Slide 1: Fourth Quarter & Full Year 2013 Earnings Presentation
IntercontinentalExchange Fourth Quarter & Full Year 2013 Earnings Presentation February 11, 2014
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 IntercontinentalExchang
Slide 3: Earnings Conference Call - Fourth Quarter 2013
Earnings Conference Call - Fourth Quarter 2013 Jeffrey C. Sprecher Chairman and Chief Executive Officer Scott A. Hill Chief Financial Officer Charles A. Vice President, Chief Operating Officer Kelly Loeffler, CFA SVP, Corporate Isabel Janci Melanie Skijus, CFA Communications, Marketing & Sr. Directo
Slide 4: 2013 & Fourth Quarter 2013 Key Takeaways
2013 & Fourth Quarter 2013 Key Takeaways ▪ 8th consecutive year of record revenue & adjusted earnings ▪ 2013 net revenue up 23%, adjusted net income attributable to ICE(1) grew 16% & adjusted EPS(1) grew 8% ▪ 4Q13 net revenue of $612MM and adjusted EPS(1) of $2.00, up 9% ▪ Record volume and Open Int
Slide 5: Fourth Quarter 2013 Financial Performance
Fourth Quarter 2013 Results include NYSE contribution from November 13, 2013 4Q13 Financial Performance INCOME STATEMENT (in millions) 4Q13 4Q12 Total Net Revenues $612 $324 ▪ Record quarterly net revenue of $612MM Operating Expenses $449 $131 ◦ Brent revenue of $50MM, +3% y/y Adj. Operating Expense
Slide 6: Commitment to Execution and Growth
Commitment to Execution and Growth Record Financial Performance in 2013 +23% y/y ▪ Net revenue of $1.67B ▪ Adj. operating expenses(1) of $715MM ▪ Adj. diluted EPS(1) of $8.17, +8% y/y Strong 2013 Operational Performance ▪ Average daily futures volume (ADV) of 9.8MM contracts, +6% y/y +16% y/y ◦ Bren
Slide 7: 2013 Pro Forma Net Revenue Diversification
2013 Pro Forma Net Revenue Diversification 2013 Revenue Mix 2013 Revenue Mix Post Euronext & NYSE technology businesses Market Data Other(3) Tech Services & Market Data Other 14% 14% 13% 16% Listings 12% 5% Listings Equity 12% Derivatives 10% Cash 6% Cash Trading Trading 13% 44% 4% Financials 5% 32%
Slide 8: Futures and Options - Fourth Quarter 2013
Futures and Options - Fourth Quarter 2013 Revenue Breakdown Futures and Options Revenue Ags & Metals ▪ 4Q13 derivatives rev of $287MM, +24% y/y ◦ Brent revenue of $50MM, +3% y/y 13% ◦ NA Nat Gas revenue of $44MM, -5% y/y ◦ Ag revenue of $38MM, +20% y/y Energy Financials ◦ Interest rate revenue of $2
Slide 9: Interest Rate Futures & Options
Interest Rate Futures & Options ▪ Leader in European short-term interest rates, building mid-curve liquidity ▪ Acquired interest rate franchise at a cyclical low ▪ ADV for Liffe's STIR benchmark, the Euribor futures contract, grew 32% y/y in 2013 ▪ 2013 global interest rate ADV grew 25% compared to
Slide 10: Credit Derivatives - Fourth Quarter 2013
Credit Derivatives - Fourth Quarter 2013 ▪ 4Q13 CDS revenues of $34MM; 2013 rev of $145MM ◦ $14MM from Creditex, -15% y/y ◦ $19MM from CDS clearing, +2% y/y ▪ Through Jan 31, $48T in CDS cleared, $1.5T Open Interest Clearing Execution ◦ ICE Clear Credit leader in buy-side clearing with $4.4T cleared
Slide 11: Expense Synergies
Expense Synergies ▪ Expect to achieve 70% synergies on a run rate basis exiting 2014 ▪ Expect to achieve 90% of synergies achieved on a run rate basis exiting 2015 ▪ 1Q expense guidance of between $470 to $480 million reflects run rate achievement of over $220 million Annual Run Rate Synergies Descr
Slide 12: Strong Cash Flow and Capital Return
Strong Cash Flow and Capital Return Solid Cash Position $735MM in operating cash flow in 2013 Flat y/y $961MM in unrestricted cash and cash equivalents at 12/31/13 Capital Management $5B in total debt, 2.5x debt-to-adj. EBITDA(2) Rapid projected deleveraging Flexibility to pursue additional growth o
Slide 13: Guidance & Reporting
Guidance & Reporting ▪ Guidance includes Euronext but excludes certain NYSE technology businesses that are expected to be reported as discontinued operations in the future ▪ For 1Q14, we will report in two segments: ICE & Euronext Guidance Key Metrics (1) 1Q14 2014 Expense synergies Achieve 70% of $
Slide 14: Expected Operating Margin Evolution
Expected Operating Margin Evolution Strategic restructuring, progress on synergy achievement expected to drive lean operating model ~57-58% ~60% ~54-55% ~48-49% Achieve 100% 45% synergies exiting '16 42% Achieve 90% synergies exiting '15 Achieve 70% synergies exiting '14 • NYXT Divestitures • Eurone
Slide 15: 2013 Progress Report – Delivering on Growth
2013 Progress Report – Delivering on Growth Five Themes in 2013 Progress Report on the Year • Total OI of 116MM contracts • Successful move to Brent NX (1,540 positions); record OI Commodity market expansion across energy and ag markets • Record volumes in interest rates through new products, option
Slide 16: Pre-eminent Trading & Listing Business
Pre-eminent Trading & Listing Business 2013 Global IPO Capital Raising - Top 5 by NYSE Listings Proceeds (in billions) ▪ #1 in global IPO and follow-on proceeds ▪ More IPO and follow-on proceeds raised than next three exchanges combined ▪ Technology Leadership; ~54% share of technology IPOs ▪ Contin
Slide 17: 2014 Strategic Priorities
2014 Strategic Priorities 1. Drive growth in our global financial and commodities futures markets 2. Build upon leading clearing position through operational and capital efficiencies 3. Advance NYSE Euronext integration Achieve cost synergies and margin expansion Transition Liffe products to ICE Dev
Slide 18: Euronext & NYSE technology businesses Update
Euronext & NYSE technology businesses Update Euronext key updates: NYSE technology businesses key updates: ▪ Established independent management team ▪ Working with bankers on business divestitures and Board of Directors ▪ Good interest across businesses ▪ Structured business with independent ▪ Restr
Slide 19: Global Network of Exchanges & Clearing Houses
Global Network of Exchanges & Clearing Houses Competitive Advantages: Regulatory Update: ▪ Leading global network of 17 exchanges and 6 ▪ Dodd Frank clearing houses on 4 continents ◦ ICE's SEF platform ICE Swap Trade launched Oct 2nd for credit & energy swaps; MAT/SEF trading as of Feb15th ▪ Global
Slide 20: Track Record of Consistent Growth
Track Record of Consistent Growth ▪ 8th consecutive year of record revenues and adjusted EPS(1) ▪ 4-year earnings CAGR of 18%; adjusted EPS(1) growth of 8% y/y ▪ Focus on growth; strategic road map in place +8% y/y (1) 20 (1) 2013 reflects a non-GAAP figure. Please refer to slide 24 for a reconcilia
Slide 21: Appendix
APPENDIX 21
Slide 22: Debt Structure
Debt Structure Principal amount of debt outstanding As of December 31, (in millions) 2013 ▪ Target of at or below 1.5x Adjusted Debt-to- EBITDA(1) by the back half of 2015 5.375% NYX Senior Notes (2015) $1,269 Bank Term Loans (2014-2016) $378 ▪ Refinanced Bank Debt with Commercial Paper Commercial P
Slide 23: ICE Summary Balance Sheet
ICE Summary Balance Sheet In millions BALANCE SHEET 12/31/13 12/31/12 CHANGE Assets Leverage with debt to trailing Adjusted EBITDA(1) of 2.5x as of Unrestricted Cash & ST Inv. $1,035 $1,612 -$577 12/31/13 Other Current Assets 43,224 32,138 11,086 Current Assets 44,259 33,750 $10,509 Unrestricted cas
Slide 24: Non-GAAP Net Income Attributable to ICE & EPS Reconciliation
Non-GAAP Net Income Attributable to ICE & EPS Reconciliation In millions (except per share amounts) 12 Months 12 Months 3 Months 3 Months Ended Ended Ended Ended 12/31/13 12/31/12 12/31/13 12/31/12 Net income (loss) attributable to ICE $ 254 $ 552 $ (176) $ 130 Add: Cetip impairment loss 190 - 190 -
Slide 25: Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation
Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation In millions 12 Months 12 Months 3 Months 3 Months Ended Ended Ended Ended 12/31/13 12/31/12 12/31/13 12/31/12 Total revenues, less transaction-based expenses $ 1,674 $ 1,363 $ 612 $ 324 Total operating expenses 884 536 44
Slide 26: Adjusted Non-GAAP EBITDA and Tax Rate Reconciliation
Adjusted Non-GAAP EBITDA and Tax Rate Reconciliation In millions 12 Months 3 Months Ended Ended 12/31/13 12/31/13 Adjusted net income attributable to ICE $ 646 Add: Income tax expense 230 Add: Income tax expense adjustment on Non-GAAP items 18 Less: Interest and investment income (3) Add: Interest e
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