Intercontinental Exchange, Inc.ICE
Intercontinental Exchange, Inc. Income Taxes Disclosure
Income Taxes
Income before income taxes and the income tax provision consisted of the following (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Income before income taxes | |||||||||||||||||
| Domestic | $ | 1,746 | $ | 1,291 | $ | 1,016 | |||||||||||
| Foreign | 2,600 | 2,337 | 1,878 | ||||||||||||||
Total | $ | 4,346 | $ | 3,628 | $ | 2,894 | |||||||||||
Income tax provision | |||||||||||||||||
Current tax expense: | |||||||||||||||||
| Federal | $ | 185 | $ | 212 | $ | 287 | |||||||||||
| State | 39 | 158 | 27 | ||||||||||||||
| Foreign | 670 | 598 | 471 | ||||||||||||||
Total | $ | 894 | $ | 968 | $ | 785 | |||||||||||
| Deferred tax expense/(benefit): | |||||||||||||||||
| Federal | $ | 30 | $ | (47) | $ | (124) | |||||||||||
| State | 63 | (86) | (197) | ||||||||||||||
| Foreign | (11) | (9) | (8) | ||||||||||||||
Total | $ | 82 | $ | (142) | $ | (329) | |||||||||||
| Total income tax expense | $ | 976 | $ | 826 | $ | 456 | |||||||||||
We adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09, on a prospective basis beginning with the year ended December 31, 2025. A reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate for the year ended December 31, 2025 is presented accordingly as follows (dollar amounts in millions):
| Year Ended December 31, 2025 | |||||||||||
| Amount | Percent | ||||||||||
| Statutory federal income tax rate | $ | 913 | 21 | % | |||||||
| State and local income taxes, net of federal benefit | 119 | 3 | |||||||||
| Effect of cross border tax laws: | |||||||||||
| Foreign-derived intangible income | (58) | (1) | |||||||||
| Other | (3) | — | |||||||||
| Tax credits | (24) | (1) | |||||||||
| Changes in valuation allowance | (19) | (1) | |||||||||
| Nontaxable or nondeductible items | — | — | |||||||||
| Other reconciling items | (6) | — | |||||||||
| Unrecognized tax benefits | (61) | (1) | |||||||||
| Foreign tax effects: | |||||||||||
| United Kingdom: | |||||||||||
| Statutory tax rate difference | 95 | 2 | |||||||||
| Other | 1 | — | |||||||||
| Other jurisdictions | 19 | — | |||||||||
| Total provision for income taxes | $ | 976 | 22 | % | |||||||
The following table reconciles the U.S. federal statutory income tax rate to our effective income tax rates for the years ended December 31, 2024 and 2023 based on the required disclosure prior to our adoption of ASU 2023-09:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Statutory federal income tax rate | 21 | % | 21 | % | |||||||
| State and local income taxes, net of federal benefit | 3 | 2 | |||||||||
| Foreign tax rate differential | 3 | 2 | |||||||||
Current year tax benefit from foreign derived intangible income | (2) | (2) | |||||||||
| Unrecognized tax benefits | — | (1) | |||||||||
| State apportionment changes | (1) | (6) | |||||||||
| Federal research tax credits | (1) | (1) | |||||||||
| Other | — | 1 | |||||||||
| Total provision for income taxes | 23 | % | 16 | % | |||||||
The states and local jurisdictions that contribute to the majority (greater than 50%) of the state tax effects in 2025 are Florida and New York State. The jurisdictions accounting for 5% or more of the total cash paid for income taxes for the year ended December 31, 2025 of $1.1 billion, include U.S. Federal $300 million, U.S. States $74 million, U.K. $615 million, and Other Foreign $79 million.
The Organisation for Economic Cooperation and Development, or OECD, Global Anti-Base Erosion Pillar Two minimum tax rules, or Pillar Two, which generally provide for a minimum effective tax rate of 15%, are intended to apply to tax years beginning in 2024. The EU member states and many other countries, including the U.K., our most significant non-U.S. jurisdiction, have committed to implement or have already enacted legislation adopting the Pillar Two rules. In July 2023, the U.K. enacted the U.K. Finance Act 2023, effective as of January 1, 2024, which included provisions to implement certain portions of the OECD Global Anti-Base Erosion Pillar Two minimum tax rules, and included an election to apply a transitional safe harbor to extend certain effective dates to accounting periods commencing on or before December 31, 2026 and ending on or before June 30, 2028. These Pillar Two rules, including those in the U.K., did not have a material impact on our income tax provision as of December 31, 2025, 2024, or 2023.
Deferred Tax Assets and Liabilities
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Certain unrecognized tax benefits associated with our acquisition of Ellie Mae are presented as a reduction to related deferred tax assets in our consolidated balance sheets. The following table summarizes the significant components of our deferred tax assets and liabilities as of December 31, 2025 and 2024 (in millions):
As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Deferred tax assets: | |||||||||||
| Deferred and stock-based compensation | $ | 93 | $ | 93 | |||||||
| Liability reserve | 59 | 74 | |||||||||
Tax credits | 12 | 10 | |||||||||
| Loss carryforward | 141 | 207 | |||||||||
Deferred revenue | 23 | 23 | |||||||||
| Lease liability | 134 | 66 | |||||||||
| Property and equipment | — | 178 | |||||||||
| Other | — | 6 | |||||||||
| Total | 462 | 657 | |||||||||
| Valuation allowance | (140) | (200) | |||||||||
| Total deferred tax assets, net of valuation allowance | $ | 322 | $ | 457 | |||||||
Deferred tax liabilities: | |||||||||||
| Property and equipment | $ | (26) | $ | — | |||||||
| Intangible assets | (4,064) | (4,239) | |||||||||
| Right of use assets | (112) | (46) | |||||||||
| Equity investments | (85) | (76) | |||||||||
| Other | (33) | — | |||||||||
| Total deferred tax liabilities | $ | (4,320) | $ | (4,361) | |||||||
| Net deferred tax liabilities | $ | (3,998) | $ | (3,904) | |||||||
Reported as: | |||||||||||
| Net non-current deferred tax liabilities | $ | (3,998) | $ | (3,904) | |||||||
A reconciliation of the beginning and ending amount of deferred income tax valuation allowance is as follows (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Beginning balance of deferred income tax valuation allowance | $ | 200 | $ | 166 | $ | 92 | |||||||||||
Charges against goodwill | — | (27) | 102 | ||||||||||||||
| Increases/(decreases) | (60) | 61 | (28) | ||||||||||||||
Ending balance of deferred income tax valuation allowance | $ | 140 | $ | 200 | $ | 166 | |||||||||||
We recognize valuation allowances on deferred tax assets if, based on the weight of the evidence, we believe that it is more likely than not that some or all of the deferred tax assets will not be realized. We recorded a valuation allowance for deferred tax assets of $140 million and $200 million as of December 31, 2025 and 2024, respectively. The net decrease of our valuation allowance in 2025 is primarily due to corresponding decreases of related capital loss deferred tax assets and additional capital gains recognized in the current year that can utilize capital loss carryovers. The net increase of our valuation allowance in 2024 is primarily due to certain tax attributes that are not more likely than not to be utilized prior to expiration in the future, partially offset by purchase accounting adjustments recorded through goodwill related to the Black Knight acquisition. The increase of valuation allowance charged against goodwill in 2023 is primarily related to certain deferred tax assets arising from the Black Knight acquisition that we believe are not more likely than not to be realized in the foreseeable future. The decrease of valuation allowance in 2023 is primarily due to certain foreign subsidiaries being liquidated in the current period with associated deferred tax assets being extinguished.
The majority of our undistributed earnings of our non-U.S. subsidiaries for the period from January 1, 2018 through December 31, 2022 were subject to the Global Intangible Low-Taxed Income provisions and, as such, were subject to immediate U.S. income taxation and can be distributed to the U.S. with no material additional income tax consequences in the future. After December 31, 2022, due to the application of the high-tax exception to Global Intangible Low-Taxed Income, the majority of the earnings of our non-U.S. subsidiaries are not subject to immediate U.S. income taxation.
However, the majority of these post-December 31, 2022 foreign earnings can also be distributed to the U.S. with no material additional U.S. income tax consequences due to the availability of full dividends received deductions.
We remain indefinitely reinvested in our non-U.S. subsidiaries’ cumulative undistributed earnings as of December 31, 2025 that are not subject to the Global Intangible Low-Taxed Income provisions and would be subject to additional U.S. income tax consequences upon distribution to the U.S. Accordingly, no provision for U.S. federal and state income taxes has been made in the accompanying consolidated financial statements. Further, a determination of the unrecognized deferred tax liability is not practicable.
As of December 31, 2025 and 2024, we have gross U.S. federal net operating loss carryforwards of $94 million and $92 million, respectively, and gross state and local net operating loss carryforwards of $138 million and $251 million for 2025 and 2024, respectively. In addition, we had $63 million and $127 million of deferred tax assets related to capital losses as of December 31, 2025 and 2024, respectively. These net operating loss carryforwards and credit carryforwards are available to offset future taxable income until they begin to expire in 2027. In addition, as of December 31, 2025 and 2024, we have gross foreign net operating loss carryforwards of $228 million and $219 million, respectively. The majority of the gross foreign net operating losses are not expected to be realizable in future periods and have related valuation allowances.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Beginning balance of unrecognized tax benefits | $ | 274 | $ | 268 | $ | 247 | |||||||||||
| Additions related to acquisitions | — | 9 | 25 | ||||||||||||||
| Additions based on tax positions taken in current year | 20 | 32 | 31 | ||||||||||||||
| Additions based on tax positions taken in prior years | 2 | 1 | 33 | ||||||||||||||
| Reductions based on tax positions taken in prior years | (58) | (9) | (18) | ||||||||||||||
| Reductions resulting from statutes of limitations lapses | (32) | (27) | (7) | ||||||||||||||
| Reductions related to settlements with taxing authorities | — | — | (43) | ||||||||||||||
| Ending balance of unrecognized tax benefits | $ | 206 | $ | 274 | $ | 268 | |||||||||||
As of December 31, 2025 and 2024, the balance of unrecognized tax benefits which would, if recognized, affect our effective tax rate was $171 million and $228 million, respectively. Of the $206 million in unrecognized tax benefits as of December 31, 2025, $174 million is recorded within other non-current liabilities and $32 million is recorded within other current liabilities.
We recognize interest and penalties accrued on income tax uncertainties as a component of income tax expense/benefit. In 2025, 2024 and 2023, we recognized a benefit of $5 million, an expense of $14 million and a benefit of $30 million, respectively, for interest and penalties. As of December 31, 2025 and 2024, accrued interest and penalties were $42 million and $47 million, respectively. Of the $42 million in accrued interest and penalties as of December 31, 2025, $30 million is recorded within other non-current liabilities and $12 million is recorded within other current liabilities in the accompanying consolidated balance sheet.
We or one of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The following table summarizes open tax years by major jurisdiction:
| Jurisdiction | Open Tax Years | ||||
| U.S. Federal | 2021 - 2025 | ||||
| U.S. States | 2015 - 2025 | ||||
| U.K. | 2023 - 2025 | ||||
We have filed amended U.S. federal returns for the years prior to 2021 to claim additional credits and deductions and the associated refund claims are subject to review by the U.S. taxing authorities. Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, including interest and penalties, have been provided for any adjustments expected to result from open tax years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 5, 2026 | Showing above |
| 2024 | Feb 6, 2025 | |
| 2023 | Feb 8, 2024 | |
| 2022 | Feb 2, 2023 | |
| 2021 | Feb 3, 2022 | |
| 2020 | Feb 4, 2021 | |
| 2019 | Feb 6, 2020 | |
| 2018 | Feb 7, 2019 | |
| 2017 | Feb 7, 2018 | |
| 2016 | Feb 7, 2017 | |
| 2015 | Feb 4, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.