Slide 1: UBS Financial Services Conference
Intercontinental Exchange (NYSE: ICE) UBS Financial Services Conference August 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 Performance Overview
ICE PERFORMANCE OVERVIEW
Slide 4: ICE: Best in Class Growth & Returns
ICE: BEST IN CLASS GROWTH & RETURNS 50% recurring revenue, highly transparent financial model Strong growth in operating cash flow and capital return Double-digit earnings growth target Disciplined investment, best in class ROIC 1H16 REVENUES OF $2.3B 43% Data Services 9% Listings (1) 39% Gl
Slide 5: Quantifiable Growth Drivers
QUANTIFIABLE GROWTH DRIVERS Proven integrator & organic (1) (2) growth driver with expense 24% Rev , 18% Adj EPS growth ~$700MM synergies ’10 –‘15 CAGR Delivered by 2019 discipline Recurring Revenue Rising demand for market data +7% y/y (1) +13% y/y(3) and related analytics and 1H16 total data r
Slide 6: Providing Seamless End-to-End Services Across the Value Chain
PROVIDING SEAMLESS END-TO-END SERVICES ACROSS THE VALUE CHAIN 11 exchanges, 6 clearing houses, listings & diverse data services Pre-trade Trade Post-trade Data is produced and consumed at each stage Data delivery, analytics and Trade and communicate Value, analyze and settle to connectivity for pre-
Slide 7: Global Markets, Clearing & Data Leader
GLOBAL MARKETS, CLEARING & DATA LEADER 11 GLOBAL EXCHANGES 6 CENTRAL CLEARING HOUSES GLOBAL DATA SERVICES Across All Asset Classes Across Futures & OTC Leveraging Proprietary Data Volume growth leader in global Clearing houses in the US, Europe, Strong recurring revenue streams futures markets
Slide 8: Exchange & Clearing Segment
EXCHANGE & CLEARING SEGMENT
Slide 9: Leading Global Network of Exchanges & Clearinghouses
LEADING GLOBAL NETWORK OF EXCHANGES & CLEARINGHOUSES Offering key asset classes across 11 exchanges Home to key benchmarks around the world: Energy: home to ~50% of crude & refined oil ADV Ags: benchmarks in sugar, coffee, cocoa and canola Rates: leading European short-term rates contracts
Slide 10: Product Diversity Enables Top-Line Growth
PRODUCT DIVERSITY ENABLES TOP-LINE GROWTH Strategically designed model driving growth amid dynamic regulatory, economic, volume & volatility environment (1) Net of Transaction Based Expenses INTERCONTINENTAL EXCHANGE 10
Slide 11: Diverse Global Transaction & Clearing ADV & OI
DIVERSE GLOBAL TRANSACTION & CLEARING ADV & OI All figures in thousands ADV ADV OI OI ADV ADV OI OI INTERCONTINENTAL EXCHANGE Financials, Ags and US Cash Equities shows volumes as if we owned NYSE prior to the November 2013 acquisition. 11
Slide 12: Productive Efforts to Improve Market Efficiency
PRODUCTIVE EFFORTS TO IMPROVE MARKET EFFICIENCY U.S. Cash Equities: 1H16 Rev +14% y/y CDS Clearing: 1H16 Rev +4% y/y Leading cash equities and listings with new Created leading clearing solution for the CDS technology and services market post-crisis Increased NYSE market share to 25.2% in 2Q16; ~600
Slide 13: Data & Listings Segment
DATA & LISTINGS SEGMENT ICE DATA SERVICES & NYSE LISTINGS
Slide 14: Building a Leading Global Provider: ICE Data Services
BUILDING A LEADING GLOBAL PROVIDER: ICE DATA SERVICES • ICE Data was launched in 2003 in recognition of the demand for customized market data across formats • ICE’s investment spans technology, intellectual property, R&D to innovate and develop new data products • ICE acquired Interactive Data Corpo
Slide 15: Diverse, Global & Proprietary Data Services
DIVERSE, GLOBAL & PROPRIETARY DATA SERVICES Pricing & Analytics - 1H16 Rev $415MM, +6% y/y(1) Full range of integrated data services for ▪ Independent evaluated pricing services, reference data and trade life-cycle and risk management valuations across fixed income markets (1) ▪ Expanding index serv
Slide 16: Mission-Critical Data for a Growing Client Base
MISSION-CRITICAL DATA FOR A GROWING CLIENT BASE ILLUSTRATIVE USE CASES FRONT OFFICE MIDDLE OFFICE BACK OFFICE Asset Gathering & Client Trade Support Reference Data Management Investment Collateral Management Corporate Actions Investment Research Portfolio Record Keeping Reporting Execution Strategy
Slide 17: NYSE Group Listings Leadership
NYSE GROUP LISTINGS LEADERSHIP ▪ Solid recurring revenue comprising 9% of $58B consolidated net revenues in 1H16 ▪ 1H16 listing revenues +3% y/y; revenue primarily comprised of ~2,400 companies’ annual listings fees ▪ Other listings revenue drivers include IPOs and corporate actions, such as follow-
Slide 18: Results-Driven
RESULTS-DRIVEN STRATEGIC APPROACH TO DRIVING GROWTH & RETURNS INTERCONTINENTAL EXCHANGE 18
Slide 19: First Half 2016 Highlights
FIRST HALF 2016 HIGHLIGHTS ▪ 1H16 revenue +6% y/y(1); 1H16 adj. EPS +16% y/y(1) to $7.12 ▪ $1.1B op cash flow, $205MM in dividends and leverage down to 2.4x adj. debt to EBITDA(2) (3) (1) $1.1B $1.2B (1) (1) 58% $7.12 (1) 1H15 figures reflect pro forma results which include Interactive Data Corporat
Slide 20: Unmatched, Consistent Growth Through Market Cycles
UNMATCHED, CONSISTENT GROWTH THROUGH MARKET CYCLES Driving growth, investing to generate strong returns on capital & double digit adj. EPS target +8% y/y +16% y/y +26% y/y $1.3B Adjusted figures represent non-GAAP figures. Please refer to slides in the appendix for reconciliations to the relevant GA
Slide 21: Appendix
APPENDIX INTERCONTINENTAL EXCHANGE 21
Slide 22: 1H16 Revenue & Expense Detail
1H16 REVENUE & EXPENSE DETAIL ▪ Total revenue +6% y/y(1) with growth across energy, ags, equities & equity derivatives, data and listings ▪ 4% y/y(1) decrease in adj. expense, adj. margin +5 pts y/y(1) to 58% ▪ Expense discipline and synergy acceleration; now expect to realize ~$100MM in 2016 expens
Slide 23: Generating Cash & Reducing Leverage
GENERATING CASH & REDUCING LEVERAGE ▪ Op. cash flow of $1.1B, +43% y/y driven by revenue growth, expense reductions and acquisition of Interactive Data ▪ Rapid deleveraging; 2.4x adj. debt to EBITDA(1) & 1H16 dividends of $205MM ▪ Board authorized $1B for new stock buyback program ▪ Announced plans
Slide 24: ICE Summary Balance Sheet
ICE Summary Balance Sheet In millions BALANCE SHEET 06/30/2016 12/31/2015 CHANGE Assets ▪ $390MM unrestricted cash Unrestricted Cash $390 $627 $(237) ▪ Total debt of $6.5B; Adj. Debt-to- Other Current Assets 50,240 52,686 (2,446) EBITDA(1) of 2.4x Current Assets 50,630 53,313 (2,683) PPE (net) 1,048
Slide 25: 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 6 Months 6 Months Ended 6/30/16 Ended 6/30/15 Ended 6/30/16 Ended 6/30/15 Income from continuing operations $363 $289 $740 $612 Add: NYSE and Interactive Data integration cost
Slide 26: 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) 12 Months 12 Months 12 Months Ended 12/31/15 Ended 12/31/14 Ended 12/31/13 Income from continuing operations $1,295 $1,005 $320 Add: NYSE and Interactive Data integration costs and banker fees
Slide 27: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation In millions 3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended 6/30/16 6/30/15 6/30/16 6/30/15 Total revenues, less transaction-based expenses $1,129 $797 $2,283 $1,647 Total operating expenses 578 367 1,148 755
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation In millions Trailing 12 Months Ended 6/30/16 Adjusted net income $1,544 Add: Income tax expense 447 Add: Income tax expense adjustment on Non-GAAP Items 169 Less: Other income, net(1) (12) Add: Interest expense(1) 136 Add: Depreciation and amortization(1) 253 Adjusted
Slide 29: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation In millions 3 Months 3 Months Ended 6/30/16 Ended 6/30/15 Income before income tax expense $516 $398 Less: Income tax expense 153 109 Net Income $363 $289 Effective tax rate 30% 27% Income before income tax expense $516 $398 Add: NYSE and Interactive Data t
Slide 30: ICE: A Growing Global Network
ICE: A GROWING GLOBAL NETWORK 1997 2001 2007 2008 2010 2011 2013 2014 Continental Power ICE expands reach ICE acquires ICE expands in Asia ICE expands into ICE acquires New ICE enters credit market ICE invests in Exchange (CPEX) in emissions markets NYSE Euronext to create with Singapore energy futu
Slide 31: Serving Global Markets
SERVING GLOBAL MARKETS MARKETS & CLEARING PRODUCTS MARKETS & CLEARING PRODUCTS FUTURES EXCHANGES CASH EXCHANGES ICE Futures U.S. New York Stock Exchange ICE Futures Europe NYSE Arca ICE Futures Canada NYSE MKT ICE Futures Singapore NYSE Amex Options ICE Endex NYSE Arca Options NYSE Bonds CENTRAL CLE