Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — KBW Market Structure Conference 2011
21 slides from Intercontinental Exchange's conference presentation, Nov 30, 2011
Slide 1: KBW Market Structure Conference
Click to edit Master title style IntercontinentalExchange KBW Market Structure Conference November 30, 2011 IntercontinentalExchange
Slide 2: Safe Harbor
Safe Harbor 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 our business that are not historical facts are forward-looking statements that i
Slide 3: ICE: Derivatives Market Leadership
ICE: Derivatives Market Leadership An Expanding Market Position Global derivatives markets Average Daily Volumes: Futures and OTC Growth and innovation leader among exchanges +20% y/y 3,000 Broad distribution and network effect 2,500 3 futures exchanges, 2 OTC markets, 5 clearing houses 2,00
Slide 4: Consistent Industry Leading Growth & Profitability
Consistent Industry Leading Growth & Profitability Revenue Growth $1,150 +16% y/y $1,200 Long-term double-digit growth target: $995 $1,000 $1,000 › Record 9-mos revenue up 16% y/y; adjusted $813 $800 expenses1 up only 9% $574 $600 Record YTD Sep 2011 revenues driven by: $400 › Record futures rev
Slide 5: Strong Balance Sheet & Cash Flow
Strong Balance Sheet & Cash Flow Operating Cash Flow +43% y/y Solid Cash Flow $600 $541 $534 $541MM in operating cash flow YTD 2011 $500 $487 $497MM in unrestricted cash at Sep 30, 2011 $400 $375 $288 $300 $200 Strong Balance Sheet $100 Pro forma debt of $888MM including additional $0 amounts
Slide 6: ICE Futures
ICE Futures 3Q11 Futures Volume and Open Interest Growth Annual Futures and Options ADV1 +17% y/y 1,542 1,600 3Q11 $155MM in revenues, +24% y/y 1,306 3Q11 ADV of 1.6MM contracts, +23% y/y 1,200 1,036 922 Strength in Brent, Gasoil, Emissions, Russell, 800 771 USDX o Energy futures ADV of 1.1MM,
Slide 7: ICE OTC Energy
ICE OTC Energy OTC Energy ADC +13% y/y 3Q11 OTC Energy Growth $1,569 $1,600 $1,374 Record OTC energy volume in 3Q11 of 107MM $1,202 contracts, +28% y/y $1,200 $1,117 3Q11 OTC energy revenue of $101MM, +13 y/y $845 $800 o 3Q11 energy ADC of $1.55MM, +14% y/y o October energy ADC of $1.6MM $400
Slide 8: ICE OTC Credit
ICE OTC Credit OTC Credit 3Q11 OTC Credit Derivatives $200 $165 $166 $160 $126 3Q11 CDS revenue of $46MM, +8% y/y $120 o $27MM from Creditex; 61% electronic $80 o $19MM from CDS clearing; +5% y/y $40 $0 Leading Global CDS Clearing Solution 2009 2010 9-mos 2011 Through Nov 18, $25.5TR in CDS clea
Slide 9: Multiple Drivers of Growth
Multiple Drivers of Growth Secular Drivers ICE 3Q11 Revenue Diversification Rising demand for commodities and hedging price exposure Volatility inherent in natural resource prices OTC Credit Increased use of risk management across industries Market Data/Other 13% Growth in emerging economies
Slide 10: Exposure to Growth Markets
Exposure to Growth Markets Geographic Diversity 2010 Consolidated Revenues Geographic diversification 100% 47% of revenues from outside of U.S. Global platform serving customers in more than 80% 57% 53% 70 countries 60% Products relevant around the world, levered to emerging economies 40% La
Slide 11: Strategic Approach to New Markets
Strategic Approach to New Markets Product & Platform Initiatives: 2011 Execution and clearing enhancements New Products & Services Swaps data repository registration 500 new products introduced in the Over 200 new cleared OTC energy products past 3 years OTC oil revenues up 73% in first ni
Slide 12: Consistent Growth and Results
Consistent Growth and Results Revenue Growth ICE’s track record of performance spans 2008-2010 CAGR all economic environments Growth in ICE’s commodity and derivative markets is sustained by secular growth trends Broad geographic relevance of ICE’s product set drives demand Beneficiary of the
Slide 13: Appendix
Click to edit Master title style Appendix IntercontinentalExchange
Slide 14: ICE Summary Income Statement
ICE Summary Income Statement Change INCOME STATEMENT 3Q11 3Q10 y/y 3Q11 Rev +19%, Adj EPS +32% Total Revenues $341 $287 19% Transaction and clearing revenues +18% Total Expenses $137 $136 1% y/y Operating Income $204 $152 35% Futures & OTC energy volume +25% y/y Operating Margin 60% 53% 7 pts
Slide 15: ICE Summary Balance Sheet
ICE Summary Balance Sheet BALANCE SHEET 9/30/11 12/31/10 CHANGE Strong 9-mos operating cash flow o $541MM, + 43% y/y Assets Cash & ST Investments $497 $624 ($126) Unrestricted cash of $497MM at Sep Other Current Assets 34,726 22,952 11,774 30, 2011 Current Assets 35,223 23,576 11,647 Pro forma
Slide 16: ICE Average Daily Volume History
ICE Average Daily Volume History 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 1,029,922 1,123,487 904,827 1,123,145 1,172,482 1,197,666 ICE Futures U.S. 383,157 469,596 422,741 389,364 383,897 526,
Slide 17: 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 & Options $ 1.53 $ 1.50 $ 1.55 $ 1.59 $ 1.59 $ 1.57 $ 1.58 $ 1.58 $1.57 $ 1.55 ICE Futures U.S. Agricultural Futures & Options $ 2.06 $
Slide 18: Non-GAAP Net Income Attributable to ICE & EPS Reconciliation
Non-GAAP Net Income Attributable to ICE & EPS Reconciliation In thousands, except per share amounts 9 Months 9 Months 3 Months 3 Months Ended Ended Ended Ended 9/30/11 9/30/10 9/30/11 9/30/10 Net income attributable to ICE $382,900 $299,166 $132,631 $96,315 Add: Acquisition-related transaction costs
Slide 19: Non-GAAP EBITDA Reconciliation
Non-GAAP EBITDA Reconciliation In thousands 9 Months 9 Months 3 Months 3 Months Ended Ended Ended Ended 9/30/11 9/30/10 9/30/11 9/30/10 Net income attributable to ICE $382,900 $299,166 $132,631 $96,315 Plus income tax expense 184,153 153,834 59,507 47,328 Less interest and investment income (2,742)
Slide 20: Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation
Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation In thousands, except operating margins 9 Months 9 Months 3 Months 3 Months Ended Ended Ended Ended 9/30/11 9/30/10 9/30/11 9/30/10 Total revenues $1,000,276 $864,921 $340,778 $287,146 Total operating expenses 401,751 371,
Slide 21: Strategic Approach to Growth and Global Market Position
Strategic Approach to Growth and Global Market Position Opportunity to Bring ICE’s Develop a expand into new platform and platform that Brought Establish a Options expertise in asset classes & provides transparency & new risk markets Nascent energy markets benefit business transparent and stability;
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