Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Q4 2015 Earnings Presentation
26 slides from Intercontinental Exchange's earnings presentation, Feb 4, 2016
Slide 1: Fourth Quarter & Full Year 2015 Earnings Supplement
(NYSE: ICE) Fourth Quarter & Full Year 2015 Earnings Supplement February 4, 2016
Slide 2: Forward-Looking Statement and Legends
Forward-Looking Statement and Legends CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS This presentation may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding ICE’s business that are
Slide 3: ICE Fourth Quarter 2015 Results
ICE Fourth Quarter 2015 Results Participants: Jeff Sprecher Chuck Vice Scott Hill Chairman & CEO President & Chief Chief Financial Officer Chairman, NYSE Operating Officer Investor Relations: Kelly Loeffler, CFA SVP, Corporate Comm., Marketing & Investor Relations kelly.loeffler@theice.com Isabel Ja
Slide 4: ICE 2015 Financial Performance
ICE 2015 Financial Performance ▪ 2015 revenue of $3.3B +8% y/y ▪ Adjusted earnings of $1.4B +23% y/y Transactions, net Data Services Listings Flat $1.9B $871MM $405MM 2,000 900 6% 450 % +2 +10 375 1,600 $ (Millions) $ (Millions) $ (Millions) 600 300 1,200 225 800 300 150 400 75 0 0 0 2014 2015 2014
Slide 5: ICE 4Q15 Financial Performance
ICE 4Q15 Financial Performance INCOME STATEMENT HIGHLIGHTS (in millions except per share amounts) 4Q15 4Q14 % Chg Net revenues $875 $800 9% Adj. Operating Expenses $364 $340 7% Adj. Operating Income $511 $460 11% Adj. Operating Margin 58% 58% - Adj. Net Income from Cont. Ops attributable to ICE $369
Slide 6: 4Q15 Consolidated Net Revenue
4Q15 Consolidated Net Revenue Net revenues (in millions) 4Q15 4Q14 % Chg Commodities $262 $254 3% Financials $150 $169 (10)% Cash Equities, net $58 $56 3% Other $46 $37 22 % Transaction & Clearing Revenues, net(1) $516 $516 — Data Services(2) $257 $189 35 % 10% Data Services, excluding 4Q15 acquisit
Slide 7: 4Q15 Revenue and Adjusted Expense Detail
4Q15 Revenue and Adjusted Expense Detail ▪ Data Services revenues would be 43% on a pro-forma basis (see appendix slide 20) ▪ Expenses, excluding Interactive Data and Trayport would have declined 2% y/y 4Q15 Revenue 4Q15 Adj. Operating Expense (in Millions) (in Millions) Other: 5% Adj. D&A: Data SG&
Slide 8: Solid Cash Generation & Capital Return
Solid Cash Generation & Capital Return ▪ $1.3B in operating cash flow in 2015; y/y variation due to around $300 million of timing differences related to integration, regulatory and tax payments ▪ 2015 capital return of ~$1B; $660MM in share buybacks and $331MM in dividends ▪ Announced 13% increase i
Slide 9: Solid Capital Structure and Returns
Solid Capital Structure and Returns (2) TTM ROIC ▪ ROIC of 8.4% continued to expand 9 8.4% and is above cost of capital (~7%) 8.2% 8 7.6% ICE ▪ $627MM in unrestricted cash at 7 WACC December 31 5.8% 6 % (Percent) ▪ Total debt $7.3B, including $2.6B in 5 commercial paper 4 (1) 3 ▪ Adjusted debt-to-EB
Slide 10: Record Annual Revenues Driven by Strategic Growth
Record Annual Revenues Driven by Strategic Growth ICE Consolidated Net Revenues $3.3B, +8% y/y 3,200 2,800 % 2,400 30 GR 63% 5 CA -’1 2,000 ’06 ($ millions) 1,600 1,200 800 400 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Transaction & Clearing Data Services Listing Other 10
Slide 11: Select Growth Drivers for 2016
Select Growth Drivers for 2016 Data & Listings ▪ Comprehensive data offering across major asset class ▪ Accelerate Interactive Data's historic growth rate; contributes to continued solid growth in data & listings businesses ▪ Broad distribution, connectivity and new data products ▪ Leveraging new cu
Slide 12: Leading Benchmarks For Global Energy Markets
Leading Benchmarks For Global Energy Markets ▪ 2015 energy revenue +7% y/y, ADV +7% y/y; record oil revenue of $468M, +14% y/y ▪ 19 years of consecutive volume records in ICE Brent futures & options; record OI in 2015 ▪ Secular trends for hedging and clearing services, as well as price volatility an
Slide 13: ICE Data Services
ICE Data Services ▪ Diverse data services & analytics across all major asset classes: energy and ag commodities, interest rates, equity indices, FX, cash equities and equity options, bonds and credit derivatives ▪ Secular trends driving demand for data, connectivity and capacity, including passive i
Slide 14: Interactive Data & ICE: One Team to Serve Customers
Interactive Data & ICE: One Team to Serve Customers ▪ Interactive Data is a leading, global data provider for a range of fixed income products, as well as connectivity services ▪ Transaction closed Dec. 14, many initiatives already underway: Created new ICE U.S. Treasury Index Series™: ◦ ICE and Int
Slide 15: NYSE Group Listings
NYSE Group Listings Global IPO leader across industries, including Tech, ETFs, REITs 2015 Listings Revenue Leader in 2015 Global Proceeds Raised $137B % 140 400 +10 120 350 300 100 $ (Billions) 250 80 200 60 150 40 100 50 20 0 0 2014 2015 NYSE Hong Kong NDAQ LSE Shanghai 15
Slide 16: Record 2015 EPS Performance
Record 2015 EPS Performance ▪ Record adjusted EPS(1) +26% y/y on net revenues +8% y/y for 2015 ▪ Executing on strategic growth initiatives, while investing to drive returns on capital ▪ Returned ~$1 billion to shareholders; over $2 billion since 4Q13 $12.15 $9.63 0% G R2 5 CA $8.38 - '1 '06 $7.52 $6
Slide 17: Appendix
APPENDIX INTERCONTINENTAL EXCHANGE 17
Slide 18: 4Q15 Pro-forma Revenue and Adj. Operating Expenses Mix
4Q15 Pro-forma Revenue and Adj. Operating Expenses Mix (1) (2) 4Q15 Pro-forma Revenue 4Q15 Pro-forma Adj. Operating Expense (in Millions) (in Millions) Other: 4% Adj. D&A: 14% SG&A and $46 Rent: 12% $70 $412 Global $60 $244 $466 Derivatives: Prof Services & (2) 39% Acq-Related Data Costs: 9% $45 Ser
Slide 19: Financial Guidance
Financial Guidance 2016 Guidance ICE expects: ▪ Adjusted Operating Expenses(1) of $2.000-2.030B, including 1Q16 operating expenses of $490-500MM (includes synergies, investments and acquisitions) ◦ Includes ~$50MM in NYSE & ~$25MM in Interactive Data expense synergies ◦ Includes ~$45MM largely relat
Slide 20: Expense Synergy Update
Expense Synergy Update ▪ Pro-forma 2015 Non-GAAP Operating expense of $2.011B: ICE, $1,333M; IDC, $636M; Trayport, $42M ▪ 2016 Total ICE Non-GAAP Operating expense Guidance: $2.000B - $2.030B ▪ Embedded in 2016 Guidance: Synergies of ~$50MM for NYSE and ~$25MM for Interactive Data; Investments inclu
Slide 21: Debt Structure
Principal amount of debt outstanding As of December 31, Debt Structure (in millions) 2015 ▪ Interactive Data financing structured through $2.5B Commercial Paper $2,593 of senior notes and commercial paper issuance 2.00% NYX Senior Notes (Oct. 2017) $850 ▪ Significant deleveraging will occur through
Slide 22: ICE Summary Balance Sheet
ICE Summary Balance Sheet In millions BALANCE SHEET 12/31/2015 12/31/2014 CHANGE Assets ▪ $627MM unrestricted cash Unrestricted Cash & ST Inv $656 $1,852 $(1,196) Other Current Assets 52,657 48,380 4,277 ▪ Total debt of $7.3B; Adj. Debt-to- Current Assets 53,313 50,232 3,081 EBITDA(1) of 2.8x PPE (n
Slide 23: Adjusted Net Income from Continuing Ops and EPS from Continuing Ops
Adjusted Net Income from Continuing Ops and EPS from Continuing Ops In millions (except per share amounts) 3 Months 3 Months 12 Months 12 Months Ended Ended Ended Ended 12/31/15 12/31/14 12/31/15 12/31/14 Income from continuing operations $ 373 $294 $1,295 $1,005 Add: NYSE and Interactive Data trans
Slide 24: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation In millions 3 Months 3 Months 12 Months 12 Months Ended 12/31/15 Ended 12/31/14 Ended 12/31/15 Ended 12/31/14 Total revenues, less transaction-based expenses $875 $800 $3,338 $3,092 Total operating expenses 457 400 1,588
Slide 25: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation In millions 12 Months Ended 12/31/15 Adjusted net income $1,359 Add: Income tax expense 358 Add: Income tax expense adjustment on Non-GAAP Items 158 Less: Other income, net(1) (15) Add: Interest expense(1) 92 Add: Depreciation and amortization(1) 234 Adjusted EBITDA fr
Slide 26: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation In millions 3 Months 3 Months 12 Month 12 Month Ended Ended Ended Ended 12/31/15 12/31/14 12/31/15 12/31/14 Income from continuing operations before income taxes $391 $412 $1,653 $1,407 Less: Income tax expense (18) (118) (358) (402) Net Income from continu
Intercontinental Exchange — Q4 2015 Earnings Presentation on 6ix