Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — UBS Global Financial Services Conference 2011
24 slides from Intercontinental Exchange's conference presentation, May 10, 2011
Slide 1: UBS Financial Services Conference
Click to edit Master title style IntercontinentalExchange UBS Financial Services Conference May 10, 2011 IntercontinentalExchange
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements Information set forth in this communication contains forward-looking statements that involve a number of risks and uncertainties. ICE and NASDAQ OMX caution readers that any forward-looking information is not a guarantee of future performance and that actual re
Slide 3: ICE: Derivatives Market Leadership
ICE: Derivatives Market Leadership Building on a Solid Market Position OTC and Futures Volume 700 662 Global franchise 600 504 523 Footprint and domain knowledge 500 379 400 Broad distribution and network effect +25% y/y 300 231 Diverse futures and OTC markets, and clearing 195 200 Organic
Slide 4: Diverse Growth Platform
Diverse Growth Platform Global Markets in Clear View 4 futures exchanges 2 OTC markets 5 clearing houses FX Credit 5 asset classes: ags, credit, energy, Energy equity index & FX Emissions Agriculture Approximately 50% of global crude and Equity Index refined oil futures market share Lead
Slide 5: ICE Global Markets
ICE Global Markets ICE’s global futures and over-the-counter markets serve the global commodity and derivatives markets on one integrated trading platform. ICE 1Q11 Revenue Diversification OTC Credit Average Daily Volume OTC and Futures Market Data/Other 11% 3,000 11% 2,500 Soft/Ag Futures OTC Energ
Slide 6: ICE Futures
ICE Futures 1Q11 $157MM in revenues, +28% y/y Annual Futures and Options Volume1 350 329 1Q11 ADV of 1.6MM contracts, +24% y/y 300 262 250 237 Strong growth in Brent, Gasoil, WTI, Cotton 194 o Energy futures ADV of 1.2MM, +36% y/y 200 o Ag & Fin ADV of 445K, +1% y/y 137 +26% y/y 150 o Emission
Slide 7: ICE OTC Markets – Energy & Credit
ICE OTC Markets – Energy & Credit +18% y/y OTC Energy ADC 1Q11 $142MM in OTC revenues: record OTC energy $1,626 $1,600 $1,374 volume of 97MM $1,202 $1,200 $1,117 1Q11 OTC energy revenue of $103MM, +20 y/y o Energy ADC of $1.6MM in 1Q11, +18% y/y $845 o April 2011 ADC of $1.5MM $800 $589 1Q11 C
Slide 8: Long-term Growth Drivers
Long-term Growth Drivers Secular Drivers Rising demand for commodities Increased use of risk management and hedging tools across industries Growth in emerging economies and recovery in Western economies Evolving regulatory landscape emphasizes transparency and clearing ICE Specific Drivers
Slide 9: Exposure to Growth Markets
Exposure to Growth Markets Geographic Diversity 2010 Consolidated Revenues 100% Geographic diversification 80% 47% of revenues from outside of U.S. 57% 53% EU/Canadian exchanges /clearinghouses 60% Globally relevant products, levered to emerging economies 40% 20% 43% 47% 0% Broad Energy Comple
Slide 10: Strategic Approach to New Markets
Strategic Approach to New Markets Product & Platform Initiatives: 2011 New Products & Services Execution and clearing enhancements Ramping of 300+ new recent products 200 new cleared OTC energy products Leverage strong energy footprint OTC oil revenues up 78% in 1Q Opportunities in finan
Slide 11: Leadership in Clearing and Evolving Markets
Leadership in Clearing and Evolving Markets Long-term Market Opportunity ADC and % Cleared $1,800 100% Thousands (Energy OTC ADC ) $1,600 OTC Energy $1,400 80% Trade automation in „00 $1,200 % Cleared 60% $1,000 Pioneered OTC energy clearing ‟02 $800 40% $600 97 new products introduced in 2010
Slide 12: Innovation and Technology Initiatives
Innovation and Technology Initiatives ICE’s focus on leading-edge technology enables successful execution on key initiatives. • Leader in electronic commodities markets – 1st fully electronic energy exchange TECHNOLOGY • Roundtrip trading time < 1 millisecond; 99.9% system availability LEADERSHIP •
Slide 13: Long-term Double-digit Growth
Long-term Double-digit Growth Revenue Growth Double-digit growth target over the long term: $1,200 $1,150 $995 › 1Q11 revenues up 19%; adj. exp1 up only 9% $1,000 $813 $800 Record revenues driven by record futures $574 $600 +19% y/y and OTC segments $334 $400 $314 › Futures rev: $157MM,+28% y/y
Slide 14: Strong Balance Sheet & Cash Flow
Strong Balance Sheet & Cash Flow Operating Cash Flow $600 Strong Cash Generating Model $534 $487 $500 Cash balance $400 $375 $694MM unrestricted $288 3-year average free cash flow yield 5.5% $300 +53% y/y 1Q11 operating cash flow $155MM $200 $151 $155 $100 $0 Disciplined Use of Capital 2006 20
Slide 15: Leadership in Dodd-Frank Implementation
Leadership in Dodd-Frank Implementation U.S. Regulation Post -Reform Required Central Clearing of Standardized Derivatives ICE Trust to transition to ICE Clear Credit (Designated Clearing Organization and Clearing Agency); ICE Clear U.S., ICE Clear Europe, ICE Canada meet applicable Rules Standardiz
Slide 16: ICE NDAQ Superior Proposal to Acquire NYX
ICE NDAQ Superior Proposal to Acquire NYX NASDAQ OMX / ICE proposal will create stronger and more balanced businesses NASDAQ OMX / ICE DB / NYSE Euronext ICE / NYSE Liffe Ags & Other Ags & Other 6% Interest Rates 1% Interest Rates More balanced Energy 38% Futures 42% derivatives product mix PRO FO
Slide 17: ICE Investment Thesis
ICE Investment Thesis Global Risk Management Platform Building on a strong franchise › Futures markets remain a solid growth area › Key benchmarks provide entry into international markets › Clearinghouses support new product development and increased demand for risk management Redefining derivat
Slide 18: Appendix
Click to edit Master title style Appendix IntercontinentalExchange
Slide 19: ICE Summary Balance Sheet
ICE Summary Balance Sheet Strong operating cash flow BALANCE SHEET 3/31/11 12/31/10 CHANGE o $155MM, + 53% y/y Assets Low leverage with debt to trailing Cash & ST Investments $694 $624 $70 twelve-month EBITDA of 0.6x Other Current Assets 24,813 22,952 1,861 Cash and unrestricted short-term Cur
Slide 20: ICE Average Daily Volume History
ICE Average Daily Volume History ICE Average Daily Volume 2011 January February March April May June July August September October November December ICE Futures Europe 1,176,543 1,241,612 1,055,675 866,718 ICE Futures U.S. 383,157 469,596 422,741 389,364 ICE Futures Canada 17,775 26,311 15,533 21,29
Slide 21: ICE Futures Rate Per Contract History
ICE Futures Rate Per Contract History Rolling Three-Month Average Rate per Contract 2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ICE Futures Europe Futures $ 1.53 $ 1.50 $ 1.55 $ 1.59 ICE Futures U.S. Agricultural Futures & Options $ 2.06 $ 2.08 $ 2.15 $ 2.26 ICE Futures U.S. Financial Futur
Slide 22: Non-GAAP Net Income Attributable to ICE & EPS Reconciliation
Non-GAAP Net Income Attributable to ICE & EPS Reconciliation In thousands, except per share amounts 3 Months 3 Months Ended Ended 3/31/11 3/31/10 Net income attributable to ICE $128,904 $101,163 Add: Acquisition-related transaction costs 3,437 545 Less: Income tax benefit related to the items above
Slide 23: Non-GAAP EBITDA Reconciliation
Non-GAAP EBITDA Reconciliation In thousands 3 Months 3 Months Ended Ended 3/31/11 3/31/10 Net income attributable to ICE $128,904 $101,163 Plus income tax expense 65,950 53,217 Less interest and investment income (988) (726) Plus interest expense 8,206 7,110 Plus depreciation and amortization expens
Slide 24: Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation
Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation In thousands 3 Months 3 Months Ended Ended 3/31/11 3/31/10 Total revenues $334,280 $281,620 Total operating expenses 130,682 117,805 Less: acquisition-related trasaction costs (3,437) (545) Adjusted total operating expens
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