ATLANTA, Aug. 3, 2011 /PRNewswire/ -- 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 second quarter of 2011. Consolidated revenues increased 10% to $325 million. Consolidated net income attributable to ICE was $121 million, up 19% versus the second quarter of 2010. Diluted earnings per share (EPS) increased 21% to $1.64.
Second quarter 2011 adjusted consolidated net income attributable to ICE, which excludes acquisition-related transaction costs during the quarter, grew 11% to $125 million and adjusted diluted EPS increased 12% to $1.69. 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: "ICE's second quarter results in an uncertain economic and regulatory environment demonstrate our strong position in global energy, agricultural and financial markets. Our continued progress in clearing, new product development and technology has produced a diverse and innovative business model that effectively serves the ongoing risk-management needs of our customers around the world."
ICE SVP and CFO Scott Hill added: "We continue to deliver consistently strong financial results, extending our multi-year track record of double-digit top- and bottom-line growth. ICE remains focused on delivering consistent growth and long-term customer and shareholder value by executing our strategic plan, investing prudently and managing expense in a disciplined manner."
Second Quarter 2011 Results
Second quarter 2011 consolidated revenues increased 10% from the second quarter of 2010 to $325 million. Consolidated transaction and clearing revenues increased 9% to $289 million. The increase in transaction and clearing revenue was driven primarily by record trading volume in ICE's Brent crude and Gasoil futures and options contracts, as well as solid OTC energy volumes.
Transaction and clearing revenues in ICE's futures segment grew 15% to $149 million in the second quarter. Average daily volume (ADV) in ICE's futures segment was 1.5 million contracts, up 5% from the prior-year second quarter.
Transaction and clearing revenues in ICE's global OTC segment grew 3% to $140 million in the second quarter of 2011. Average daily commissions (ADC) for ICE's OTC energy business increased 7% to $1.5 million. Revenues from ICE's credit default swap (CDS) trade execution and clearing business totaled $41 million in the second quarter of 2011, including $17 million from CDS clearing.
Consolidated market data revenues were a record $31 million in the second quarter of 2011, up 13% from the prior second quarter. Consolidated other revenues were $6 million.
Consolidated operating expenses were $134 million in the quarter, an increase of 14% from the second quarter of 2010. This increase was primarily attributable to an increase in amortization expenses relating to the addition of intangible assets associated with the acquisition of Climate Exchange plc in the third quarter of 2010, and transaction costs associated with the proposed acquisition of NYSE Euronext during the quarter.
Consolidated operating income increased 7% to $191 million in the quarter. Operating margin was 59% in the second quarter of 2011.
The effective tax rate for the second quarter of 2011 was 32% compared to 34% for the prior second quarter.
First Half 2011 Results
Consolidated revenues in the first half of 2011 grew 14% to $659 million. First half futures volumes increased 15% to 191 million contracts, driving futures transaction and clearing revenue growth to $306 million, up 21% from the first half of 2010. ADV in the first half of the year was 1.5 million contracts, up 14% from the first six months of 2010.
Global OTC segment transaction and clearing revenues were $281 million in the first half of the year, up 7% from the first half of 2010. ADC in ICE's OTC energy markets were $1.6 million in the first half of 2011, up 13% from the same period of 2010. Consolidated market data revenues increased 11% to $60 million and consolidated operating margin was 60% for the first half of 2011.
Cash flows from operations totaled $321 million in the first half of 2011, up 24% year-over-year. Capital expenditures during the first half of 2011 were $14 million and capitalized software development costs totaled $16 million.
Unrestricted cash and investments were $757 million as of June 30, 2011. At the end of the second quarter, ICE had $457 million in outstanding debt.
Financial Guidance and Additional Information
- ICE expects CDS clearing revenues in the range of $35 million to $37 million in the second half of 2011.
- Including capitalized software, ICE expects capital expenditures in the range of $25 million to $28 million in the second half of 2011.
- ICE expects transaction costs related to the Cetip investment in the range of $5 million to $8 million for the three months ending September 30, 2011.
- ICE's diluted share count for the third quarter of 2011 is expected to be in the range of 73.8 million to 74.8 million weighted average shares outstanding, and the diluted share count for fiscal year 2011 in the range of 74.0 million to 75.0 million weighted average shares outstanding. ICE's remaining capacity in its share repurchase program is $185 million.