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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Intercontinental Exchange Inc | NYSE:ICE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
3.96 | 3.13% | 130.50 | 131.68 | 127.80 | 127.80 | 3,990,783 | 01:00:00 |
15th consecutive year of record revenues
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services, today reported financial results for the fourth quarter and full year of 2020. For the quarter ended December 31, 2020, consolidated net income attributable to ICE was $526 million on $1.7 billion of consolidated revenues less transaction-based expenses. Fourth quarter GAAP diluted earnings per share (EPS) were $0.93. Adjusted net income attributable to ICE was $639 million in the fourth quarter and adjusted diluted EPS were $1.13.
For the full year of 2020 consolidated net income attributable to ICE was $2.1 billion on $6.0 billion of consolidated revenues less transaction-based expenses. Full year 2020 GAAP diluted EPS were $3.77. On an adjusted basis, net income attributable to ICE for the year was $2.5 billion and adjusted diluted EPS were $4.51, up 16% year-over-year.
Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted EPS and free cash flow.
Scott A. Hill, ICE Chief Financial Officer, added: "In 2020 we generated record revenues, record operating income and record cash flows. This performance reflects the strength of our unique business model, the strategic investments we have made in the past and a remarkable contribution from our employees. As we enter 2021, we are well-positioned to invest in future growth and to continue building on our track record of success."
Fourth Quarter and Full Year 2020 Business Highlights
$ (in millions)
Net Revenue
Op Margin
Adj Op Margin
Net Revenue
Op Margin
Adj Op Margin
Full Year 2020
4Q20
Exchanges
$3,631
66%
68%
$871
63%
67%
Fixed Income and Data Services
$1,810
27%
38%
$450
27%
37%
Mortgage Technology
$595
25%
61%
$350
32%
60%
Consolidated
$6,036
50%
59%
$1,671
47%
57%
Fourth quarter consolidated net revenues were $1.7 billion up 29% year-over-year including exchange net revenues of $871 million, fixed income and data services revenues of $450 million and ICE Mortgage Technology revenues of $350 million. Consolidated operating expenses were $891 million for the fourth quarter of 2020. On an adjusted basis, consolidated operating expenses were $712 million. Consolidated operating income for the fourth quarter was $780 million and the operating margin was 47%. On an adjusted basis, consolidated operating income for the fourth quarter was $959 million and the adjusted operating margin was 57%.
Full year 2020 consolidated net revenues were $6.0 billion, up 16% year-over-year including exchange net revenues of $3.6 billion, fixed income and data services revenues of $1.8 billion and ICE Mortgage Technology revenues of $595 million. Consolidated operating expenses were $3.0 billion for 2020. On an adjusted basis, consolidated operating expenses were $2.5 billion. Consolidated operating income for the year was $3.0 billion and the operating margin was 50%. On an adjusted basis, consolidated operating income for the year was $3.5 billion and the adjusted operating margin was 59%.
ICE Exchanges Segment Results
Fourth quarter exchange net revenues were $871 million, up 7% year-over-year. Exchange operating expenses were $323 million and on an adjusted basis, were $289 million in the fourth quarter. Segment operating income for the fourth quarter was $548 million and the operating margin was 63%. On an adjusted basis, operating income was $582 million and the adjusted operating margin was 67%.
$ (in millions)
4Q20
4Q19
% Chg
Revenue, net:
Energy
$262
$243
8%
Ags and Metals
48
57
(15)%
Financials(1)
82
80
3%
Cash Equities and Equity Options
89
73
21%
OTC and Other(2)
77
60
27%
Data and Connectivity Services
201
190
6%
Listings
112
113
(1)%
Segment Revenue
$871
$816
7%
(1) Financials include interest rates and other financial futures and options. (2) OTC & other includes physical energy, interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, technology development fees, exchange member fees, and agriculture grading and certification fees.Full year exchange net revenues were $3.6 billion, up 10% year-over-year. Exchange operating expenses were $1.2 billion and on an adjusted basis, were $1.1 billion for the full year. Segment operating income for 2020 was $2.4 billion and the operating margin was 66%. On an adjusted basis, operating income was $2.5 billion and the adjusted operating margin was 68%.
$ (in millions)
FY20
FY19
% Chg
Revenue, net:
Energy
$1,120
$992
13%
Ags and Metals
245
251
(2)%
Financials(1)
357
332
8%
Cash Equities and Equity Options
377
298
27%
OTC and Other(2)
296
233
27%
Data and Connectivity Services
790
752
5%
Listings
446
449
(1)%
Segment Revenue
$3,631
$3,307
10%
(1) Financials include interest rates and other financial futures and options. (2) OTC & other includes physical energy, interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, technology development fees, exchange member fees, and agriculture grading and certification fees.Fixed Income and Data Services Segment Results
Fourth quarter fixed income and data services revenues were $450 million, up 3% year-over-year. Fixed income and data services operating expenses were $331 million and adjusted operating expenses were $284 million in the fourth quarter. Segment operating income for the fourth quarter was $119 million and the operating margin was 27%. On an adjusted basis, operating income was $166 million and the adjusted operating margin was 37%.
$ (in millions)
4Q20
4Q19
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$14
$19
(23)%
(23)%
CDS Clearing
42
48
(12)%
(14)%
Fixed Income Data and Analytics
262
244
7%
7%
Other Data and Network Services
132
125
5%
5%
Segment Revenue
$450
$436
3%
3%
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 4Q19, 1.2874 and 1.1070, respectively.
Full year 2020 fixed income and data services revenues were $1.8 billion, up 3% year-over-year. Fixed income and data services operating expenses were $1.3 billion and on an adjusted basis, were $1.1 billion for the year. Segment operating income for the full year was $492 million and the operating margin was 27%. On an adjusted basis, operating income was $691 million and the adjusted operating margin was 38%.
$ (in millions)
FY20
FY19
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$70
$83
(15)%
(15)%
CDS Clearing
208
214
(2)%
(3)%
Fixed Income Data and Analytics
1,018
969
5%
5%
Other Data and Network Services
514
490
5%
5%
Segment Revenue
$1,810
$1,756
3%
3%
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2019, 1.2769 and 1.1195, respectively.
ICE Mortgage Technology Segment Results
Fourth quarter mortgage technology revenues were $350 million, including $276 million from Ellie Mae. Mortgage technology operating expenses were $237 million and adjusted operating expenses were $139 million in the fourth quarter. Segment operating income for the fourth quarter was $113 million and the operating margin was 32%. On an adjusted basis, operating income was $211 million and the adjusted operating margin was 60%.
$ (in millions)
4Q20
4Q19
% Chg
Revenue:
Origination Technology
$201
$—
n/a
Network and Closing Solutions
77
17
358%
Data and Analytics
17
—
n/a
Registrations and Other
55
29
86%
Segment Revenue
$350
$46
658%
Full year mortgage technology revenues were $595 million, including $351 million from Ellie Mae. Mortgage technology operating expenses were $443 million and adjusted operating expenses were $231 million in 2020. Segment operating income for the full year was $152 million and the operating margin was 25%. On an adjusted basis, operating income was $364 million and the adjusted operating margin was 61%.
$ (in millions)
FY20
FY19
% Chg
Revenue:
Origination Technology
$253
$—
n/a
Network and Closing Solutions
158
36
331%
Data and Analytics
22
—
n/a
Registrations and Other
162
103
56%
Segment Revenue
$595
$139
324%
Other Matters
Financial Guidance
GAAP
Non-GAAP
2021 Operating Expenses
$3.465 - $3.515 billion
$2.830 - $2.880 billion(1)
1Q21 Operating Expenses
$885 - $895 million
$720 - $730 million(1)
1Q21 Non-Operating Expense(2)
$97 - $102 million
$105 - $110 million
2021 Capital Expenditures
$400 - $430 million for operational, non-operational capital expenditures and capitalized development
2021 Effective Tax Rate
22.5% - 24.5%(3)
1Q21 Weighted Average Shares Outstanding
562 - 568 million shares
(1) 2021 and 1Q21 non-GAAP operating expenses exclude amortization of acquisition-related intangibles and integration expenses.
(2) Non-operating expense includes interest income, interest expense and net other income. Non-GAAP non-operating expense excludes the equity earnings from OCC.
(3) This represents 2021 full year guidance for both the GAAP and non-GAAP effective tax rates but note that the GAAP effective tax rate is more susceptible to diverging from this guidance based on items outside the normal course of business that are adjusted for to derive our non-GAAP results. Such items can be unknown, unpredictable or uncertain, requiring unreasonable efforts to determine with any precision and which could potentially be confusing or misleading.
Earnings Conference Call Information
ICE will hold a conference call today, February 4, at 8:30 a.m. ET to review its fourth quarter 2020 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 0682536 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.
The conference call for the first quarter 2021 earnings has been scheduled for April 29 at 8:30 a.m. ET. Please refer to the Investor Relations website at www.ir.theice.com for additional information.
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.
Consolidated Statements of Income
(In millions, except per share amounts)
Twelve Months Ended December 31,
Three Months Ended December 31,
Revenues:
2020
2019
2020
2019
Exchanges
$
5,839
$
4,652
$
1,433
$
1,185
Fixed income and data services
1,810
1,756
450
436
Mortgage technology
595
139
350
46
Total revenues
8,244
6,547
2,233
1,667
Transaction-based expenses:
Section 31 fees
622
379
157
105
Cash liquidity payments, routing and clearing
1,586
966
405
264
Total revenues, less transaction-based expenses
6,036
5,202
1,671
1,298
Operating expenses:
Compensation and benefits
1,188
1,042
339
274
Professional services
144
125
44
28
Acquisition-related transaction and integration costs
105
2
15
1
Technology and communication
549
469
161
123
Rent and occupancy
81
68
22
16
Selling, general and administrative
185
161
53
45
Depreciation and amortization
751
662
257
189
Total operating expenses
3,003
2,529
891
676
Operating income
3,033
2,673
780
622
Other income (expense):
Interest income
10
35
1
8
Interest expense
(357
)
(285
)
(112
)
(71
)
Other income, net
80
58
5
28
Other income (expense), net
(267
)(192
)
(106
)
(35
)
Income before income tax expense
2,766
2,481
674
587
Income tax expense
658
521
146
134
Net income
$
2,108
$
1,960
$
528
$
453
Net income attributable to non-controlling interest
(19
)
(27
)
(2
)
(5
)
Net income attributable to Intercontinental Exchange, Inc.
$
2,089
$
1,933
$
526
$
448
Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic
$
3.79
$
3.44
$
0.94
$
0.81
Diluted
$
3.77
$
3.42
$
0.93
$
0.80
Weighted average common shares outstanding:
Basic
552
561
561
556
Diluted
555
565
564
560
Consolidated Balance Sheets
(In millions)
As of
As of
December 31, 2020
December 31, 2019
Assets:
Current assets:
Cash and cash equivalents
$
583
$
841
Short-term restricted cash and cash equivalents
1,000
943
Customer accounts receivable, net
1,230
988
Margin deposits, guaranty funds and delivery contracts receivable
84,083
64,987
Prepaid expenses and other current assets
323
220
Total current assets
87,219
67,979
Property and equipment, net
1,713
1,536
Other non-current assets:
Goodwill
21,291
13,342
Other intangible assets, net
14,408
10,258
Long-term restricted cash and cash equivalents
408
404
Other non-current assets
1,161
974
Total other non-current assets
37,268
24,978
Total assets
$
126,200
$
94,493
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities
$
639
$
505
Section 31 fees payable
207
138
Accrued salaries and benefits
346
291
Deferred revenue
158
129
Short-term debt
2,411
2,569
Margin deposits, guaranty funds and delivery contracts payable
84,083
64,987
Other current liabilities
155
197
Total current liabilities
87,999
68,816
Non-current liabilities:
Non-current deferred tax liability, net
3,563
2,314
Long-term debt
14,126
5,250
Accrued employee benefits
206
198
Non-current operating lease liability
320
281
Other non-current liabilities
359
270
Total non-current liabilities
18,574
8,313
Total liabilities
106,573
77,129
Commitments and contingencies
Redeemable non-controlling interests in consolidated subsidiaries
93
78
Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Common stock
6
6
Treasury stock, at cost
(5,200)
(3,879)
Additional paid-in capital
13,845
11,742
Retained earnings
11,039
9,629
Accumulated other comprehensive loss
(192
)(243
)Total Intercontinental Exchange, Inc. stockholders’ equity
19,498
17,255
Non-controlling interest in consolidated subsidiaries
36
31
Total equity
19,534
17,286
Total liabilities and equity
$
126,200
$
94,493
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 GAAP results and the accompanying reconciliation, we believe that our presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparison of results because the items described below as adjustments to GAAP are not reflective of our 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. We use these adjusted results because we believe they more clearly highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our core operating performance. We strongly recommend that investors review the GAAP financial measures and additional non-GAAP information included in our Annual Report on Form 10-K, including our consolidated financial statements and the notes thereto.
Adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common stockholders, adjusted diluted earnings per share and free cash flow for the periods presented below are calculated by adding or subtracting the adjustments described below, which are not reflective of our cash operations and core business performance, and their related income tax effect and other tax adjustments (in millions, except for per share amounts):
Adjusted Operating Income, Operating Margin and Operating Expense Reconciliation
(In millions)
(Unaudited)
Exchanges Segment
Fixed Income and Data Services Segment
Mortgage Technology Segment
Consolidated
Year Ended December 31,
Year Ended December 31,
Year Ended December 31,
Year Ended December 31,
2020
2019
2020
2019
2020
2019
2020
2019
Total revenues, less transaction-based expenses
$3,631
$3,307
$1,810
$1,756
$595
$139
$6,036
$5,202
Operating expenses
1,242
1,140
1,318
1,317
443
72
3,003
2,529
Less: Amortization of acquisition-related intangibles
74
68
191
225
123
16
388
309
Less: Transaction and integration costs and acquisition-related success fees
12
—
—
—
89
—
101
—
Less: Impairment of developed software
11
—
—
—
—
—
11
—
Less: Impairment of exchange registration intangible assets on ICE Futures Singapore
—
31
—
—
—
—
—
31
Less: Accruals relating to a regulatory settlement
—
—
8
—
—
—
8
—
Adjusted operating expenses
$1,145
$1,041
$1,119
$1,092
$231
$56
$2,495
$2,189
Operating income
$2,389
$2,167
$492
$439
$152
$67
$3,033
$2,673
Adjusted operating income
$2,486
$2,266
$691
$664
$364
$83
$3,541
$3,013
Operating margin
66%
66%
27%
25%
25%
48%
50%
51%
Adjusted operating margin
68%
69%
38%
38%
61%
59%
59%
58%
Adjusted Operating Income, Operating Margin and Operating Expense Reconciliation
(In millions)
(Unaudited)
Exchanges Segment
Fixed Income and Data Services Segment
Mortgage Technology Segment
Consolidated
Three Months Ended December 31,
Three Months Ended December 31,
Three Months Ended December 31,
Three Months Ended December 31,
2020
2019
2020
2019
2020
2019
2020
2019
Total revenues, less transaction-based expenses
$871
$816
$450
$436
$350
$46
$1,671
$1,298
Operating expenses
323
323
331
330
237
23
891
676
Less: Amortization of acquisition-related intangibles
21
16
47
54
85
5
153
75
Less: Transaction and integration costs
2
—
—
—
13
—
15
—
Less: Impairment of developed software
11
—
—
—
—
—
11
—
Less: Impairment of exchange registration intangible assets on ICE Futures Singapore
—
31
—
—
—
—
—
31
Adjusted operating expenses
$289
$276
$284
$276
$139
$18
$712
$570
Operating income
$548
$493
$119
$106
$113
$23
$780
$622
Adjusted operating income
$582
$540
$166
$160
$211
$28
$959
$728
Operating margin
63%
60%
26%
24%
32%
51%
47%
48%
Adjusted operating margin
67%
66%
37%
37%
60%
61%
57%
56%
Adjusted Net Income Attributable to ICE and EPS
(In millions)
Twelve Months Ended 12/31/2020
Twelve Months Ended 12/31/2019
Net income attributable to ICE common stockholders
$
2,089
$
1,933
Add: Amortization of acquisition-related intangibles
388
309
Add: Transaction and integration costs and acquisition-related success fees
101
—
Less: Gain on equity investments
(55
)
—
Add: Extinguishment of 2020 Senior Notes
14
—
Add: Pre-acquisition interest expense on debt issued for Ellie Mae acquisition
5
—
Less: Impairment of developed software
11
—
Add: Impairment of CAT promissory notes
2
16
Add: Impairment of exchange registration intangible assets on ICE Futures Singapore
—
31
Add: Accrual for potential legal settlements
30
—
Add: Accruals relating to a regulatory settlement
8
—
Less: Income tax effect for the above items
(129
)
(90
)Add/(Less): Deferred tax adjustments on acquisition-related intangibles
36
(8
)Add: Other tax adjustments
—
3
Adjusted net income attributable to ICE common stockholders
$
2,500
$
2,194
Basic earnings per share attributable to ICE common stockholders
$
3.79
$
3.44
Diluted earnings per share attributable to ICE common stockholders
$
3.77
$
3.42
Adjusted basic earnings per share attributable to ICE common stockholders
$
4.53
$
3.91
Adjusted diluted earnings per share attributable to ICE common stockholders
$
4.51
$
3.88
Basic weighted average common shares outstanding
552
561
Diluted weighted average common shares outstanding
555
565
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
Three Months Ended 12/31/2020
Three Months Ended 12/31/2019
Net income attributable to ICE
$
526
$
448
Add: Amortization of acquisition-related intangibles
153
75
Add: Transaction and integration costs
15
—
Add: Impairment of exchange registration intangible assets on ICE Futures Singapore
—
31
Less: Gain on equity investments
(55
)
—
Add: Impairment of developed software
11
—
Add: Accrual for potential legal settlements
30
—
Less: Income tax effect related to the items above
(44
)
(25
)Add: Deferred tax adjustments on acquisition-related intangibles
3
5
Adjusted net income attributable to ICE
$
639
$
534
Basic earnings per share
$
0.94
$
0.81
Diluted earnings per share
$
0.93
$
0.80
Adjusted basic earnings per share
$
1.14
$
0.96
Adjusted diluted earnings per share
$
1.13
$
0.95
Basic weighted average common shares outstanding
561
556
Diluted weighted average common shares outstanding
564
560
Free Cash Flow Calculation
(In millions)
(Unaudited)
Twelve Months Ending December 31, 2020
Twelve Months Ending December 31, 2019
Cash flow from operations
$2,881
$2,659
Less: Capital expenditures and capitalized software development costs
(410
)(305
)Less: Section 31 fees, net
(69
)(34
)Free cash flow
$2,402
$2,320
About Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE) is a Fortune 500 company and provider of marketplace infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. We operate regulated marketplaces, including the New York Stock Exchange, for the listing, trading and clearing of a broad array of derivatives contracts and financial securities across major asset classes. Our comprehensive data services offering supports the trading, investment, risk management and connectivity needs of customers around the world and across asset classes. As a leading technology provider for the U.S. residential mortgage industry, ICE Mortgage Technology provides the technology and infrastructure to transform and digitize U.S. residential mortgages, from application and loan origination through to final settlement.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
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 ICE's Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 4, 2021.
SOURCE: Intercontinental Exchange
ICE-CORP
View source version on businesswire.com: https://www.businesswire.com/news/home/20210204005447/en/
ICE Investor Relations Contact: Warren Gardiner +1 770 835 0114 warren.gardiner@theice.com
investors@theice.com
ICE Media Contact: Josh King +1 212 656 2490 josh.king@theice.com
media@theice.com
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