Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  
TRANSCRIPT SPONSOR
Wall Street Breakfast

Intercontinental Exchange, Inc. (ICE)

Q2 2007Earnings Call

July 26, 2007 8:30 am ET

Executives

Kelly Loeffler – VP, IR & Corporate Communications

Jeff Sprecher - Founder, Chairman & CEO

Chuck Vice - President & COO

Scott Hill - CFO

Analysts

Daniel Harris - Goldman Sachs

Howard Chen - Credit Suisse

Mike Vinciquerra - BMO Capital Markets

Ken Worthington - J.P. Morgan

Jonathan Castellan - Wachovia Securities

Rich Repetto - Sandler O'Neill

Niamh Alexander - CIBC World Markets

Rob Rutschow - Deutsche Bank

Chris Allen - Banc of America Securities

Presentation

Operator

Please stand by; we're about to begin. Good day everyone and welcome to the Intercontinental Exchange second quarter earnings release conference call. Today's call is being recorded.

For opening remarks and introductions, I would like to turn the conference over to Kelly Loeffler, Vice President of Investor Relations and Corporate Communications.

Please go ahead.

Kelly Loeffler

Good morning. To obtain a copy of the Company's second-quarter earnings release and presentations, please visit the Investor Relations section of our website at theice.com. These items will be archived and available for replay.

Please be aware that our comments may contain forward-looking statements. These statements represent our current judgment and as always are subject to various risks, assumptions and uncertainties as outlined in the Company's filings with the SEC. Actual results may differ materially from those that are expressed or anticipated in any forward-looking statement.

With us on the call today is Jeff Sprecher, Chairman and CEO, Chuck Vice, President and Chief Operating Officer, and Scott Hill, Chief Financial Officer.

Today is the first earnings presentation since Scott has joined ICE. And as you'll see we've changed the format of our presentation by asking Scott to begin our discussions. At the conclusion of our prepared remarks, we'll take your questions.

I'd now like to turn the call over to Scott.

Scott Hill

Thank you, Kelly. I'll begin by highlighting ICE's key financial and operating metrics for the second quarter, and then turn the call over to Jeff, who'll talk about ICE's reconnectivity strategic plan and growth initiatives.

Let me start on Slide 4, with an overview of ICE's second quarter results. We delivered another solid quarter including record, consolidated revenues of $137 million, up 86% year-over-year. Our operating income increased 61% to $77 million during the quarter, while our operating margin was 56%.

Net income for the quarter was $54 million and on a GAAP basis, earnings per diluted share were $0.75. It's important to note that our second quarter results include $10.9 million of expense related to our proposed merger with the Chicago Board of Trade. These non-recurring expenses included banking, and legal advisory expenses, and associated transaction costs.

Excluding that expense, operating margins would have been roughly flat year-to-year at 64%, despite the fact that we have integrated a lower margin business, the New York Board of Trade and more than doubled our headcount.

Excluding the non-recurring item, our diluted earnings per share would have been $0.85 on net income of $61 million. Also, our tax rate decreased in the second quarter of 2007 to 29% compared to 36% for the second quarter of 2006.

This is the result of our determination that we will indefinitely reinvest prior and current undistributed foreign earnings. There are two impacts related to this change.

First, we realized a non-recurring benefit to net income of $3.6 million, a benefit of roughly $0.5 to our 2Q EPS. Second, and more importantly, our effective tax rate improved by roughly 2 percentage points versus prior guidance. We now expect our ongoing effective tax rate to be in the range of 34% to 36%.

In the appendix of the presentation, and in our Press Release issued this morning, we provide a reconciliation of the non-GAAP measures to the corresponding measure under U.S. GAAP.

Next, on Slide 5, I'll discuss some of the key drivers of our performance. You can see that our consolidated revenue results were driven by strong growth in each of our four business segments. During the second quarter of 2007 ICE's average daily volume was 1.4 million contracts in our combined commodity futures and OTC market. This performance extended our position as the leading electronic, energy and soft commodity marketplace.

You'll see our consolidated transaction revenues on Slide 6. These revenues comprise our U.S. and U.K. regulated futures exchanges and our global OTC segment, and totaled $117 million up 84% year-to-year. Transaction revenues, accounted for 86% of our consolidated revenues in the quarter. Consolidated market data revenues increased 80% to $16 million, and accounted for roughly 12% of consolidated revenues in the quarter. Our market data business provides a consistent and highly profitable annuity revenue stream.

Beginning on Slide 7, I'll go into greater detail for our largest business segment. First, our ICE futures business delivered 57% average daily volume growth in the second quarter to 522,000 contracts per day. Transaction revenues were $43 million, up 44% over the second quarter of 2006, and accounted for 36% of second quarter consolidated transaction revenues. The growth in ICE Futures was driven by continued strength in our Brent and WTI Crude futures offering. Finally, Rate Per Contract or RPC, on ICE futures was $1.29 during the quarter, equal to 1Q '07, and versus $1.40 in the second quarter of 2006.

If you turn to Slide 8, you will see the strength of our global crude offering relative to that offered by NYMEX, on Globex. We have maintained nearly 50% market share in global crude futures compared to only 37% in January 2006.

Turning to NYBOT's performance on Slide 9, average daily volumes for NYBOT rose to a record 242,000 contracts per day, up 26% year-to-year. Transaction revenues were $28 million, up 48% over the second quarter of 2006, and accounted for 24% of second quarter consolidated transaction revenues.

Many volume records have been established following the launch of the soft commodities futures market on the ICE platform. In June, we established a new volume record with more than 6 million contracts traded. In the second quarter, RPC, for soft commodities, was $1.85 compared to $1.59 in 1Q '07, and $1.55 in 2Q '06.

In June, the NYBOT Board implemented a $0.25 per side fee increase on electronically traded soft commodity futures contract. In addition, on June 15th, ICE listed two of NYBOT's index contracts on its electronic trading platform, the Russell 1000 and the U.S. Dollar Index.

We're pleased with the progress we've seen in our financial products and see excellent growth potential. Later in the presentation, Jeff will discuss our expansion into the Index business through our exclusive Russell agreement.

On Slide 10, you can see that our over-the-counter business delivered transaction revenues of $47 million, up 37% year-over-year. OTC revenues accounted for 40% of our second quarter consolidated transaction revenues. This strength was driven primarily by growth in cleared contract volume, which grew 31% year-over-year to a record 31 million cleared OTC contracts for the quarter. For the second quarter, average daily commissions rose 36% to a record $718,000 per day. Currently, we are seeing seasonally strong fundamentals as we enter the very important risk season as hedgers monitor both the weather and supply during the traditionally volatile summer and fall seasons.

Moving on to Slide 11, second quarter consolidated operating expenses totaled $60 million, up a 130% compared to last year's second quarter. The two largest drivers of expense were the inclusion of NYBOT expenses and the $10.9 million of non-recurring expense related to the CBOT Merger Proposal.

We also began increasing our investment and building our clearing business, and continued investing in our technology platform. We are making solid progress on delivering our NYBOT synergy, and we remain focused on increasing the efficiency of our operations while growing the valuable asset classes acquired through NYBOT.

And importantly as I just noted, we are operating and expanding our clearing business. We are building out a European clearing business together with ICE Clear U.S. Developing this capability recruited a prudent investment that would generate long-term value and substantial revenues for the Company.

We continue to expect to incur $7 million to $9 million in startup expenses over the period 2007 to 2008, or roughly about $1 million to $1.5 million of expense per quarter through the first half of next year. During the first half of 2007 we incurred approximately $1.6 million in startup expenses for clearing.

Finally on Slide 12, I'll wrap-up with some comments on our strong balance sheet and cash flow. We delivered $64 million of operating cash flow during the second quarter, up significantly versus the same period in the prior year. And, as of June 30, 2007, we had $248 million in cash and investments including $17 million of restricted cash.

We ended the quarter with $241 million in debt as a result of the NYBOT transaction, and we have full availability of our $250 million credit facility. During the period, capital expenditures totaled $9.5 million, and capitalized software development costs were $2.8 million respectively. These costs relate to the expansion of our technology platform and the investment in our clearing capabilities.

We've included enough data on some of our expectations in our announcement this morning. So, please refer to either the Earnings Release or the appendix of this presentation for more information.

With that I'd like to turn the call over to Jeff.

Jeff Sprecher

Well, thank you Scott. I'll take a moment to discuss our current business environment and opportunities. In the second quarter, which tends not to be the seasonally strongest quarter for us, we achieved record revenues. And we did this while we were pursuing a range of diverse strategic opportunities, in addition to expanding our core business. As you've seen we have capitalized on growth opportunities in three basic ways, organic growth, acquisition, and through partnership.

We are increasingly focused on leveraging our proven technology platform, and growing our footprints in the global futures and over-the-counter commodities markets to expand our business, and to bring new opportunities to our customers. In terms of our organic growth, ICE's synergy segment remains the fastest growing energy marketplace today. We possess proprietary technology and the ability to offer diverse and global market, ranging form oil and natural gas to emissions contracts on a single platform.

As Scott mentioned, our Brent and WTI crude oil volume and open interest is growing. ICE Brent continues to gain recognition as being far more reflective of the price of the world's crude oil, trading at a premium to West Texas Intermediate for the first half of this year. We believe that Brent is a more globally relevant contract given its portability, and its use as a price reference in crude-streams in the Middle East and Asia.

In addition, the flexibility and broad distribution of our platform allows us to list specialized markets and products such as Middle East sour crude at a very low cost. In our global over-the-counter market, the largest participant group continues to be commercial participants. But we also see strong interests from other constituencies such as funds, proprietary traders, and algorithmic trading firms, as they enter our marketplace.

The technology enhancement that we made in the first quarter, and that we continue to make, ensure that our OTC technology suits the needs of financial traders and hedgers alike. The new financial customers we've attracted are bringing important liquidity to the hedging community.

We continue to make excellent progress on our global clearing initiative, which is another key piece of our strategy. Earlier this week we announced that we provided a Notice of Termination to our outsourced clearing provider LCH.Clearnet. We anticipate taking clearing in-house for all of our business segments beginning in the third quarter of '08.

Many of you have recognized that we're already realizing some early benefits of moving to our own clearing model. Beginning on July 1st, we began recapturing some of the pricing that previously went to the clearinghouse, including $0.06 per contract for most of our energy futures.

Yesterday, we also announced the appointment of Paul Swann as President of ICE Clear, Europe. Paul has deep experience in clearing through his two-decade involvement as a clearinghouse executive, including senior posts in risk-management. We're preparing the submission of the final version of our application to the FSA. This application document comprises literally hundreds of pages of detailed plans for the clearinghouse infrastructure and the risk management processes.

We've announced that we'll be establishing a technical working group including members of the FCM Community in an effort to meet the needs of our clearing customers. We believe that we can bring both cost and efficiency improvements to clearing as well as new products that customers need, in order to grow their businesses. We will work with the FCM Community to ensure that ICE Clear establishes the modern standard of excellence in risk management for both futures and over-the-counter markets.

We're grateful to LCH.Clearnet for serving as our clearers in 2001, and we continue to work closely to ensure a smooth transition for our customers. On the mergers and acquisitions fronts, we've successfully completed a handful of transactions this year including the acquisitions of NYBOT, ChemConnect and the technology risk management business.

We remain party to a binding acquisition agreement with the Winnipeg Commodity Exchange and we continue to dialogue with management regarding consummation of that transaction in the face of a non-binding proposal from another suitor. ICE's agreement with Winnipeg contains contractual protections including a breakup fee and a match right. We're well positioned to protect our rights. This is a very dynamic situation, so all that I can say at this time is that we'll continue to be disciplined in our approach as we have with all of our past proposals.

Our integration of NYBOT has progressed rapidly and we're benefiting from efforts by staff to realize the full potential of these new markets. As Scott mentioned, we continue to seek ways to bring the NYBOT financial model more in line with ICE's operating metrics by managing costs and pursuing significant revenue opportunities that exist in NYBOT's markets.

In addition, in June, we revised the fee schedules to recognize value unlocked through electronic trading. Every progression in our NYBOT integration; we've announced this morning that we intend to rename NYBOT as ICE Future's U.S. In the past seven years, we've brought together, seven brands under the ICE name that thousands of customers around the world have come to rely on.

In renaming NYBOT, we want to ensure that we offer ICE customers and shareholders a unified vision for our markets. We bring the commitment of one Company with a shared goal of growth, service and innovation, and we're pleased to add the NYBOT staff, customers and their heritage to our brand.

Many of you ask about our views on prospective mergers and acquisitions. ICE has been a leader in industry consolidation with both futures and over-the-counter deals successfully completed already this year. When asked about the possibility of ICE being an acquirer or being acquired, we've answered the question the same way for the last two years.

We work for our shareholders and our customers and we're obviously very focused on building value. We have a world-class independent Board of Directors that ensures management maintains this focus. They evaluate strategic opportunities with shareholders in mind and that's how we've approached all of our strategic opportunities.

We have a track record of quickly and successfully integrating businesses that we acquire. For example, we announced closed-on and integrated ChemConnect's electronic OTC business in a matter of just two months last quarter, and we continue to see many opportunities, both large and small.

Our evaluation criteria are simple; we're disciplined in sticking to them. First, we make sure the transaction will profitably grow our business. Second, we look at the strategic synergy opportunity, and consider whether we have the availability to integrate it with our existing business to recognize synergies. And finally, the valuation must be right for us.

We spend a significant amount of time on each of these criteria and if they fall into place we aggressively pursue the deal. As a result of our disciplined but steady efforts to diversify our revenue streams, our products, and our geographic base, today, ICE is the only Company with both the U.S. and European regulated futures exchange, a proprietary trading platform and technology infrastructure, a wholly-owned clearing business and a vibrant global over-the-counter marketplace.

On the strategic front, we've announced a number of agreements this year, which include Platts, the natural gas exchange and NGI. Most recently, we announced our strategic agreement to acquire the exclusive rights to list the full suite of benchmarked Russell Index products.

We identified what we believe is a significant opportunity to list all of the U.S. Russell index products for futures and options on futures. The Russell suite of products today is relied upon by institutional money managers more than any other set of index products and we see strong demand for increased access to these products on one electronic trading platform.

Beginning in August, we'll expand our Russell product suite on ICE with the Russell 2000 full size and mini contracts. Our agreement with Russell marks an important long-term commitment to expanding our presence in the equity index business and the growing Russell volume from their current levels.

For the first time, the benefits of cross-margining the Russell 1000, 2000 and their upward -- other equity index style products would be available on a common platform. We are very confident in the attractiveness of the Russell complex and in our ability to grow the franchise. We continue to provide more details on the Russell contract offerings as we begin expanding the product suite over the next several months.

And finally, just a few words regarding the Chicago Board of Trade. We were opportunistic in our bid for the Company, but we were certainly committed to succeeding. And while we did not complete the proposed merger, we came away from the process just how we said we would. We were disciplined and creative in our strategies and we refrained from entering into a bidding war where to do so would've jeopardized the benefits for our stockholders. We believe that we've strengthened our strategic positioning in the exchange phase, and throughout the process we appreciated the support of the customers, shareholders and members.

On our March 15th call announcing the merger proposals, we said that if we didn't succeed with the merger, we certainly were no less excited about our future prospects. And this is even truer today. We're aggressively pursuing a range of diverse and meaningful growth initiatives to continue our expansion across markets, through our global business.

As we execute on building a leading clearinghouse, growing our core commodities businesses, enhancing our technology, and becoming a leader in the equity index futures business, we are extremely well positioned for long-term growth.

This concludes our prepared remarks and with that we'll be happy to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) And we'll go first to Daniel Harris, Goldman Sachs.

Daniel Harris - Goldman Sachs

Hi, good morning how are you?

Jeff Sprecher

Good morning.

Daniel Harris - Goldman Sachs

I was wondering if you could give us a status update on the clearing facilities, both the completion in Europe, when do you think that'll be done and the upgrades here in the U.S., obviously, we saw about $1 million in costs rise ICE Clear, Europe; but how should the trend of expenses go for the next couple of quarters and how should we think about that in terms to CapEx.

Jeff Sprecher

Let me ask Chuck Vice, who's sitting here next to me to answer the question, it's -- the first part of the question, and I'll ask Scott to handle the financial piece.

Chuck Vice

Sure. Taking the U.S. first, starting next week we'll begin deploying some of that capital investment in a new post trade management system, which is a new system for clearers to -- and brokers to give up trades to other clearers, allocate trades amongst their customers, that'll be quickly followed by an upgrade of the two-way facsimile feed, which is the high volume method of clearers getting data in and out of those systems.

We're also in the process of moving those systems out of NYBOT's data centers into the ICE data centers in Atlanta and Chicago, so that is -- that's on schedule and moving forward.

And in Europe, we have been meeting in earnest with the clearers there for several months now individually and that's continuing, and we are in the process of -- in the next week or two we will begin working group meetings with those clearers presenting our transition plan to them and the -- all the details of the clearing house both from a legal, financial risk perspective as well as IT operations getting their input into that process, and continuing those working group meetings throughout the next 12 months.

As we stated earlier, I think part of our -- a key part of our strategy in building out that clearinghouse in the -- in Europe is to utilize the same third-party provided systems for trade allocations and doing the clearing runs for the margin calculations that is used by LCH, and in doing that we minimize and to a great extent eliminate the need for those clearers to develop interfaces to do systems and to learn how to use these systems.

So, that's a -- that's a huge benefit in terms of eliminating risk and eliminating the timeframe needed to do that work. On the backend, as part of this global project, we have our IT teams in New York and Atlanta working to enhance the NYBOT's ECS clearing system which will be used in Europe for banking settlement and delivery activities. So, we will be interfaced to the TRS, CPS systems provided by AEMS. So a lot of acronyms in there, I know, but hopefully it conveyed some sense of the strategy we're using to build an upgrade in both of those clearing houses in kind of the what the next 12 months look like.

And maybe Scott can elaborate a little more on this -- the scheduled CapEx over that timeframe.

Scott Hill

Yes, let me -- you'd asked about the spending and the CapEx. Let me start with the spending. As you said, we spent around $1 million in the quarter. As I've said in my prepared remarks, about $1.6 million through the first half of the year. We've previously indicated we expected to spend around $7 million and $9 million in 2007 and 2008, and we're still expecting that range. As you look at the third and fourth quarter, I think the expectations ought to be somewhere in the $1 million to $1.5 million range.

In terms of CapEx, we've previously said we expected to spend in the range of $7 million to $10 million, and I think that's still the right range.

You can take a look at one of the charts we have in our appendix, which talks about our spending expectations around clearing, and also mentioned is our view about the second half of 2008, rather in the range of $25 million to $30 million for that clearing business.

Daniel Harris - Goldman Sachs

Great. That's perfect, Scott, thanks. Jeff?

Jeff Sprecher

Yes?

Daniel Harris - Goldman Sachs

You've -- you've sure to have been very busy on Capitol Hill toward the quarter, for better or worse and I was hoping you can give us some of your updated thoughts on further regulation in the natural gas market and maybe more broadly just the OTC markets?

Jeff Sprecher

Sure. I think, I've said to those that have asked to me in the past that I see the -- our energy markets in -- particularly in North America, and I believe this will ultimately play out probably to be on a continuum where ICE took markets that existed but were very okay. And it brought more transparency to them. And as we brought more transparency and as they've grown, and as people have come to rely on them more and more, it's a natural evolution I believe, that you're going to see more oversight and ultimately more regulation. And I -- and we've seen that at ICE.

And I think you're aware that most recently now, in natural gas trade that can potentially relate to NYMEX's future. We are sending those trades everyday, every single trade every day directly to the CFTC. And we've spent hundreds of man hours building systems so that we can take over-the-counter swaps and derivatives and put them in a format that can be recognized and utilized by the CFTC as if they were futures contracts, which is really what the CFTC systems do.

Now that the CFTC had that vision into the markets, I think that the basis going on now is what if anything should be done additionally, and if there should be something done additionally who should do it, and should the OTC markets take on a self-regulatory type role and should ICE have a handle in that, or should the government itself have direct oversight of markets that relate to sources of price discovery.

And that's an evolving dialogue, and you're correct that I have spent the time on Capitol Hill and there are a number of Congressmen and Senators and agencies that are working with different views. And I think ultimately some consensus will be delivered here.

I believe that ultimately this process of going from opaque to transparent and putting structure around it is a good thing for ICE. And because people ultimately have to have confidence in the markets and ICE particularly has benefited by targeting the hedging community, which are in many cases small utilities, municipalities, and independent drillers and others that we want to use hedging tools. And those people need to feel that these markets have confidence that they're being treated fairly and that no one has an edge.

And so you're seeing now some of the benefits of the additional visibility into those markets where government is at least alleging that some people have misused them in the past, and to get those people out of the markets and to get that view out of the market, I think, will be helpful to us.

Daniel Harris - Goldman Sachs

Do you think that the sort of the news headlines this quarter sort of kept people that may have been looking for connecting to the OTC markets a little bit more on the sidelines, and should this get settled in a way that's better for the market participants overall that you'll see acceleration in algorithms as a sign of going forward?

Jeff Sprecher

It's hard to say whether it kept people on the sidelines or not, because you just don't know. But I will tell you that at least there are a number of industry groups that represent the kind of user that I am talking about, and we've been meeting with those industry groups and talking about what we do and the benefits frankly of hedging for their customers and so on and so forth. And I think we have a better relationship with those groups today than we've ever had, because we have a common goal, which is to have markets that people can trust and rely on.

Well, there may be differences in the debate on Capitol Hill about exactly how to do that, who should do it and what have you, but the underlying goal which is for transparence, and markets with integrity is really what ICE can deliver on with an electronic platform. So, I think it's going to get better. To the extent that people are on the sidelines, I think they're going to feel better about what ICE is doing and the ability to do hedging.

Daniel Harris - Goldman Sachs

Okay, Jeff, thanks very much. And then just lastly, in your first full quarter of trading electronic on the NYBOT, how would you characterize any changes there, whether it's participation by the old floor traders or new volume being driven by participants that weren't in the market before. Thank you very much.

Jeff Sprecher

Okay. Just anecdotally, you can see our -- the rate for contracts has increased this quarter. So there has been a mixed shift and that shift is driven by what would be called non-members at the NYBOT, in other words new participants that were not historic members, coming in and paying the higher non-member rate.

We do now have some new customers that had not before traded the NYBOT products that are in the top five, and certainly top 10, in terms of customer base. So, there is -- there are definitely new customers coming in as a result of expanded access through electronic trading and they're making meaningful volume growth, as you can probably tell by looking at the numbers.

Operator: We'll go next to Howard Chen, Credit Suisse.

Howard Chen - Credit Suisse

Good morning, everyone.

Jeff Sprecher

Good morning.

Howard Chen - Credit Suisse

First question, in terms of the new product innovation on the OTC side of the house, I didn't see any new figures within the presentation this quarter. I know you do a lot of it. So just curious, any updates on the new products, the new product capture in the new over-the-counter business. And second part of the question, do you think the notification to LCH in the relationship at all stunts that new product growth?

Jeff Sprecher

Sure, Howard. You may have seen if you follow our press releases that we announced yesterday, I think about 15 new OTC products. So we continue to develop and put new products on our platform. And in fact in the specific case of those products, those are -- many of those are results of our new relationship with McGraw-Hill Platt as we move into the physical oil space with them, on the back of our partnership with them.

We don't break up the revenues, we haven't broken up the revenues of the new products that I think you're referring to per se. And in fact, in looking at the performance of ICE's business, we don't even look at -- we don't break out those internally and look at them that way. So I can't even editorialize a little before you on those.

Howard Chen - Credit Suisse

Okay. We will move on. And then on the reiteration of the clearing synergy expectations, about $25 million to $30 million in the back half of next year, any refined thoughts on some of the -- perhaps volume growth, pricing assumptions based into that guidance for now?

Jeff Sprecher

No, just to be clear, the $25 million to $30 million are reflective of what we think the revenue would be in the back half of next year. And really, there is no additional guidance that we would give at this time, although clearly, we are working to build up the business, and we will continue to update you as things change and move.

Howard Chen - Credit Suisse

Okay. And Scott, one quick numbers question for you. Market data and some of the other revenues this quarter were pretty strong. What necessarily drove that and what do you -- and how do you feel those necessarily sustainable or sticky going forward?

Scott Hill

One thing you have to make sure if the market data and other similar to total -- include NYBOT, and what we reported this year, and didn't, and what we reported last year. So that drives a good portion of the growth. But I would tell you the underlying business particularly in market data continues to perform well, and that's an important part of our overall business and financial model, because as I mentioned in my remark, the market data business is an annuity strain, and it's a highly profitable annuity strain.

So, I do think the performance continues to be strong, and it continues to be an important part of our model, but the numbers growth you see right now does reflect the introduction of NYBOT into our numbers this year.

Howard Chen - Credit Suisse

Great, okay. And then, final one on the Russell contract, on the financial standpoint, and when will be begin to see the upfront costs if we haven't already?

And then for Jeff, from a competitive landscape, how do you kind of prepare to attack the open interest that's currently at the CME, and then, hope we successfully migrate it to you over the next 12 to 18 months.

Scott Hill

Yes, so the -- as we discussed publicly the $50 million upfront payment will actually start to amortize into our income statement over seven years, beginning in the third quarter. So, give or take, about $2 million a quarter over the next -- with 28 quarters. So you'll start to see that immediately in the third quarter.

And then the other detail, frankly we're still working through the other details related to Russell, and again to the extent there's any material change, we'll provide additional guidance when it's available.

Jeff Sprecher

Howard, the Russell contracts are quarterly contracts. So, effectively the large institutional hedgers who use those will hold open interest -- tend to be long, and tend to roll four times a year. So, you'll see in our announcement that we're offering essentially the first initial launch here for free, which is really just a way of saying that we'll make it convenient for you to roll into ICE at low cost.

I believe there's roughly $4 trillion worth of institutional money benchmarked to the Russell indices. These people use these toward hedging, and frankly they use futures for funds that are equity oriented funds, but because of the leverage of futures, they can take their cash position that they need to keep for redemption purposes. They always have some cash available, and they take a portion of that and allocate it to futures where the leverage of futures can get the same return since the fund is judged in total.

And so there are real reasons that people use Russell to hedge, and I don't think those people are frankly agnostic to which exchange they are traded on. As much as I'd like to promote that we have a great exchange, I think they are more interested in the product, and we'll follow the product as it moves. But we are going to try to make it easy for them.

We've been out meeting with large institutional holders of open interest to explain this to them. I have personally been in front of some of the large institutions, and I think the transition should go relatively smoothly in that regard.

Howard Chen - Credit Suisse

Great. Thanks a lot for the thought.

Jeff Sprecher

Great. Thank You.

Operator

We'll go next to Mike Vinciquerra of BMO Capital Markets.

Mike Vinciquerra - BMO Capital Markets

Thank you. Good morning Jeff.

Jeff Sprecher

Good morning, Mike.

Mike Vinciquerra - BMO Capital Markets

Can I follow-up on the last question? I just want to get a sense, obviously the markets going to make a big push with the SMP products over the next year. And it kind of indicates that, both of you think that this is a rapidly growing market. It's been growing nicely over the last few years.

But do you see the market being broad enough to have to support two sets of kind of major index products -- you've got the DOW is well over at the former CBOT, but to just kind of get a sense for what you think about the equity side of futures?

Jeff Sprecher

Ah sure. I think, let me speak to the Russell side of that question. As I mentioned there's $4 trillion or so worth of institutional money benchmarked for the Russell, and the equity options that trade on the Russell are phenomenally large products. And many of the traders of equity options use the futures to hedge those.

So, there's a very close relationship between the options, the ETFs and the futures, as well as obviously huge amounts of institutional money that's looking to hedge. So, I think the Russell is, in terms of its movement to ICE, there's just no structural reason why that wouldn't follow. It's very, very difficult to dislocate a benchmark, particularly one that is so broad and has so much recognition as Russell.

Now that being said, I think the CME obviously have very, very strong franchise and management team. And the SMP 600 Contract, which I think, did only 27 lots for the all of last year is basically, they are starting from zero. But, if they can get it going, I think it would be a very good thing for the market. And I think it will be a very good thing for ICE and the Russell contracts. It will provide another push of marketing for to get institutional users to use futures as hedging tools.

And beyond that the 600 companies in the SMP 600 and the 2000 companies in the Russell 2000 are pretty correlated, and I think you'd create arbitrage opportunities between the two, which would probably continue to drive growth into both.

So, I don't see it as, it's not an either/or to me, that people are either going to use one or the other. I think the whole space can grow, although I think we all recognize the difficulty of trying to establish a benchmark that doesn't exist. But I wish them well in that regard.

Mike Vinciquerra - BMO Capital Markets

That's fair and thank you Jeff. And then just to stay on that topic of portfolio margining Index Futures aren't included in current portfolio margining rules right now. Any chance, if that happens to, that would obviously seem to add some additional fuel to the fire for growth in this category?

Jeff Sprecher

We are definitely in conversations with other clearing organizations about that topic, and let's just say that it's a work in progress. But we have, as you can imagine, knowing the personality of the firm here, we kind of grab the bull by the horns, and are definitely trying to say what can we do now as a Company that's got a new clearing infrastructure to really improve our positioning in the market, and make it easier for customers to trade. And so I'm hoping that we'll have some movement in that regard.

Mike Vinciquerra - BMO Capital Markets

Okay. And then just one clarification on the tax effect in the quarter, could you just get a little more detail on why you get the tax benefit because you are going to keep the capital overseas. And secondly, will the CBOT related cost in the quarter deductible for tax purposes, does that have any impact on the actual rate that was reported?

Jeff Sprecher

With the CBOT we did actually report that impact net of tax is about $7.1 million in the quarter to answer the second question first.

But going back to the tax rate, when you make a determination that you are going to permanently reinvest your foreign earning, you fundamentally, you have to reverse any prior tax liability you booked on those earnings. So, prior to this declaration, some amount of the foreign earnings were expected to be brought back to the U.S. and therefore we booked those earnings at a U.S. tax rate.

As we make the declaration that we are going to reinvest those funds outside the U.S. that we are having a lower effect of rate outside the U.S., and we get a onetime benefit, and that's $3.6 million, or roughly $.05 a share that I mentioned in my remark. But more than the numbers I think it's important to look at what the exchange signaled for us. What this says is we have growing confidence that there it tremendous opportunity outside of the U.S., in building up the clearing business in merger and acquisition activity like Winnipeg. So, growing confidence that we'll have a great opportunity to use those funds outside the U.S.

It also reflects confidence that we have strong cash flows inside the U.S., particularly being generated out of our NYBOT business. And it reflects great confidence, and I think well founded confidence in the strength of our balance sheet to support additional leverage get the right opportunity for them to sell.

Scott Hill

Mike, let me just editorialize one last thing? When Richard Spencer, our former CFO and I sat down, we decided that we should really, we've gotten to the point where I should look for a global CFO that understands the fact that we have, we are earning money from around the world, and are becoming increasingly complicated in the money flow, and tax liability that we pay.

So, Scott, as you probably know spent time working in Europe, and in Asia, and really have a global perspective. And one of the first great benefits that he's brought to us is by sitting down and just looking at our money flows, our earnings abroad, and the future needs, and reorienting the internal views here to deliver effectively a lower tax rate without any gimmicks, and so it's really been a great hire and we really appreciate that Scott has been able to do this for us.

Mike Vinciquerra - BMO Capital Markets

Great, thanks for that clarification.

Operator

We'll go next to Ken Worthington, JP Morgan.

Ken Worthington - J.P. Morgan

Hi, good morning.

Jeff Sprecher

Good morning, Ken.

Ken Worthington - J.P. Morgan

Maybe to follow up on Dan's question earlier on future steps in clearing, can you walk us through the major milestones in terms of what you need from both regulators and what you need from your trading customers and then as we think about the risks, where are the risks in those two areas of this process?

Jeff Sprecher

Well, one of the milestones is obviously the regulator, the FSA, we plan to file an application next week actually to the FSA, we've been in dialogue with them for some time now, they've seen drafts of our application, we've gotten feedback from them, we've modified the application, we continue to fill in all of the different areas in operations, in IT, in risk and audit and so forth.

Ken Worthington - J.P. Morgan

Does that go to a common period at all or is that just a straight approval?

Jeff Sprecher

I'm not sure about that.

Scott Hill

I think there are some common periods available and including beyond the FSA I believe there's one through the Office of Fair Trade or something of that ilk as well.

Ken Worthington - J.P. Morgan

Okay, so FSA approval, office of Fair Trade approval?

Scott Hill

Yes, I think the Bank of England through the OFP or whatever their version of that is does a review. I believe, that's going on right now, in fact.

Ken Worthington - J.P. Morgan

Okay.

Jeff Sprecher

Right. And then -- separately, as I said earlier, we're meeting with the clearers, I mean, they want to know of course, the financial structure of the clearinghouse and their participation in that, they want to know the operations, IT side of it, how it impacts them, we're also -- in giving notice to LCH, they have indicated back to us that they -- per the terms of at least one of our agreements with them, that they will assist in formulating an exit management plan and facilitating a smooth transition.

The FSA has also indicated to us that they have an interest in seeing that both parties facilitate a smooth transition. So really it's about lots of meetings and working through the details of all of that in -- with the clearers and also with third-party systems providers, as I said AEMS and the back office providers such as SunGuard, Rolfe & Nolan and others.

Ken Worthington - J.P. Morgan

Okay, and when you say, "clearers," what do you mean by "clearer"? Are these firms that are trading through you and therefore going to clear those trades through you?

Jeff Sprecher

They're the clearing -- the -- they're clearing members of LCH today that also clear -- in that regard, clear ICE futures and ICE OTC business. They're primarily large investment banks and they clear both their own business as well as the business of other trading firms and -- for the futures part of our business, down to retail customers.

Ken Worthington - J.P. Morgan

Got you, I understand. I'm -- so I just wanted to clarify, and then how about in terms of margining and in cash deposits, where does that start to take place and to what extent have you seen acceptance or pushback from these clearers there?

Jeff Sprecher

Ken we haven't made any specific announcements other than some board statements that I think you're probably aware of, and that's part of what we're going to do now, is sit down with the FCM -- because we're a public Company unfortunately, we can't work all this out in the background.

We had to announce what we were doing and then -- which is a little bit of an affront to the community frankly, but then behind that announcement, we're able to sit down and have open dialogue, which is what's going on right now.

One other data point for you that may give you some comfort is that the ICE futures, which clears in Europe has an independent Board of Directors, and the ICE futures Board is the one that ultimately decided to give notice and that Board wanted to make sure that they were absolutely confident that in terminating the current relationship that they were comfortable that there would be a place for those trades to be cleared.

And so there has been an independent check in balance on this system by independent directors who have a legal responsibility to that futures business along with a lot of consultation with the regulator over there -- who has a similar concern, which is that regulated futures not be damaged.

So we have a lot of confidence in the schedule that we have in place in the roadmap that we've laid out. What's in front of us now are a lot of details on execution, and a lot of dialogue with the clearing community itself. And separately, by the way, we have talked to all of our major customers, which are the people that are banks and oil companies that actually do the trades and they are incredibly supportive of this move.

They have seen the fact that we've introduced over a 100 clear products, started this concept of OTC clearing doing things like acquiring ChemConnect, that which we will bring those products into a cleared environment, those kinds of revolutions in our industries are things that have been driven by ICE, and our customers are aware of that and supportive of that and want that to continue and we have spent a fair amount of time with the major customers articulating the limitations that we have using third party clearing as opposed to the ability to control the speed, the pace, the margining, the banking side of that business in a way that can adapt faster.

Ken Worthington - J.P. Morgan

Thank you, and where is the risk in this process? Like what do we -- kind of investors need to pay attention to -- where could the time table slip or get delayed or fall apart, if there's any risk to that?

Jeff Sprecher

Well, we're starting a new Company and moving into a new space just like, every one of these things that we do here I mean --

Ken Worthington - J.P. Morgan

Not from an occupational standpoint, but from a regulatory or customer acceptance perspective?

Jeff Sprecher

I think, obviously lot of things can happen in a regulatory process, so it's undefined, it's just how you've managed it and I think what you're hearing from us is that while the application hasn't been turned in, a tremendous amount of work and dialogue has already gone on and that -- and staffing has begun and -- in earnest and so those people are working daily with the regulator. So, I don't know well, how to give you anymore comfort other than the fact that we have a lot of time and attention and some of the best people in the industry working on it.

From a customer acceptance standpoint, I think the major users of our markets are very close to us, these are people that in many cases helped us start the business and that have worked with us for years that are intimately aware of what we're doing through dialogue with them, and I think the clearing community will -- the customers ultimately -- the end-user customer ultimately will tell its broker where it wants to do business.

So I think the clearing community to the extent of some trepidations will gather around us. We haven't had the benefit of actually unveiling all of our ideas for the FCM Community, and I think as they get into it, you'll see that they'll gravitate towards it, because we're interested in bringing them into the process and building a better clearing infrastructure that can -- where people can make money including them and where we can grow volumes, which is -- how FCMs make money is volume of their business.

So, we have some very new interesting ideas that we want a dialogue with. So, I think you'll see it gel over time, but we'll obviously keep anything material we'll put out there, because we know that people like you are trying to model this opportunity and we want to make sure we're transparent on that.

Ken Worthington - J.P. Morgan

All right, thank you, and then an easy one, the cost synergies on NYBOT, you've had some fair amount of headcount reductions, the projection was $8 million to $9 million annually for cost-saves for 2007, where are we along that particular part of the synergy is that, that cost synergy right now?

Scott Hill

I think we continue to make progress towards that number, and we remain confident that the $89 million synergies will be achieved.

Ken Worthington - J.P. Morgan

Okay, thank you.

Operator

And please limit yourself to one question, and one follow-up question, we'll go next to Jonathan Castellan with Wachovia Securities.

Jonathan Castellan - Wachovia Securities

Hi, good morning.

Jeff Sprecher

Morning.

Jonathan Castellan - Wachovia Securities

Is there any way to scale the new opportunities you're bringing to the exchange as very little financial consideration around ChemConnect and the natural gas exchange, Platts et cetera, is there any way to give us some metrics around ChemConnect or exactly what's going on with the natural gas exchange?

Jeff Sprecher

Yes, these are OTC opportunities and as Jonathan, the -- they will show up in our -- when we announce our OTC commissions at the end of every month.

We haven't -- we've specifically not given any guidance on them, because similar to the clearing opportunity, it's hard to know exactly when these things are going to transition, and if so how and then how much faster that ICE can grow then relative to where they were before.

So, I'm avoiding your question in a way, because we don't really know the answers. I think you'll start seeing ChemConnect, which really did integrate pretty quickly, will start showing up in the numbers OTC numbers and you'll be able to, I think, to make your own assessment.

Jonathan Castellan - Wachovia Securities

Right. But generally you said all three ventures are immediately accretive, the ChemConnect, the Natural Gas and the Platts, is that correct?

Jeff Sprecher

Yes, we -- NGX has not yet transitioned. But nonetheless, yes, all three should be immediately accretive in our view.

Jonathan Castellan - Wachovia Securities

Okay, got it. My follow up --

Jeff Sprecher

And not hugely immaterial that that it calls for us to -- point it out to you but definitely additive to our overall OTC business, so it should continue to help drive growth there.

Jonathan Castellan - Wachovia Securities73

Got it. And my follow-up question is, you talked a little bit about already capturing some of the clearing economics currently, can you just flush out exactly how that's running through?

Jeff Sprecher

Sure, the London Clearing House lowered its rates and we simultaneously raised our rates…

Jonathan Castellan - Wachovia Securities

Okay.

Jeff Sprecher

…which I think you saw in futures. And we continue to make rate adjustments in over-the-counter as well, although we don't publicize those in the same way that we do with futures.

Jonathan Castellan - Wachovia Securities

Understood, okay, thank you.

Operator

We'll go next to Rich Repetto, Sandler O'Neill.

Rich Repetto - Sandler O’Neill

Yes, good morning guys.

Scott Hill

Good morning, Rich.

Jeff Sprecher

Good morning, Rich.

Rich Repetto - Sandler O’Neill

I guess first -- my first one question is, you mentioned Scott, about this OTC seasonally strong, part of the year. We're looking at natural gas pricing volatility just at peak levels. And I wonder if you might, since we are in an FD open environment, might you quantify like, how we are looking in July?

Scott Hill

I can't really quantify it. I mean as I said (inaudible) this is -- seems to be a seasonally, what I'll say a volatile period. We just -- it's hard to predict volumes. And one of the reasons we don't tend to provide guidance is you just -- you don't know in this business.

We have an apparently fixed cost base, but our top line is very dependent on volumes and so Rich, as historically, and I'm going to continue that historic trend, we tend not to provide specific guidance.

Rich Repetto - Sandler O’Neill

Okay. And then I guess my one follow-up as long as I've only go one. Jeff, you made an excellent pitch on consolidate -- at least the attributes, the positive attributes of ICE, to a potential acquirer, that you're approved at the futures exchanges in multiple continents, the global clearing, the OTC proven platform.

I guess the question would be, is consolidation of the energy exchanges which provides significant diversity, is that something that's -- we hear a whole lot of talk about how, is this a six-month game, or is this a game that's going to take longer to play out do you think?

Jeff Sprecher

Well, it's hard to say. I've approached what we've done simply not to get bigger, but to say, are there things that we can do that would give us growth?

We're just so growth focused here, and what you've laid out and I think underlined some investment pieces on larger consolidation has to do with other companies that are missing parts to give them that growth.

So it's hard to for me to say, put myself in the shoes of other exchanges and say, what I want ICE and if so when would I want it, which is really what your question is. That -- and its odd because that's my whole approach. What we've done here is, we wanted to get global, we wanted to get multi-asset classes, we wanted a global clearing strategy, we want to have OTC in futures operating on the same platform, even though they're functionally very different, and we've got a lot of those pieces in place now.

So we continue to look for the holes to fill or where we can drop something on to that platform like ChemConnect that -- where we believe we can drive faster growth. So I'm -- I believe I'm looking at the space slightly differently than some of the managers of the larger businesses. But nonetheless, it's very, very hard to predict.

I hope people will to the extent they want to own ICE stock will realize that we are working very, very hard to build value for our shareholders with what we have, and we don't need a larger partner to do that in my view, and I think we've shown that we can be the fastest growing exchange, and to be very dynamic and diverse with our own resources.

If somebody else can come along and help us to do that faster and better, hey, that would be great. But it's not necessarily a fundamental part of our thinking here.

Rich Repetto - Sandler O’Neill

Okay. And if I can cheat and just add one quick question?

Jeff Sprecher

Sure.

Rich Repetto - Sandler O’Neill

Is that -- you did a admirable and innovative job with the CBOT. Would the closing of that transaction, has that changed the intensity of discussions across the industry; certainly it has in the press?

Jeff Sprecher

Yes, I don't know. I mean I think it's yet to be shown that the large merged exchanges delivered large shareholder value. And I think nothing against CME and border trade. But at least the immediate response of the capital markets was not that rewarding, and I think Euronext, NYSE, the capital markets have not been that rewarding.

So I think the jury is still out on whether at least on one set of shareholders, those maybe good deals. It's not clear to the other set that they've been good deals yet. And so I think that will drive the intensity ultimately of the debate. I guess I believe in markets because we run them.

Rich Repetto - Sandler O’Neill

And thanks Jeff, that's excellent feedback, thanks.

Operator

We'll go next to Niamh Alexander of CIBC World Markets.

Niamh Alexander - CIBC World Markets

Thanks for taking my question, I'll be quick. And NYBOT's -- how should I think about the use of the NYSE trading floor here in the NYMEX building, the pit now with the soft business, kind of decreasingly part of the physical trading and now rolling out the rest of the products, head over at NYBOT about kind of the need of the pits and then maybe some timeline on reducing those?

Jeff Sprecher

Yes, there is no specific plans in place yet, to cut to the chase. But this week, in looking at the numbers this week, the floor represents about 15% to 17% of the total futures volume, and that's ex-options, which is all-four based. But the actual underlying futures is about 15%. So far the economics -- we've been able to take a lot of costs out of the operation of the NYBOT floors and the operation of the NYBOT itself.

So, so far even with that volume it still feels net accretive to the business. And so as in that regard, it hasn't forced anyone to even think about making a decision around those floors.

Niamh Alexander - CIBC World Markets

Okay.

Jeff Sprecher

I think separately, and if you're aware that all of the futures exchanges are looking at how to electronify the options business, and there've been some limited successes, but not binary success of going from floor to screen yet. And we are working diligently on some internal technology that we think will be another attempt, another spin on helping to bring electronic options together, which will deal with that one also part of floor-based trading that we have.

Niamh Alexander - CIBC World Markets

Okay that's helpful, thanks. And just on NYBOT, follow-up. You had the price increase, is there room for some more?

Jeff Sprecher

Well, what was our rate for contract, was it $1.85…?

Niamh Alexander - CIBC World Markets

$1.85, not bad.

Jeff Sprecher

…so, and I think we are one of the more expensive agricultural futures exchanges. And but we provide a lot of value around that so, so far our customers has seen the benefits and have obviously are growing that business against those rates. But it -- we're not trying to set a world record here in terms of rates.

Scott Hill

But the growth opportunities -- and Jeff talked earlier about the growing number of non-members that we have trading, and you can also look at the product expansion. We talked about the Russell 1000, we talked about U.S. Dollar Index, and as Jeff alluded to in the remarks, we're working on our exclusive arrangement with Russell, so we'll -- you go through those avenues as well.

Niamh Alexander - CIBC World Markets

Okay, that's great. I have some other questions, I'll follow-up with you afterwards, thanks.

Jeff Sprecher

Great, thanks Niamh.

Operator

We'll go next to Rob Rutschow with Deutsche Bank.

Rob Rutschow - Deutsche Bank

Well, hi, good morning.

Jeff Sprecher

Good morning.

Rob Rutschow - Deutsche Bank

I'll do my old school impression. I have one question in sixteen parts. Actually just a couple of mulling questions. I guess, surrounding the RPC numbers that you've given, what with the NYBOT-RPC event, if it had been implemented April 1st? And then the WTI-RPC, I believe you've finished running specials on that at the end of June. And so I'm wondering if that should drift-up towards the -- towards the overall brand numbers that you have for RPCs.

Jeff Sprecher

See, I mean, and to be completely frank with you, I haven't modeled what the rate would have looked like if we had implemented from April 1st and we don't provide forward-looking guidance. I would tell you that, the rate per contract, if you look beyond the 25% increase it's been relatively flat over the last couple of quarters. And so I wouldn't expect any great movement as you move forward and similarly if you look at the U.K. futures business, the rate per contract has been $1.29, around that level for the past three quarters. And again, I'm not aware of any significant driver, which would move that number materially.

But, mix is the unknown. So I don't know mix and mix can drive the overall average rate per contract and so I can't really predict with the mixture.

Rob Rutschow - Deutsche Bank

You're talking about the WTI that shouldn't move too much?

Jeff Sprecher

Yes, I mean, I think it's fair to say that we experiment a lot with rates underneath these things. I don't know if we have found the magic formula yet. But as you are well aware, some of the high velocity traders really to make money and provide liquidity need a different rate structure than some of the hedgers. So, we fine-tune all that and so even though things expire we think about should we try something different or new, and all of which we do in the context of recognizing we are a public Company, and not wanting to make dramatic modeling problems for the street. So --

Rob Rutschow - Deutsche Bank

Okay. My follow-up regarding clearing, you talked about the revenues for next year in the second half. I'm wondering if you can give us an idea of what sort of pretax margin you are looking for in clearing?

And then, sort of separately, in the OTC space what new product are you looking for there on the agricultural side if any in the next, say, 6 to 12 months?

Chuck Vice

I'll take those. The first on clearing we've been, we painted that guidance we've given you with a fairly broad brush. And we tried to avoid being too specific because we do want to sit down with the FCM community and talk about some of our ideas on how to run that clearing house. And so we are comfortable with the guidance that we have given you, but uncomfortable really giving you much visibility into that until we move forward another step or two.

On the ag products, I think we mentioned that we are working with the CFTC to try to implement an over-the-counter ag business, and that process is ongoing. It's still in the regulatory process. It's hard to again envision exactly when it will come out of that process. And even harder to envision exactly how meaningful it will be, other than we know there is an addressable market out there.

But this will be bringing some new products and new techniques into a market that hasn't seen them before. We did that obviously with energy, so we have some; we have a roadmap, but again, very hard to model. So I don't want to give you any specific guidance at this state.

Rob Rutschow - Deutsche Bank

Okay. Thanks.

Operator

We'll go to Chris Allen, Banc of America Securities.

Chris Allen - Banc of America Securities

Hey you guys, how are you doing?

Jeff Sprecher

Good morning.

Chris Allen - Banc of America Securities

Just one question on the balance sheet. You guys have the current portion of the licensing agreement at 59 million, and in the non-current portion at 90 million. I'm going to assume this 50 million is part of the 59 upfront. Is the rest of them kind of your minimum payments to Russell over the course of the seven-year contract?

Scott Hill

Yes, that's exactly what it is.

Chris Allen - Banc of America Securities

Okay, so if we just take the whole total divide it by seven, it would probably be your annual run rate?

Scott Hill

That will get you an approximation. I'll tell you, there are some details that we are working through that might move that more relative to volumes out into the futures as opposed to just a flat amortization.

Chris Allen - Banc of America Securities

Okay.

Scott Hill

Again, we'll give you additional guidance as we work through those details. But for modeling purposes now, what you suggested is probably the best approach for now.

Chris Allen - Banc of America Securities

Great. That's it, that's all I guess.

Operator

And having no further questions I'd like to turn the conference back over to management for any additional closing comments.

Kelly Loeffler

Thank you for your time today, and please contact Investor Relations if you've got any follow-up questions, thank you.

Operator

That concludes today's conference. Thank you for your participation. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Intercontinental Exchange Q2 2007 Earnings Call Transcript
This Transcript
All Transcripts