15th consecutive year of record
revenues
- 2020 net revenues of $6.0 billion, +16% y/y
- 2020 GAAP diluted EPS of $3.77
- 2020 adj. diluted EPS of $4.51, +16% y/y
- 2020 operating margin of 50%; adj. operating margin of
59%
- Over $1.9 billion returned to stockholders in 2020
- Completed $11 billion acquisition of Ellie Mae on September
4, 2020
Jeffrey C. Sprecher,ICE Chairman & Chief Executive
Officer, said,"We are pleased to report our 15th consecutive year
of record revenues and another year of double-digit earnings per
share growth. In this unprecedented year, we are grateful for our
customers and their trust. As we begin 2021, we are focused on
applying our expertise, technology and data services to solving
problems for our customers and creating value for our
shareholders."
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
- ICE repurchased $1.2 billion of its common stock and paid $669
million in dividends in 2020.
- Unrestricted cash was $583 million and outstanding debt was
$16.5 billion as of December 31, 2020.
- Operating cash flow for 2020 was $2.9 billion, up 8% from $2.7
billion one year ago. 2020 free cash flow was $2.4 billion, up 4%
from one year ago.
- The effective tax rate for the fourth quarter was 22%.
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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