Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Citi Financial Services Conference 2011
22 slides from Intercontinental Exchange's conference presentation, Mar 10, 2011
Slide 1: Citi Financial Services Conference
Click to edit Master title style IntercontinentalExchange Citi Financial Services Conference March 10, 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 Building on a Solid Market Position OTC and Futures Volume +27% y/y 700 662 Global franchise 600 504 523 Footprint and domain knowledge 500 379 400 Broad distribution and network effect 300 231 Diverse futures and OTC markets, and clearing 200 Organic gro
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: Energy ags, credit, energy, equity index & FX Emissions Agriculture Approximately 50% of global crude and Equity Index refined futures market share Leading
Slide 5: ICE Markets
ICE Markets ICE’s global futures and over-the-counter markets serve the global commodity and derivatives markets on one integrated trading platform. ICE Revenue Diversification OTC Credit Average Daily Volume OTC and Futures Market Data/Other 14% 2,500 11% 2,000 OTC Energy Soft/Ag Futures 1,500 12%
Slide 6: ICE Futures
ICE Futures Annual Futures and Options Volume1 +25% y/y 4Q10 $127MM in revenues, +24% y/y 350 329 300 4Q10 ADV of 1.27MM contracts, +21% y/y 262 250 237 4Q10 strong growth in Brent, Gasoil, Cotton, Sugar 194 200 o Energy futures ADV of 848K, +23% y/y 150 137 o Ag & Fin ADV of 416K, +16% y/y 10
Slide 7: ICE OTC Markets – Energy & Credit
ICE OTC Markets – Energy & Credit OTC Energy ADC +14% y/y 4Q10 $125MM in OTC revenues: record OTC energy $1,374 volume of 88MM $1,500 $1,202 $1,117 Quarterly OTC energy revenue of $87MM, flat y/y o Energy ADC of $1.33MM in 4Q10 $1,000 $845 o YTD - Feb 9 ADC of over $1.6MM $589 Quarterly CDS re
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 Geographic diversification 100% 47% of revenues from outside of U.S. 80% EU/Canadian exchanges /clearinghouses 57% 53% Globally relevant products, levered to 60% emerging economies 40% 20% 43% 47% Broad Energy Complex 0
Slide 10: Strategic Approach to New Markets
Strategic Approach to New Markets Product & Platform Initiatives: 2010 New Products & Services Execution and clearing enhancements Additional new products in 2011 90+ new cleared OTC energy products Leverage strong energy footprint OTC oil revenues up 72% in 2010 Opportunities in financi
Slide 11: Leadership in Clearing and Evolving Markets
Leadership in Clearing and Evolving Markets Long-term Market Opportunity ADC and % Cleared $1,400 100% Thousands (Energy OTC ADC ) $1,200 OTC Energy 80% $1,000 Trade automation in „00 % Cleared $800 60% Pioneered OTC energy clearing ‟02 $600 40% 300 new products introduced since 2009 $400 20%
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 +16% y/y Double-digit growth target over the long $1,200 $1,150 term: $995 › 2010 revenues up 16%; adj. exp1 up only 5% $1,000 $813 $800 Record revenues driven by record futures $600 $574 and OTC segments $400 $314 › Futures rev: $504MM,+23% y/y $200
Slide 14: Strong Balance Sheet & Cash Flow
Strong Balance Sheet & Cash Flow Operating Cash Flow +10% y/y Strong Cash Generating Model $600 $534 $487 $500 Cash balance $400 $375 $624MM unrestricted $288 3-year average free cash flow yield 5.5% $300 2010 operating cash flow $534MM $200 $151 $100 $0 Disciplined Use of Capital 2006 2007 20
Slide 15: 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 16: Appendix
Click to edit Master title style Appendix IntercontinentalExchange
Slide 17: ICE Summary Financials – FY 2010
ICE Summary Financials – FY 2010 Change FY 2010 revenues up 16%; adjusted INCOME STATEMENT FY2010 FY2009 y/y expenses1 up only 5% Total Revenues $1,150 $995 16% Record revenues driven by record Total Expenses $498 $482 3% futures and OTC segments Operating Income $652 $513 27% o Fut. rev: $504MM
Slide 18: 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 ICE Futures U.S. 383,157 469,596 ICE Futures Canada 17,775 26,311 CCFE 752 680 TOTAL 1,578,227 1,738,199 2010 January February March Apri
Slide 19: ICE Futures Rate Per Contract History
ICE Futures Rate Per Contract History 2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ICE Futures Europe Futures $ 1.53 $ 1.50 ICE Futures U.S. Agricultural Futures & Options $ 2.06 $ 2.08 ICE Futures U.S. Financial Futures & Options $ 0.94 $ 1.00 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct No
Slide 20: Non-GAAP Net Income Attributable to ICE & EPS Reconciliation
Non-GAAP Net Income Attributable to ICE & EPS Reconciliation In thousands, except per share amounts 12 Months 3 Months 12 Months 3 Months Ended Ended Ended Ended 12/31/10 12/31/10 12/31/09 12/31/09 Net income attributable to ICE $398,298 $99,132 $315,988 $84,254 Add: Loss on hedge related to CLE acq
Slide 21: Non-GAAP EBITDA Reconciliation
Non-GAAP EBITDA Reconciliation In thousands 12 Months 12 Months 12 Months 12 Months 12 Months Ended Ended Ended Ended Ended 12/31/10 12/31/09 12/31/08 12/31/07 12/31/06 Net income attributable to ICE $398,298 $315,988 $300,972 $240,612 $143,269 Plus income tax expense 202,375 179,551 172,524 117,822
Slide 22: Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation
Non-GAAP Operating Income, Operating Margin & Operating Expense Reconciliation In thousands 12 Months 12 Months Ended Ended 12/31/10 12/31/09 Total Revenues $1,149,944 $994,788 Total operating expenses 497,695 482,169 Less: Acquisition-related trasaction costs (9,996) (6,139) Less: Lease termination
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