8-K
Intercontinental Exchange, Inc. (ICE)
UNITED STATES SECURITIES AND EXCHANGECOMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 or 15(d)of THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of
earliest event reported): February 8, 2024
Intercontinental
Exchange, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-36198 | 46-2286804 |
|---|---|---|
| (State or<br> other jurisdiction of<br><br> incorporation) | (Commission<br><br> File No.) | (I.R.S.<br> Employer Identification<br><br> Number) |
5660
New Northside Drive, Third Floor, Atlanta, Georgia 30328
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including
area code: (770) 857-4700
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which<br><br> Registered |
|---|---|---|
| Common<br> Stock, $0.01 par value per share | ICE | New<br> York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On February 8, 2024, Intercontinental Exchange, Inc. issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2023. A copy of the press release announcing such financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained herein, including the attached press release, is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 except as may be expressly set forth by specific reference in such filing.
Intercontinental Exchange makes references to non-GAAP financial information in the attached press release. A description of the non-GAAP financial information and a reconciliation of the non-GAAP financial information to the comparable GAAP financial measures are contained in the attached press release and Intercontinental Exchange’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed as part of this Current Report on Form 8-K:
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated February 8, 2024. |
| 104 | The cover<br> page from Intercontinental Exchange, Inc.’s Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INTERCONTINENTAL EXCHANGE, INC. |
|---|
| /s/ A. Warren Gardiner |
| A. Warren Gardiner |
| Chief Financial Officer |
Date: February 8, 2024
Exhibit 99.1
Intercontinental Exchange Reports Strong FullYear 2023 Results
18th consecutive year of record revenues
| · 2023 net revenues of 8.0 billion, +10% y/y |
|---|
| · 2023 GAAP diluted EPS of 4.19, +62% y/y |
| · 2023 adj. diluted EPS of 5.62, +6% y/y |
| · Record 2023 operating income of 3.7 billion, +2% y/y; Record adj. operating income of 4.7 billion, +9% y/y |
| · 2023 operating margin of 46%; adj. operating margin of 59% |
| · Nearly 1 billion returned to stockholders through dividends in 2023 |
| · Completed the strategic acquisition of Black Knight on September 5, 2023 |
All values are in US Dollars.
ATLANTA & NEW YORK, February 8, 2024 - Intercontinental Exchange (NYSE: ICE), a leading global provider of technology and data, today reported financial results for the fourth quarter and full year of 2023. For the quarter ended December 31, 2023, consolidated net income attributable to ICE was $373 million on $2.2 billion of consolidated revenues less transaction-based expenses. Fourth quarter GAAP diluted earnings per share (EPS) was $0.65. Adjusted net income attributable to ICE was $760 million in the fourth quarter and adjusted diluted EPS was $1.33.
For the full year of 2023 consolidated net income attributable to ICE was $2.4 billion on $8.0 billion of consolidated revenues less transaction-based expenses. Full year 2023 GAAP diluted EPS was $4.19, up 62% year-over-year. On an adjusted basis, net income attributable to ICE for the year was $3.2 billion and adjusted diluted EPS was $5.62, up 6% 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 adjusted free cash flow.
Warren Gardiner, ICE Chief Financial Officer, added: "In 2023, we once again generated record revenues and record operating income. This performance is a clear testament to the strength of our strategically diversified business model, which, through an array of macroeconomic environments, continues to deliver consistent and compounding growth for our stockholders. As we enter 2024, we remain well positioned to benefit from numerous cyclical tailwinds and secular trends."
1
Fourth Quarter and Full Year 2023 Business Highlights
Fourth quarter consolidated net revenues were $2.2 billion, up 25% year-over-year, including exchange net revenues of $1.1 billion, fixed income and data services revenues of $563 million and mortgage technology revenues of $502 million. Consolidated operating expenses were $1.3 billion for the fourth quarter of 2023. On an adjusted basis, consolidated operating expenses were $952 million. Consolidated operating income for the fourth quarter was $925 million and the operating margin was 42%. On an adjusted basis, consolidated operating income for the fourth quarter was $1.2 billion and the adjusted operating margin was 57%.
Full year 2023 consolidated net revenues were $8.0 billion, up 10% year-over-year, including exchange net revenues of $4.4 billion, fixed income and data services revenues of $2.2 billion and mortgage technology revenues of $1.3 billion. Consolidated operating expenses were $4.3 billion for 2023. On an adjusted basis, consolidated operating expenses were $3.3 billion. Consolidated operating income for the year was $3.7 billion and the operating margin was 46%. On an adjusted basis, consolidated operating income for the year was $4.7 billion and the adjusted operating margin was 59%.
| Net<br> Revenue | Op<br> Margin | Adj Op<br> Margin | Net<br> Revenue | Op<br> Margin | Adj Op<br> Margin | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $ (in millions) | Full Year 2023 | 4Q23 | ||||||||||||||
| Exchanges | $ | 4,440 | 71 | % | 73 | % | $ | 1,136 | 70 | % | 72 | % | ||||
| Fixed Income and Data Services | $ | 2,231 | 36 | % | 44 | % | $ | 563 | 36 | % | 43 | % | ||||
| Mortgage Technology | $ | 1,317 | (21 | )% | 39 | % | $ | 502 | (15 | )% | 39 | % | ||||
| Consolidated | $ | 7,988 | 46 | % | 59 | % | $ | 2,201 | 42 | % | 57 | % | ||||
| FY23 | FY22 | % Chg | 4Q23 | 4Q22 | % Chg | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Recurring Revenue | $ | 4,138 | $ | 3,721 | 11 | % | $ | 1,199 | $ | 940 | 28 | % | ||||
| Transaction Revenue, net | $ | 3,850 | $ | 3,571 | 8 | % | $ | 1,002 | $ | 828 | 21 | % |
2
Exchanges Segment Results
Fourth quarter exchange net revenues were $1.1 billion, up 16% year-over-year. Exchange operating expenses were $337 million and on an adjusted basis, were $321 million in the fourth quarter. Segment operating income for the fourth quarter was $799 million and the operating margin was 70%. On an adjusted basis, operating income was $815 million and the adjusted operating margin was 72%.
| (in millions) | 4Q23 | 4Q22 | % Chg | Const Curr^(1)^ | |||
|---|---|---|---|---|---|---|---|
| Revenue, net: | |||||||
| Energy | 414 | $ | 278 | 48 | % | 46 | % |
| Ags and Metals | 63 | 56 | 13 | % | 12 | % | |
| Financials(2) | 116 | 100 | 16 | % | 11 | % | |
| Cash Equities and Equity Options | 99 | 92 | 7 | % | 7 | % | |
| OTC and Other(3) | 89 | 103 | (13 | )% | (14 | )% | |
| Data and Connectivity Services | 234 | 226 | 3 | % | 3 | % | |
| Listings | 121 | 127 | (4 | )% | (4 | )% | |
| Segment Revenue | 1,136 | $ | 982 | 16 | % | 14 | % |
| Recurring Revenue | 355 | $ | 353 | 1 | % | 1 | % |
| Transaction Revenue, net | 781 | $ | 629 | 24 | % | 22 | % |
All values are in US Dollars.
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 4Q22, 1.1737 and 1.0211, respectively.
(2) Financials include interest rates and other financial futures and options.
(3) OTC & other primarily 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 $4.4 billion, up 9% year-over-year. Exchange operating expenses were $1.3 billion and on an adjusted basis, were $1.2 billion for the full year. Segment operating income for 2023 was $3.2 billion and the operating margin was 71%. On an adjusted basis, operating income was $3.2 billion and the adjusted operating margin was 73%.
3
| $ (in millions) | FY23 | FY22 | % Chg | Const Curr^(1)^ | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue, net: | ||||||||||
| Energy | $ | 1,498 | $ | 1,162 | 29 | % | 28 | % | ||
| Ags and Metals | 271 | 235 | 15 | % | 15 | % | ||||
| Financials^(2)^ | 460 | 475 | (3 | )% | (3 | )% | ||||
| Cash Equities and Equity Options | 383 | 378 | 1 | % | 1 | % | ||||
| OTC and Other^(3)^ | 398 | 429 | (7 | )% | (7 | )% | ||||
| Data and Connectivity Services | 933 | 877 | 6 | % | 6 | % | ||||
| Listings | 497 | 515 | (4 | )% | (4 | )% | ||||
| Segment Revenue | $ | 4,440 | $ | 4,071 | 9 | % | 9 | % | ||
| Recurring Revenue | $ | 1,430 | $ | 1,392 | 3 | % | 3 | % | ||
| Transaction Revenue, net | $ | 3,010 | $ | 2,679 | 12 | % | 12 | % |
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2022, 1.2376 and 1.0540, respectively.
(2) Financials include interest rates and other financial futures and options.
(3) OTC & other primarily 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 $563 million, up 5% year-over-year. Fixed income and data services operating expenses were $363 million and adjusted operating expenses were $322 million in the fourth quarter. Segment operating income for the fourth quarter was $200 million and the operating margin was 36%. On an adjusted basis, operating income was $241 million and the adjusted operating margin was 43%.
4
| (in millions) | 4Q23 | 4Q22 | % Chg | Const Curr^(1)^ | |||
|---|---|---|---|---|---|---|---|
| Revenue: | |||||||
| Fixed Income Execution | 35 | $ | 35 | — | % | — | % |
| CDS Clearing | 81 | 79 | 5 | % | 4 | % | |
| Fixed Income Data and Analytics | 286 | 274 | 4 | % | 4 | % | |
| Other Data and Network Services | 161 | 149 | 8 | % | 7 | % | |
| Segment Revenue | 563 | $ | 537 | 5 | % | 4 | % |
| Recurring Revenue | 447 | $ | 423 | 5 | % | 5 | % |
| Transaction Revenue | 116 | $ | 114 | 4 | % | 3 | % |
All values are in US Dollars.
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 4Q22, 1.1737 and 1.0211, respectively.
Full year 2023 fixed income and data services revenues were $2.2 billion, up 7% year-over-year. Fixed income and data services operating expenses were $1.4 billion and on an adjusted basis, were $1.3 billion for the year. Segment operating income for the full year was $811 million and the operating margin was 36%. On an adjusted basis, operating income was $979 million and the adjusted operating margin was 44%.
| $ (in millions) | FY23 | FY22 | % Chg | Const Curr^(1)^ | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue: | ||||||||||
| Fixed Income Execution | $ | 124 | $ | 101 | 23 | % | 23 | % | ||
| CDS Clearing | 360 | 305 | 18 | % | 18 | % | ||||
| Fixed Income Data and Analytics | 1,118 | 1,098 | 2 | % | 2 | % | ||||
| Other Data and Network Services | 629 | 588 | 7 | % | 7 | % | ||||
| Segment Revenue | $ | 2,231 | $ | 2,092 | 7 | % | 6 | % | ||
| Recurring Revenue | $ | 1,747 | $ | 1,686 | 4 | % | 3 | % | ||
| Transaction Revenue | $ | 484 | $ | 406 | 20 | % | 19 | % |
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2022, 1.2376 and 1.0540, respectively.
5
Mortgage Technology Segment Results
Fourth quarter mortgage technology revenues were $502 million. Mortgage technology operating expenses were $576 million and adjusted operating expenses were $309 million in the fourth quarter. Segment operating loss for the fourth quarter was $74 million and the operating margin was (15)%. On an adjusted basis, operating income was $193 million and the adjusted operating margin was 39%.
| (in millions) | 4Q23 | 4Q22 | % Chg | ||
|---|---|---|---|---|---|
| Revenue: | |||||
| Origination Technology | 170 | $ | 181 | (6 | )% |
| Closing Solutions | 43 | 44 | (2 | )% | |
| Servicing Software | 219 | — | n/a | ||
| Data and Analytics | 70 | 24 | 192 | % | |
| Segment Revenue | 502 | $ | 249 | 102 | % |
| Recurring Revenue | 397 | $ | 164 | 144 | % |
| Transaction Revenue | 105 | $ | 85 | 22 | % |
All values are in US Dollars.
Full year mortgage technology revenues were $1.3 billion. Mortgage technology operating expenses were $1.6 billion and adjusted operating expenses were $809 million in 2023. Segment operating loss for the full year was $276 million and the operating margin was (21)%. On an adjusted basis, operating income was $508 million and the adjusted operating margin was 39%.
| $ (in millions) | FY23 | FY22 | % Chg | ||||
|---|---|---|---|---|---|---|---|
| Revenue: | |||||||
| Origination Technology | $ | 694 | $ | 798 | (13 | )% | |
| Closing Solutions | 179 | 239 | (25 | )% | |||
| Servicing Software | 288 | — | n/a | ||||
| Data and Analytics | 156 | 92 | 69 | % | |||
| Segment Revenue | $ | 1,317 | $ | 1,129 | 17 | % | |
| Recurring Revenue | $ | 961 | $ | 643 | 50 | % | |
| Transaction Revenue | $ | 356 | $ | 486 | (27 | )% |
6
Other Matters
| · | Operating cash flow for 2023 was $3.5 billion and adjusted free cash flow was $3.2 billion. |
|---|---|
| · | As of December 31, 2023, unrestricted cash was $899 million and outstanding debt was $22.6 billion. |
| --- | --- |
| · | ICE paid $955 million in dividends in 2023. |
| --- | --- |
Financial Guidance
| GAAP | |
|---|---|
| 2024 Exchange Recurring Revenue (% growth) | Low-single digits |
| 2024 Fixed Income & Data Services Recurring Revenue (% growth) | Mid-single digits |
| 2024 Mortgage Technology Revenue (% growth) | Low-to-mid single digits |
| 2024 Operating Expenses | 4.775 - 4.820 billion |
| 1Q24 Operating Expenses | 1.175 - 1.185 billion |
| 1Q24 Non-Operating Expense^(2)^ | 245 - 250 million |
| 2024 Capital Expenditures | 600 - 650 million |
| 2024 Effective Tax Rate | 24% - 26%(3) |
| 1Q24 Weighted Average Shares Outstanding | 572 - 578 million shares |
All values are in US Dollars.
(1) 2024 and 1Q24 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/expense. Adjusted non-operating expense excludes equity earnings from unconsolidated investees.
(3) This represents 2024 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.
7
Earnings Conference Call Information
ICE will hold a conference call today, February 8, at 8:30 a.m. ET to review its fourth quarter 2023 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 833-470-1428 from the United States or 929-526-1599 from outside of the United States. Telephone participants are required to provide the participant entry number571937 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 2024 earnings has been scheduled for May 2nd 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: https://ir.theice.com/investor-resources/supplemental-information/default.aspx
8
Consolidated Statements of Income
(In millions, except per share amounts)
| Twelve Months Ended<br> <br>December 31, | Three Months Ended<br> <br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenues: | ||||||||||||
| Exchanges | $ | 6,355 | $ | 6,415 | $ | 1,601 | $ | 1,591 | ||||
| Fixed income and data services | 2,231 | 2,092 | 563 | 537 | ||||||||
| Mortgage technology | 1,317 | 1,129 | 502 | 249 | ||||||||
| Total revenues | 9,903 | 9,636 | 2,666 | 2,377 | ||||||||
| Transaction-based expenses: | ||||||||||||
| Section 31 fees | 293 | 499 | 62 | 167 | ||||||||
| Cash liquidity payments, routing and clearing | 1,622 | 1,845 | 403 | 442 | ||||||||
| Total revenues, less transaction-based expenses | 7,988 | 7,292 | 2,201 | 1,768 | ||||||||
| Operating expenses: | ||||||||||||
| Compensation and benefits | 1,595 | 1,407 | 492 | 349 | ||||||||
| Professional services | 123 | 131 | 35 | 30 | ||||||||
| Acquisition-related transaction and integration costs | 269 | 93 | 68 | 12 | ||||||||
| Technology and communication | 734 | 683 | 205 | 170 | ||||||||
| Rent and occupancy | 92 | 83 | 27 | 20 | ||||||||
| Selling, general and administrative | 266 | 226 | 70 | 60 | ||||||||
| Depreciation and amortization | 1,215 | 1,031 | 379 | 263 | ||||||||
| Total operating expenses | 4,294 | 3,654 | 1,276 | 904 | ||||||||
| Operating income | 3,694 | 3,638 | 925 | 864 | ||||||||
| Other income/(expense): | ||||||||||||
| Interest income | 319 | 108 | 32 | 66 | ||||||||
| Interest expense | (808 | ) | (616 | ) | (251 | ) | (176 | ) | ||||
| Other income/(expense), net | (311 | ) | (1,322 | ) | (190 | ) | (190 | ) | ||||
| Total other income/(expense), net | (800 | ) | (1,830 | ) | (409 | ) | (300 | ) | ||||
| Income before income tax expense | 2,894 | 1,808 | 516 | 564 | ||||||||
| Income tax expense | 456 | 310 | 126 | 124 | ||||||||
| Net income | $ | 2,438 | $ | 1,498 | $ | 390 | $ | 440 | ||||
| Net income attributable to non-controlling interest | (70 | ) | (52 | ) | (17 | ) | (15 | ) | ||||
| Net income attributable to Intercontinental Exchange, Inc. | $ | 2,368 | $ | 1,446 | $ | 373 | $ | 425 | ||||
| Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders: | ||||||||||||
| Basic | $ | 4.20 | $ | 2.59 | $ | 0.65 | $ | 0.76 | ||||
| Diluted | $ | 4.19 | $ | 2.58 | $ | 0.65 | $ | 0.76 | ||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 564 | 559 | 572 | 559 | ||||||||
| Diluted | 565 | 561 | 574 | 560 |
9
Consolidated Balance Sheets
(In millions)
| As of | As of | |||||
|---|---|---|---|---|---|---|
| December 31, 2023 | December 31, 2022 | |||||
| Assets: | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 899 | $ | 1,799 | ||
| Short-term restricted cash and cash equivalents | 531 | 6,149 | ||||
| Restricted short-term investments | 680 | — | ||||
| Cash and cash equivalent margin deposits and guaranty funds | 78,980 | 141,990 | ||||
| Invested deposits, delivery contracts receivable and unsettled variation margin | 1,814 | 5,382 | ||||
| Customer accounts receivable, net | 1,366 | 1,169 | ||||
| Prepaid expenses and other current assets | 703 | 458 | ||||
| Total current assets | 84,973 | 156,947 | ||||
| Property and equipment, net | 1,923 | 1,767 | ||||
| Other non-current assets: | ||||||
| Goodwill | 30,553 | 21,111 | ||||
| Other intangible assets, net | 17,317 | 13,090 | ||||
| Long-term restricted cash and cash equivalents | 340 | 405 | ||||
| Other non-current assets | 978 | 1,018 | ||||
| Total other non-current assets | 49,188 | 35,624 | ||||
| Total assets | $ | 136,084 | $ | 194,338 | ||
| Liabilities and Equity: | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ | 1,003 | $ | 866 | ||
| Section 31 fees payable | 79 | 223 | ||||
| Accrued salaries and benefits | 459 | 352 | ||||
| Deferred revenue | 200 | 170 | ||||
| Short-term debt | 1,954 | 4 | ||||
| Margin deposits and guaranty funds | 78,980 | 141,990 | ||||
| Invested deposits, delivery contracts payable and unsettled variation margin | 1,814 | 5,382 | ||||
| Other current liabilities | 137 | 184 | ||||
| Total current liabilities | 84,626 | 149,171 | ||||
| Non-current liabilities: | ||||||
| Non-current deferred tax liability, net | 4,080 | 3,493 | ||||
| Long-term debt | 20,659 | 18,118 | ||||
| Accrued employee benefits | 193 | 160 | ||||
| Non-current operating lease liability | 299 | 254 | ||||
| Other non-current liabilities | 441 | 381 | ||||
| Total non-current liabilities | 25,672 | 22,406 | ||||
| Total liabilities | 110,298 | 171,577 | ||||
| Commitments and contingencies | ||||||
| Equity: | ||||||
| Intercontinental Exchange, Inc. stockholders’ equity: | ||||||
| Common stock | 6 | 6 | ||||
| Treasury stock, at cost | (6,304 | ) | (6,225 | ) | ||
| Additional paid-in capital | 15,953 | 14,313 | ||||
| Retained earnings | 16,356 | 14,943 | ||||
| Accumulated other comprehensive loss | (294 | ) | (331 | ) | ||
| Total Intercontinental Exchange, Inc. stockholders’ equity | 25,717 | 22,706 | ||||
| Non-controlling interest in consolidated subsidiaries | 69 | 55 | ||||
| Total equity | 25,786 | 22,761 | ||||
| Total liabilities and equity | $ | 136,084 | $ | 194,338 |
10
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 adjusted 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):
11
Adjusted Operating Income, Operating Marginand Operating Expense Reconciliation
(In millions)
(Unaudited)
| Exchanges<br> Segment | Fixed Income<br> and Data<br> Services<br> Segment | Mortgage<br> Technology<br> Segment | Consolidated | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended<br> December 31, | Year Ended<br> December 31, | Year Ended<br> December 31, | Year Ended<br> December 31, | |||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| Total revenues, less transaction-based expenses | $ | 4,440 | $ | 4,071 | $ | 2,231 | $ | 2,092 | $ | 1,317 | $ | 1,129 | $ | 7,988 | $ | 7,292 | ||||||||
| Operating expenses | 1,281 | 1,209 | 1,420 | 1,373 | 1,593 | 1,072 | 4,294 | 3,654 | ||||||||||||||||
| Less: Amortization of acquisition-related intangibles | 65 | 67 | 168 | 180 | 515 | 363 | 748 | 610 | ||||||||||||||||
| Less: Transaction and integration costs | — | — | — | — | 269 | 91 | 269 | 91 | ||||||||||||||||
| Less: Other | 17 | — | — | — | — | — | 17 | — | ||||||||||||||||
| Adjusted operating expenses | $ | 1,199 | $ | 1,142 | $ | 1,252 | $ | 1,193 | $ | 809 | $ | 618 | $ | 3,260 | $ | 2,953 | ||||||||
| Operating income/(loss) | $ | 3,159 | $ | 2,862 | $ | 811 | $ | 719 | $ | (276 | ) | $ | 57 | $ | 3,694 | $ | 3,638 | |||||||
| Adjusted operating income | $ | 3,241 | $ | 2,929 | $ | 979 | $ | 899 | $ | 508 | $ | 511 | $ | 4,728 | $ | 4,339 | ||||||||
| Operating margin | 71 | % | 70 | % | 36 | % | 34 | % | (21 | )% | 5 | % | 46 | % | 50 | % | ||||||||
| Adjusted operating margin | 73 | % | 72 | % | 44 | % | 43 | % | 39 | % | 45 | % | 59 | % | 59 | % |
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Adjusted Operating Income, Operating Marginand Operating Expense Reconciliation
(In millions)
(Unaudited)
| Exchanges<br> Segment | Fixed Income<br> <br>and Data Services Segment | Mortgage<br> Technology <br> Segment | Consolidated | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months <br><br>Ended <br><br>December 31, | Three Months <br><br>Ended <br><br>December 31, | Three Months <br><br>Ended <br><br>December 31, | Three Months <br><br>Ended <br><br>December 31, | |||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| Total revenues, less transaction-based expenses | $ | 1,136 | $ | 982 | $ | 563 | $ | 537 | $ | 502 | $ | 249 | $ | 2,201 | $ | 1,768 | ||||||||
| Operating expenses | 337 | 305 | 363 | 344 | 576 | 255 | 1,276 | 904 | ||||||||||||||||
| Less: Amortization of acquisition-related intangibles | 16 | 17 | 41 | 43 | 199 | 92 | 256 | 152 | ||||||||||||||||
| Less: Transaction and integration costs | — | — | — | — | 68 | 12 | 68 | 12 | ||||||||||||||||
| Adjusted operating expenses | $ | 321 | $ | 288 | $ | 322 | $ | 301 | $ | 309 | $ | 151 | $ | 952 | $ | 740 | ||||||||
| Operating income/(loss) | $ | 799 | $ | 677 | $ | 200 | $ | 193 | $ | (74 | ) | $ | (6 | ) | $ | 925 | $ | 864 | ||||||
| Adjusted operating income | $ | 815 | $ | 694 | $ | 241 | $ | 236 | $ | 193 | $ | 98 | $ | 1,249 | $ | 1,028 | ||||||||
| Operating margin | 70 | % | 69 | % | 36 | % | 36 | % | (15 | )% | (2 | )% | 42 | % | 49 | % | ||||||||
| Adjusted operating margin | 72 | % | 71 | % | 43 | % | 44 | % | 39 | % | 39 | % | 57 | % | 58 | % |
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Adjusted Net Income Attributable to ICE andEPS
(In millions)
(Unaudited)
| Twelve Months<br> Ended <br> December 31,<br> 2023 | Twelve Months<br> Ended<br> December 31,<br> 2022 | |||||
|---|---|---|---|---|---|---|
| Net income attributable to ICE common stockholders | $ | 2,368 | $ | 1,446 | ||
| Add: Amortization of acquisition-related intangibles | 748 | 610 | ||||
| Add: Transaction and integration costs | 269 | 91 | ||||
| Less: Gain on sale and fair value adjustment of equity <br>investments | — | (41 | ) | |||
| Add: Net losses from and impairment of unconsolidated investees | 122 | 1,340 | ||||
| Add/(less): Net interest (income)/expense on pre-acquisition-related debt and debt extinguishment | (12 | ) | 89 | |||
| Add: Other | 196 | 9 | ||||
| Less: Net income tax effect for the above items <br>and deferred tax adjustments | (309 | ) | (579 | ) | ||
| Add/(less): Deferred tax adjustments on acquisition-related intangibles | (126 | ) | 9 | |||
| Less: Other tax adjustments | (79 | ) | — | |||
| Adjusted net income attributable to ICE common stockholders | $ | 3,177 | $ | 2,974 | ||
| Diluted earnings per share attributable to ICE common stockholders | $ | 4.19 | $ | 2.58 | ||
| Adjusted diluted earnings per share attributable to ICE common stockholders | $ | 5.62 | $ | 5.30 | ||
| Diluted weighted average common shares outstanding | 565 | 561 |
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Adjusted Net Income Attributable to ICE andEPS
(In millions)
(Unaudited)
| Three Months<br> Ended<br> December 31,<br> 2023 | Three Months<br> Ended<br> December 31,<br> 2022 | |||||
|---|---|---|---|---|---|---|
| Net income attributable to ICE | $ | 373 | $ | 425 | ||
| Add: Amortization of acquisition-related intangibles | 256 | 152 | ||||
| Add: Transaction and integration costs | 68 | 12 | ||||
| Add: Net losses from and impairment of unconsolidated investees | 31 | 188 | ||||
| Add: Net interest expense on pre-acquisition-related debt and debt extinguishment | — | 10 | ||||
| Less: Other | 156 | — | ||||
| Less: Net income tax effect for the above items <br>and deferred tax adjustments | (131 | ) | (101 | ) | ||
| Add: Deferred tax adjustments on acquisition-related intangibles | 5 | 12 | ||||
| Less: Other tax adjustments | 2 | — | ||||
| Adjusted net income attributable to ICE | $ | 760 | $ | 698 | ||
| Diluted earnings per share | $ | 0.65 | $ | 0.76 | ||
| Adjusted diluted earnings per share | $ | 1.33 | $ | 1.25 | ||
| Diluted weighted average common shares outstanding | 574 | 560 |
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Adjusted Free Cash Flow Calculation
(In millions)
(Unaudited)
| Twelve<br> Months Ended<br> December 31, 2023 | Twelve<br> Months Ended<br> December 31, 2022 | |||||
|---|---|---|---|---|---|---|
| Net cash provided by operating activities | $ | 3,542 | $ | 3,554 | ||
| Less: Capital expenditures | (190 | ) | (225 | ) | ||
| Less: Capitalized software development costs | (299 | ) | (257 | ) | ||
| Free cash flow | 3,053 | 3,072 | ||||
| Add/(Less): Section 31 fees, net | 144 | (166 | ) | |||
| Adjusted free cash flow | $ | 3,197 | $ | 2,906 |
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About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds, and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options exchanges -- including the New York Stock Exchange -- and clearing houses help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology, we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines, and automates industries to connect our customers to opportunity.
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 at http://www.intercontinentalexchange.com/terms-of-use. 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 Intercontinental Exchange, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024. We caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of an unanticipated event. New factors emerge from time to time, and it is not possible for management to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
SOURCE: Intercontinental Exchange
ICE-CORP
ICE Investor Relations Contact:
Katia Gonzalez
+1 678 981 3882
katia.gonzalez@ice.com
investors@ice.com
ICE Media Contact:
Josh King
+1 212 656 2490
josh.king@ice.com
media@ice.com
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