EX-99.1 2 ex99-1.htm EXHIBIT 99.1


Exhibit 99.1
 
(LOGO)
 
Intercontinental Exchange Reports Record Fourth Quarter 2014 Adjusted EPS from Continuing Operations of $2.59, +30% year over year; Record Full Year 2014 Adjusted EPS from Continuing Operations of $9.63, +15% year over year
 
ATLANTA, February 5, 2015 - Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, today reported record financial results for the fourth quarter and full year 2014. For the quarter ended December 31, 2014, consolidated net income attributable to ICE was $288 million on $800 million consolidated revenues less transaction-based expenses. On a GAAP basis, diluted earnings per share (EPS) in the fourth quarter were $2.54 and for the full year 2014 were $8.55.
 
ICE’s operating results include amortization of acquisition-related intangibles, acquisition and integration related expenses, gain on our Euronext sale and our share of OCC’s full year income that are not reflective of ICE’s cash operations and core business performance. Excluding these items, net of tax, fourth quarter 2014 adjusted income from continuing operations was $294 million and adjusted diluted EPS from continuing operations were $2.59, an increase of 30% year over year. Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on adjusted income from continuing operations and adjusted diluted EPS from continuing operations.
 
“By focusing on the requirements of our customers and delivering on our integration milestones, we achieved  record results in 2014,” said ICE Chairman and CEO Jeffrey C. Sprecher.  “We strengthened our leadership position in growth markets, including global oil, natural gas and swaps clearing. During the year we also separated Euronext, seamlessly transitioned Liffe’s markets to our exchanges and accelerated our synergy realization. We grew revenues at the New York Stock Exchange, increased market share in trading and again led in global capital raising with 129 initial public offerings. We remain focused on delivering growth and solid returns to our investors by putting the needs of our customers first.”
 
“Our strong cash generation and balance sheet enabled us to pursue strategic growth initiatives this year while returning nearly $1 billion of capital to shareholders through dividends and share buybacks,” said ICE CFO, Scott A. Hill. “We recorded our 18th record year in Brent volume and earned nearly $100 million in CDS clearing revenues. We continued to expand our leadership in clearing through product innovation and strategic acquisitions. At the same time, we completed nearly $290 million, or over 50%, of our synergy target by the end of 2014. The strong momentum we have established entering 2015 coupled with continued execution of our strategic initiatives and further expense reductions during 2015 support our target of once again delivering double digit earnings growth, strong cash generation and meaningful capital returns.”
 
Fourth Quarter 2014 Results
 
Fourth quarter 2014 consolidated revenues, less transaction-based expenses, were $800 million.  Included in this amount are transaction and clearing revenues, less transaction-based expenses, of $479 million.
 
Consolidated data services fee revenues for the fourth quarter of 2014 were $174 million, consolidated listings revenues were $95 million and consolidated other revenues were $52 million.
 
Consolidated operating expenses were $400 million for the fourth quarter of 2014, including $27 million in integration and deal related expenses. Consolidated operating income for the fourth quarter was $400 million and operating margin was 50%.  The effective tax rate for the fourth quarter was 29%.
 
 
 

 

 
 
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Full Year 2014 Results
 
For the year ended December 31, 2014, consolidated revenues, less transaction-based expenses, were $3.1 billion.  Included in this amount are transaction and clearing revenues, less transaction-based expenses, of $1.9 billion.  Consolidated data services fee revenues for 2014 were $631 million, consolidated listings revenues were $367 million and consolidated other revenues were $210 million.
 
Consolidated 2014 income from continuing operations was $1.0 billion and diluted EPS from continuing operations were $8.46.  Adjusted income from continuing operations was $1.1 billion and adjusted diluted EPS from continuing operations were $9.63 for the year, representing a 15% increase year over year. Please refer to the reconciliation of non-GAAP financial measure included in this press release.
 
Consolidated operating expenses were $1.6 billion for 2014, including $124 million in integration and deal related expenses.  Consolidated operating income for 2014 was $1.4 billion and operating margin was 47%. The effective tax rate for the year was 29%.
 
Consolidated cash flows from operations were a record $1.5 billion for 2014. Operational capital expenditures were $91 million and capitalized software development costs totaled $78 million in 2014.  Dividends paid during 2014 were $299 million and share repurchases totaled $645 million.
 
As of December 31, 2014, ICE had unrestricted cash of $652 million and $3.2 billion in outstanding debt, excluding $1.1 billion reserved for the repayment of the 2015 Eurobonds.
 
Financial Guidance and Additional Information
 
 
ICE expects full year 2015 combined Data Services and Listings revenue growth of approximately $100 million, excluding acquisitions.
 
 
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.
 
 
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.
 
 
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.
 
 
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.
 
 
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.
 
 
ICE expects full year 2015 consolidated tax rate in the range of 28% to 31%.
 
 
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.
 
Earnings Conference Call Information
 
ICE will hold a conference call today, February 5th, at 8:30 a.m. ET to review its fourth quarter and full year 2014 financial results. A live audio webcast of the earnings call will be available on the company’s website at www.theice.com in the investor relations section. Participants may also listen via telephone by dialing 888-317-6003 from the United States, 866-284-3684 from Canada or 412-317-6061 from outside of the United States and Canada. Telephone participants are required to provide the participant entry number 2502670 and are recommended to call 10 minutes prior to the start of the call. The call will be archived on the company’s website for replay.
 
Historical futures, options and cash ADV, rate per contract, open interest data and CDS cleared information can be found at: http://ir.theice.com/investors-and-media/supplemental-volume-info/default.aspx
 
 
 

 

 
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Consolidated Statements of Income
(In millions, except per share amounts)
                         
   
Year Ended December 31,
   
Three months ended
December 31,
 
   
2014
   
2013
   
2014
   
2013
 
Revenues:
                       
Transaction and clearing fees, net
  $ 3,013     $ 1,379     $ 811     $ 480  
Data services fees
    631       229       174       100  
Listing fees
    367       33       95       33  
Other revenues
    210       75       52       41  
Total revenues
    4,221       1,716       1,132       654  
Transaction-based expenses:
                               
Section 31 fees
    359       32       107       32  
Cash liquidity payments, routing and clearing
    770       86       225       86  
Total revenues, less transaction-based expenses
    3,092       1,598       800       536  
Operating expenses:
                               
Compensation and benefits
    592       302       144       109  
Technology and communication
    188       63       53       27  
Professional services
    181       54       31       31  
Rent and occupancy
    78       39       17       16  
Acquisition-related transaction and integration costs
    129       143       27       111  
Selling, general and administrative
    143       51       39       23  
Depreciation and amortization
    333       156       89       56  
Total operating expenses
    1,644       808       400       373  
Operating income
    1,448       790       400       163  
Other income (expense):
                               
Interest expense
    (96 )     (56 )     (23 )     (27 )
Other income (expense), net
    55       (230 )     35       (233 )
Other income (expense), net
    (41 )     (286 )     12       (260 )
Income from continuing operations before income tax expense
    1,407       504       412       (97 )
Income tax expense
    402       184       118       23  
Income (loss) from continuing operations
    1,005       320       294       (120 )
Income (loss) from discontinued operations, net of tax
    11       (50 )           (50 )
Net income (loss)
  $ 1,016     $ 270     $ 294     $ (170 )
Net income attributable to non-controlling interest
    (35 )     (16 )     (6 )     (6 )
Net income (loss) attributable to Intercontinental Exchange, Inc.
  $ 981     $ 254     $ 288     $ (176 )
                                 
Basic earnings (loss) per share attributable to Intercontinental Exchange, Inc. common shareholders:
                               
Continuing operations
  $ 8.50     $ 3.88     $ 2.56     $ (1.32 )
Discontinued operations
    0.10       (0.64 )           (0.53 )
Basic earnings per share
  $ 8.60     $ 3.24     $ 2.56     $ (1.85 )
Diluted earnings (loss) per share attributable to Intercontinental Exchange, Inc. common shareholders:
                               
Continuing operations
  $ 8.46     $ 3.84     $ 2.54     $ (1.31 )
Discontinued operations
    0.09       (0.63 )           (0.52 )
Diluted earnings per share
  $ 8.55     $ 3.21     $ 2.54     $ (1.83 )
Weighted average common shares outstanding:
                               
Basic
    114       78       113       95  
Diluted
    115       79       113       96  
Dividend per share
  $ 2.60     $ 0.65     $ 0.65     $ 0.65  
 
 
 

 

 
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Consolidated Balance Sheets (in millions)
 
   
December 31,
   
December 31,
 
   
2014
   
2013
 
Assets:
           
Current assets:
           
Cash and cash equivalents
  $ 652     $ 961  
Short-term investments
    1,200       74  
Short-term restricted cash and investments
    329       277  
Customer accounts receivable, net
    471       546  
Margin deposits and guaranty funds
    47,458       42,216  
Prepaid expenses and other current assets
    135       195  
Total current assets
    50,245       44,269  
Property and equipment, net
    874       889  
Other non-current assets:
               
Goodwill
    8,535       9,189  
Other intangible assets, net
    7,780       9,323  
Long-term restricted cash and investments
    297       161  
Long-term investments
    379       324  
Other non-current assets
    169       267  
Total other non-current assets
    17,160       19,264  
Total assets
  $ 68,279     $ 64,422  
                 
Liabilities and Equity:
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 337     $ 392  
Section 31 fees payable
    137       85  
Accrued salaries and benefits
    205       304  
Deferred revenue
    69       58  
Short-term debt
    2,042       1,135  
Margin deposits and guaranty funds
    47,458       42,216  
Other current liabilities
    291       131  
Total current liabilities
    50,539       44,321  
Non-current liabilities:
               
Non-current deferred tax liability, net
    1,938       2,594  
Long-term debt
    2,247       3,923  
Accrued employee benefits
    516       412  
Other non-current liabilities
    482       469  
Total non-current liabilities
    5,183       7,398  
Total liabilities
    55,722       51,719  
Redeemable non-controlling interest
    165       322  
Equity:
               
ICE shareholders’ equity:
               
Common stock
    1       1  
Treasury stock, at cost
    (743 )     (53 )
Additional paid-in capital
    9,938       9,794  
Retained earnings
    3,210       2,482  
Accumulated other comprehensive income (loss)
    (46 )     125  
Total ICE shareholders’ equity
    12,360       12,349  
Non-controlling interest in consolidated subsidiaries
    32       32  
Total equity
    12,392       12,381  
Total liabilities and equity
  $ 68,279     $ 64,422  
 
 
 

 

 
(LOGO)
 
Non-GAAP Financial Measures and Reconciliation
 
We use non-GAAP measures internally to evaluate our performance and in making financial and operational decisions. When viewed in conjunction with our U.S. generally accepted accounting principles, or GAAP, results and the accompanying reconciliation, we believe that our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. We strongly recommend that investors review the U.S. GAAP financial measures included in this press release and in our Annual Report on Form 10-K, including our consolidated financial statements and the notes thereto.
 
Adjusted income from continuing operations for the periods presented below are calculated by adding income from continuing operations, the adjustments described below, which are not reflective of our cash operations and core business performance, and the related income tax effect. The following table reconciles income from continuing operations to adjusted income from continuing operations and calculates adjusted earnings per share from continuing operations for the period presented below (in millions except per share amounts):
 
               
Three months
   
Three months
 
   
Year ended
   
Year ended
   
ended
   
ended
 
   
December 31,
   
December 31,
   
December 31,
   
December 31,
 
   
2014
   
2013
   
2014
   
2013
 
                         
Income (loss) from continuing operations
  $ 1,005     $ 320     $ 294     $ (120 )
Add: NYSE integration costs and banker fees
    124       140       27       109  
Add: Amortization of acquisition-related intangibles
    131       56       33       20  
Add: Cetip impairment loss
          190             190  
Add: Early payoff of outstanding debt
          51             51  
Add: Duplicate rent expenses
          7              
Less: Net gain on sale of 6% remaining ownership in Euronext
    (4 )           (4 )      
Less: Income from OCC equity investment
    (26 )           (26 )      
Less: Income tax effect related to the items above
    (91 )     (85 )     (24 )     (53 )
Less: Net income from continuing operations attributable to non- controlling interest
    (35 )     (16 )     (6 )     (6 )
Adjusted income from continuing operations:
  $ 1,104     $ 663     $ 294     $ 191  
                                 
Earnings (loss) per share from continuing operations:
                               
Basic
  $ 8.50     $ 3.88     $ 2.56     $ (1.32 )
Diluted
  $ 8.46     $ 3.84     $ 2.54     $ (1.31 )
                                 
Adjusted earnings per share from continuing operations:
                               
Adjusted basic
  $ 9.67     $ 8.45     $ 2.60     $ 2.02  
Adjusted diluted
  $ 9.63     $ 8.38     $ 2.59     $ 2.00  
                                 
Weighted average common shares outstanding:
                               
Basic
    114       78       113       95  
Diluted
    115       79       113       96  
 
 
 

 

 
(LOGO)
 
About Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE) is the leading network of regulated exchanges and clearing houses for financial and commodity markets.  ICE delivers transparent, reliable and accessible data, technology and risk management services to markets around the world through its portfolio of exchanges, including the New York Stock Exchange, ICE Futures and Liffe.
 
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE, New York Stock Exchange and LIFFE. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at www.intercontinentalexchange.com/terms-of-use.
 
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - Statements in this press release regarding ICE’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE’s Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in Intercontinental Exchange, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on February 5, 2015.  We caution you not to place undo reliance on these forward looking statements.  Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of an unanticipated event. New factors emerge from time to time, and it is not possible for management to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
 
SOURCE: Intercontinental Exchange
 
ICE-CORP
 
Media Contact:                                                                                                                                 
 
Brookly McLaughlin, Senior Director Communications
+1 312 836 6728
brookly.mclaughlin@theice.com
 
Investor Contact:
 
Kelly Loeffler, SVP Investor Relations & Corp. Communications
+1 770 857 4726
kelly.loeffler@theice.com
 
Isabel Janci, Senior Director, Investor Relations
+1 770 857 0363
isabel.janci@theice.com
 
Melanie Skijus, Director, Investor Relations
+1 770 857 2532
melanie.skijus@theice.com