Slide 1: Fourth Quarter & Full Year 2014 Earnings Presentation
Intercontinental Exchange (NYSE: ICE) Fourth Quarter & Full Year 2014 Earnings Presentation February 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: Earnings Conference Call - Fourth Quarter 2014
Earnings Conference Call - Fourth Quarter 2014 Jeffrey C. Sprecher Chairman and Chief Executive Officer Scott A. Hill Chief Financial Officer Charles A. Vice President, Chief Operating Officer Kelly Loeffler, CFA Isabel Janci Melanie Skijus, CFA SVP, Corporate Communications, Sr. Director, Investor
Slide 4: 9th Consecutive Record Year Driven by Solid Execution
9th Consecutive Record Year Driven by Solid Execution Net Revenues Record Financial Performance in 2014 3,200 $3.1B ▪ Net revenue(1) of $3.1B, +3% y/y pro-forma 2,800 25% ▪ Adj. operating margin(2) of 55% GR 2,400 ' 14 CA '09 - ▪ Adj. EPS(2) of $9.63, +15% y/y $ (Millions) 2,000 1,600 ▪ Record opera
Slide 5: Fourth Quarter 2014 Financial Performance
Fourth Quarter 2014 Financial Performance INCOME STATEMENT (in millions except per share amounts) 4Q14 4Q13 Financial Highlights Net revenues $800 $536 ▪ Consolidated 4Q14 net revenues of Operating Expenses $400 $373 $800MM, +10% y/y pro-forma(3) (1) Adj. Operating Expenses $340 $244 ◦ Record data s
Slide 6: Fourth Quarter 2014 Revenue and Expense Detail
Fourth Quarter 2014 Revenue and Expense Detail Net Revenue Mix Adjusted Expenses(3) U.S. Cash Non-Cash Listings Cash Comp. Equities Comp. & Benefits 7% 12% 6% 36% Prof. Services & Data Services Acquisition Exp. 22% 9% 53% 16% Tech & Global 6% Deprec. & 17% Communications Derivatives Other 16% Amorti
Slide 7: Futures & Options - Fourth Quarter 2014
Futures & Options - Fourth Quarter 2014 4Q14 futures and options rev of $335MM, +7% Futures & Options Revenue y/y pro-forma(1) +7% y/y(1) 350 ▪ Brent rev of $65MM, +31% y/y 300 ▪ Nat Gas rev of $53MM, +5% y/y 250 ($ millions) 200 ▪ Interest Rate rev of $53MM, -19% y/y pro-forma(1) 150 100 Rate Per C
Slide 8: OTC Swaps Clearing - Fourth Quarter 2014
OTC Swaps Clearing - Fourth Quarter 2014 CDS Clearing Revenue $97MM, 100 +23% y/y Since launch, $61T in CDS cleared, $1.6T OI 90 80 2014 CDS Revenue of $97MM, +23% y/y 70 $ (Millions) 60 ▪ ICE Clear Credit leader in buyside clearing with 50 $11T cleared through 2014 40 30 ▪ Buyside activity increase
Slide 9: NYSE Cash Trading & Listings Leadership
NYSE Cash Trading & Listings Leadership US Cash ADV & Market Share NYSE Cash Trading 25 ▪ 2014 Revenue of $188MM, +6% y/y pro- 1,500 forma(1) 23 Market Share (%) ▪ Increased share and revenue capture ADV (in millions) 21 1,000 ▪ Advocating for market structure change 19 500 NYSE Listings - Record 20
Slide 10: Expense Synergy Realization
Expense Synergy Realization ▪ Accelerated expense synergy realization for the second consecutive quarter ▪ Over 50% of synergies realized by the end of 2014 ▪ 1Q15 operating expense $335-340MM and FY15 operating expense $1.335-1.355B, including acquisitions, synergies and investments ▪ Please refer
Slide 11: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow Operating Cash Flow Solid Balance Sheet 1,500 ▪ $0.7B net unrestricted cash and short-term investments 1,250 26% ▪ Net debt of $3.2B; Adjusted Debt-to-EBITDA(1) of 1.7x GR CA -'14 1,000 '09 $ (Millions) 2014 Cash Flow 750 ▪ Record $1.5B in operating cash flow 500 ▪ Generate
Slide 12: Completed all 2014 Integration & Strategic Objectives
Completed all 2014 Integration & Strategic Objectives Strategic Initiatives 1Q-3Q14 4Q14 Implemented quarterly dividend policy Completion of SMX/SMXCC acquisition Liffe/Euronext separation IBA assumed administration of LIBOR and ISDAFIX® Launched Liffe 30-Year Ultra Long Gilt NYSE Technologies dives
Slide 13: 2015 Opportunities and Environment
2015 Opportunities and Environment Expect double-digit earnings growth in 2015 driven by several diverse areas including: ▪ Expense base declines driven by $110-115MM in synergy realization ▪ Data services growth driven by expanded product suite across Liffe, IBA, SuperDerivatives and NYSE ▪ OTC cle
Slide 14: ICE Brent: Leading Global Oil Benchmark
ICE Brent: Leading Global Oil Benchmark ▪ 18th consecutive year of record volume driven by secular trends in risk management, role as the global benchmark, options growth, and introduction of 400 related refined oil products in last seven years ▪ Record 2014 ADV +3% y/y; Record OI +50% y/y ▪ Global
Slide 15: Natural Gas: Volumes Improving, Revenue Growing
Natural Gas: Volumes Improving, Revenue Growing ▪ Secular trends toward exchange trading and clearing in EU gas markets ▪ 4Q14 Nat Gas ADV, -11% y/y but revenue +5% y/y driven by continued growth in EU Nat Gas ▪ 4Q14 EU Nat Gas ADV +91% y/y; OI +73% y/y ▪ Adding to EU gas contracts that include: UK
Slide 16: Interest Rates: Strength in UK Rates
Interest Rates: Strength in UK Rates ▪ Expanding European interest rate (IR) products; introduced >20 IR products across the curve ▪ 4Q14 IR ADV of -32%; Euribor volume impacted by low volatility in European short-term rates ▪ Excluding Euribor, 4Q14 IR ADV +14% y/y and OI +27% y/y driven by growth
Slide 17: Leading European Interest Rate Complex
Leading European Interest Rate Complex ▪ Developing new products across OTC, swap futures (ERIS) and futures ▪ Products span European geographies, tenors and instruments 17
Slide 18: Expanding Data Services Offering
Expanding Data Services Offering ▪ Broad range of data products and services across futures, OTC and equities ▪ Growing through internal product development and strategic acquisitions ▪ ICE Benchmark Administration supporting increased confidence in benchmarks Quarterly Data Services Revenue Annual
Slide 19: ICE: Consistent Growth and Strong Strategic Position
ICE: Consistent Growth and Strong Strategic Position Adjusted EPS from Continuing Operations $9.63 10 9 $8.38 1 9% 8 AGR $7.52 4C -’1 $6.90 ’06 7 6 $5.35 5 $4.17 $4.27 4 $3.39 3 $2.40 2 1 0 (1) (1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 (1) These figures represent non-GAAP results. Please refe
Slide 20: Appendix
SI EE APPENDIX 20
Slide 21: Financial Guidance & Synergy Expense Base Reconciliation
Financial Guidance & Synergy Expense Base Reconciliation 2015 Guidance ICE expects: ▪ Combined Data Services and Listings Revenue growth of ~$100MM (excluding acquisitions) ▪ Incremental Revenues of $50-55MM and Expenses of $40-45MM from 4Q14 acquisitions ▪ Operating Expense reduction of ~$90MM, inc
Slide 22: ICE Summary Balance Sheet
ICE Summary Balance Sheet In millions BALANCE SHEET 12/31/2014 12/31/2013 CHANGE Assets ▪ $0.7B unrestricted cash and Unrestricted Cash & ST Inv $1,852 $1,035 $817 short-term investments, Other Current Assets 48,393 43,234 5,159 excluding $1.1B set aside for the Current Assets 50,245 44,269 5,976 re
Slide 23: Adjusted Net Income from Continuing Ops and Diluted EPS from Continuing Ops
Adjusted Net Income from Continuing Ops and Diluted EPS from Continuing Ops In millions (except per share amounts) 12 Months 12 Months 3 Months 3 Months Ended Ended Ended Ended 12/31/14 12/31/13 12/31/14 12/31/13 Income (loss) from continuing operations $1,005 $320 $294 (120) Add: NYSE transaction a
Slide 24: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation In millions 12 Months 12 Months 3 Months 3 Months Ended 12/31/14 Ended 12/31/13 Ended 12/31/14 Ended 12/31/13 Total revenues, less transaction-based expenses $3,092 $1,598 $800 $536 Total operating expenses 1,644 808 400
Slide 25: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate In millions Three Months Ended Year Ended December 31 December 31 2014 2013 2014 2013 Income from continuing operations before income taxes $ 1,407 $ 504 $ 412 $ (97) Less: Income tax expense 402 184 118 23 Net Income from continuing operations $ 1,005 $ 320 $ 294 $ (120)
Slide 26: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation In millions Trailing 12 Months Ended 12/31/14 Adjusted net income from Continuing Ops $1,104 Add: Income tax expense 402 Add: Income tax expense adjustment on Non-GAAP Items 91 Less: Other (income) expense, net(1) (25) Add: Interest expense 96 Add: Depreciation and amo