Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — KBW 2014 Securities Brokerage & Market Structure Conference
21 slides from Intercontinental Exchange's conference presentation, Nov 19, 2014
Slide 1: KBW 2014 Securities Brokerage & Market Structure Conference
KBW 2014 Securities Brokerage & Market Structure Conference November 19, 2014 Intercontinental Exchange (NYSE: ICE)
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: ICE: Global Network of Exchanges & Clearing Houses
ICE: Global Network of Exchanges & Clearing Houses LEADING EXCHANGES SERVING 9 ASSET CLASSES Global benchmarks in energy, interest rates, ags, & equity indexes 2014 Revenue Mix Leading equities and equity options exchanges Listings Global 6 CENTRAL CLEARING HOUSES Cash Derivatives Equities 11%
Slide 4: Focused on Growth and Innovation
Focused on Growth and Innovation Net Revenue $ (millions) 2,500 2006 2014 $2,292 Exchanges 1 11 Clearing Houses 0 6 2,000 Asset Classes 1 9 $1,674 1,500 $1,327 $1,363 $1,150 $995 1,000 $813 $574 500 $314 0 2006 2007 2008 2009 2010 2011 2012 2013 YTD Sep 4
Slide 5: Leading Position in World's Oil Markets
Leading Position in World's Oil Markets ▪ Global oil benchmark ICE Brent ADV +8% y/y in 3Q, +28% y/y in Oct. to 817k ADV ▪ Brent OI surpassed 2Q's record levels at 3.8MM contracts, +20% YTD Oct '14 ▪ Combined ICE Brent & WTI futures market share of 55% YTD Sep '14 ▪ Secular trends, geopolitical even
Slide 6: Natural Gas Futures & Options
Natural Gas Futures & Options ▪ Total nat gas ADV declined 19% in 3Q y/y while revenues declined only 1% y/y due to mix ◦ EU nat gas volumes nearly double FY2013 volumes ▪ U.S. nat gas volatility and volume remains muted, EU nat gas volume benefiting from move to exchange trading and clearing ADV +8
Slide 7: Interest Rate Futures & Options
Interest Rate Futures & Options ▪ Total interest rate (IR) ADV -31% 3Q y/y, revenue of $60MM in 3Q, -17% y/y on a pro-forma basis ▪ Excluding Euribor, 3Q14 IR ADV -3% y/y; OI up 47% y/y ◦ Other EU interest rates ADV up in 3Q14; Gilt +14% y/y, Swiss +3% y/y, GCF Repo +17% y/y -17% y/y (1) (1) (1) 3Q1
Slide 8: Leading Global CDS Clearing Solution
Leading Global CDS Clearing Solution ▪ Through October 31st, $59TR in CDS cleared, including $10TR in buy-side clearing ▪ Over 500 instruments cleared including single names and indices ▪ Record buyside clearing driven by increasing European participation at ICE Clear Credit Clearing Revenue $ (mill
Slide 9: NYSE Trading & Listing
NYSE Trading & Listing NYSE Trading ▪ 3Q ADV -4% y/y; Oct ADV +32% y/y ▪ Solid share and revenue capture ▪ Advocating for market structure change ◦ Rationalizing order types ◦ Streamlining technology platforms ▪ Investing to enhance corporate services NYSE Listings – Record 3Q14 ▪ Record revenue of
Slide 10: Diverse Long-term Growth and Earnings Drivers
Diverse Long-term Growth and Earnings Drivers Demand for Risk Management Grow Clearing & Global Opportunities ▪ New products >1000 since 2008 ▪ Develop rates franchise, including swaps clearing alongside CDS ▪ Rising open interest and volatility create volume growth ▪ ICE Futures Singapore & ICE Cle
Slide 11: Extending ICE's Global Clearing & Data Services
Extending ICE's Global Clearing & Data Services ICE Clear Singapore Holland Clearing House SuperDerivatives Expand clearing network into Asia Expand clearing network to Continental EU Multi-faceted data provider offering multiple growth avenues • Closed February 2014 • Expected to close 4Q14 • $350M
Slide 12: Significant Progress on NYSE Liffe Integration
Significant Progress on NYSE Liffe Integration 3Q14 End of 2014 2015 2016 Divested NYSE NYSE Liffe Optimize Business Complete NYSE Tech Businesses Integration with Platforms & Tech Platform ICE Futures Rationalization 11/13/13 Mid 2014 End 2014 1Q16 1Q17 Closed NYSE Euronext Liffe: Expect Realized E
Slide 13: Robust Cash Generation & Strong Balance Sheet
Robust Cash Generation & Strong Balance Sheet ▪ Record $922MM in operating cash flow Sep YTD ‘14 ▪ YTD Sep ‘14 adjusted EPS(1) of $6.53, +5% y/y ▪ Returned $738MM of capital to shareholders through October 2014 ▪ Use excess cash to generate best returns & long-term growth for shareholders Operating
Slide 14: ICE: Consistent Growth through Cycles
ICE: Consistent Growth through Cycles (1) (1) (1) These figures represent non-GAAP results. Please refer to slides in the appendix for a reconciliation to the equivalent GAAP measure. 14
Slide 15: Appendix
APPENDIX Intercontinental Exchange 15
Slide 16: Financial Reporting & Guidance Update
Financial Reporting & Guidance Update Strong Cash Generation to be Reflected in Adjusted EPS Metric: ▪ Starting in 4Q14, ICE's adjusted EPS will exclude amortization of acquisition-related intangibles, net of tax ◦ D&A guidance excludes amortization of acquisition-related intangibles ▪ Adjusted EPS
Slide 17: ICE Summary Balance Sheet
ICE Summary Balance Sheet In millions BALANCE SHEET 09/30/2014 12/31/2013 CHANGE Assets ▪ $0.7B unrestricted cash and Unrestricted Cash & ST Inv $1,879 $1,035 $844 short-term investments, Other Current Assets 47,499 43,224 4,275 excluding $1.2B set aside for the Current Assets 49,378 44,259 5,119 re
Slide 18: 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 Months 9 Months 9 Months 3 Months 3 Months Ended Ended 9/30/14 Ended 9/30/13 Ended 9/30/14 Ended 9/30/13 12/31/13 Income from continuing operations $711 $440 $223 $145 $261 Add: NYSE Euronex
Slide 19: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation In millions 9 Months 9 Months 3 Months 3 Months Ended 9/30/14 Ended 9/30/13 Ended 9/30/14 Ended 9/30/13 Total revenues, less transaction-based expenses $2,292 $1,062 $745 $338 Total operating expenses 1,244 435 415 136 Le
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation In millions Trailing 12 Months Ended 9/30/14 Adjusted net income from Continuing Ops $934 Add: Income tax expense 345 Add: Income tax expense adjustment on Non-GAAP Items 32 Less: Other expense, net (24) Add: Interest expense 99 Add: Depreciation and amortization 301 A
Slide 21: Adjusted Operating Income, Adjusted Net Income and EPS from Cont. Ops
Adjusted Operating Income, Adjusted Net Income and EPS from Cont. Ops (excluding amortization of acquisition-related intangibles) In millions (except per share amounts) 3 Months 3 Months 3 Months Ended 9/30/14 Ended 6/30/14 Ended 3/31/14 Total revenue, less transaction based fees $745 $750 $797 Tota
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