Intercontinental Exchange, a leading operator of global exchanges and clearing houses and provider of data and listing services, reported financial results for the second quarter of 2018. For the quarter ended June 30, 2018, consolidated net income attributable to ICE was $455 million on $1.2 billion of consolidated revenues less transaction-based expenses. Second quarter GAAP diluted earnings per share were $0.78. Adjusted net income was $525 million in the second quarter and adjusted diluted EPS were $0.90, up 18% 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, organic data revenue and free cash flow.

Scott A. Hill, ICE CFO, added: "In the first half of 2018, we grew revenues, expanded margins and generated over $1.2 billion of operating cash flow. We returned over $1 billion of capital to stockholders in 2018 while also continuing to invest and position our business for future growth. As we look to the second half of the year, we are excited about the array of growth opportunities ahead and our ability to generate value for stockholders."

Second quarter, consolidated net revenues were $1.2 billion, up 6% year-over-year. Data and listings revenues in the second quarter were $637 million and trading and clearing net revenues were $609 million. Consolidated operating expenses were $591 million for the second quarter of 2018. On an adjusted basis, consolidated operating expenses were $503 million. Consolidated operating income for the second quarter was $655 million and the operating margin was 53%. On an adjusted basis, consolidated operating income for the second quarter was $743 million and the adjusted operating margin was 60%.

Data and Listings Segment Results

Second quarter data and listings revenues were $637 million, including data revenues of $526 million, up 1% year-over-year, negatively impacted by the divestiture of Trayport in the fourth quarter of 2017, and listings revenues of $111 million, up 2% year-over-year, negatively impacted by the divestiture of NYSE Governance Services in the second quarter of 2017. On an organic, constant currency basis⁽¹⁾, segment revenues were up 4% with data revenues up 4% year-over-year and listings revenues up 5% year-over-year. Data and listings operating expenses were $373 million and on an adjusted basis, were $308 million in the second quarter. Segment operating income for the second quarter was $264 million and the operating margin was 41%. On an adjusted basis, operating income was $329 million and the adjusted operating margin was 52%.

Trading and Clearing Segment Results

Second quarter trading and clearing net revenues were $609 million, up 11% from one year ago. Trading and clearing operating expenses were $218 million and adjusted operating expenses were $195 million in the second quarter. Segment operating income for the second quarter was $391 million and the operating margin was 64%. On an adjusted basis, operating income was $414 million and the adjusted operating margin was 68%.

• Energy futures and options revenue in the second quarter increased 8% year-over-year driven by a 11% increase in rate per contract (RPC), partially offset by a 5% decline in average daily volume (ADV).

• Ags and metals futures and options revenue in the second quarter increased 20% year-over-year driven by a 13% increase in ADV and 4% increase in RPC.

• Financials futures and options revenue in the second quarter increased 7% year-over-year driven by a 2% increase in ADV and a 5% increase in RPC.

• U.S. cash equities and equity options revenue in the second quarter increased 6% year-over-year driven by a 35% increase in equity options ADV and a 5% increase in U.S. Cash Equities RPC.

• OTC and other transaction revenues in the second quarter were up 26% year-over-year driven by a 19% increase in CDS clearing revenue in the second quarter and the addition of BondPoint.

Other Matters

• The effective tax rate for the second quarter was 24%.

• Through the second quarter, ICE repurchased approximately $759 million of its common stock and paid $279 million in dividends.

• Unrestricted cash was $532 million and outstanding debt was $6.9 billion as of June 30, 2018.

• Operating cash flow through the second quarter was $1.24 billion compared to $1.10 billion one year ago. Through the second quarter, free cash flow was $1.05 billion, up 17% from $898 million one year ago.

Financial Guidance

• ICE's third quarter 2018 data revenues are expected to be in a range of $530 million to $532 million.

• ICE's fourth quarter 2018 data revenues are expected to be in a range of $538 million to $542 million.

• ICE's third quarter 2018 GAAP operating expenses are expected to be in a range of $590 million to $600 million and adjusted operating expenses⁽¹⁾ are expected to be in a range of $520 million to $525 million.

• ICE's full year 2018 GAAP operating expenses are expected to be in a range of $2,355 million to $2,365 million and adjusted operating expenses⁽¹⁾ are expected to be in a range of $2,040 million to $2,050 million.

• ICE's interest expense is expected to be $67 million in the third quarter and $73 million in the fourth quarter.

• ICE's diluted share count for the third quarter is expected to be in the range of 575 million to 577 million weighted average shares outstanding and 577 million to 582 million for the full year, including only share repurchases completed through July 31, 2018.