IntercontinentalExchange Reports Third Quarter Earnings; Diluted EPS of $1.79

IntercontinentalExchange Reports Third Quarter Earnings; Diluted EPS of $1.79

- Revenues of $323MM; -5% yty

- Operating Income of $194MM; -5% yty

- Net Income Attributable to ICE of $131MM; -1% yty

PR Newswire

ATLANTA, Nov. 5, 2012

ATLANTA, Nov. 5, 2012 /PRNewswire/ --IntercontinentalExchange, Inc. (NYSE:
ICE), a leading operator of global markets and clearing houses, today reported
financial results for the third quarter of 2012. Consolidated revenues were
$323 million, a decrease of 5% compared to the third quarter of 2011.
Consolidated net income attributable to ICE was $131 million, down 1% versus
the third quarter of 2011. Diluted earnings per share (EPS) were $1.79, down
1% from the prior third quarter.

(Logo:http://photos.prnewswire.com/prnh/20090727/CL51999LOGO )

Consolidated net income attributable to ICE of $131 million and diluted EPS of
$1.79 for the third quarter of 2012 compare to adjusted consolidated net
income attributable to ICE of $137 million and adjusted diluted EPS of $1.85
for the third quarter of 2011.Please refer to the reconciliation of non-GAAP
financial measures included in this press release for more information on
adjusted net income attributable to ICE and adjusted diluted EPS for the
periods in 2011.

Said ICE Chairman and CEO Jeffrey C. Sprecher: "ICE remains at the forefront
of solutions for financial reform as evidenced by our successful and timely
transition from OTC energy swaps contracts to fully regulated futures on
October 15th. This transition required significant planning and effort and I
am proud that the ICE team achieved this significant move for our customers on
schedule, while positioning ICE to pursue additional growth opportunities.
We also continue to enhance our leadership in clearing and post-trade services
for the OTC markets, and remain focused on delivering sector-leading growth by
leveraging our global markets infrastructure, along with our drive to
innovate."

ICE SVP and CFO Scott A. Hill added: "ICE's consistent outperformance is the
result of financial discipline, a lean operating model, and the ability to
concurrently execute on multiple strategic growth opportunities. During the
past few months, we have announced several new initiatives ranging from
expanding into European natural gas markets to developing CDS futures, while
serving the needs of our customers by successfully transitioning our energy
swaps to futures and launching our new swap data repository."

Third Quarter 2012 Results
Third quarter 2012 consolidated revenues were $323 million, down 5% from the
prior third quarter. Consolidated transaction and clearing revenues decreased
7% to $279 million. The decrease in transaction and clearing revenues was
driven primarily by decreased trading volume in OTC North American natural gas
and power contracts, and a decline in CDS transactions.

Third quarter transaction and clearing revenues in ICE's futures segment grew
1% to $156 million. Average daily volume (ADV) in ICE's futures segment was
1.5 million contracts, down 4% from the prior third quarter.

Transaction and clearing revenues in ICE's global OTC segment were $123
million, down 16% compared to the prior third quarter. Average daily
commissions (ADC) for ICE's OTC energy business decreased 9% to $1.4 million.
Revenues from ICE's credit default swap (CDS) trade execution and clearing
business totaled $33 million in the third quarter of 2012, including $16
million from CDS clearing.

Consolidated market data revenues in the third quarter increased 12% over the
prior third quarter to $36 million. Consolidated other revenues were $8
million.

Consolidated operating expenses were $129 million in the third quarter of
2012, a decline of 6% compared to the year-ago quarter. Consolidated operating
income fell 5% to $194 million in the quarter. Operating margin was 60% in the
third quarter of 2012, consistent with the previous third quarter.

The effective tax rate for the third quarter of 2012 was 27%, compared to 30%
in the third quarter of 2011. 

First Nine Months of 2012 Results
Consolidated revenues in the first nine months of 2012 grew 4% to $1.0
billion. Futures volumes in the first three quarters of the year increased 1%
to 294 million contracts, driving futures transaction and clearing revenue of
$485 million, up 5% from the first three quarters of 2011. ADV in the first
nine months of 2012 was 1.6 million contracts, up 1% from the first three
quarters of 2011.

Global OTC segment transaction and clearing revenues were $423 million in the
first nine months of 2012, down 1% from the prior year period. ADC in ICE's
OTC energy markets were $1.6 million in the first nine months of 2012, up 5%
from the same period of 2011. Consolidated market data revenues increased 19%
to $110 million and consolidated operating margin was 61% for the first three
quarters of 2012.

Cash flows from operations were $573 million in the first nine months of 2012,
up 6% year-over-year. Capital expenditures during the first three quarters of
2012 were $24 million and capitalized software development costs totaled $26
million.

Unrestricted cash was $1.2 billion as of September 30, 2012. At the end of the
third quarter, ICE had $850 million in outstanding debt.

Financial Guidance and Additional Information

  oICE expects consolidated operating expenses for the full year 2012 to be
    flat to up 2% compared to 2011.
  oICE's diluted share count for the fourth quarter of 2012 is expected to be
    in the range of 73.0 million to 74.0 million weighted average shares
    outstanding, and the diluted share count for fiscal year 2012 in the range
    of 72.9 million to 73.9 million weighted average shares outstanding.
  oICE's share repurchase authorization was increased to $500 million in the
    third quarter of 2012. ICE repurchased $13 million in October 2012 and has
    $487 million in remaining capacity in its share repurchase program.

Earnings Conference Call Information
ICE will hold a conference call today, November 5, at 8:30 a.m. ET to review
its third quarter 2012 financial results. A live audio webcast of the earnings
call will be available on the company's website at www.theice.com under About
ICE/Investors & Media. Participants may also listen via telephone by dialing
877-674-6420 if calling from the United States, or 708-290-1370 if dialing
from outside of the United States. Telephone participants should call 10
minutes prior to the start of the call. The call will be archived on the
company's website for replay.

Historical futures volume and OTC commission data can be found at:
http://ir.theice.com/supplemental.cfm

About IntercontinentalExchange
IntercontinentalExchange (NYSE: ICE) is a leading operator of regulated
futures exchanges and over-the-counter markets for agricultural, credit,
currency, emissions, energy and equity index contracts. ICE Futures Europe
hosts trade in half of the world's crude and refined oil futures. ICE Futures
U.S. and ICE Futures Canada list agricultural, currencies and Russell Index
markets. ICE is also a leading operator of central clearing services for the
futures and over-the-counter markets, with five regulated clearing houses
across North America and Europe. ICE serves customers in more than 70
countries.www.theice.com 

The following are trademarks of IntercontinentalExchange, Inc. and/or its
affiliated companies: IntercontinentalExchange, IntercontinentalExchange &
Design, ICE, ICE and block design, ICE Futures Canada, ICE Futures Europe, ICE
Futures U.S., ICE Clear Credit, ICE Clear Europe, ICE Clear U.S., ICE Clear
Canada, The Clearing Corporation, U.S. Dollar Index, ICE Link and Creditex.
All other trademarks are the property of their respective owners. For more
information regarding registered trademarks owned by IntercontinentalExchange,
Inc. and/or its affiliated companies, see https://www.theice.com/terms.jhtml.

Forward-Looking Statements
This press release may contain "forward-looking statements" made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Statements regarding IntercontinentalExchange's business that are not
historical facts are forward-looking statements that involve risks,
uncertainties and assumptions that are difficult to predict. These statements
are not guarantees of future performance and actual outcomes and results may
differ materially from what is expressed or implied in any forward-looking
statement. The factors that might affect our performance include, but are not
limited to: our business environment and industry trends; conditions in global
financial markets; domestic and international economic conditions; volatility
in commodity prices; changes in laws and regulations; increasing competition
and consolidation in our industry; our ability to identify and effectively
pursue acquisitions and strategic alliances and successfully integrate the
companies we acquire on a cost-effective basis; the success of our clearing
houses and our ability to minimize the risks associated with operating
multiple clearing houses in multiple jurisdictions; technological
developments, including ensuring that the technology we utilize is not
vulnerable to security risks; the accuracy of our cost estimates and
expectations, including, without limitation, those set forth in this press
release under "Guidance and Additional Information"; our belief that cash
flows will be sufficient to service our debt and fund our working capital
needs and capital expenditures for the foreseeable future; our ability to
develop new products and services on a timely and cost-effective basis;
leveraging our risk management capabilities; maintaining existing market
participants and attracting new ones; protecting our intellectual property
rights; not violating the intellectual property rights of others; potential
adverse litigation results; our belief in our electronic platform and disaster
recovery system technologies; and identification of trends and how they will
impact our business. For a discussion of such 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 ICE's most recent
Annual Report on Form 10-K for the year ended December 31, 2011, as filed with
the SEC on February 8, 2012, and ICE's Quarterly Reports on Form 10-Q for the
quarter ended June 30, 2012, as filed with the SEC on August 1, 2012, and the
quarter ended September 30, 2012, as filed with the SEC on November 5, 2012.
These filings are also available in the Investors & Media section of our
website. You should not place undue reliance on forward-looking statements,
which speak only as of the date of this press release. Except for any
obligations to disclose material information under the Federal securities
laws, ICE undertakes no obligation to publicly update any forward-looking
statements to reflect events or circumstances after the date of this press
release.



Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)


                                  Nine Months Ended         Three Months Ended
                                  September30,             September30,
                                  2012         2011         2012       2011
Revenues:
Transaction and clearing fees,    $  908,057  $  889,060  $         $ 
net                                                         279,177    301,510
Market data fees                  109,504      92,331       35,947     32,212
Other                             22,033       18,885       8,063      7,056
Total revenues                    1,039,594    1,000,276    323,187    340,778
Operating expenses:
Compensation and benefits         194,596      187,951      61,820     64,137
Technology and communications     34,535       35,886       11,073     12,316
Professional services             25,741       24,970       7,813      8,743
Rent and occupancy                14,544       13,928       5,167      5,107
Acquisition-related transaction   9,994        14,760       2,285      5,446
costs
Selling, general and              28,580       25,464       8,114      7,885
administrative
Depreciation and amortization     96,955       99,063       32,864     33,095
Total operating expenses          404,945      402,022      129,136    136,729
Operating income                  634,649      598,254      194,051    204,049
Other income (expense):
Interest and investment income    1,014        2,219        332        388
Interest expense                  (29,112)     (23,623)     (9,445)    (8,128)
Other expense, net                (253)        (819)        (279)      (258)
Total other expense, net          (28,351)     (22,223)     (9,392)    (7,998)
Income before income taxes        606,298      576,031      184,659    196,051
Income tax expense                177,114      184,557      50,552     59,103
Net income                        $  429,184  $  391,474  $         $ 
                                                            134,107    136,948
Net income attributable to        (7,080)      (8,574)      (3,025)    (4,317)
noncontrolling interest
Net income attributable to        $  422,104  $  382,900  $         $ 
IntercontinentalExchange, Inc                               131,082    132,631
Earnings per share attributable
to IntercontinentalExchange, Inc.
common shareholders:
Basic                             $         $         $       $   
                                  5.80        5.22        1.80      1.81
Diluted                           $         $         $       $   
                                  5.76        5.17        1.79      1.80
Weighted average common shares
outstanding:
Basic                             72,729       73,335       72,789     73,139
Diluted                           73,339       74,057       73,411     73,836





IntercontinentalExchange, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

(Unaudited)


                                        September30,        December31,
                                        2012                 2011
ASSETS
Current assets:
Cash and cash equivalents               $   1,241,176     $     822,949
Short-term restricted cash              80,570               52,982
Customer accounts receivable            148,897              136,331
Margin deposits and guaranty funds      32,530,788           31,555,831
Prepaid expenses and other current      33,064               37,298
assets
Total current assets                    34,034,495           32,605,391
Property and equipment, net             140,926              130,962
Other noncurrent assets:
Goodwill                                1,936,796            1,902,984
Other intangible assets, net            816,626              854,374
Long-term restricted cash               164,950              164,496
Long-term investments                   414,529              451,136
Other noncurrent assets                 31,762               38,521
Total other noncurrent assets           3,364,663            3,411,511
Total assets                            $  37,540,084      $  36,147,864
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued            $      83,725  $     
liabilities                                                  65,964
Accrued salaries and benefits           47,020               58,248
Current portion of licensing agreement  19,249               19,249
Current portion of long-term debt       50,000               50,000
Income taxes payable                    36,878               22,614
Margin deposits and guaranty funds      32,530,788           31,555,831
Other current liabilities               42,682               28,408
Total current liabilities               32,810,342           31,800,314
Noncurrent liabilities:
Noncurrent deferred tax liability, net  216,028              235,889
Long-term debt                          800,000              837,500
Noncurrent portion of licensing         67,473               80,084
agreement
Other noncurrent liabilities            40,282               31,736
Total noncurrent liabilities            1,123,783            1,185,209
Total liabilities                       33,934,125           32,985,523
EQUITY
IntercontinentalExchange, Inc.
shareholders' equity:
Common stock                            798                  792
Treasury stock, at cost                 (664,389)            (644,291)
Additional paid-in capital              1,887,354            1,829,181
Retained earnings                       2,379,200            1,957,096
Accumulated other comprehensive loss    (27,104)             (21,253)
Total IntercontinentalExchange, Inc.    3,575,859            3,121,525
shareholders' equity
Noncontrolling interest in consolidated 30,100               40,816
subsidiaries
Total equity                            3,605,959            3,162,341
Total liabilities and equity            $  37,540,084      $  36,147,864

Non-GAAP Financial Measures and Reconciliation
ICE uses non-GAAP measures internally to evaluate performance and in making
financial and operational decisions. When viewed in conjunction with the U.S.
generally accepted accounting principles, or GAAP, results and the
accompanying reconciliation, ICE believes that the presentation of these
measures provides investors with greater transparency and supplemental data
relating to its financial condition and results of operations. In addition,
ICE believes the presentation of these measures is useful to investors for
period-to-period comparison of results because the items described below are
not reflective of ICE's core business performance. These financial measures
are not in accordance with, or an alternative to, GAAP financial measures and
may be different from non-GAAP measures used by other companies. ICE uses
adjusted net income attributable to ICE and adjusted earnings per share
attributable to ICE common shareholders because they more clearly highlight
trends in its business that may not otherwise be apparent when relying solely
on GAAP financial measures, since these measures eliminate from the results
specific financial items that have less bearing on the operating performance.
ICE strongly recommend that investors review the GAAP financial measures
included in the Quarterly Report on Form 10-Q, including the consolidated
financial statements and the notes thereto.

During the nine months and three months ended September30, 2011, ICE incurred
a banking success fee expense of $4.3 million relating to the closing of its
stake in Cetip in July 2011. There is no tax impact related to this fee
because the expense is not deductible.Adjusted net income attributable to ICE
for the periods presented below is calculated by adding net income
attributable to ICE and the amount described above, which is not reflective of
the core business performance. For the nine and three months ended September
30, 2011, ICE previously included all acquisition-related transaction costs as
non-GAAP adjustments. ICE now includes acquisition-related transaction costs
as part of its core business expenses, except for those that are directly
related to the closing, financing or termination of a transaction. The
following table reconciles net income attributable to ICE to adjusted net
income attributable to ICE and calculates adjusted earnings per share
attributable to ICE common shareholders as follows for the following periods
(in thousands, except per share amounts):



                                            Nine Months       Three Months
                                            Ended             Ended
                                            September 30,     September 30,
                                            2011              2011
Net income attributable to ICE              $   382,900    $   132,631
Add: Cetip investment banking success fee   4,250             4,250
Adjusted net income attributable to ICE     $   387,150    $   136,881
Earnings per share attributable to ICE
common shareholders:
Basic                                       $      5.22  $      1.81
Diluted                                     $      5.17  $      1.80
Adjusted earnings per share attributable to
ICE common shareholders:
Adjusted basic                              $      5.28  $      1.87
Adjusted diluted                            $      5.23  $      1.85
Weighted average common shares outstanding:
Basic                                       73,335            73,139
Diluted                                     74,057            73,836

ICE-CORP

SOURCE IntercontinentalExchange, Inc.

Website: https://www.theice.com
Contact: Investor and Media Contacts: Kelly Loeffler, VP, Investor Relations &
Corp. Communications, IntercontinentalExchange, +1-770-857-4726,
kelly.loeffler@theice.com or Melanie Skijus, Director, Investor Relations,
IntercontinentalExchange, +1-770-857-2532, melanie.skijus@theice.com
 
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