ICE Q1 net income slides

Source: IntercontinentalExchange

IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today reported financial results for the first quarter of 2013.

Consolidated revenues were $352 million, a decline of 4% from the first quarter of 2012. Consolidated net income attributable to ICE was $135 million, down 8% from the first quarter of 2012, and diluted earnings per share (EPS) decreased 8% to $1.85 on a GAAP basis.

For the first quarter ended March 31, 2013, certain items were included in ICE's operating results that are not indicative of our core business performance, including transaction costs related to ICE's proposed acquisition of NYSE Euronext, the closing of ICE Endex and duplicate rent expense. Excluding these items, first quarter 2013 adjusted net income attributable to ICE increased 1% to $149 million and adjusted diluted EPS rose 1% to $2.03. 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.

Said ICE Chairman and CEO Jeffrey C. Sprecher: "Amid ongoing regulatory uncertainty, we continue to expand our markets and services to customers. We executed on many initiatives during the quarter, including the completion of the ICE Endex transaction, which extends our reach in the global natural gas markets. As we continue with the regulatory approval process for the acquisition of NYSE Euronext, we are advancing our integration plans while focusing on opportunities to grow and serve customers across all of our markets globally."

ICE CFO Scott A. Hill added: "Our April year-to-date performance has us on track to achieve our 2013 objectives. Our work on developing clearing for NYSE Liffe continues on schedule, and we are serving customers in complying with mandatory swaps clearing. ICE's open interest is up from 2012 and we continue to grow market participation. Finally, we continue to enhance our credit derivatives business to serve demand driven by financial reform and create new products that support the evolution of the market."

First Quarter 2013 Results

First quarter 2013 consolidated revenues declined 4% from the prior first quarter to $352 million and consolidated transaction and clearing revenues decreased 7% to $300 million.

Futures average daily volume (ADV) was 3.6 million contracts, down 4% compared to the first quarter of 2012. Revenues from ICE's credit default swap (CDS) trade execution, processing and clearing business were $33 million, down 16% from the first quarter of 2012, and included $16 million in CDS clearing revenues.

Consolidated market data revenues increased 12% in the first quarter of 2013 compared to the same period in 2012 to a record $41 million. Consolidated other revenues were $11 million.
Consolidated operating expenses were up 8% from the prior first quarter to $152 million, and consolidated operating income fell 11% to $200 million. Operating margin was 57%, and the effective tax rate for the quarter was 28%.

Consolidated cash flow from operations decreased 19% from the first quarter of 2012 to $150 million. Capital expenditures were $16 million and capitalized software development costs totaled $9 million in the first quarter of 2013.

Unrestricted cash was $1.4 billion as of March 31, 2013 and ICE had $911 million in outstanding debt.

• ICE expects acquisition expense for the second quarter of 2013 in the range of $10 million to $12 million related to the NYSE Euronext transaction, which will be excluded from non-GAAP results.
• ICE has scheduled a special stockholder meeting for June 3, 2013 to approve the acquisition of NYSE Euronext with a record date of April 26, 2013.
• ICE's diluted share count for the second quarter of 2013 is expected to be in the range of 73.1 million to 74.1 million weighted average shares outstanding. 

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