Slide 1: Second Quarter 2015 Earnings Presentation
(NYSE: ICE) Second Quarter 2015 Earnings Presentation August 5, 2015
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: Second Quarter 2015 Earnings Conference Call
Second Quarter 2015 Earnings Conference Call Agenda: • Record 1H15 Earnings Performance • 2Q15 Earnings and Operational Highlights • Revenue and Earnings Growth Drivers • Q&A • Call will conclude at 9:30 a.m. Participants: Jeff Sprecher Chairman & Chief Executive Officer; Chairman, NYSE Scott Hill C
Slide 4: Record First Half 2015 Earnings Performance
Record First Half 2015 Earnings Performance • Record adjusted EPS(1) +27% y/y on net revenues +6% y/y in 1H15 • Executing on strategic growth initiatives and driving expense reductions • Record data services and listings revenue; average daily volume (ADV) up in oil, ags, FX and equities • Returned
Slide 5: Strong Second Quarter 2015 Financial Performance
Strong Second Quarter 2015 Financial Performance • Adjusted EPS(1) +27% y/y on net revenues +6% y/y • Adj. operating expenses -8% y/y and adj. operating margin of 59%, +6 pts y/y INCOME STATEMENT HIGHLIGHTS (in millions except per share amounts) 2Q15 2Q14 % Chg Net revenues $797 $750 6% Operating Ex
Slide 6: Multiple Sources of Revenue Growth
Multiple Sources of Revenue Growth 2Q15 Net Revenue Mix Total Net Revenue(1) +6% y/y to $797MM U.S. Cash Listings Equities • Commodities +8% y/y 13% ◦ Commercial participants in global energy 6% Data Services markets relying on ICE for risk 24% management; rev +6% y/y ◦ Global natural gas ADV up; re
Slide 7: Continued Growth in Futures & Options Revenue
Continued Growth in Futures & Options Revenue • 2Q15 revenue -2% on ADV -6% y/y; low volatility in rates partially offset by growth in global oil, nat gas, ags revenues +11%, +7%, +14% y/y, respectively • Futures & Options (F&O) open interest (OI) +3% YTD June, with OI in gasoil, emissions and STIRs
Slide 8: Leading the World's Energy Markets
Leading the World's Energy Markets • 2Q15 global oil revenue +11% y/y; Brent, Other Oil (including WTI) & Gasoil rev. +11%, +15% & +5% respectively • Oil OI +8% 1H15 YTD; 50% market share of global oil futures market • Secular trends toward hedging and clearing, volatility and new products driving g
Slide 9: Consistent Growth in OTC Swaps Clearing
Consistent Growth in OTC Swaps Clearing • 1H15 clearing revenue $51MM, +3% y/y; 2Q15 clearing revenue $22MM, -6% y/y • Expect >$100M CDS clearing revenue in 2015; new cleared product pipeline & accelerating buyside interest • ICE is the leader in clearing with $68T gross notional cleared to date, in
Slide 10: Strong Contribution from NYSE U.S. Cash Markets
Strong Contribution from NYSE U.S. Cash Markets • 2Q15 ADV +11% y/y, 2Q15 market share +1.7 points y/y, maintaining solid capture • 2Q15 NYSE adj. operating margin >50%; nearly double NYSE's 2012 adj. operating margin • Advancing market structure and technology improvements across the organization •
Slide 11: Maintaining NYSE Global Leadership in Listings
Maintaining NYSE Global Leadership in Listings • Record 1H15 listings revenue of $202M, +12% y/y • Leader in global proceeds for 1H15, raising $95 billion in 264 transactions; ◦ Global IPO leader across industries, including tech, ETFs, REITs; MSG transferred to NYSE in July • Continued momentum and
Slide 12: Delivering Record Revenues in Data Services
Delivering Record Revenues in Data Services • 2Q15 revenues +29% y/y; addition of new customers across futures, OTC and equities along with acquisition of SuperDerivatives • ICE Benchmark Administration addressing demand for transparent, regulated benchmarks ◦ Building on LIBOR, ICE Swap Rate and Go
Slide 13: Disciplined Expense Management
Disciplined Expense Management 2Q15 Adjusted Op Expenses (1) • Adj. operating expenses(1) -8% y/y to $328MM Cash Comp. Non-Cash & Benefits Comp. ◦ Comp exp -4% y/y; disciplined hiring 7% Prof. Services & and investment in growth initiatives 37% Acquisition Exp. 10% ◦ Reducing contractor levels and 1
Slide 14: Solid Cash Generation & Capital Structure
Solid Cash Generation & Capital Structure • $770MM in operating cash flow in 1H15 • $700MM in unrestricted cash & short-term investments at June 30; includes $187MM EMIR required future regulatory capital • Total debt of $3.3B; repaid June '15 Euronotes of $1.0B • Adjusted Debt-to-EBITDA(1) of 1.6x
Slide 15: Delivering Shareholder Value
Delivering Shareholder Value • All operating cash flows YTD used for capital return, M&A and cap ex • Cap ex and cap software expected to normalize in 2016 to levels below 2015 cap ex • ~$290MM in dividends & repurchases in 2Q15; returned ~$1.6B since 4Q13; • Expect to use 100% of future excess cash
Slide 16: Diverse Revenue and Earnings Growth Drivers
Diverse Revenue and Earnings Growth Drivers Strong secular and capital market growth trends • Net revenues of $1.6B, +6% y/y in 1H15 • Secular growth in the global commodity and financial markets; demand for hedging and trading • Rising demand for market data and clearing; focus on risk management a
Slide 17: Diverse Revenue and Earnings Growth Drivers
Diverse Revenue and Earnings Growth Drivers Organic growth, cyclical recovery and optionality are additional opportunities • Delivering more clearing solutions and derivatives products through our multi-asset clearing houses • EU interest rate cycle behind US, expect recovery as economy stabilizes •
Slide 18: Record First Half 2015 Earnings Performance
Record First Half 2015 Earnings Performance • Record adjusted EPS(1) +27% y/y on net revenues +6% y/y in 1H15 • Executing on strategic growth initiatives synergies while continuing to invest in the business • Record data services and listings revenue; average daily volume (ADV) up in oil, ags, FX an
Slide 19: Appendix
APPENDIX INTINENTAL EXCHANGE 19
Slide 20: ICE Summary Balance Sheet
ICE Summary Balance Sheet In millions BALANCE SHEET 06/30/2015 12/31/2014 CHANGE Assets • $700MM unrestricted cash and short- Unrestricted Cash & ST Inv $700 $1,852 $(1,152) term investments, including $187MM Other Current Assets 44,433 48,367 (3,934) EMIR regulatory capital requirement for Current
Slide 21: 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 Month 12 Month 3 Months 3 Months 6 Months 6 Months Ended Ended Ended 6/30/15 Ended 6/30/14 Ended 6/30/15 Ended 6/30/14 12/31/14 12/31/13 Income from continuing operations $289 $227 $612 $488
Slide 22: 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 3 Months 3 Months Ended Ended 3 Months 3 Months Ended 9/30/14 Ended 9/30/13 12/31/14 12/31/13 Ended 3/31/15 Ended 3/31/14 Income from continuing operations $223 $145 $294 (120
Slide 23: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation In millions 3 Months 3 Months 6 Months 6 Months Ended 6/30/15 Ended 6/30/14 Ended 6/30/15 Ended 6/30/14 Total revenues, less transaction-based expenses $797 $750 $1,647 $1,547 Total operating expenses 367 423 755 829 Less
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation In millions Trailing 12 Months Ended 6/30/15 Adjusted net income from Continuing Ops $1,228 Add: Income tax expense 435 Add: Income tax expense adjustment on Non-GAAP Items 85 Less: Other income, net (22) Add: Interest expense 91 Add: Depreciation and amortization 222
Slide 25: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation In millions 3 Months 3 Months Ended 6/30/15 Ended 6/30/14 Income from continuing operations before income taxes $398 $320 Less: Income tax expense (109) (93) Net Income from continuing operations $289 $227 Effective tax rate 27% 29% Income from continuing o