Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Corporate Update (November 2013)
26 slides from Intercontinental Exchange's corporate update, Nov 19, 2013
Slide 1: ICE Strategic & Financial Update
ICE Strategic & Financial Update November 19, 2013
Slide 2: Cautionary Statement Regarding Forward Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS This presentation contains “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 - look
Slide 3: IntercontinentalExchange Group
IntercontinentalExchange Group ICE is the leading network of regulated exchanges and clearing houses for the global financial and commodity markets. 3
Slide 4: Strategic Opportunities
Strategic Opportunities Capitalize on Clearing Leadership ▪ Driving greater operational and capital efficiencies for market participants ▪ Well - positioned to serve regulatory mandates to clear swaps in US and EU ▪ Leading global CDS clearing houses ▪ Addition of 6th clearing house in Asia; reflect
Slide 5: A Focus on Results
A Focus on Results Strong Cash Flow & Capital Return ▪ Robust cash flow immediately upon closing, pro - forma ~$1.6 B in TTM Op CF as of 9/30/13 ▪ Rapid projected deleveraging to 1.5x Debt - to - Adj. EBITDA (1) within 18 - 24 months post - close ▪ Flexibility to pursue additional strategic growth o
Slide 6: Diversified Across Growth Markets
Diversified Across Growth Markets (1) Does not reflect any adjustment for estimated transaction - related non - cash write - down of deferred revenue (2) Other revenues include: NYSE Regulation, Market Connectivity, Co - location, SFTI and other technology services and miscel laneous revenue Exchang
Slide 7: Liffe US to Transition to ICE Futures US & Liffe UK
Liffe US to Transition to ICE Futures US & Liffe UK CURRENT OPERATIONS TARGET OPERATIONS NYSE Liffe US ▪ Euribor ▪ Treasuries ▪ DTCC GCF Repo ▪ Metals ▪ MSCI ▪ Bring operational and capital efficiencies across Liffe’s interest rate offering ▪ Establishing strong index complex by pairing MSCI, Russel
Slide 8: Euronext Liffe Separation
Euronext Liffe Separation ▪ First priority is to execute on an extensive work plan that has been established with regulators to separate the Euronext and Liffe businesses that merged in 2002 ▪ No strategic opportunities may be pursued with respect to Euronext until separation work is fully completed
Slide 9: Liffe UK to Transition to ICE Futures Europe
Liffe UK to Transition to ICE Futures Europe CURRENT OPERATIONS TARGET OPERATIONS NYSE Liffe UK ▪ Interest Rates ▪ FTSE Indexes ▪ FX ▪ Soft Commodities ▪ Strengthen Liffe’s interest rate complex by combining rates products into one exchange and clearing house ▪ Strong commodities franchise across gl
Slide 10: Interest Rate Markets
Interest Rate Markets 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Euribor Futures Short Sterling Futures Euribor Options Short Sterling Options Long GILT Other ▪ Opportunity across short - , mid - and long - term interest rate products ▪ Plan to launch Ultra Long 30 year Gilt as first major ne
Slide 11: ICE Benchmark Administration (LIBOR)
▪ NYSE’s transition as the new administrator for LIBOR expected to be completed in early 2014 ▪ LIBOR remains one of the most ubiquitous benchmarks globally ▪ Estimates on the notional value of financial products using LIBOR range from $300 trillion (1) up to $900 trillion (2) ▪ Track record of leve
Slide 12: Establish Independent Euronext Structure
Establish Independent Euronext Structure: ▪ Euronext markets in Paris, Amsterdam, Brussels, London and Lisbon & Continental Derivatives ▪ The Euronext perimeter also includes certain commercial technology and exchange solutions that were formerly part of NYXT Key Elements: ▪ European management team
Slide 13: Pre-eminent Trading & Listing Business
Pre - eminent Trading & Listing Business $28.6B $7.4B $6.7B $6.5B $5.8B NYSE Euronext Tokyo Nasdaq OMX Brazil LSE YTD 2013 Global IPO Capital Raising - Top 5 by Proceeds $105.3B $32.2B $17.9B $17.4B $16.0B NYSE Euronext Nasdaq OMX LSE Tokyo Hong Kong YTD 2013 Global Follow - On Capital Raising - Top
Slide 14: Optimize NYXT Portfolio
Optimize NYXT Portfolio ~$120MM Revenue¹ ~17% EBITDA margin ¹ ~ 600 Headcount ¹ 2014 Estimate; EBITDA margin is a non - GAAP measure and is calculated before corporate allocations. Buy - side Platforms NYFIX ▪ Leading buy - side order and messaging delivery platform, 800 buy - side firms ▪ 11,000 or
Slide 15: Singapore Mercantile Exchange (SMX)
Singapore Mercantile Exchange (SMX) Extending ICE’s global markets and clearing network ▪ Extends ICE’s exchange and clearing infrastructure into Asia • ICE markets and clearing houses now in US, UK, Continental Europe, Brazil, Canada and Asia • Responsive to regionalization trend driven by ongoing
Slide 16: Combined Trailing Twelve Month Financial Highlights
Combined Trailing Twelve Month (TTM) Financial Highlights Key Financial Adjustments (3) ▪ Non - cash o Elimination of deferred listings revenue - $90MM to $95MM per year o Lower D&A from B/S revaluation to fair market value - $45MM to $50MM per year o Lower Interest Expense from Debt revaluation - $
Slide 17: Expense Synergies
Expense Synergies Expect $500MM; $95MM achieved through 3Q13 * Synergy plans developed and in place to achieve a total of ~$500MM * Expect to achieve 70%+ of synergies on a run rate basis exiting 2014 * 90%+ of synergies achieved on a run rate basis exiting 2015 Annual Run-Rate Synergies Description
Slide 18: Debt Structure and Maturity Schedule
$1,260 $600 $800 $12 $55 $73 $250 CP $ 1,350 $850 $0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 NYX Eurobond ICE 5-Yr Senior Notes ICE 10-Yr Senior Notes Term Loan Facility Commercial Paper NYX Senior Notes 1.4 50 % Debt Structure ▪ Issued $1.4B
Slide 19: Guidance & Reporting
Guidance & Reporting ▪ Two reporting segments: ICE Group & Euronext ▪ Provide financial information and volumes for our Global Derivatives business (including options) and Cash Equities & Listings Business ▪ Volumes release will reflect combined company beginning in 2014 and move to 3 rd business da
Slide 20: Key Milestones
Key Milestones 1H14 NYXT Optimization & Liffe Integration End of 2014 70%+ synergies achieved on run rate exiting 2014 In 18-24 Months Debt-to-EBITDA <1.5x 2014 2015 11/13/13 Deal Completion Mid 2014 Euronext / Liffe; Separation & Euronext IPO End of 2014 NYSE Liffe Integration with ICE Futures End
Slide 21: Appendix
APPENDIX Intercontinentalexchange 21
Slide 22: Helpful Website Links
Helpful Website Links ▪ Fact sheet ▪ ICE - NYX Deal ▪ Supplemental Information including volumes and trading days ▪ Management Bios 22
Slide 23: Trailing Twelve Month Calculations
Trailing Twelve Month Calculations 23 Income Statement (in 000's) ICE NYSE Euronext Combined ICE NYSE Euronext Combined Total Revenues, Less Transaction-Based Expenses $1,384,748 $2,347,000 $3,731,748 $1,366,809 $2,390,000 $3,756,809 Total Operating Expenses $565,466 $1,663,000 $2,228,466 $537,352 $
Slide 24: ICE Non-GAAP Reconciliation
12 Months Ended 9/30/13 12 Months Ended 9/30/12 Net income attributable to ICE $559 $549 Add: NYSE Euronext transaction costs and banker fee relating to other acquisitions (1) 40 - Add: Costs expensed related to the Credit Facilities (1) - 3 Add: Duplicate rent expenses and lease termination costs (
Slide 25: NYSE Euronext Non-GAAP Reconciliation
12 Months Ended 9/30/13 12 Months Ended 9/30/12 Income (loss) before income taxes - GAAP $570 $517 Less: Merger expenses and exit costs (1) 127 107 Debt refinancing costs 24 - BlueNext tax settlement (1) - 42 Net (gain) loss on disposal activities (15) 2 Fair value adjustment to RSU awards (1) 10 -
Slide 26: Reconciliation of Adjusted Non-GAAP EBITDA
Reconciliation of Adjusted Non - GAAP EBITDA 26 ( in $ millions) T TM 3Q13 2Q13 1Q13 4Q12 Net income attributable to ICE $559 $141 $153 $136 $129 Add: NYSE Euronext transaction costs and banker fee relating to ICE Endex acquisition 40 5 8 17 9 Add: Duplicate rent expenses and lease termination costs
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