IntercontinentalExchange Reports Record Revenues and Net Income Attributable to ICE; Record First Quarter Diluted EPS of $2.02, Up 16% -- Record Revenues of $365 MM, Up 9%

-- Record Net Income Attributable to ICE of $148 MM, Up 15%

-- Operating Cash Flow of $186 MM, Up 19%

ATLANTA, May 2, 2012 /PRNewswire/ -- IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of regulated global exchanges, clearing houses and over-the-counter (OTC) markets, today reported financial results for the first quarter of 2012. Consolidated revenues were a record $365 million, up 9% from the first quarter of 2011. Consolidated net income attributable to ICE was a record $148 million, up 15% from the first quarter of 2011, and diluted earnings per share (EPS) increased 16% to a record $2.02. Operating income grew 11% from the prior first quarter to a record $225 million and cash flow from operations increased 19% to $186 million.

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Said ICE Chairman and CEO Jeffrey C. Sprecher: "Our results continue to reflect the role that ICE's markets and clearing houses play in enabling companies to manage risks in a dynamic economic and regulatory environment. Our markets are increasingly relevant around the world and continue to attract new participants globally. At the same time, we remain focused on innovation by delivering new products that anticipate and respond to customer demand."

ICE CFO Scott A. Hill added: "2012 is off to a very strong start for ICE, with record revenues and net income in the first quarter, and leading returns on invested capital. Our company and shareholders continue to benefit from strong earnings growth, solid cash flow and financial flexibility, all driven by a culture of operating efficiency and disciplined investment."

First Quarter 2012 Results

First quarter 2012 consolidated revenues grew 9% from the prior first quarter to $365 million and consolidated transaction and clearing revenues increased 8% to $322 million. The increase in transaction and clearing revenues was driven primarily by trading volume growth in ICE's energy OTC markets.

Transaction and clearing revenues in ICE's futures segment totaled $160 million in the first quarter of 2012, up 1% from the same period of 2011. Consolidated average daily volume in ICE's futures segment in the first quarter of 2012 declined 3% compared to the first quarter of 2011 to 1.6 million contracts.

Transaction and clearing revenues in ICE's global OTC segment increased 15% from the first quarter of 2011 to $163 million. Average daily commissions (ADC) for ICE's OTC energy business were a record $1.95 million in the first quarter of 2012, an increase of 20% from the first quarter of 2011. Revenues from ICE's credit default swap (CDS) trade execution and clearing business increased 2% to $40 million in the first quarter of 2012, including $16 million from CDS clearing.

Consolidated market data revenues increased 24% in the first quarter of 2012 compared to the same period in 2011 to a record $36 million. Consolidated other revenues were $7 million.

Consolidated operating expenses were up 7% from the prior first quarter to $140 million, and consolidated operating income grew 11% to a record $225 million. Operating margin was 62%, and the effective tax rate for the quarter was 30%.

Consolidated cash flow from operations increased 19% from the first quarter of 2011 to $186 million. Capital expenditures were $7 million and capitalized software development costs totaled $9 million in the first quarter of 2012.

Unrestricted cash was $968 million as of March 31, 2012. At the end of the quarter, ICE had $875 million in outstanding debt.

Financial and Operating Guidance

  • ICE expects acquisition expense for the second quarter of 2012 in the range of $3 to $4 million.
  • ICE's diluted share count for the second quarter of 2012 is expected to be in the range of 72.9 million to 73.9 million weighted average shares outstanding.

Earnings Conference Call Information

ICE will hold a conference call today, May 2, at 8:30 a.m. ET to review its first 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 from the United States, or 708-290-1370 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, rate per contract 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. 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 Unaudited Financial Statements


 

IntercontinentalExchange, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)











Three Months Ended


March 31,


2012


2011

Revenues:




Transaction and clearing fees, net

$ 322,072


$ 299,010

Market data fees

36,386


29,420

Other

6,736


5,850





Total revenues

365,194


334,280





Operating expenses:




Compensation and benefits

68,076


61,638

Technology and communication

11,702


11,525

Professional services

9,402


7,805

Rent and occupancy

4,462


4,359

Acquisition-related transaction costs

3,463


3,437

Selling, general and administrative

10,924


9,062

Depreciation and amortization

31,983


33,131





Total operating expenses

140,012


130,957





Operating income

225,182


203,323





Other income (expense):




Interest and investment income

240


988

Interest expense

(10,068 )


(7,743 )

Other expense, net

(279 )


(276 )





Total other expense, net

(10,107 )


(7,031 )





Income before income taxes

215,075


196,292

Income tax expense

65,296


66,138





Net income

$ 149,779


$ 130,154





Net income attributable to noncontrolling interest

(1,914 )


(1,250 )





Net income attributable to IntercontinentalExchange, Inc

$ 147,865


$ 128,904





Earnings per share attributable to IntercontinentalExchange, Inc. common shareholders:




Basic

$       2.04


$       1.76





Diluted

$       2.02


$       1.74





Weighted average common shares outstanding:




Basic

72,641


73,433





Diluted

73,252


74,201






 

IntercontinentalExchange, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands)
(Unaudited)






March 31,
2012


Dec. 31,
2011

ASSETS




Current assets:




Cash and cash equivalents

$       968,385


$       822,949

Short-term restricted cash

53,711


52,982

Customer accounts receivable

178,844


136,331

Margin deposits and guaranty funds

31,269,459


31,555,831

Prepaid expenses and other current assets

36,385


37,298





Total current assets

32,506,784


32,605,391





Property and equipment, net

133,247


130,962





Other noncurrent assets:




Goodwill

1,916,483


1,902,984

Other intangible assets, net

844,648


854,374

Long-term restricted cash

164,498


164,496

Long-term investments

523,262


451,136

Other noncurrent assets

35,179


38,521





Total other noncurrent assets

3,484,070


3,411,511





Total assets

$  36,124,101


$  36,147,864





LIABILITIES AND EQUITY




Current liabilities:




Accounts payable and accrued liabilities

$         76,821


$         65,964

Accrued salaries and benefits

24,656


58,248

Current portion of licensing agreement

19,248


19,249

Current portion of long-term debt

50,000


50,000

Income taxes payable

65,515


22,614

Margin deposits and guaranty funds

31,269,459


31,555,831

Other current liabilities

44,802


28,408





Total current liabilities

31,550,501


31,800,314





Noncurrent liabilities:




Noncurrent deferred tax liability, net

232,434


235,889

Long-term debt

825,000


837,500

Noncurrent portion of licensing agreement

74,769


80,084

Other noncurrent liabilities

33,500


31,736





Total noncurrent liabilities

1,165,703


1,185,209





Total liabilities

32,716,204


32,985,523









EQUITY




IntercontinentalExchange, Inc. shareholders' equity:




Common stock,

797


792

Treasury stock, at cost;

(658,310 )


(644,291 )

Additional paid-in capital

1,854,240


1,829,181

Retained earnings

2,104,961


1,957,096

Accumulated other comprehensive income (loss)

70,948


(21,253 )





Total IntercontinentalExchange, Inc. shareholders' equity

3,372,636


3,121,525

Noncontrolling interest in consolidated subsidiaries

35,261


40,816





Total equity

3,407,897


3,162,341





Total liabilities and equity

$  36,124,101


$  36,147,864






ICE-CORP

SOURCE IntercontinentalExchange, Inc.



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