we used a combination of cash on hand and net proceeds from thesale of commercial paper to redeem all of our 2018 Notes. In addition, in June2017, we used net proceeds from the sale of commercial paper to repay $300million of the amount outstanding on the 2016 Credit Facility. See “EarlyExtinguishment of 2018 Notes” and “2016 Credit Facility” below for furtherdiscussion.In connection with our agreement to acquire eVestment, we issued the 2019Notes. Since the proposed acquisition of eVestment was not immediatelyexpected to close, $276 million of the net proceeds from the 2019 Notes was used to partially pay down ouroutstanding commercial paper balance. See “Senior Unsecured Floating RateNotes” below for further discussion of our 2019 Notes.As of December 31, 2017 , commercial paper notes in the table above reflectthe aggregate principal amount, less the unamortized discount which is beingaccreted through interest expense over the life of the applicable notes. Theoriginal maturities of these notes range from 12 days to 119 days and theweighted-average maturity is 22 days . The weighted-average effective interestrate is 1.70% per annum.Senior Unsecured NotesOur senior unsecured notes were all issued at a discount. As a result of thediscount, the proceeds received from each issuance were less than the aggregateprincipal amount. As of December 31, 2017 , the amounts in the table abovereflect the aggregate principal amount, less the unamortized debt discount andthe unamortized debt issuance costs which are being accreted through interestexpense over the life of the applicableF- 32 Table of Contentsnotes. Our senior unsecured notes are general unsecured obligations of ours andrank equally with all of our existing and future unsubordinated obligations andthey are not guaranteed by any of our subsidiaries. The senior unsecured noteswere issued under indentures that, among other things, limit our ability toconsolidate, merge or sell all or substantially all of our assets, create liens, andenter into sale and leaseback transactions.With the exception of the 2020 Notes, upon a change of control triggering event(as defined in the various note indentures), the terms require us to repurchase allor part of each holder’s notes for cash equal to 101% of the aggregate principalamount purchased plus accrued and unpaid interest, if any.5.55% Senior Unsecured NotesIn January 2010, Nasdaq issued the 2020 Notes. The 2020 Notes pay interestsemiannually at a rate of 5.55% per annum until January 15, 2020 .Early Extinguishment of 2018 NotesIn December 2010, Nasdaq issued the 2018 Notes. The 2018 Notes paid interestsemiannually at a rate of 5.25% per annum.In May 2017, we redeemed all of our 2018 Notes using a combination of cashon hand and net proceeds from the sale of commercial paper issued through thecommercial paper program. See “Commercial Paper Program” above for furtherdiscussion of our commercial paper program. In connection with the earlyextinguishment of the 2018 Notes, we recorded a pre-tax charge of $9 million ,which primarily included a make-whole redemption price premium. This chargeis included in general, administrative and other expense in the ConsolidatedStatements of Income for the year ended December 31, 2017 .3.875% Senior Unsecured NotesIn June 2013, Nasdaq issued the 2021 Notes. The 2021 Notes pay interestannually at a rate of 3.875% per annum until June 7, 2021 and such rate mayvary with Nasdaq’s debt rating up to a rate not to exceed 5.875% .The 2021 Notes have been designated as a hedge of our net investment incertain foreign subsidiaries to mitigate the foreign exchange risk associatedwith certain investments in these subsidiaries. The increase in the carryingamount of $91 million noted in the “Payments, Accretion and Other” column inthe table above primarily reflects the translation of the 2021 Notes into U.S.dollars and is recorded in accumulated other comprehensive loss withinstockholders’ equity in the Consolidated Balance Sheets as of December 31,2017 .4.25% Senior Unsecured NotesIn May 2014, Nasdaq issued the 2024 Notes. The 2024 Notes pay interestsemiannually at a rate of 4.25% per annum until June 1, 2024 and such ratemay vary with Nasdaq’s debt rating up to a rate not to exceed 6.25% . 1.75% Senior Unsecured NotesIn May 2016, Nasdaq issued the 2023 Notes. We used the net proceeds from the2023 Notes and the 2026 Notes to fund our acquisition of ISE. See “Acquisitionof ISE,” of Note 4, “Acquisitions,” for further discussion of the ISE acquisition.The 2023 Notes pay interest annually at a rate of 1.75% per annum untilMay 19, 2023 and such rate may vary with Nasdaq’s debt rating up to a rate notto exceed 3.75% .The 2023 Notes have been designated as a hedge of our net investment incertain foreign subsidiaries to mitigate the foreign exchange rate risk associatedwith certain investments in these subsidiaries. The increase in the carryingamount of $90 million noted in the “Payments, Accretion and Other” column inthe table above reflects the translation of the 2023 Notes into U.S. dollars and isrecorded in accumulated other comprehensive loss within stockholders’ equityin the Consolidated Balance Sheets as of December 31, 2017 .3.85% Senior Unsecured NotesIn June 2016, Nasdaq issued the 2026 Notes. We used the net proceeds from the2023 Notes and the 2026 Notes to fund our acquisition of ISE. See “Acquisitionof ISE,” of Note 4, “Acquisitions,” for further discussion of the ISE acquisition.The 2026 Notes pay interest semiannually at a rate of 3.85% per annum untilJune 30, 2026 and such rate may vary with Nasdaq’s debt rating up to a rate notto exceed 5.85% .Senior Unsecured Floating Rate NotesIn September 2017, Nasdaq issued the 2019 Notes. We used the net proceedsfrom the 2019 Notes to partially pay down our outstanding commercial paperbalance and the remainder of the net proceeds was used to partially fund ouracquisition of eVestment. See “Acquisition of eVestment,” of Note 4,“Acquisitions,” for further discussion of the eVestment acquisition.The 2019 Notes pay interest quarterly in arrears at a rate equal to the three-month U.S. dollar LIBOR as determined at the beginning of each quarterlyperiod plus 0.39% per annum until March 22, 2019.Credit FacilitiesAs of December 31, 2017 , the amounts in the table above reflect the aggregateprincipal amount, less the unamortized debt issuance costs which are beingaccreted through interest expense over the life of the applicable credit facility.Nasdaq is permitted to repay borrowings under our credit facilities at any timein whole or in part, without penalty.Our credit facilities contain financial and operating covenants. Financialcovenants include a minimum interest expense coverage ratio and a maximumleverage ratio. Operating covenants include, among other things, limitations onNasdaq’s ability to incur additional indebtedness, grant liens on assets, disposeof assets and pay dividends. Our credit facilities allow us to pay cash dividendson our common stock. The facilities also contain customary affirmativecovenants, including accessF- 33 Table of Contentsto financial statements, notice of defaults and certain other material events,maintenance of properties and insurance, and events of default, including cross-defaults to our material indebtedness.2017 Credit FacilityIn April 2017, Nasdaq entered into the 2017 Credit Facility. The 2017 CreditFacility consists of a $1 billion five -year revolving credit facility (withsublimits for non-dollar borrowings, swingline borrowings and letters of credit),which replaced our 2014 credit facility. See “2014 Credit Facility” below forfurther discussion. Nasdaq intends to use funds available under the 2017 CreditFacility for general corporate purposes and to provide liquidity support for therepayment of commercial paper issued through the commercial paper program.As of December 31, 2017 , the balance of $110 million reflects the outstandingamount under the 2017 Credit Facility, less unamortized debt issuance costs of$5 million . Of the $885 million that is available for borrowing as ofDecember 31, 2017 , $480 million provides liquidity support for the principalamount outstanding under the commercial paper program. In addition, $1million has been utilized for a letter of credit. As such, as of December 31, 2017, the total remaining amount available under the 2017 Credit Facility was $404million . See “Commercial Paper Program” above for further discussion of ourcommercial paper program.Under our 2017 Credit Facility, borrowings under the revolving credit facilityand swingline borrowings bear interest on the principal amount outstanding at avariable interest rate based on either the LIBOR or the base rate (as defined inthe credit agreement) (or other applicable rate with respect to non-dollarborrowings), plus an applicable margin that varies with Nasdaq’s debt rating.The 2017 Credit Facility includes an option for Nasdaq to increase the availableaggregate amount by up to $500 million , subject to the consent of the lendersfunding the increase and certain other conditions.2016 Credit FacilityIn March 2016, Nasdaq entered into the 2016 Credit Facility. In March 2016,loans in an aggregate principal amount of $400 million were drawn under the2016 Credit Facility and the net proceeds were used to partially repay amountsoutstanding under the revolving credit commitment of the 2014 credit facility.See “2014 Credit Facility” below for further discussion of our 2014 creditfacility.Under our 2016 Credit Facility, borrowings bear interest on the principalamount outstanding at a variable interest rate based on either the LIBOR or thebase rate (or other applicable rate with respect to non-dollar borrowings), plusan applicable margin that varies with Nasdaq’s debt rating.In June 2017, we used net proceeds from the sale of commercial paper issuedthrough the commercial paper program to repay $300 million of the amountoutstanding on the 2016 Credit Facility. The remaining amount outstanding of$100 million is due upon maturity at November 25, 2019. See “Commercial Paper Program”above for further discussion of our commercial paper program. In connectionwith the partial repayment of the amount outstanding on the 2016 CreditFacility, we recorded a pre-tax charge of $1 million which related to the write-off of unamortized debt issuance costs related to the $300 million payment.This charge is included in general, administrative and other expense in theConsolidated Statements of Income for the year ended December 31, 2017 .2014 Credit FacilityIn November 2014, Nasdaq entered into the 2014 credit facility. The 2014credit facility consisted of a $750 million revolving credit commitment (withsublimits for non-dollar borrowings, swingline borrowings and letters of credit).Loans under the 2014 credit facility had a variable interest rate based on eitherthe LIBOR or the base rate (as defined in the credit agreement) (or otherapplicable rate with respect to non-dollar borrowings), plus an applicablemargin that varied with Nasdaq’s debt rating.In April 2017, Nasdaq entered into the 2017 Credit Facility which replaced the2014 credit facility. As a result, our 2014 credit facility has been terminated. Noamounts were outstanding on the 2014 credit facility during 2017. See “2017Credit Facility” above for further discussion of our 2017 Credit Facility.Other Credit FacilitiesWe also have credit facilities related to our Nasdaq Clearing operations in orderto provide further liquidity. Credit facilities, which are available in multiplecurrencies, totaled $187 million as of December 31, 2017 and $170 million asof December 31, 2016 in available liquidity, none of which was utilized.Debt CovenantsAs of December 31, 2017 , we were in compliance with the covenants of all ofour debt obligations.F- 34 Table of Contents11. Income TaxesThe income tax provision consists of the following amounts: Year Ended December 31, 2017 2016 2015 (in millions)Current income taxes: Federal$51 $37 $139State17 21 42Foreign68 106 36Total current income taxes136 164 217Deferred income taxes: Federal(14) (97) (18)State24 (35) (1)Foreign— (4) 5Total deferred income taxes10 (136) (14)Total income tax provision$146 $28 $203We have determined that undistributed earnings of certain non-U.S. subsidiarieswill be reinvested for an indefinite period of time. We have both the intent andability to indefinitely reinvest these earnings. As of December 31, 2017 , thecumulative amount of undistributed earnings in these subsidiaries isapproximately $131 million . Given our intent to reinvest these earnings for anindefinite period of time, we have not accrued a deferred tax liability on theseearnings. A determination of an unrecognized deferred tax liability related tothese earnings is not practicable.A reconciliation of the income tax provision, based on the U.S. federal statutoryrate, to our actual income tax provision for the years ended December 31, 2017, 2016 and 2015 is as follows: Year Ended December 31, 2017 2016 2015Federal income tax provision atthe statutory rate35.0 % 35.0 % 35.0 %State income tax provision, netof federal effect2.6 % (6.7)% 3.9 %Change in deferred taxes due tochange in law(9.9)% (1.2)% 0.2 %Excess tax benefits related toemployee share-basedcompensation(4.0)% — % — %Non-U.S. subsidiary earnings(6.0)% (7.3)% (6.4)%Tax credits and deductions(1.0)% (5.1)% (0.8)%Change in unrecognized taxbenefits(0.8)% 4.2 % 0.3 %Other, net0.7 % 1.7 % — %Actual income tax provision16.6 % 20.6 % 32.2 % The lower effective tax rate in 2017 when compared to 2016 is primarily due toa decrease to tax expense associated with the remeasurement of our net U.S.deferred tax liability as a result of enactment of the Tax Cuts and Jobs Act. Thedecrease in the effective tax rate in 2017 is also due to the recognition of excesstax benefits associated with the vesting of employee share-based compensationarrangements. See “Recent Accounting Pronouncements” of Note 2, “Summaryof Significant Accounting Policies” for further discussion. The lower effectivetax rate in 2016 when compared to 2015 is primarily due to a shift in thegeographic mix of earnings, largely driven by the write-off of the eSpeed tradename, partially offset by an unfavorable ruling from the Finnish SupremeAdministrative Court.The effective tax rate may vary from period to period depending on, amongother factors, the geographic and business mix of earnings and losses. Thesesame and other factors, including the history of pre-tax earnings and losses, aretaken into account in assessing the ability to realize deferred tax assets.F- 35 Table of ContentsThe temporary differences, which give rise to our deferred tax assets and(liabilities), consisted of the following: December 31, 2017 2016 (in millions)Deferred tax assets: Deferred revenues$25 $39U.S. federal net operating loss1 2Foreign net operating loss30 37State net operating loss4 1Compensation and benefits42 99Foreign currency translation292 528Tax credits7 7Other20 34Gross deferred tax assets$421 $747 Deferred tax liabilities: Amortization of software developmentcosts and depreciation$(47) $(63)Amortization of acquired intangibleassets(510) (596)Investments(26) (37)Other(19) (24)Gross deferred tax liabilities(602) (720)Net deferred tax assets before valuationallowance(181) 27Less: valuation allowance(30) (30)Net deferred tax assets (liabilities)$(211) $(3)A valuation allowance has been established with regards to the tax benefitsprimarily associated with certain net operating losses, or NOLs, as it is morelikely than not that these benefits will not be realized in the foreseeable future.As of December 31, 2017 , the expiration dates for the NOLs, and credits are asfollows:Jurisdiction Amount Expiration Date (in millions) U.S. Federal NOL $1 2033-2035Foreign NOL 4 2018-2026Foreign NOL 26 No expiration dateState NOL 4 2025-2036U.S. Federal Tax credits 7 2018-2027 The following represents the domestic and foreign components of incomebefore income tax provision: Year Ended December 31, 2017 2016 2015 (in millions)Domestic$556 $(155) $393Foreign324 291 237Income before income tax provision$880 $136 $630We recorded income tax benefits of $40 million in 2017 , $41 million in 2016and $34 million in 2015 , primarily related to share-based compensation. In2017, the benefit was included in income tax expense. In 2016 and 2015, theamounts were recorded as additional paid-in-capital in the ConsolidatedBalance Sheets. See “Recent Accounting Pronouncements,” of Note 2,“Summary of Significant Accounting Policies,” for further discussion.We are subject to examination by federal, state and local, and foreign taxauthorities. We regularly assess the likelihood of additional assessments byeach jurisdiction and have established tax reserves that we believe are adequatein relation to the potential for additional assessments. We believe that theresolution of tax matters will not have a material effect on our financialcondition but may be material to our operating results for a particular periodand the effective tax rate for that period.There are $45 million as of December 31, 2017 and $48 million as ofDecember 31, 2016 of unrecognized tax benefits that if recognized would affectour effective tax rate.A reconciliation of the beginning and ending amount of unrecognized taxbenefits is as follows: Year Ended December 31, 2017 2016 (in millions)Beginning balance$48 $40Additions as a result of tax positions taken inprior periods2 9Additions as a result of tax positions taken inthe current period5 3Reductions related to settlements with taxingauthorities— (4)Reductions as a result of lapses of the applicablestatute of limitations(10) —Ending balance$45 $48Our policy is to recognize interest and/or penalties related to income tax mattersin income tax expense. We have accrued $9 million as of December 31, 2017and $8 million as of December 31, 2016 for interest and penalties, net of taxeffect.Nasdaq and its eligible subsidiaries file a consolidated U.S. federal income taxreturn and applicable state and local income tax returns and non-U.S. incometax returns. Federal income tax returns for the years 2012 through 2015 arecurrently under examination by the Internal Revenue Services and we areF- 36 Table of Contentssubject to examination by the Internal Revenue Service for 2016. Several statetax returns are currently under examination by the respective tax authorities forthe years 2005 through 2015 and we are subject to examination for 2016. Non-U.S. tax returns are subject to examination by the respective tax authorities forthe years 2009 through 2016. Although the results of such examinations mayhave an impact on our unrecognized tax benefits, we do not anticipate that suchimpact will be material to our consolidated financial position or results ofoperations. Based on the expiration of the statute of limitations in the thirdquarter of 2017, we recognized $8 million in previously unrecognized taxbenefits associated with positions taken in prior years. In addition, we anticipatethat the amount of unrecognized tax benefits as of December 31, 2017 willdecrease in the next twelve months as we expect to settle certain tax audits.The Swedish Tax Agency has disallowed certain interest expense deductionsfor the years 2013 - 2015. We have appealed to the Lower AdministrativeCourt. Despite a prior negative decision from the Council for Advance Rulingsand the Supreme Administrative Court's refusal to hear our appeal at that time,we continue to expect a favorable decision from the Swedish Courts. SinceJanuary 1, 2013, we have recorded tax benefits of $56 million associated withthis matter. We continue to pay all assessments from the Swedish Tax Agencywhile this matter is pending. If the Swedish Courts agree with our position wewill receive a refund of all paid assessments; if the Swedish Courts disagreewith our position, we will record tax expense of $48 million or $0.28 perdiluted share, which is gross of any related U.S. tax benefits and reflects theimpact of foreign currency translation. We record quarterly tax benefits of $1million to $2 million related to this matter.The Tax Cuts and Jobs Act was enacted on December 22, 2017 and is effectiveJanuary 1, 2018. The new legislation contains several key provisions, includinga reduction of the U.S. corporate income tax rate from 35% to 21%. We arerequired to remeasure all our U.S. deferred tax assets and liabilities as ofDecember 22, 2017 and record the impact of such remeasurement in our 2017financial statements. For the year ended December 31, 2017, we recorded adecrease to tax expense of $87 million , substantially all of which reflects theestimated impact associated with the remeasurement of our net U.S. deferredtax liability at the lower U.S. federal corporate income tax rate. The Tax Cutsand Jobs Act also imposes a transition tax on unremitted aggregate accumulatedearnings of non-U.S. subsidiaries, which did not impact us.SAB 118 has provided guidance which allows us to record provisional amountsduring a measurement period not to extend beyond one year of the enactmentdate. As of December 31, 2017, we have recorded a provisional estimate of theeffects of the new legislation. We will continue to analyze the Tax Cuts andJobs Act and related accounting guidance and interpretations in order to finalizeany impacts within the measurement period. 12. Retirement PlansDefined Contribution Savings PlanWe sponsor a 401(k) Plan for U.S. employees. Employees are immediatelyeligible to make contributions to the plan and are also eligible for an employercontribution match at an amount equal to 100.0% of the first 6.0% of eligibleemployee contributions. Savings plan expense included in compensation andbenefits expense in the Consolidated Statements of Income was $13 million for2017, $11 million for 2016 and $10 million for 2015. Pension and Supplemental Executive Retirement PlansWe maintain non-contributory, defined-benefit pension plans, non-qualifiedSERPs for certain senior executives and other post-retirement benefit plans foreligible employees in the U.S., collectively referred to as the Nasdaq BenefitPlans. Our pension plans and SERPs are frozen. Future service and salary forall participants do not count toward an accrual of benefits under the pensionplans and SERPs. Most employees outside the U.S. are covered by localretirement plans or by applicable social laws. Benefits under social laws aregenerally expensed in the periods in which the costs are incurred. The totalexpense for these plans is included in compensation and benefits expense in theConsolidated Statements of Income and was $21 million in 2017 , $23 millionin 2016 and $22 million in 2015 .Nasdaq recognizes the funded status of the Nasdaq Benefit Plans, measured asthe difference between the fair value of the plan assets and the benefitobligation, in the Consolidated Balance Sheets. The funded status related to theNasdaq Benefit Plans was underfunded by $60 million as of December 31, 2017, $59 million as of December 31, 2016 and $64 million as of December 31,2015 and is included in accrued personnel costs and other non-current liabilitiesin the Consolidated Balance Sheets. The fair value of the plan assets was $79million as of December 31, 2017 and $74 million as of December 31, 2016 andthe benefit obligation was $139 million as of December 31, 2017 and $133million as of December 31, 2016 . The plan assets of the Nasdaq Benefit Plansare invested in securities per target allocations adopted by Nasdaq’s Pensionand 401(k) Committee and are primarily invested in equity and fixed incomesecurities, which are primarily categorized as Level 2 in the fair valuehierarchy.Accumulated Other Comprehensive LossAs of December 31, 2017 , accumulated other comprehensive loss for theNasdaq Benefit Plans was $22 million reflecting an unrecognized net loss of$37 million , partially offset by an income tax benefit of $15 million , primarilydue to our pension plans.Estimated Future Benefit PaymentsWe expect to make the following benefit payments to participants in the nextten fiscal years under the Nasdaq Benefit Plans:F- 37 Table of Contents Pension SERP Post-retirement TotalFiscal Year Ended:(in millions)2018$5 $2 $— $720195 7 — 1220205 2 — 720215 2 — 720226 2 — 82023 through 202729 10 1 40 $55 $25 $1 $8113. Share-Based CompensationWe have a share-based compensation program that provides our board ofdirectors broad discretion in creating employee equity incentives. Share-basedawards granted under this program include stock options, restrictedstock (consisting of restricted stock units), and PSUs. For accounting purposes,we consider PSUs to be a form of restricted stock.Summary of Share-Based Compensation ExpenseThe following table shows the total share-based compensation expenseresulting from equity awards and the 15.0% discount for the ESPP for the yearsended December 31, 2017 , 2016 and 2015 in the Consolidated Statements ofIncome: Year Ended December 31, 2017 2016 2015 (in millions)Share-based compensation expense beforeincome taxes$70 $86 $68Income tax benefit(29) (35) (28)Share-based compensation expense afterincome taxes$41 $51 $40Common Shares Available Under Our Equity PlanAs of December 31, 2017 , we had approximately 5.8 million shares ofcommon stock authorized for future issuance under our Equity Plan.Restricted StockWe grant restricted stock to most active employees. The grant date fair value ofrestricted stock awards is based on the closing price at the date of grant less thepresent value of future cash dividends. Restricted stock awards grantedgenerally vest 25.0% on the second anniversary of the grant date, 25.0% on thethird anniversary of the grant date, and 50.0% on the fourth anniversary of thegrant date. We generally recognize compensation expense for restricted stockawards on a straight-line basis over the requisite service period of the award,taking into account an estimated forfeiture rate. Summary of Restricted Stock ActivityThe following table summarizes our restricted stock activity for the years endedDecember 31, 2017 , 2016 and 2015: Restricted Stock Number of Awards Weighted-AverageGrant Date Fair ValueUnvested balances at December 31,20143,193,230 $30.99Granted823,950 $49.26Vested(370,998) $29.90Forfeited(302,444) $34.34Unvested balances at December 31,20153,343,738 $35.36Granted724,200 $62.91Vested(1,238,980) $27.91Forfeited(268,380) $43.29Unvested balances at December 31,20162,560,578 $45.92Granted737,864 $67.48Vested(1,102,823) $38.56Forfeited(207,119) $52.29Unvested balances at December 31,20171,988,500 $57.34As of December 31, 2017 , $54 million of total unrecognized compensation costrelated to restricted stock is expected to be recognized over a weighted-averageperiod of 1.8 years .PSUsThe grant date fair value of PSUs is based on the closing price at the date ofgrant less the present value of future cash dividends. PSUs are based onperformance measures that impact the amount of shares that each recipient willreceive upon vesting. We report the target number of PSUs granted, unless wehave determined that it is more likely than not, based on the actual achievementof performance measures, that an employee will receive a different amount ofshares underlying the PSUs, in which case we report the amount of shares theemployee is likely to receive. We have two performance-based long-term PSUprograms for certain officers, a one -year performance-based program and athree -year cumulative performance-based program that focuses on TSR.One -Year PSU ProgramUnder the one -year performance-based program, an employee may receivefrom 0.0% to 150.0% of the target amount granted, depending on theachievement of performance measures. These awards vest ratably on an annualbasis over a three -year period commencing with the end of the performanceperiod. Compensation cost is recognized over the performance period and thethree -year vesting period, taking into account an estimated forfeiture rate.During 2017, certain grants of PSUs with a one -year performance periodexceeded the applicable performanceF- 38 Table of Contentsparameters. As a result, an additional 14,497 units above target were consideredgranted in the first quarter of 2018.Three -Year PSU ProgramUnder the three -year performance-based program, each individual receivesPSUs with a three -year cumulative performance period that vest at the end ofthe performance period. Compensation cost is recognized over the three -yearvesting period. Performance will be determined by comparing Nasdaq’s TSR totwo peer groups, each weighted 50.0% . The first peer group consists ofexchange companies, and the second peer group consists of all companies in theS&P 500. Nasdaq’s relative performance ranking against each of these groupswill determine the final number of shares delivered to each individual under theprogram. The payout under this program will be between 0.0% and 200.0% ofthe number of PSUs granted and will be determined by Nasdaq’s overallperformance against both peer groups. However, if Nasdaq’s TSR is negativefor the three -year performance period, regardless of TSR ranking, the payoutwill not exceed 100.0% of the number of PSUs granted. We estimate the fairvalue of PSUs granted under the three -year PSU program using the MonteCarlo simulation model, as these awards contain a market condition.Certain grants of PSUs that were issued in 2015 with a three -year performanceperiod exceeded the applicable performance parameters. As a result, anadditional 237,876 units above target were considered granted in the firstquarter of 2018.The following weighted-average assumptions were used to determine theweighted-average fair values of the PSU awards granted under the three -yearPSU program for the years ended December 31, 2017 and 2016: Year Ended December 31, 2017 2016Weighted-average risk free interest rate (1)1.44% 0.84%Expected volatility (2)19.2% 21.0%Weighted-average grant date share price$69.45 $66.36Weighted-average fair value at grant date$81.57 $93.25____________(1) The risk-free interest rate for periods within the expected life of the awardis based on the U.S. Treasury yield curve in effect at the time of grant.(2) We use historic volatility for PSU awards issued under the three -year PSUprogram, as implied volatility data could not be obtained for all thecompanies in the peer groups used for relative performance measurementwithin the program. In addition, the annual dividend assumption utilized in the Monte Carlosimulation model is based on Nasdaq’s dividend yield at the date of grant. Summary of PSU ActivityThe following table summarizes our PSU activity for the years endedDecember 31, 2017 , 2016 and 2015: PSUs One-Year Program Three-Year Program Number of Awards Weighted-Average GrantDate FairValue Number of Awards Weighted-Average GrantDate FairValueUnvestedbalances atDecember 31,2014558,040 $24.17 1,654,567 $35.57Granted206,199 $48.16 649,626 $49.69Vested(247,273) $30.51 (837,109) $22.50Forfeited(92,999) $34.74 (27,366) $43.49Unvestedbalances atDecember 31,2015423,967 $41.34 1,439,718 $49.41Granted242,642 $58.33 761,501 $66.89Vested(242,793) $39.63 (879,926) $43.81Forfeited(45,050) $47.72 (6,625) $69.11Unvestedbalances atDecember 31,2016378,766 $52.55 1,314,668 $63.18Granted197,075 $65.51 803,712 $55.57Vested(202,073) $49.93 (1,079,925) $42.83Forfeited(40,764) $55.92 (28,497) $87.86Unvestedbalances atDecember 31,2017333,004 $61.39 1,009,958 $78.18As of December 31, 2017 , $9 million of total unrecognized compensation costrelated to the one -year PSU program is expected to be recognized over aweighted-average period of 1.4 years . For the three -year PSU program, $21million of total unrecognized compensation cost is expected to be recognizedover a weighted-average period of 1.4 years .Stock OptionsThe fair value of stock options is estimated using the Black-Scholes option-pricing model. Each grant has a 10 -year life. In January 2017, our CEOreceived 268,817 performance-based non-qualified stock options which willvest annually over a three -year period, with each vesting contingent upon theachievement of annual performance parameters. On January 30, 2018, Nasdaq'smanagement compensation committee and board of directors determined thatthe performance goal for 2017 was met, resulting in the settlement of the firstone-third of the grant. There were no stock option awards granted during theyears ended December 31, 2016 and 2015.F- 39 Table of ContentsSummary of Stock Option ActivityA summary of stock option activity for the year ended December 31, 2017 is asfollows: Number of Stock Options Weighted-AverageExercise Price Outstanding at December 31, 20143,316,782 $27.56Exercised(682,054) 26.84Forfeited(8,241) 28.53Outstanding at December 31, 20152,626,487 $27.74Exercised(1,219,820) 34.00Forfeited(296) 23.31Outstanding at December 31, 20161,406,371 $22.32Granted268,817 66.68Exercised(1,102,830) 21.98Forfeited(978) 21.33Outstanding at December 31, 2017571,380 $43.84Exercisable at December 31, 2017302,563 $23.55We received net cash proceeds of $24 million from the exercise of 1,102,830stock options for the year ended December 31, 2017 , received net cashproceeds of $41 million from the exercise of 1,219,820 stock options for theyear ended December 31, 2016 and received net cash proceeds of $18 millionfrom the exercise of 682,054 stock options for the year ended December 31,2015.F- 40 Table of ContentsThe following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2017: Outstanding ExercisableRange of Exercise Prices Number ofStock Options Weighted-AverageRemainingContractual Term (inyears) Weighted-AverageExercise Price AggregateIntrinsicValue (in millions) Number Exercisable Weighted-AverageRemainingContractual Term (inyears) Weighted-AverageExercise Price Aggregate IntrinsicValue (in millions)$17.36-$19.99 94,265 2.14 $19.73 $5 94,265 2.14 $19.73 $5$20.00-$25.75 206,980 2.39 25.20 11 206,980 2.39 25.20 11$25.76-$66.68 270,135 8.84 66.53 3 1,318 0.48 36.40 —Total 571,380 5.40 $43.84 $19 302,563 2.30 $23.55 $16 The aggregate intrinsic value in the above table represents the total pre-taxintrinsic value (i.e., the difference between our closing stock price onDecember 29, 2017 of $76.83 and the exercise price, times the number ofshares) based on stock options with an exercise price less than Nasdaq’s closingprice of $76.83 as of December 29, 2017, which would have been received bythe option holders had the option holders exercised their stock options on thatdate. This amount can change based on the fair market value of our commonstock. The total number of in-the-money stock options exercisable as ofDecember 31, 2017 was 0.3 million and the weighted-average exercise pricewas $23.55 . As of December 31, 2016 , 1.4 million outstanding stock optionswere exercisable and the weighted-average exercise price was $22.32 . The total pre-tax intrinsic value of stock options exercised was $54 millionduring 2017, $40 million during 2016 and $17 million during 2015. ESPPWe have an ESPP under which approximately 2.1 million shares of ourcommon stock have been reserved for future issuance as of December 31, 2017. Under our ESPP, employees may purchase shares having a value notexceeding 10.0% of their annual compensation, subject to applicable annualInternal Revenue Service limitations. We record compensation expense relatedto the 15.0% discount that is given to our employees. The following tablesummarizes employee activity and expense associated with the ESPP for theyears ended December 31, 2017, 2016 and 2015. Year Ended December 31, 2017 2016 2015Number of shares purchased byemployees235,859 233,464 247,444Weighted-average price of sharespurchased$58.26 $50.39 $40.95Compensation expense (inmillions)$3 $4 $4 14. Nasdaq Stockholders’ EquityCommon StockAs of December 31, 2017 , 300,000,000 shares of our common stock wereauthorized, 172,373,432 shares were issued and 167,441,030 shares wereoutstanding. The holders of common stock are entitled to one vote per share,except that our certificate of incorporation limits the ability of any person tovote in excess of 5.0% of the then-outstanding shares of Nasdaq common stock.Common Stock in Treasury, at CostWe account for the purchase of treasury stock under the cost method with theshares of stock repurchased reflected as a reduction to Nasdaq stockholders’equity and included in common stock in treasury, at cost in the ConsolidatedBalance Sheets. Shares repurchased under our share repurchase program arecurrently retired and canceled. When treasury shares are reissued, they arerecorded at the average cost of the treasury shares acquired. We held 4,932,402 shares of common stock in treasury as of December 31, 2017 and 3,921,718shares as of December 31, 2016, most of which are related to shares of ourcommon stock repurchased for the settlement of employee tax withholdingobligations arising from the vesting of restricted stock.Share Repurchase ProgramIn the fourth quarter of 2014, our board of directors authorized the repurchaseof up to $500 million of our outstanding common stock and in the first quarterof 2016, our board of directors authorized the repurchase of an additional $370million of our outstanding common stock under our share repurchase program.These purchases may be made from time to time at prevailing market prices inopen market purchases, privately-negotiated transactions, block purchasetechniques or otherwise, as determined by our management. The purchases areprimarily funded from existing cash balances. The share repurchase programmay be suspended, modified or discontinued at any time.F- 41 Table of ContentsThe following table summarizes our share repurchase activity: Year Ended December 31, 2017 2016Number of shares ofcommon stockrepurchased 2,843,519 1,547,778Average price paid per share $71.56 $64.42Total purchase price (inmillions) $203 $100As discussed above in “Common Stock in Treasury, at Cost,” sharesrepurchased under our share repurchase program are currently retired andcancelled. As of December 31, 2017 , the remaining amount authorized forshare repurchases under the program was $226 million . In January 2018, theboard of directors authorized an additional $500 million for the sharerepurchase program bringing the total capacity to $726 million . See “Definitive Agreement to Sell our Public Relations Solutions and DigitalMedia Services Businesses,” of Note 21, “Subsequent Events,” for furtherdiscussion.Other Repurchases of Common StockFor the year ended December 31, 2017 , we repurchased 1,008,882 shares ofour common stock in settlement of employee tax withholding obligationsarising from the vesting of restricted stock.Preferred StockOur certificate of incorporation authorizes the issuance of 30,000,000 shares ofpreferred stock, par value $0.01 per share, issuable from time to time in one ormore series. As of December 31, 2017 and December 31, 2016, no shares ofpreferred stock were issued or outstanding. * * * * * *Cash Dividends on Common StockDuring 2017, our board of directors declared the following cash dividends:Declaration Date Dividend PerCommon Share Record Date Total Amount Paid Payment Date (in millions) January 30, 2017 $0.32 March 17, 2017 $53 March 31, 2017April 25, 2017 0.38 June 16, 2017 63 June 30, 2017July 25, 2017 0.38 September 15, 2017 64 September 29, 2017October 24, 2017 0.38 December 15, 2017 63 December 29, 2017 $243 The total amount paid of $243 million was recorded in retained earnings in the Consolidated Balance Sheets as of December 31, 2017 .In April 2017, the board of directors declared a regular quarterly cash dividend of $0.38 per share on our outstanding common stock which reflected a 19.0%increase from our prior quarterly cash dividend of $0.32 . In addition, in April 2017, our board of directors adopted a dividend policy with the intention to provideshareholders with regular and growing dividends over the long term as earnings and cash flow grow.In January 2018, the board of directors declared a regular quarterly cash dividend of $0.38 per share on our outstanding common stock. The dividend is payable onMarch 30, 2018 to shareholders of record at the close of business on March 16, 2018. The estimated amount of this dividend is $64 million . Future declarations ofquarterly dividends and the establishment of future record and payment dates are subject to approval by the board of directors.F- 42 Table of ContentsAccumulated Other Comprehensive LossThe following table outlines the components of accumulated other comprehensive loss: Foreign CurrencyTranslation Adjustments Employee Benefit PlanAdjustments Accumulated OtherComprehensive Loss (in millions)Gross balance, December 31, 2016 $(1,481) $(35) $(1,516)Income taxes 523 14 537Net balance, December 31, 2016 $(958) $(21) $(979) Gross balance, December 31, 2017 $(1,268) $(37) $(1,305)Income taxes 428 15 443Net balance, December 31, 2017 $(840) $(22) $(862)Foreign currency translation adjustments include cumulative gains (losses) on foreign currency translation adjustments from non-U.S. subsidiaries for which thefunctional currency is other than the U.S. dollar.Employee benefit plan adjustments represent unrecognized net actuarial gains (losses) related to the Nasdaq Benefit Plans.15. Earnings Per ShareThe following table sets forth the computation of basic and diluted earnings per share: Year Ended December 31, 2017 2016 2015 (in millions, except share and per share amounts)Numerator: Net income attributable to common shareholders$734 $108 $428Denominator: Weighted-average common shares outstanding for basic earnings per share166,364,299 165,182,290 167,285,450Weighted-average effect of dilutive securities: Employee equity awards2,861,892 3,258,136 3,638,981Contingent issuance of common stock358,840 360,571 358,840Weighted-average common shares outstanding for diluted earnings per share169,585,031 168,800,997 171,283,271Basic and diluted earnings per share: Basic earnings per share$4.41 $0.65 $2.56Diluted earnings per share$4.33 $0.64 $2.50Stock options to purchase 571,380 shares of common stock and 3,331,462shares of restricted stock and PSUs were outstanding as of December 31, 2017 .For the year ended December 31, 2017 , we included 302,563 of theoutstanding stock options and 2,978,856 shares of restricted stock and PSUs inthe computation of diluted earnings per share, on a weighted-average basis, astheir inclusion was dilutive. The remaining stock options, shares of restrictedstock and PSUs are antidilutive, and as such, they were properly excluded.Stock options to purchase 1,406,371 shares of common stock and 4,254,012shares of restricted stock and PSUs were outstanding as of December 31, 2016 .For the year ended December 31, 2016 , we included all of the outstandingstock options and 3,663,919 shares of restricted stock and PSUs in thecomputation of diluted earnings per share, on a weighted- average basis, as their inclusion was dilutive. The remaining shares of restrictedstock and PSUs are antidilutive, and as such, they were properly excluded.Stock options to purchase 2,626,487 shares of common stock and 5,207,423shares of restricted stock and PSUs were outstanding as of December 31, 2015 .For the year ended December 31, 2015 , we included all of the outstandingstock options and 4,842,383 shares of restricted stock and PSUs in thecomputation of diluted earnings per share, on a weighted-average basis, as theirinclusion was dilutive. The remaining shares of restricted stock and PSUs areantidilutive, and as such, they were properly excluded.F- 43 Table of Contents16. Fair Value of Financial InstrumentsThe following table presents our financial assets that are measured at fair valueon a recurring basis as of December 31, 2017 and December 31, 2016 . We didnot have any financial liabilities measured at fair value on a recurring basis asof December 31, 2017 and December 31, 2016 . December 31, 2017 Total Level 1 Level 2 Level 3 (in millions)Financial investments, atfair value$235 $135 $100 $—Default fund and margindeposit investments2,129 371 1,758 —Total$2,364 $506 $1,858 $— December 31, 2016 Total Level 1 Level 2 Level 3 (in millions)Financial investments,at fair value$245 $151 $94 $—Default fund andmargin depositinvestments1,900 614 1,286 —Total$2,145 $765 $1,380 $—Our Level 1 financial investments, at fair value were comprised of tradingsecurities, mainly highly rated European government debt securities. Level 2financial investments, at fair value were primarily comprised of tradingsecurities, mainly European mortgage and corporate bonds, as of December 31,2017 and were primarily comprised of available-for-sale investment securitiesin short-term commercial paper and trading securities, mainly Europeanmortgage and corporate bonds, as of December 31, 2016. Of the Level 1 andLevel 2 financial investments, at fair value, $160 million as of December 31,2017 and $172 million as of December 31, 2016 are assets utilized to meetregulatory capital requirements, primarily for our clearing operations at NasdaqClearing.Our default fund and margin deposit investments include cash contributionsinvested by Nasdaq Clearing, in accordance with its investment policy. Of thetotal balance of $3,988 million recorded in the Consolidated Balance Sheets asof December 31, 2017 , $1,909 million of cash contributions have been investedin highly rated European and U.S. government debt securities or central bankcertificates and $220 million in reverse repurchase agreements. The remainderof this balance is held in cash. Of the total balance of $3,301 million recordedin the Consolidated Balance Sheets as of December 31, 2016 , $1,763 million ofcash contributions have been invested in highly rated European and U.S.government debt securities and central bank certificates and $137 million ofcash contributions have been invested in reverse repurchase agreements. Theremainder of this balance is held in cash. See Note 17, “Clearing Operations,” for further discussion of default fund contributions and margindeposits.There were no transfers between Level 1 and Level 2 of the fair value hierarchyas of December 31, 2017 and December 31, 2016 . Financial Instruments Not Measured at Fair Value on a Recurring BasisSome of our financial instruments are not measured at fair value on a recurringbasis but are recorded at amounts that approximate fair value due to their liquidor short-term nature. Such financial assets and financial liabilities include: cashand cash equivalents, restricted cash, receivables, net, certain other currentassets, accounts payable and accrued expenses, Section 31 fees payable to SEC,accrued personnel costs, commercial paper and certain other current liabilities.In addition, our investments in OCC and EuroCCP N.V. are accounted forunder the equity method of accounting and our investments in Borsa Istanbuland LCH.Clearnet Group Limited are carried at cost. See “Equity MethodInvestments,” and “Cost Method Investments,” of Note 7, “Investments,” forfurther discussion.We also consider our debt obligations to be financial instruments. The fairvalue of our debt obligations, utilizing discounted cash flow analyses for ourfloating rate debt and prevailing market rates for our fixed rate debt, was $4.4billion as of December 31, 2017 and $3.8 billion as of December 31, 2016 . Thediscounted cash flow analyses are based on borrowing rates currently availableto us for debt with similar terms and maturities. The fair value of ourcommercial paper approximates the carrying value since the rates of interest onthis short-term debt approximate market rates as of December 31, 2017 . Ourcommercial paper and our fixed rate and floating rate debt are categorized asLevel 2 in the fair value hierarchy.For further discussion of our debt obligations, see Note 10, “Debt Obligations.”Non-Financial Assets Measured at Fair Value on a Non-Recurring BasisOur non-financial assets, which include goodwill, intangible assets, and otherlong-lived assets, are not required to be carried at fair value on a recurringbasis. Fair value measures of non-financial assets are primarily used in theimpairment analysis of these assets. Any resulting asset impairment wouldrequire that the non-financial asset be recorded at its fair value. Nasdaq usesLevel 3 inputs to measure the fair value of the above assets on a non-recurringbasis. As of December 31, 2017 and December 31, 2016 , there were no non-financial assets measured at fair value on a non-recurring basis.17. Clearing OperationsNasdaq ClearingNasdaq Clearing is authorized and supervised under EMIR as a multi-assetclearinghouse by the SFSA and is authorized toF- 44 Table of Contentsconduct clearing operations in Norway by the Norwegian Ministry of Finance.The clearinghouse acts as the CCP for exchange and OTC trades in equityderivatives, fixed income derivatives, resale and repurchase contracts, powerderivatives, emission allowance derivatives, freight and fuel oil derivatives, ironore derivatives and seafood derivatives. Through our clearing operations in the financial markets, which include theresale and repurchase market, the commodities markets, and the seafoodmarket, Nasdaq Clearing is the legal counterparty for, and guarantees thefulfillment of, each contract cleared. These contracts are not used by NasdaqClearing for the purpose of trading on its own behalf. As the legal counterpartyof each transaction, Nasdaq Clearing bears the counterparty risk between thepurchaser and seller in the contract. In its guarantor role, Nasdaq Clearing hasprecisely equal and offsetting claims to and from clearing members on oppositesides of each contract, standing as the CCP on every contract cleared. Inaccordance with the rules and regulations of Nasdaq Clearing, clearingmembers’ open positions are aggregated to create a single portfolio for whichdefault fund and margin collateral requirements are calculated. See “DefaultFund Contributions and Margin Deposits” below for further discussion ofNasdaq Clearing’s default fund and margin requirements.Nasdaq Clearing maintains four member sponsored default funds: one related tofinancial markets, one related to commodities markets, one related to theseafood market, and a mutualized fund. Under this structure, Nasdaq Clearingand its clearing members must contribute to the total regulatory capital relatedto the clearing operations of Nasdaq Clearing. This structure applies an initialseparation of default fund contributions for the financial, commodities andseafood markets in order to create a buffer for each market’s counterparty risks.Simultaneously, a mutualized default fund provides capital efficiencies toNasdaq Clearing’s members with regard to total regulatory capital required. See“Default Fund Contributions” below for further discussion of NasdaqClearing’s default fund. Power of assessment and a liability waterfall also havebeen implemented. See “Power of Assessment” and “Liability Waterfall” belowfor further discussion. These requirements ensure the alignment of risk betweenNasdaq Clearing and its clearing members.Default Fund Contributions and Margin DepositsAs of December 31, 2017 , clearing member default fund contributions andmargin deposits were as follows: December 31, 2017 Cash Contributions Non-CashContributions Total Contributions (in millions)Default fundcontributions$360 $130 $490Margin deposits3,628 4,047 7,675Total$3,988 $4,177 $8,165 In accordance with its investment policy, of the total cash contributions of$3,988 million , Nasdaq Clearing has invested $1,909 million in highly ratedEuropean and U.S. government debt securities or central bank certificates and$220 million in reverse repurchase agreements. The remainder of this balance isheld in cash. Of the total default fund contributions of $490 million , NasdaqClearing can utilize $454 million as capital resources in the event of acounterparty default. The remaining balance of $36 million pertains to memberposted surplus balances.Default Fund ContributionsContributions made to the default funds are proportional to the exposures ofeach clearing member. When a clearing member is active in more than onemarket, contributions must be made to all markets’ default funds in which themember is active. Clearing members’ eligible contributions may include cashand non-cash contributions. Cash contributions received are held in cash orinvested by Nasdaq Clearing, in accordance with its investment policy, either inhighly rated government debt securities, time deposits, central bank certificatesor reverse repurchase agreements with highly rated government debt securitiesas collateral. Nasdaq Clearing maintains and manages all cash deposits relatedto margin collateral. All risks and rewards of collateral ownership, includinginterest, belong to Nasdaq Clearing. Clearing members’ cash contributions areincluded in default funds and margin deposits in the Consolidated BalanceSheets as both a current asset and a current liability. Non-cash contributionsinclude highly rated government debt securities that must meet specific criteriaapproved by Nasdaq Clearing. Non-cash contributions are pledged assets thatare not recorded in the Consolidated Balance Sheets as Nasdaq Clearing doesnot take legal ownership of these assets and the risks and rewards remain withthe clearing members. These balances may fluctuate over time due to changesin the amount of deposits required and whether members choose to providecash or non-cash contributions. Assets pledged are held at a nominee account inNasdaq Clearing’s name for the benefit of the clearing members and areimmediately accessible by Nasdaq Clearing in the event of a default. In additionto clearing members’ required contributions to the liability waterfall, NasdaqClearing is also required to contribute capital to the liability waterfall andoverall regulatory capital as specified under its clearinghouse rules. As ofDecember 31, 2017 , Nasdaq Clearing committed capital totaling $114 millionto the liability waterfall and overall regulatory capital, in the form ofgovernment debt securities, which are recorded as financial investments, at fairvalue in the Consolidated Balance Sheets. The combined regulatory capital ofthe clearing members and Nasdaq Clearing will serve to secure the obligationsof a clearing member and may be used to cover losses sustained by a clearingmember in the event of a default.Margin DepositsNasdaq Clearing requires all clearing members to provide collateral, which mayconsist of cash and non-cash contributions, to guarantee performance on theclearingF- 45 Table of Contentsmembers’ open positions, or initial margin. In addition, clearing members mustalso provide collateral to cover the daily margin call if needed. See “DefaultFund Contributions” above for further discussion of cash and non-cashcontributions.Similar to default fund contributions, Nasdaq Clearing maintains and managesall cash deposits related to margin collateral. All risks and rewards of collateralownership, including interest, belong to Nasdaq Clearing. These cash depositsare recorded in default funds and margin deposits in the Consolidated BalanceSheets as both a current asset and current liability. Pledged margin collateral isnot recorded in our Consolidated Balance Sheets as all risks and rewards ofcollateral ownership, including interest, belong to the counterparty. Assetspledged are held at a nominee account in Nasdaq Clearing’s name for thebenefit of the clearing members and are immediately accessible by NasdaqClearing in the event of a default.Nasdaq Clearing marks to market all outstanding contracts and requirespayment from clearing members whose positions have lost value. The mark-to-market process helps identify any clearing members that may not be able tosatisfy their financial obligations in a timely manner allowing Nasdaq Clearingthe ability to mitigate the risk of a clearing member defaulting due toexceptionally large losses. In the event of a default, Nasdaq Clearing can accessthe defaulting member’s margin deposits to cover the defaulting member’slosses.Regulatory Capital and Risk Management CalculationsNasdaq Clearing manages risk through a comprehensive counterparty riskmanagement framework, which is comprised of policies, procedures, standardsand financial resources. The level of regulatory capital is determined inaccordance with Nasdaq Clearing’s regulatory capital policy, as approved bythe SFSA. Regulatory capital calculations are continuously updated through aproprietary capital-at-risk calculation model that establishes the appropriatelevel of capital.As mentioned above, Nasdaq Clearing is the legal counterparty for eachcontract traded and thereby guarantees the fulfillment of each contract. NasdaqClearing accounts for this guarantee as a performance guarantee. We determinethe fair value of the performance guarantee by considering daily settlement ofcontracts and other margining and default fund requirements, the riskmanagement program, historical evidence of default payments, and theestimated probability of potential default payouts. The calculation is determinedusing proprietary risk management software that simulates gains and lossesbased on historical market prices, extreme but plausible market scenarios,volatility and other factors present at that point in time for those particularunsettled contracts. Based on this analysis, the estimated liability was nominaland no liability was recorded as of December 31, 2017 . The market value of derivative contracts outstanding prior to netting was asfollows: December 31, 2017 (in millions)Commodity and seafood options, futures and forwards(1)(2)(3)$524Fixed-income options and futures (1)(2)729Stock options and futures (1)(2)132Index options and futures (1)(2)111Total$1,496____________(1) We determined the fair value of our option contracts using standardvaluation models that were based on market-based observable inputsincluding implied volatility, interest rates and the spot price of theunderlying instrument.(2) We determined the fair value of our futures contracts based upon quotedmarket prices and average quoted market yields.(3) We determined the fair value of our forward contracts using standardvaluation models that were based on market-based observable inputsincluding LIBOR rates and the spot price of the underlying instrument.The total number of derivative contracts cleared through Nasdaq Clearing forthe years ended December 31, 2017 and 2016 was as follows: December 31, 2017 December 31, 2016Commodity and seafood options,futures and forwards (1)2,824,188 3,530,746Fixed-income options and futures20,376,383 14,639,065Stock options and futures26,023,816 28,496,143Index options and futures44,928,284 50,636,527Total94,152,671 97,302,481____________(1)The total volume in cleared power related to commodity contracts was1,199 Terawatt hours (TWh) for the year ended December 31, 2017 and1,658 TWh for the year ended December 31, 2016 .The outstanding contract value of resale and repurchase agreements was $2.3billion as of December 31, 2017 and $1.9 billion as of December 31, 2016 . Thetotal number of contracts cleared was 8,534,986 for the year endedDecember 31, 2017 and was 7,941,666 for the year ended December 31, 2016 .F- 46 Table of ContentsPower of Assessment To further strengthen the contingent financial resources of the clearinghouse,Nasdaq Clearing has power of assessment that provides the ability to collectadditional funds from its clearing members to cover a defaulting member’sremaining obligations up to the limits established under the terms of theclearinghouse rules. The power of assessment corresponds to 100.0% of theclearing member’s aggregate contribution to the financial, commodities andseafood markets’ default funds.Liability WaterfallThe liability waterfall is the priority order in which the capital resources wouldbe utilized in the event of a default where the defaulting clearing member’scollateral would not be sufficient to cover the cost to settle its portfolio. If adefault occurs and the defaulting clearing member’s collateral, including cashdeposits and pledged assets, is depleted, then capital is utilized in the followingamount and order:•junior capital contributed by Nasdaq Clearing, which totaled $18 million asof December 31, 2017 ;•a loss sharing pool related only to the financial market that is contributed toby clearing members and only applies if the defaulting member’s portfolioincludes interest rate swap products;•specific market default fund where the loss occurred (i.e., the financial,commodities, or seafood market), which includes capital contributions ofthe clearing members on a pro-rata basis;•senior capital contributed to each specific market by Nasdaq Clearing,calculated in accordance with clearinghouse rules, which totaled $24million as of December 31, 2017 ; and•mutualized default fund, which includes capital contributions of theclearing members on a pro-rata basis.If additional funds are needed after utilization of the mutualized default fund,then Nasdaq Clearing will utilize its power of assessment and additional capitalcontributions will be required by non-defaulting members up to the limitsestablished under the terms of the clearinghouse rules.18. LeasesWe lease some of our office space under non-cancelable operating leases withthird parties and sublease office space to third parties. Some of our leaseagreements contain renewal options and escalation clauses based on increasesin property taxes and building operating costs.As of December 31, 2017 , future minimum lease payments under non-cancelable operating leases (net of sublease income) are as follows: Gross LeaseCommitments SubleaseIncome Net LeaseCommitments (in millions)Year ending December 31: 2018$90 $3 $87201976 3 73202070 3 67202157 3 54202251 3 48Thereafter113 3 110Total future minimumlease payments$457 $18 $439Rent expense for operating leases (net of sublease income of $3 million in2017, $4 million in 2016, and $5 million in 2015) was $83 million in 2017, $78million in 2016, and $88 million in 2015. 19. Commitments, Contingencies and GuaranteesGuarantees Issued and Credit Facilities AvailableIn addition to the default fund contributions and margin collateral pledged byclearing members discussed in Note 17, “Clearing Operations,” we haveobtained financial guarantees and credit facilities which are guaranteed by usthrough counter indemnities, to provide further liquidity related to our clearingbusinesses. Financial guarantees issued to us totaled $14 million as ofDecember 31, 2017 and $13 million as of December 31, 2016 . As discussed in“Other Credit Facilities,” of Note 10, “Debt Obligations,” clearing-relatedcredit facilities, which are available in multiple currencies, totaled $187 millionas of December 31, 2017 and $170 million as of December 31, 2016 , inavailable liquidity, none of which was utilized.Execution Access is an introducing broker which operates the trading platformfor our Fixed Income business to trade in U.S. Treasury securities. ExecutionAccess has a clearing arrangement with Cantor Fitzgerald. As of December 31,2017 , we have contributed $19 million of clearing deposits to CantorFitzgerald in connection with this clearing arrangement. These deposits arerecorded in other current assets in our Consolidated Balance Sheets. Thisclearing agreement will end on July 31, 2018, and will be replaced by a clearingagreement with ICBC. Some of the trading activity in Execution Access iscleared by Cantor Fitzgerald (and similarly will be by ICBC after July 31,2018) through the Fixed Income Clearing Corporation. Execution Accessassumes the counterparty risk of clients that do not clear through the FixedIncome Clearing Corporation. Counterparty risk of clients exists for ExecutionAccess between the trade date and the settlement date of the individualtransactions, which is at least one business day (or more, if specified by theU.S. Treasury issuance calendar). All of Execution Access’ obligations underthe clearing arrangement with Cantor Fitzgerald are guaranteed by Nasdaq.Counterparties that do not clear through the Fixed Income ClearingCorporation are subject to a credit due diligenceF- 47 Table of Contentsprocess and may be required to post collateral, provide principal letters, orprovide other forms of credit enhancement to Execution Access for the purposeof mitigating counterparty risk. Daily position trading limits are also enforcedfor such counterparties.We believe that the potential for us to be required to make payments underthese arrangements is mitigated through the pledged collateral and our riskmanagement policies. Accordingly, no contingent liability is recorded in theConsolidated Balance Sheets for these arrangements. However, no guaranteecan be provided that these arrangements will at all times be sufficient.Lease CommitmentsWe lease some of our office space under non-cancelable operating leases withthird parties and sublease office space to third parties. Some of our leaseagreements contain renewal options and escalation clauses based on increasesin property taxes and building operating costs.In February 2018, we entered into a lease agreement as part of a plan to relocateour world headquarters. See “New World Headquarters,” of Note 21,“Subsequent Events,” for further discussion.Other GuaranteesWe have provided other guarantees of $3 million as of December 31, 2017 andDecember 31, 2016 . These guarantees are primarily related to obligations forour rental and leasing contracts as well as performance guarantees on certainmarket technology contracts related to the delivery of software technology andsupport services. We have received financial guarantees from various financialinstitutions to support the above guarantees.Through our clearing operations in the financial markets, Nasdaq Clearing isthe legal counterparty for, and guarantees the performance of, its clearingmembers. See Note 17, “Clearing Operations,” for further discussion of NasdaqClearing performance guarantees.We have provided a guarantee related to lease obligations for The NasdaqEntrepreneurial Center, Inc. which is a not-for-profit organization designed toconvene, connect and engage aspiring and current entrepreneurs. This entity isnot included in the consolidated financial statements of Nasdaq.We believe that the potential for us to be required to make payments underthese arrangements is unlikely. Accordingly, no contingent liability is recordedin the Consolidated Balance Sheets for the above guarantees. Non-Cash Contingent Consideration As part of the purchase price consideration of a prior acquisition, we haveagreed to future annual issuances of 992,247 shares of Nasdaq common stockwhich approximated certain tax benefits associated with the transaction. Suchcontingent future issuances of Nasdaq common stock will be paid ratablythrough 2027 if Nasdaq’s total gross revenues equal or exceed $25 million ineach such year. The contingent future issuances of Nasdaq common stock aresubject to anti-dilution protections and acceleration upon certain events.Escrow AgreementsIn connection with prior acquisitions, we entered into escrow agreements tosecure the payment of post-closing adjustments and to ensure other closingconditions. As of December 31, 2017 , these escrow agreements provide forfuture payment of $18 million , of which $14 million is included in othercurrent liabilities and $4 million is included in other non-current liabilities inthe Consolidated Balance Sheets.Routing Brokerage ActivitiesOne of our broker-dealer subsidiaries, Nasdaq Execution Services, provides aguarantee to securities clearinghouses and exchanges under its standardmembership agreements, which require members to guarantee the performanceof other members. If a member becomes unable to satisfy its obligations to aclearinghouse or exchange, other members would be required to meet itsshortfalls. To mitigate these performance risks, the exchanges andclearinghouses often require members to post collateral, as well as meet certainminimum financial standards. Nasdaq Execution Services’ maximum potentialliability under these arrangements cannot be quantified. However, we believethat the potential for Nasdaq Execution Services to be required to makepayments under these arrangements is unlikely. Accordingly, no contingentliability is recorded in the Consolidated Balance Sheets for these arrangements.Legal and Regulatory Matters As previously disclosed, we were named as a defendant in a putative classaction, Rabin v. NASDAQ OMX PHLX LLC, et al., No. 15-551 (E.D. Pa.),filed in 2015 in the United States District Court for the Eastern District ofPennsylvania. On April 21, 2016, the court entered an order granting ourmotion to dismiss the complaint. The plaintiff appealed the dismissal to theCourt of Appeals for the Third Circuit on May 18, 2016. On October 25, 2017,the Third Circuit issued a decision affirming the dismissal of the case, and onNovember 22, 2017, denied a petition for rehearing and rehearing en banc.We also are named as one of many defendants in City of Providence v. BATSGlobal Markets, Inc., et al., 14 Civ. 2811 (S.D.N.Y.), which was filed on April18, 2014 in the United States District Court for the Southern District of NewYork. The district court appointed lead counsel, who filed an amendedcomplaint on September 2, 2014. The amended complaint names as defendantsseven national exchanges, as well as Barclays PLC, which operated a privatealternative tradingF- 48 Table of Contentssystem. On behalf of a putative class of securities traders, the plaintiffs allegethat the defendants engaged in a scheme to manipulate the markets throughhigh-frequency trading; the amended complaint asserts claims against us underSection 10(b) of the Exchange Act and Rule 10b-5, as well as under Section6(b) of the Exchange Act. The plaintiffs seek injunctive and monetary relief ofan unspecified amount. We filed a motion to dismiss the amended complaint onNovember 3, 2014. In response, the plaintiffs filed a second amended complainton November 24, 2014, which names the same defendants and allegesessentially the same violations. We then filed a motion to dismiss the secondamended complaint on January 23, 2015. On August 26, 2015, the district courtentered an order dismissing the second amended complaint in its entirety withprejudice, concluding that most of the plaintiffs’ theories were foreclosed byabsolute immunity and in any event that the plaintiffs failed to state any claim.The plaintiffs appealed the judgment of dismissal to the United States Court ofAppeals for the Second Circuit. The Second Circuit heard oral argument onAugust 24, 2016. On August 25, 2016, the Second Circuit issued an orderrequesting the SEC’s views on whether the district court had subject-matterjurisdiction over the case, and whether the defendants are immune from suitregarding the challenged conduct. The SEC filed its brief on November 28,2016. The exchanges and plaintiffs filed supplemental briefs responding to theSEC’s brief on December 12, 2016. On December 19, 2017, the Second Circuitissued an opinion vacating the district court’s judgment of dismissal andremanding to the district court for further proceedings. The exchanges filed apetition before the Second Circuit seeking panel or en banc rehearing onJanuary 31, 2018, addressing Section 10(b) and Rule 10b-5 issues and absoluteimmunity. Given the preliminary nature of the proceedings, we are unable toestimate what, if any, liability may result from this litigation. However, webelieve (as the district court concluded) that the claims are without merit andwill continue to litigate vigorously.Except as disclosed above and in prior reports filed under the Exchange Act, weare not currently a party to any litigation or proceeding that we believe couldhave a material adverse effect on our business, consolidated financial condition,or operating results. However, from time to time, we have been threatened with, or named asa defendant in, lawsuits or involved in regulatory proceedings.In the normal course of business, Nasdaq discusses matters with its regulatorsraised during regulatory examinations or otherwise subject to their inquiry andoversight. These matters could result in censures, fines, penalties or othersanctions. Management believes the outcome of any resulting actions will nothave a material impact on its consolidated financial position or results ofoperations. However, we are unable to predict the outcome or the timing of theultimate resolution of these matters, or the potential fines, penalties orinjunctive or other equitable relief, if any, that may result from these matters.Tax AuditsWe are engaged in ongoing discussions and audits with taxing authorities onvarious tax matters, the resolutions of which are uncertain. Currently, there arematters that may lead to assessments, some of which may not be resolved forseveral years. Based on currently available information, we believe we haveadequately provided for any assessments that could result from thoseproceedings where it is more likely than not that we will be assessed. Wereview our positions on these matters as they progress.20. Business SegmentsWe manage, operate and provide our products and services in four businesssegments: Market Services, Corporate Services, Information Services andMarket Technology. See Note 1, “Organization and Nature of Operations,” forfurther discussion of our reportable segments.Our management allocates resources, assesses performance and manages thesebusinesses as four separate segments. We evaluate the performance of oursegments based on several factors, of which the primary financial measure isoperating income. Results of individual businesses are presented based on ourmanagement accounting practices and structure.F- 49 Table of ContentsThe following table presents certain information regarding our operating segments for the years ended December 31, 2017 , 2016 and 2015 : Market Services Corporate Services InformationServices Market Technology Corporate Items Consolidated (in millions)2017 Total revenues$2,418 $656 $588 $303 $— $3,965Transaction-based expenses(1,537) — — — — (1,537)Revenues less transaction-based expenses881 656 588 303 — 2,428Depreciation and amortization95 49 25 $19 — 188Operating income (loss)481 184 418 $65 (149) 999Total assets9,471 866 3,420 627 1,402 15,786Purchase of property and equipment59 41 10 34 — 1442016 Total revenues$2,255 $635 $540 $275 $— $3,705Transaction-based expenses(1,428) — — — — (1,428)Revenues less transaction-based expenses827 635 540 275 — 2,277Depreciation and amortization87 47 18 18 — 170Operating income (loss)450 158 383 69 (221) 839Total assets8,626 1,263 2,439 559 1,263 14,150Purchase of property and equipment62 37 8 27 — 1342015 Total revenues$2,084 $562 $512 $245 $— $3,403Transaction-based expenses(1,313) — — — — (1,313)Revenues less transaction-based expenses771 562 512 245 — 2,090Depreciation and amortization64 42 14 18 — 138Operating income (loss)413 140 365 58 (256) 720Total assets6,906 576 2,456 752 1,171 11,861Purchase of property and equipment53 38 11 31 — 133Certain amounts are allocated to corporate items in our management reportsbased on the decision that those activities should not be used to evaluate thesegment’s ongoing operating performance. The following items are allocated tocorporate items for segment reporting purposes:Amortization expense of acquired intangible assets: We amortize intangibleassets acquired in connection with various acquisitions. Intangible assetamortization expense can vary from period to period due to episodicacquisitions completed, rather than from our ongoing business operations. Assuch, if intangible asset amortization is included in performance measures, it ismore difficult to assess the day-to-day operating performance of the segments,and the relative operating performance of the segments between periods.Management does not consider intangible asset amortization expense for thepurpose of evaluating the performance of our segments or their managers orwhen making decisions to allocate resources. Therefore, we believeperformance measures excluding intangible asset amortization expense providemanagement with a more useful representation of our segments' ongoingactivity in each period. Merger and strategic initiatives expense: We have pursued various strategicinitiatives and completed a number of acquisitions in recent years which haveresulted in expenses which would not have otherwise been incurred. Theseexpenses generally include integration costs, as well as legal, due diligence andother third party transaction costs. The frequency and the amount of suchexpenses vary significantly based on the size, timing and complexity of thetransaction. Accordingly, we do not allocate these costs for purposes ofdisclosing segment results because they do not contribute to a meaningfulevaluation of a particular segment’s ongoing operating performance.Restructuring charges: Restructuring charges are associated with our 2015restructuring plan to improve performance, cut costs and reduce spending andare primarily related to (i) severance and other termination benefits, (ii) assetimpairment charges, and (iii) other charges. We do not allocate theserestructuring costs because they do not contribute to a meaningful evaluation ofa particular segment’s ongoing operating performance.F- 50 Table of ContentsOther significant items: We have excluded certain other charges or gains thatare the result of other non-comparable events to measure operatingperformance. For the year ended December 31, 2017, other significant itemsincluded loss on extinguishment of debt and a sublease loss reserve chargerecorded on space we currently occupy due to excess capacity. For 2016, othersignificant items primarily included a regulatory fine received by our exchangein Stockholm and Nasdaq Clearing, the release of a sublease loss reserve due to the early exit of a facility and costs associated with the acceleration ofpreviously granted equity awards due to the retirement of our former CEO. For2015, other significant items included the reversal of a VAT refund. We believethe exclusion of such amounts allows management and investors to betterunderstand the financial results of Nasdaq.* * * * * *A summary of our corporate items is as follows: Year Ended December 31, 2017 2016 2015 (in millions)Amortization expense of acquired intangible assets$92 $82 $62Merger and strategic initiatives expense44 76 10Restructuring charges— 41 172Loss on extinguishment of debt10 — —Regulatory matter1 6 —Sublease loss reserve2 (1) —Reversal of VAT refund receivables— — 12Executive compensation— 12 —Other— 5 —Total$149 $221 $256Total assets increased $1,636 million as of December 31, 2017 compared withDecember 31, 2016 primarily due to an increase in default funds and margindeposits, reflecting an increase in cash margin deposits pledged by members ofour Nasdaq Clearing business resulting from an increase in clearing volume.Also contributing to the increase is an increase in goodwill and intangible assetsassociated with our 2017 acquisitions, partially offset by a decrease in deferredtax assets primarily due to the impact of the Tax Cuts and Jobs Act. See Note11, “Income Taxes,” for further discussion. Total assets increased $2,289million as of December 31, 2016 compared with December 31, 2015 primarilydue to new regulatory rules in 2016 that require all collateral pledged bymembers of our Nasdaq Clearing business to be recorded on the balance sheetand an increase in goodwill associated with our 2016 acquisitions, partiallyoffset by a pre-tax, non-cash intangible asset impairment charge of $578 millionto write off the full value of the eSpeed trade name. For further discussion ofthe impairment charge, see “Intangible Asset Impairment Charges,” of Note 6,“Goodwill and Acquired Intangible Assets.”For further discussion of our segments’ results, see “Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations—Segment Operating Results.” Geographic DataThe following table presents total revenues and property and equipment, net bygeographic area for 2017, 2016 and 2015. Revenues are classified based uponthe location of the customer. Property and equipment information is based onthe physical location of the assets. TotalRevenues Property andEquipment,Net (in millions)2017: United States$3,062 $247All other countries903 153Total$3,965 $400 2016: United States$2,659 $244All other countries1,046 118Total$3,705 $362 2015: United States$2,408 $217All other countries995 106Total$3,403 $323Our property and equipment, net for all other countries primarily includes assetsheld in Sweden.F- 51 Table of ContentsNo single customer accounted for 10.0% or more of our revenues in 2017, 2016and 2015.21. Subsequent EventsDefinitive Agreement to Sell our Public Relations Solutions and DigitalMedia Services BusinessesIn January 2018, we announced that we entered into a definitive agreement tosell our Public Relations Solutions and Digital Media Services businesseswithin our Corporate Solutions business for $335 million, subject to post-closing adjustments. The closing of this transaction, which is subject toregulatory approvals and customary closing conditions, is projected to occur inthe second quarter of 2018. Nasdaq expects to use the proceeds from the salefor share repurchases. In conjunction with this, Nasdaq's board of directors hasauthorized an additional $500 million for the share repurchase programbringing the total capacity to $726 million .New World HeadquartersIn February 2018, we announced that we will consolidate our offices in NewYork City and move to a single location at MarketSite, 4 Times Square, NewYork, NY which will be our new world headquarters. As part of this plan, weentered into a new lease agreement for additional space at the MarketSitelocation.F- 52Exhibit 12.1Nasdaq, Inc.Computation of Ratio of Earnings to Fixed Charges (Dollars in Millions) Year Ended December 31, 2017 2016 2015 2014 2013 Determination of earnings: Pre-tax income from continuing operations$880 $136(2) $630(2) $594 $600(3) Add: distributed income from equity investees10 5 — — — Add: fixed charges162 151 127 134 126 Less: income from unconsolidated investees(16) (9) (18) (2) — Pre-tax earnings before fixed charges$1,036 $283 $739 $726 $726 Total fixed charges - interest expense (1)$162 $151 $127 $134 $126 Ratio of earnings to fixed charges6.40 1.87 5.82 5.42 5.76 (1) Consists of interest expense on all debt obligations (including accretion of debt issuance costs and debt discount) and the portion of operating lease rentalexpense that is representative of the interest factor.(2) Includes an asset impairment charge of $578 million in 2016 and costs of $41 million in 2016 and $172 million in 2015 associated with Nasdaq’s 2015restructuring program that was announced in 2015.(3) Includes costs of $9 million in 2013 associated with Nasdaq’s 2012 restructuring program that was announced in 2012.Exhibit 21.1SUBSIDIARIESU.S. Subsidiaries1.A.S.A.P. Advisor Services, Inc. (incorporated in New York)2.BoardVantage, Inc. (incorporated in Delaware)3.Boston Stock Exchange Clearing Corporation (incorporated in Massachusetts)4.BWise Internal Control, Inc. (incorporated in New York)5.Channel Capital Group Inc. (incorporated in Delaware)6.Consolidated Securities Source LLC (organized in Delaware)7.Curzon Street Acquisition, LLC (organized in Delaware)8.Dianum, LLC (organized in Delaware)9.Directors Desk, LLC (organized in Delaware)10.Dorsey, Wright & Associates, LLC (organized in Virginia)11.ETC Acquisition Corp. (incorporated in Delaware)12.eVestment Alliance Holdings, Inc. (incorporated in Delaware)13.eVestment Alliance Holdings, LLC (organized in Georgia)14.eVestment Alliance, LLC (organized in Georgia)15.eVestment, Inc. (incorporated in Delaware)16.ExactEquity, LLC (organized in Delaware)17.Execution Access, LLC (organized in Delaware)18.FinQloud LLC (organized in Delaware)19.FINRA/NASDAQ Trade Reporting Facility LLC (organized in Delaware)20.FTEN, Inc. (incorporated in Delaware)21.Fundspire, Inc. (incorporated in Delaware)22.Global Network Content Services, LLC (organized in Florida) 23.GlobeNewswire, Inc. (incorporated in California)24.GraniteBlock, Inc. (incorporated in Delaware)25.Granite Redux, Inc. (incorporated in Delaware)26.Inet Futures Exchange, LLC (organized in Delaware)27.International Securities Exchange Holdings, Inc. (incorporated in Delaware)28.ISE ETF Ventures LLC (organized in Delaware)29.Kleos Managed Services Holdings, LLC (organized in Delaware)30.Kleos Managed Services, L.P. (organized in Delaware)31.Longitude LLC (organized in Delaware)32.Marketwire, Inc. (organized in California)33.MW Holdco (2006) Inc. (organized in Delaware)34.Nasdaq BX, Inc. (incorporated in Delaware)35.Nasdaq Capital Markets Advisory LLC (organized in Delaware)36.Nasdaq Commodities Clearing LLC (organized in Delaware)37.Nasdaq Corporate Services, LLC (organized in Delaware)38.Nasdaq Corporate Solutions, LLC (organized in Delaware)39.NASDAQ Energy Futures, LLC (organized in Delaware)40.Nasdaq Execution Services, LLC (organized in Delaware)41.NASDAQ Futures, Inc. (incorporated in Pennsylvania)42.Nasdaq GEMX, LLC (organized in Delaware)43.NASDAQ Global, Inc. (incorporated in Delaware)44.Nasdaq Information, LLC (organized in Delaware)45.Nasdaq International Market Initiatives, Inc. (incorporated in Delaware)46.Nasdaq ISE, LLC (organized in Delaware)47.Nasdaq MRX, LLC (organized in Delaware)48.NASDAQ OMX BX Equities LLC (organized in Delaware)49.NASDAQ OMX (San Francisco) Insurance LLC (organized in Delaware)50.Nasdaq PHLX LLC (organized in Delaware)51.Nasdaq Technology Services, LLC (organized in Delaware)52.Norway Acquisition LLC (organized in Delaware)53.NPM Securities, LLC (organized in Delaware)54.Operations & Compliance Network, LLC (incorporated in Delaware)55.Public Plan IQ Limited Liability Company (organized in New Jersey)56.SecondMarket Labs, LLC (organized in Delaware)57.SecondMarket Solutions, Inc. (organized in Delaware)58.SMTX, LLC (organized in Delaware)59.Strategic Financial Solutions, LLC (organized in Nevada)60.Sybenetix Inc. (incorporated in Delaware)61.The Nasdaq Options Market LLC (organized in Delaware)62.The NASDAQ Private Market, LLC (organized in California)63.The Nasdaq Stock Market LLC (organized in Delaware)64.The Stock Clearing Corporation of Philadelphia (incorporated in Pennsylvania)65.U.S. Exchange Holdings, Inc. (incorporated in Delaware)Non-U.S. Subsidiaries1.2157971 Ontario Ltd (organized in Canada)2.AB Nasdaq Vilnius (organized in Lithuania) (96.35% owned, directly or indirectly, by Nasdaq, Inc.)3.AS eCSD Expert (organized in Estonia)4.AS Pensionikeskus (organized in Estonia)5.BoardVantage (HK) Limited (organized in Hong Kong)6.BoardVantage (UK) Limited (organized in the United Kingdom)7.BoardVantage Singapore Pte. Limited (organized in Singapore)8.BWise Beheer B.V. (organized in the Netherlands)9.BWise B.V. (organized in the Netherlands)10.BWise Germany GmbH (organized in Germany)11.BWISE Holding B.V. (organized in the Netherlands)12.Clearing Control CC AB (organized in Sweden)13.Curzon Street Holdings Limited (organized in the United Kingdom)14.Eignarhaldsfelagid Verdbrefathing hf. (organized in Iceland)15.Ensoleillement Inc. (organized in Canada)16.eVestment Alliance Australia Pty Ltd (organized in Australia)17.eVestment Alliance Hong Kong Limited (organized in Hong Kong)18.eVestment Alliance (UK) Limited (organized in the United Kingdom)19.Farm Church Holdings ULC (organized in Canada)20.Indxis Ltd (organized in the United Kingdom)21.LLC "SYBENETIX UKRAINE" (organized in Ukraine)22.Longitude S.A. (organized in Luxembourg)23.Marketwire China Holding (HK) Ltd. (organized in Hong Kong)24.Marketwired UK Ltd (organized in the United Kingdom)25.Nasdaq AB (organized in Sweden)26.Nasdaq (Asia Pacific) Pte. Ltd. (organized in Singapore)27.Nasdaq Australia Holding Pty Ltd (organized in Australia)28.Nasdaq Broker Services AB (organized in Sweden)29.Nasdaq Canada Inc. (organized in Canada)30.Nasdaq Clearing AB (organized in Sweden)31.Nasdaq Copenhagen A/S (organized in Denmark)32.Nasdaq Corporate Solutions Canada ULC (organized in Canada)33.Nasdaq Corporate Solutions (India) Private Limited (organized in India)34.Nasdaq Corporate Solutions International Limited (organized in the United Kingdom)35.Nasdaq CSD Iceland hf. (organized in Iceland)36.Nasdaq CSD SE (organized in Latvia)37.Nasdaq CXC Limited (organized in Canada)38.Nasdaq Exchange and Clearing Services AB (organized in Sweden)39.Nasdaq France SAS (organized in France)40.Nasdaq Germany GmbH (organized in Germany)41.Nasdaq Helsinki Ltd (organized in Finland)42.Nasdaq Holding AB (organized in Sweden)43.Nasdaq Holding Denmark A/S (organized in Denmark)44.Nasdaq Holding Luxembourg Sárl (organized in Luxembourg)45.Nasdaq Iceland hf. (organized in Iceland)46.Nasdaq International Ltd (organized in the United Kingdom)47.Nasdaq Korea Ltd. (organized in South Korea)48. Nasdaq Ltd (organized in Hong Kong)49. Nasdaq NLX Ltd (organized in the United Kingdom)50. Nasdaq Nordic Ltd (organized in Finland)51. NASDAQ OMX Europe Ltd (organized in the United Kingdom)52. Nasdaq Oslo ASA (organized in Norway)53. Nasdaq Pty Ltd (organized in Australia)54. Nasdaq Riga, AS (organized in Latvia) (92.98% owned, directly or indirectly, by Nasdaq, Inc.)55. Nasdaq Stockholm AB (organized in Sweden) 56. Nasdaq Tallinn AS (organized in Estonia)57. Nasdaq Technology AB (organized in Sweden)58. Nasdaq Technology Canada Inc. (organized in Canada)59. Nasdaq Technology Energy Systems AS (organized in Norway)60. Nasdaq Technology Italy Srl (organized in Italy)61. Nasdaq Technology (Japan) Ltd (organized in Japan)62. Nasdaq Teknoloji Servisi Limited Sirketi (organized in Turkey)63. Nasdaq Treasury AB (organized in Sweden)64. Nasdaq Vilnius Services UAB (organized in Lithuania)65. OMX Netherlands B.V. (organized in the Netherlands)66. OMX Netherlands Holding B.V. (organized in the Netherlands)67. OMX Treasury Euro AB (organized in Sweden) (99.9% owned, directly or indirectly, by Nasdaq, Inc.)68. OMX Treasury Euro Holding AB (organized in Sweden)69. PerTrac Financial Solutions Hong Kong Limited (organized in Hong Kong)70. Shareholder.com B.V. (organized in the Netherlands)71. SMARTS (Asia) Ltd (organized in China)72. SMARTS Broker Compliance Pty Ltd (organized in Australia)73. SMARTS Market Surveillance Pty Ltd (organized in Australia)74. Sybenetix Limited (organized in the United Kingdom)75. TopQ Software Limited (organized in the United Kingdom)76. Whittaker & Garnier Limited (organized in the United Kingdom)*The list of subsidiaries does not include not-for-profit entities or foreign branches of particular subsidiaries.Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1)Registration Statement (Form S-3 No. 333-209080) of Nasdaq, Inc.,(2)Registration Statement (Form S-8 No. 333-196838) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.)Equity Incentive Plan,(3)Registration Statement (Form S-8 No. 333-167724) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.)Employee Stock Purchase Plan,(4)Registration Statement (Form S-8 No. 333-167723) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.)Equity Incentive Plan,(5)Registration Statement (Form S-8 No. 333-110602) pertaining to The Nasdaq Stock Market, Inc. Equity Incentive Plan,(6)Registration Statement (Form S-8 No. 333-106945) pertaining to the Employment Agreement with Robert Greifeld of TheNasdaq Stock Market, Inc.,(7)Registration Statement (Form S-8 No. 333-76064) pertaining to The Nasdaq Stock Market, Inc. 2000 Employee StockPurchase Plan,(8)Registration Statement (Form S-8 No. 333-72852) pertaining to The Nasdaq Stock Market, Inc. 2000 Employee StockPurchase Plan, and (9)Registration Statement (Form S-8 No. 333-70992) pertaining to The Nasdaq Stock Market, Inc. Equity Incentive Plan;of our reports dated February 28, 2018, with respect to the consolidated financial statements of Nasdaq, Inc. and the effectiveness ofinternal control over financial reporting of Nasdaq, Inc. included in this Annual Report (Form 10-K) of Nasdaq, Inc. for the yearended December 31, 2017.New York, New YorkFebruary 28, 2018Exhibit 24.1POWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ Melissa M. ArnoldiSignaturePOWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ Charlene T. BegleySignaturePOWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ Steven D. BlackSignaturePOWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ Essa KazimSignaturePOWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ Thomas A. KloetSignaturePOWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ John D. RaineySignaturePOWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ Michael R. SplinterSignaturePOWER OF ATTORNEYANNUAL REPORT ON FORM 10-KNASDAQ, INC.Know all men by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and appoints Edward S. Knightand Joan C. Conley, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and agents, each with full power and substitution andresubstitution, for him and in his name, place, and stead, in any case and all capacities to:(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December 31, 2017, includingany and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities Exchange Act of 1934, as amended, and therules thereunder;(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be filed, the Annual Reportwith all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with the United States Securities and ExchangeCommission; and(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact, may be of benefit to, in thebest interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorneys-in-fact on behalf of the undersignedpursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite,necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or coulddo if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such shall lawfully do or cause to be done by virtueof this Power of Attorney and the rights and powers herein granted.IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 28, 2018./s/ Lars R. WedenbornSignatureExhibit 31.1CERTIFICATIONI, Adena T. Friedman, certify that:1. I have reviewed this Annual Report on Form 10-K of Nasdaq, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. /s/ Adena T. Friedman Name:Adena T. Friedman Title:President and Chief Executive Officer Date: February 28, 2018Exhibit 31.2CERTIFICATIONI, Michael Ptasznik, certify that:1. I have reviewed this Annual Report on Form 10-K of Nasdaq, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. /s/ Michael Ptasznik Name:Michael Ptasznik Title:Executive Vice President, Corporate Strategy and ChiefFinancial Officer Date: February 28, 2018Exhibit 32.1Certification of CEO and CFO Pursuant to18 U.S.C. Section 1350as Adopted Pursuant toSection 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report on Form 10-K of Nasdaq, Inc. (the “Company”) for the year ended December 31, 2017 as filed with the Securitiesand Exchange Commission on the date hereof (the “Report”), Adena T. Friedman, as President and Chief Executive Officer of the Company, and Michael Ptasznik,as Executive Vice President, Corporate Strategy and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adoptedpursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of her or his knowledge:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of theCompany. /s/ Adena T. Friedman Name:Adena T. Friedman Title:President and Chief Executive Officer Date:February 28, 2018 /s/ Michael Ptasznik Name:Michael Ptasznik Title:Executive Vice President, Corporate Strategy and ChiefFinancial Officer Date:February 28, 2018 This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-OxleyAct of 2002, be deemed filed by the Company for purposes of § 18 of the Securities Exchange Act of 1934, as amended.

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