Slide 1: 4Q18 Earnings Supplement
Intercontinental Exchange Earnings Supplement Fourth Quarter 2018 February 7, 2019 4Q18 Earnings Supplement February 7, 2019
Slide 2: Forward-Looking Statements & Legends
FORWARD-LOOKING STATEMENTS & 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 2018 Earnings Call Participants
ICE FOURTH QUARTER 2018 EARNINGS CALL PARTICIPANTS Management: Jeff Sprecher Ben Jackson Scott Hill Chairman & CEO President Chief Financial Officer Chairman, NYSE Investor Relations: • Warren Gardiner, CFA Vice President, Investor Relations warren.gardiner@theice.com • Mary Caroline O'Neal, CPA Man
Slide 4: 4Q18 Performance
4Q18 PERFORMANCE in millions except per share amounts INCOME STATEMENT Record Operating Performance HIGHLIGHTS 4Q18 4Q17 % Chg Record net revenue +14% y/y Net Revenues $1,308 $1,146 14% Adj. Op Expenses $553 $481 15% Record Trading & Record Clearing revenue Data revenue Adj. Op Income $755 $665 14%
Slide 5: Record Annual Capital Return in 2018
RECORD ANNUAL CAPITAL RETURN IN 2018 ▪ Nearly $1.8B returned to shareholders in 2018, +23% y/y, more than any year in our history ▪ $1.7B in strategic initiatives, including Bakkt investment ▪ Leverage 2.3x debt-to-EBITDA(1) ▪ 1Q19 dividend $0.275, +15% y/y ▪ $2.0B share repurchase program effective
Slide 6: 4Q18 Trading & Clearing Performance
4Q18 TRADING & CLEARING PERFORMANCE ▪ Record futures & options average daily volume (ADV) in 2018 ▪ Annual ADV records in gasoil, TTF gas, emissions, WTI, interest rates, MSCI and ags & metals ▪ 2018 record energy and ags revenue 71.1 ▪ 4Q18 ADV +21% y/y, Open Interest (OI) +10% y/y 68.5 ▪ 4Q18 NYSE
Slide 7: 4Q18 Data & Listings Performance
4Q18 DATA & LISTINGS PERFORMANCE ▪ Record data revenue +6% y/y, org CC Annual Subscription Value (ASV) ▪ FY18 revenue from ASV(1) products +6% y/y, org CC $1,922 ▪ 4Q18 Pricing & Analytics (P&A) revenue +7% y/y, org CC +6% $ (Millions) $1,812 Organic $ (in millions) 4Q18 4Q17 % Chg CC Revenue: 4Q17
Slide 8: Record 2018 Performance & 2019 Outlook
RECORD 2018 PERFORMANCE & 2019 OUTLOOK in millions except per share amounts Financial Guidance INCOME STATEMENT HIGHLIGHTS 2018 2017 % Chg ▪ Data revenue $2.19 - $2.24B Net Revenues $4,979 $4,638 7% ▪ ASV $1.922B entering 1Q19 ▪ 1Q19 data revenue $540 - $545M Adj. Op Expenses $2,071 $1,947 6% ▪ Cap
Slide 9: Most Diverse Market Infrastructure Provider
MOST DIVERSE MARKET INFRASTRUCTURE PROVIDER Global Benchmarks NYSE Data ▪ 2018 record Brent revenue ▪ Unique DMM model reduces ▪ Subscription-based, recurring ▪ Global natural gas complex volatility and offers tighter revenue ▪ MSCI equity indices ADV +34% spreads ▪ Bringing efficiencies across the
Slide 10: Consistent Track Record of Growth
CONSISTENT TRACK RECORD OF GROWTH 2018 Highlights (1) Record futures & options ADV +5% y/y $3.59 Record data & listings revenues +5% y/y(2) Adjusted EPS Record net revenues +7% y/y (1) (1) $2.97 Record adj. op income +8% y/y $2.79 Record adj. EPS +21% y/y 1 8% (1) AGR $2.43 C - '18 '06 (1) $1.92 (1)
Slide 11: Appendix
APPENDIX Intercontinental Exchan
Slide 12: 2019 Guidance
2019 GUIDANCE Financial Guidance Expenses/Synergies ▪ Data revenue $2.19 - $2.24B ▪ Adj. expenses $2.15 - $2.20B for FY19 ▪ ASV $1.922B entering 1Q19 ▪ $35 - $40M of M&A, net of ~$15M cost savings; ▪ 1Q19 data revenue $540 - $545M $100M+ of associated revenue ▪ Cap ex/software $290 - $320M ▪ $30M of
Slide 13: Data Services Supplemental Data
DATA SERVICES SUPPLEMENTAL DATA GAAP to Organic Data Revenue ASV - FX Impact in millions 4Q17 4Q18 in millions 4Q17 4Q18 Data Revenue (as reported) $525 $539 ASV, as reported $1,812 $1,922 Adjusted for: Adjusted for: Acq., divestitures and wind FX (11) — down of acq. businesses(1)(2) (21) (6) ASV(4)
Slide 14: Data Services Supplemental Data
DATA SERVICES SUPPLEMENTAL DATA ▪ Beginning 4Q18, we now report feeds revenue within Exchange Data and Feeds whereas we previously reported in Desktops and Connectivity. Pro Forma Data Revenue in millions 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Revenue: Pricing and Analytics $238 $242 $242 $248 $254
Slide 15: Data Services Supplemental Data
DATA SERVICES SUPPLEMENTAL DATA 4Q18 Organic, CC Data Revenue 2018 Organic, CC Data Revenue APAC APAC EMEA EMEA 4% 20% 4% 21% 75% 76% Americas Americas 15
Slide 16: Strong Annual Futures Growth Trends
STRONG ANNUAL FUTURES GROWTH TRENDS lots in thousands ICE Futures Total ADV & OI Global Oil ADV & OI ADV OI ADV OI 6,400 75,000 2,000 12,000 60,000 4,800 ADV 1,500 ADV +5% 45,000 +2% 8,000 3,200 1,000 OI 30,000 OI +10% +8% 4,000 1,600 500 15,000 0 0 0 0 2015 2016 2017 2018 2015 2016 2017 2018 Total
Slide 17: GAAP Results
GAAP RESULTS INCOME STATEMENT HIGHLIGHTS GAAP GAAP GAAP GAAP in millions except per share amounts 4Q18 4Q17 % Chg 2018 2017 % Chg Net revenues $1,308 $1,146 14% $4,979 $4,638 7% Operating Expenses $632 $554 14% $2,396 $2,259 6% Operating Income $676 $592 14% $2,583 $2,379 9% Operating Margin 52% 52%
Slide 18: ICE Summary Balance Sheet
ICE SUMMARY BALANCE SHEET in millions BALANCE SHEET 12/31/2018 12/31/2017 CHANGE Assets ▪ $724M unrestricted cash Unrestricted Cash $724 $535 $189 ▪ $183M related to Bakkt Other Current Assets 65,968 53,027 12,941 Current Assets 66,692 53,562 13,130 ▪ Total debt of $7.4B; Adj. Debt-to- EBITDA(1) of
Slide 19: Adjusted Net Income from Continuing Ops and EPS from Continuing Ops
ADJUSTED NET INCOME FROM CONTINUING OPS AND EPS FROM CONTINUING OPS 3 Months 3 Months 12 Months 12 Months Ended Ended Ended Ended 12/31/2018 12/31/2017 12/31/2018 12/31/2017 Net income attributable to ICE $ 611 $ 1,233 $ 1,988 $ 2,526 Add: Interactive Data transaction and integration costs and acqui
Slide 20: Adjusted Net Income from Continuing Ops and EPS from Continuing Ops
ADJUSTED NET INCOME FROM CONTINUING OPS AND EPS FROM CONTINUING OPS 12 Months 12 Months 12 Months 12 Months Ended Ended Ended Ended in millions except per share amounts 12/31/16 12/31/15 12/31/14 12/31/13 Net income attributable to ICE $1,429 $1,274 $981 $254 Add: Interactive Data and NYSE transacti
Slide 21: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
ADJUSTED OPERATING INCOME, OPERATING MARGIN & OPERATING EXPENSE RECONCILIATION Trading and Clearing Data and Listings Segment Segment Consolidated 3 Months Ended 3 Months Ended 3 Months Ended December 31, December 31, December 31, 2018 2017 2018 2017 2018 2017 Total revenues, less transaction-based
Slide 22: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
ADJUSTED OPERATING INCOME, OPERATING MARGIN & OPERATING EXPENSE RECONCILIATION Trading and Clearing Data and Listings Segment Segment Consolidated 12 Months Ended 12 Months Ended 12 Months Ended December 31, December 31, December 31, 2018 2017 2018 2017 2018 2017 Total revenues, less transaction-bas
Slide 23: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION 12 Months Ended in millions 12/31/18 Adjusted net income $2,077 Add: Interest expense 244 Add: Adjusted income tax expense(1) 627 Add: Adjusted depreciation and amortization(1) 295 Adjusted EBITDA from Continuing Ops $3,243 Adjusted EBITDA - CHX & TMC (pre acquisition)
Slide 24: Adjusted Effective Tax Rate Reconciliation
ADJUSTED EFFECTIVE TAX RATE RECONCILIATION 3 Months 3 Months 12 Months 12 Months Ended Ended Ended Ended in millions 12/31/2018 12/31/2017 12/31/2018 12/31/2017 Income before income tax expense (benefit) $738 $671 $2,520 $2,526 Less: Income tax expense (benefit) 119 (568) 500 (28) Effective tax rate
Slide 25: Free Cash Flow Calculation
FREE CASH FLOW CALCULATION 12 Months Ended 12 Months Ended in millions 12/31/2018 12/31/2017 Cash flow from operations $2,533 $2,085 Less: Capital expenditures and capitalized software development costs (280) (357) Add: Section 31 fees, net 33 2 Free cash flow $2,286 $1,730 25