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.
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.