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Revenue Recognition | 12 Months Ended
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Dec. 31, 2019
Revenue Recognition and Deferred Revenue [Abstract] |
Revenue Recognition | Revenue Recognition Our primary revenue contract classifications are described below. These categories best represent those with similar economic characteristics of the nature, amount, timing and uncertainty of our revenues and cash flows.
• | Transaction and clearing, net - Transaction and clearing revenues represent fees charged for the performance obligations of derivatives trading and clearing, cash, equity options and fixed income trading, as well as mortgage and technology services. In our derivatives markets, we earn transaction and clearing revenues from both counterparties to each contract that is traded and/or cleared, and in our equity and equity options markets, we receive trade execution fees. In our fixed income trading markets, we earn transaction fees on the trade execution of agency trades, commissions and net markups and markdowns on riskless principal trades. In our mortgage services market we earn fees for the registration and electronic recording of residential mortgage transactions.
The derivatives trading and clearing fees contain two performance obligations: (1) trade execution/clearing novation and (2) risk management of open interest. While we allocate the transaction price between these two performance obligations, since they generally are satisfied almost simultaneously, there is no significant deferral of revenue. Cash trading, equity options, mortgage services and fixed income fees contain one performance obligation related to each transaction which occurs instantaneously, and the revenue is recorded at the point in time of the transaction. Our transaction and clearing revenues are reported net of rebates, except for the NYSE transaction-based expenses. Rebates were $860 million, $844 million and $749 million in 2019, 2018 and 2017, respectively. Transaction and clearing fees can be variable based on trade volume discounts used in the determination of rebates, however virtually all volume discounts are calculated and recorded on a monthly basis. Transaction and clearing fees, as well as any volume discounts rebated to our customers, are calculated and billed monthly in accordance with our published fee schedules. In our NYSE businesses, we make liquidity payments to certain customers, as well as charge routing fees related to orders in our markets which are routed to other markets for execution and recognize those payments as a cost of revenue. In addition, we pay NYSE regulatory oversight fees to the SEC and collect equal amounts from our customers. These are also considered a cost of revenue, and both of these NYSE-related fees are included in transaction-based expenses. Transaction and clearing revenues and the related transaction-based expenses are all recognized in our Trading and Clearing segment. In certain of our revenue share arrangements with third parties we control the delivered contract; in these arrangements we are acting as a principal and the revenue is recorded gross.
• | Data services - Data service revenues represent the following:
◦ | Pricing and analytics services provide global securities evaluations, reference data, market indices, risk analytics, derivatives pricing and other information designed to meet our customers' portfolio management, trading, risk management, reporting and regulatory compliance needs.
◦ | Exchange data and feeds services provide real-time, historical and derived pricing data, order book and transaction information related to our trading venues, as well as data from a broad array of third-party trading venues and news feeds.
◦ | Desktops and connectivity services provide the connection to our exchanges, clearing houses and data centers and comprise hosting, colocation, infrastructure, technology-based information platforms, workstations and connectivity solutions through the ICE Global Network.
The nature and timing of each contract type for the data services above are similar in nature. Data services revenues are primarily subscription-based, billed monthly, quarterly or annually in advance and recognized ratably over time as our performance obligations of data delivery are met consistently throughout the period. Considering these contracts primarily consist of single performance obligations with fixed prices, there is no variable consideration and no need to allocate the transaction price. In certain of our data contracts, where third parties are involved, we arrange for the third party to transfer the services to our customers; in these arrangements we are acting as an agent and revenue is recorded net. All data services fees are included in our Data and Listings segment.
• | Listings - Listings revenues include original and annual listings fees, and other corporate action fees. Each distinct listing fee is allocated to multiple performance obligations including original and incremental listing and investor relations services, as well as a customer’s material right to renew the option to list on our exchanges. In performing this allocation, the standalone selling price of the listing services is based on the original and annual listing fees and the standalone selling price of the investor relations services is based on its market value. All listings fees are billed upfront and the identified performance obligations are satisfied over time. Revenue related to the investor relations performance obligation is recognized ratably over the period these services are provided, with the remaining revenue recognized ratably over time as customers continue to list on our exchanges. Listings fees related to other corporate actions are considered contract modifications of our listing contracts and are recognized ratably over time as customers continue to list on our exchanges. All listings fees are recognized in our Data and Listings segment.
• | Other revenues - Other revenues primarily include interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, technology development fees, exchange membership fees and agricultural grading and certification fees. Generally, fees for other revenues contain one performance obligation. Because these contracts primarily consist of single performance obligations with fixed prices, there is no variable consideration and no need to allocate the transaction price. Services for other revenues are primarily satisfied at a point in time. Therefore, there is no need to allocate the fee and no deferral results as we have no further obligation to the customer at that time. Other revenues are recognized in our Trading and Clearing segment.
The following table depicts the disaggregation of our revenue according to business line and segment (in millions). Amounts here have been aggregated as they follow consistent revenue recognition patterns, and are consistent with the segment information in Note 18:
| Trading & Clearing Segment |  | Data & Listings Segment |  | Total Consolidated
Year ended December 31, 2019 |  |  |  |  |
Transaction and clearing, net | $ | 3,627 |  |  | $ | — |  |  | $ | 3,627 |
Data services | — |  |  | 2,211 |  |  | 2,211 |
Listings | — |  |  | 449 |  |  | 449 |
Other revenues | 260 |  |  | — |  |  | 260 |
Total revenues | 3,887 |  |  | 2,660 |  |  | 6,547 |
Transaction-based expenses | 1,345 |  |  | — |  |  | 1,345 |
Total revenues, less transaction-based expenses | $ | 2,542 |  |  | $ | 2,660 |  |  | $ | 5,202 |
Timing of Revenue Recognition |  |  |  |  |
Services transferred at a point in time | $ | 2,194 |  |  | $ | — |  |  | $ | 2,194 |
Services transferred over time | 348 |  |  | 2,660 |  |  | 3,008 |
Total revenues, less transaction-based expenses | $ | 2,542 |  |  | $ | 2,660 |  |  | $ | 5,202 |
| Trading & Clearing Segment |  | Data & Listings Segment |  | Total Consolidated
Year ended December 31, 2018 |  |  |  |  |
Transaction and clearing, net | $ | 3,483 |  |  | $ | — |  |  | $ | 3,483 |
Data services | — |  |  | 2,115 |  |  | 2,115 |
Listings | — |  |  | 444 |  |  | 444 |
Other revenues | 234 |  |  | — |  |  | 234 |
Total revenues | 3,717 |  |  | 2,559 |  |  | 6,276 |
Transaction-based expenses | 1,297 |  |  | — |  |  | 1,297 |
Total revenues, less transaction-based expenses | $ | 2,420 |  |  | $ | 2,559 |  |  | $ | 4,979 |
Timing of Revenue Recognition |  |  |  |  |
Services transferred at a point in time | $ | 2,074 |  |  | $ | — |  |  | $ | 2,074 |
Services transferred over time | 346 |  |  | 2,559 |  |  | 2,905 |
Total revenues, less transaction-based expenses | $ | 2,420 |  |  | $ | 2,559 |  |  | $ | 4,979 |
| Trading & Clearing Segment |  | Data & Listings Segment |  | Total Consolidated
Year ended December 31, 2017 |  |  |  |  |
Transaction and clearing, net | $ | 3,131 |  |  | $ | — |  |  | $ | 3,131 |
Data services | — |  |  | 2,084 |  |  | 2,084 |
Listings | — |  |  | 426 |  |  | 426 |
Other revenues | 202 |  |  | — |  |  | 202 |
Total revenues | 3,333 |  |  | 2,510 |  |  | 5,843 |
Transaction-based expenses | 1,205 |  |  | — |  |  | 1,205 |
Total revenues, less transaction-based expenses | $ | 2,128 |  |  | $ | 2,510 |  |  | $ | 4,638 |
Timing of Revenue Recognition |  |  |  |  |
Services transferred at a point in time | $ | 1,813 |  |  | $ | — |  |  | $ | 1,813 |
Services transferred over time | 315 |  |  | 2,510 |  |  | 2,825 |
Total revenues, less transaction-based expenses | $ | 2,128 |  |  | $ | 2,510 |  |  | $ | 4,638 |
The Trading and Clearing segment revenues above include $247 million, $248 million, and $226 million in 2019, 2018 and 2017, respectively, for services transferred over time related to risk management of open interest performance obligations. A majority of these performance obligations are performed over a short period of time of one month or less. Beginning in the three months ended June 30, 2019, we have reflected amounts owed under certain third-party revenue share arrangements as technology and communication operating expenses rather than as had been previously recorded net within transaction and clearing revenues. These are included within our Trading and Clearing segment. Deferred Revenue Our contract liabilities, or deferred revenue, represent consideration received that is yet to be recognized as revenue. Total deferred revenue was $201 million as of December 31, 2019, including $129 million in current deferred revenue and $72 million in other non-current liabilities. Total deferred revenue was $217 million as of December 31, 2018, including $135 million in current deferred revenue and $82 million in other non-current liabilities. See Note 5 for a description of our annual listing, original listing, other listings and data services revenues and the revenue recognition policy for each of these revenue streams. The changes in our deferred revenue during 2019 and 2018 are as follows (in millions):
| Annual Listing Revenue |  | Original Listing Revenues |  | Other Listing Revenues |  | Data Services and Other Revenues |  | Total
Deferred revenue balance at January 1, 2018 | $ | — |  |  | $ | 25 |  |  | $ | 98 |  |  | $ | 93 |  |  | $ | 216 |
Additions | 384 |  |  | 24 |  |  | 38 |  |  | 366 |  |  | 812 |
Amortization | (384 | ) |  | (24 | ) |  | (36 | ) |  | (367 | ) |  | (811 | )
Deferred revenue balance at December 31, 2018 | — |  |  | 25 |  |  | 100 |  |  | 92 |  |  | 217 |
Additions | 384 |  |  | 17 |  |  | 36 |  |  | 394 |  |  | 831 |
Amortization | (384 | ) |  | (23 | ) |  | (42 | ) |  | (398 | ) |  | (847 | )
Deferred revenue balance at December 31, 2019 | $ | — |  |  | $ | 19 |  |  | $ | 94 |  |  | $ | 88 |  |  | $ | 201 |
Included in the amortization recognized in 2019, $122 million related to the deferred revenue balance as of January 1, 2019. Included in the amortization in 2018, $114 million related to the deferred revenue balance as of January 1, 2018. As of December 31, 2019, we estimate that our deferred revenue will be recognized in the following years (in millions):
| Original Listing Revenues |  | Other Listing Revenues |  | Data Services and Other Revenues |  | Total
2020 | $ | 15 |  |  | $ | 31 |  |  | $ | 83 |  |  | $ | 129 |
2021 | 4 |  |  | 24 |  |  | 4 |  |  | 32 |
2022 | — |  |  | 21 |  |  | 1 |  |  | 22 |
2023 | — |  |  | 11 |  |  | — |  |  | 11 |
2024 | — |  |  | 6 |  |  | — |  |  | 6 |
Thereafter | — |  |  | 1 |  |  | — |  |  | 1 |
Total | $ | 19 |  |  | $ | 94 |  |  | $ | 88 |  |  | $ | 201 |

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