UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 or 15(d) of THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 5, 2015 |
INTERCONTINENTAL EXCHANGE, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware | 001-36198 | 46-2286804 |
(State or other jurisdiction of incorporation) |
(Commission File No.) |
(I.R.S. Employer Identification Number) |
5660 New Northside Drive, Third Floor, Atlanta, Georgia 30328
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (770) 857-4700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 5, 2015, Intercontinental Exchange, Inc. issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2014. A copy of the press release announcing such financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained herein, including the attached press release, is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 except as may be expressly set forth by specific reference in such filing.
Intercontinental Exchange makes references to non-GAAP financial information in the attached press release. A description of the non-GAAP financial information and a reconciliation of the non-GAAP financial information to the comparable GAAP financial measures are contained in the attached press release and Intercontinental Exchange’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits | ||
99.1 | Press Release dated February 5, 2015. |
2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
INTERCONTINENTAL EXCHANGE, INC. | |||
Date: February 5, 2015 | /s/ Scott A. Hill | ||
Scott A. Hill Chief Financial Officer |
3 |
INDEX TO EXHIBITS
Exhibit Number | Description |
99.1 | Press Release dated February 5, 2015 |
4 |
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ICE expects full year 2015 combined Data Services and Listings revenue growth of approximately $100 million, excluding acquisitions.
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ICE expects fourth quarter 2014 acquisitions to contribute $50 million to $55 million in incremental 2015 revenues and $40 million to $45 million in incremental 2015 expenses.
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ICE expects a full year 2015 operating expense reduction of ~$90 million, including $110 million to $115 million of synergies and $20 million to $25 million of incremental investments, excluding fourth quarter 2014 acquisitions.
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ICE expects first quarter and full year 2015 operating expenses, excluding amortization of acquisition-related intangibles, in the range of $335 million to $340 million and $1.335 billion to $1.355 billion, respectively. Full year operating expense guidance includes synergies, investments and acquisitions.
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ICE expects first quarter and second quarter 2015 interest expense in the range of $23 million to $25 million, declining to the range of $20 million to $22 million in the second half of 2015.
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ICE expects full year 2015 operational capital expenditures in the range of $165 million to $175 million. ICE expects full year 2015 real estate capital expenditures in the range of $70 million to $80 million.
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ICE expects full year 2015 consolidated tax rate in the range of 28% to 31%.
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ICE’s diluted share count for the first quarter 2015 is expected to be in the range of 112 million to 113 million weighted average shares outstanding. Full year 2015 diluted share count is expected to be in the range of 112 million to 114 million weighted average shares outstanding, in each case including share repurchases through January 2015.
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ICE declared a quarterly cash dividend of $0.65 per share for the first quarter of 2015 with a record date of March 17, 2015 and a payment date of March 31, 2015. The ex-dividend date is March 13, 2015.
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Year Ended December 31,
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Three months ended
December 31, |
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2014
|
2013
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2014
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2013
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Revenues:
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||||||||||||||||
Transaction and clearing fees, net
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$ | 3,013 | $ | 1,379 | $ | 811 | $ | 480 | ||||||||
Data services fees
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631 | 229 | 174 | 100 | ||||||||||||
Listing fees
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367 | 33 | 95 | 33 | ||||||||||||
Other revenues
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210 | 75 | 52 | 41 | ||||||||||||
Total revenues
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4,221 | 1,716 | 1,132 | 654 | ||||||||||||
Transaction-based expenses:
|
||||||||||||||||
Section 31 fees
|
359 | 32 | 107 | 32 | ||||||||||||
Cash liquidity payments, routing and clearing
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770 | 86 | 225 | 86 | ||||||||||||
Total revenues, less transaction-based expenses
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3,092 | 1,598 | 800 | 536 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Compensation and benefits
|
592 | 302 | 144 | 109 | ||||||||||||
Technology and communication
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188 | 63 | 53 | 27 | ||||||||||||
Professional services
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181 | 54 | 31 | 31 | ||||||||||||
Rent and occupancy
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78 | 39 | 17 | 16 | ||||||||||||
Acquisition-related transaction and integration costs
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129 | 143 | 27 | 111 | ||||||||||||
Selling, general and administrative
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143 | 51 | 39 | 23 | ||||||||||||
Depreciation and amortization
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333 | 156 | 89 | 56 | ||||||||||||
Total operating expenses
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1,644 | 808 | 400 | 373 | ||||||||||||
Operating income
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1,448 | 790 | 400 | 163 | ||||||||||||
Other income (expense):
|
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Interest expense
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(96 | ) | (56 | ) | (23 | ) | (27 | ) | ||||||||
Other income (expense), net
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55 | (230 | ) | 35 | (233 | ) | ||||||||||
Other income (expense), net
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(41 | ) | (286 | ) | 12 | (260 | ) | |||||||||
Income from continuing operations before income tax expense
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1,407 | 504 | 412 | (97 | ) | |||||||||||
Income tax expense
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402 | 184 | 118 | 23 | ||||||||||||
Income (loss) from continuing operations
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1,005 | 320 | 294 | (120 | ) | |||||||||||
Income (loss) from discontinued operations, net of tax
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11 | (50 | ) | — | (50 | ) | ||||||||||
Net income (loss)
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$ | 1,016 | $ | 270 | $ | 294 | $ | (170 | ) | |||||||
Net income attributable to non-controlling interest
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(35 | ) | (16 | ) | (6 | ) | (6 | ) | ||||||||
Net income (loss) attributable to Intercontinental Exchange, Inc.
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$ | 981 | $ | 254 | $ | 288 | $ | (176 | ) | |||||||
Basic earnings (loss) per share attributable to Intercontinental Exchange, Inc. common shareholders:
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Continuing operations
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$ | 8.50 | $ | 3.88 | $ | 2.56 | $ | (1.32 | ) | |||||||
Discontinued operations
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0.10 | (0.64 | ) | — | (0.53 | ) | ||||||||||
Basic earnings per share
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$ | 8.60 | $ | 3.24 | $ | 2.56 | $ | (1.85 | ) | |||||||
Diluted earnings (loss) per share attributable to Intercontinental Exchange, Inc. common shareholders:
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Continuing operations
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$ | 8.46 | $ | 3.84 | $ | 2.54 | $ | (1.31 | ) | |||||||
Discontinued operations
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0.09 | (0.63 | ) | — | (0.52 | ) | ||||||||||
Diluted earnings per share
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$ | 8.55 | $ | 3.21 | $ | 2.54 | $ | (1.83 | ) | |||||||
Weighted average common shares outstanding:
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Basic
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114 | 78 | 113 | 95 | ||||||||||||
Diluted
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115 | 79 | 113 | 96 | ||||||||||||
Dividend per share
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$ | 2.60 | $ | 0.65 | $ | 0.65 | $ | 0.65 |
December 31,
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December 31,
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2014
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2013
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Assets:
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Current assets:
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Cash and cash equivalents
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$ | 652 | $ | 961 | ||||
Short-term investments
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1,200 | 74 | ||||||
Short-term restricted cash and investments
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329 | 277 | ||||||
Customer accounts receivable, net
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471 | 546 | ||||||
Margin deposits and guaranty funds
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47,458 | 42,216 | ||||||
Prepaid expenses and other current assets
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135 | 195 | ||||||
Total current assets
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50,245 | 44,269 | ||||||
Property and equipment, net
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874 | 889 | ||||||
Other non-current assets:
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Goodwill
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8,535 | 9,189 | ||||||
Other intangible assets, net
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7,780 | 9,323 | ||||||
Long-term restricted cash and investments
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297 | 161 | ||||||
Long-term investments
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379 | 324 | ||||||
Other non-current assets
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169 | 267 | ||||||
Total other non-current assets
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17,160 | 19,264 | ||||||
Total assets
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$ | 68,279 | $ | 64,422 | ||||
Liabilities and Equity:
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Current liabilities:
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Accounts payable and accrued liabilities
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$ | 337 | $ | 392 | ||||
Section 31 fees payable
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137 | 85 | ||||||
Accrued salaries and benefits
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205 | 304 | ||||||
Deferred revenue
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69 | 58 | ||||||
Short-term debt
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2,042 | 1,135 | ||||||
Margin deposits and guaranty funds
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47,458 | 42,216 | ||||||
Other current liabilities
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291 | 131 | ||||||
Total current liabilities
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50,539 | 44,321 | ||||||
Non-current liabilities:
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Non-current deferred tax liability, net
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1,938 | 2,594 | ||||||
Long-term debt
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2,247 | 3,923 | ||||||
Accrued employee benefits
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516 | 412 | ||||||
Other non-current liabilities
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482 | 469 | ||||||
Total non-current liabilities
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5,183 | 7,398 | ||||||
Total liabilities
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55,722 | 51,719 | ||||||
Redeemable non-controlling interest
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165 | 322 | ||||||
Equity:
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ICE shareholders’ equity:
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Common stock
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1 | 1 | ||||||
Treasury stock, at cost
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(743 | ) | (53 | ) | ||||
Additional paid-in capital
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9,938 | 9,794 | ||||||
Retained earnings
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3,210 | 2,482 | ||||||
Accumulated other comprehensive income (loss)
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(46 | ) | 125 | |||||
Total ICE shareholders’ equity
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12,360 | 12,349 | ||||||
Non-controlling interest in consolidated subsidiaries
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32 | 32 | ||||||
Total equity
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12,392 | 12,381 | ||||||
Total liabilities and equity
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$ | 68,279 | $ | 64,422 |
Three months
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Three months
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Year ended
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Year ended
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ended
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ended
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December 31,
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December 31,
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December 31,
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December 31,
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2014
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2013
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2014
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2013
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Income (loss) from continuing operations
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$ | 1,005 | $ | 320 | $ | 294 | $ | (120 | ) | |||||||
Add: NYSE integration costs and banker fees
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124 | 140 | 27 | 109 | ||||||||||||
Add: Amortization of acquisition-related intangibles
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131 | 56 | 33 | 20 | ||||||||||||
Add: Cetip impairment loss
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— | 190 | — | 190 | ||||||||||||
Add: Early payoff of outstanding debt
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— | 51 | — | 51 | ||||||||||||
Add: Duplicate rent expenses
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— | 7 | — | — | ||||||||||||
Less: Net gain on sale of 6% remaining ownership in Euronext
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(4 | ) | — | (4 | ) | — | ||||||||||
Less: Income from OCC equity investment
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(26 | ) | — | (26 | ) | — | ||||||||||
Less: Income tax effect related to the items above
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(91 | ) | (85 | ) | (24 | ) | (53 | ) | ||||||||
Less: Net income from continuing operations attributable to non- controlling interest
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(35 | ) | (16 | ) | (6 | ) | (6 | ) | ||||||||
Adjusted income from continuing operations:
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$ | 1,104 | $ | 663 | $ | 294 | $ | 191 | ||||||||
Earnings (loss) per share from continuing operations:
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Basic
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$ | 8.50 | $ | 3.88 | $ | 2.56 | $ | (1.32 | ) | |||||||
Diluted
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$ | 8.46 | $ | 3.84 | $ | 2.54 | $ | (1.31 | ) | |||||||
Adjusted earnings per share from continuing operations:
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Adjusted basic
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$ | 9.67 | $ | 8.45 | $ | 2.60 | $ | 2.02 | ||||||||
Adjusted diluted
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$ | 9.63 | $ | 8.38 | $ | 2.59 | $ | 2.00 | ||||||||
Weighted average common shares outstanding:
|
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Basic
|
114 | 78 | 113 | 95 | ||||||||||||
Diluted
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115 | 79 | 113 | 96 |