IntercontinentalExchange Announces 2003 Results

IntercontinentalExchange, Inc. (“Intercontinental” or “ICE”) today announced its 2003 financial results. On a consolidated basis, Intercontinental reported 2003 revenues of $93.7 million with pre-tax profits of $19.9 million. Net income for 2003 was $13.0 million and cash flow from operations was $27.1 million. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) were $37.6 million.

Capital expenditures, software and licenses in 2003 totaled $8.8 million, which primarily included technology provided by Intercontinental to its wholly-owned subsidiary, the International Petroleum Exchange of London (“IPE”). Intercontinental ended the year with no debt and with $93.7 million in cash, of which $24.0 million is reserved for potential shareholder redemption obligations and $12.8 million is restricted under regulation.

“Intercontinental achieved solid results in a year of mixed events for energy trading,” commented Jeffrey Sprecher, Chairman and Chief Executive Officer. “The IPE set volume records throughout the year, including achieving the best month in the history of the exchange in October. The IPE ended the year with its sixth consecutive annual volume record, as credit conditions drove trading firms to move into the regulated futures markets and cleared over-the-counter (“OTC”) markets. The launch of the first continuous electronically traded oil futures contract by the IPE in October 2003 marked an important milestone for global energy trading and will be a key driver of our activities in 2004.”

OTC Markets
“The continued contraction among energy merchants resulted in significantly less participation in the OTC gas and power markets,” Sprecher continued. “However, ICE’s investment in the development of cleared OTC products was beneficial to a growing number of market participants who relied on clearing to ease credit constraints while managing risk. As a result, Intercontinental is well positioned to participate in the stabilizing OTC energy markets, and to facilitate the migration to electronic price discovery.”

In the fourth quarter of 2003, Intercontinental launched seven cleared financial power products that quickly exceeded volume expectations. Intercontinental currently offers 20 cleared OTC products, including the industry’s first electronically traded US natural gas options.

“ICE’s development of OTC cleared products has attracted new participants to the broader energy markets, including hedge funds, banks, proprietary trading firms and futures exchange locals,” Sprecher added. “Participant companies accessing ICE increased by 8% in 2003 as price discovery continued to move online. This growth is despite significant departures from trading by numerous merchant energy firms. Thousands of participants rely upon transparent and open markets on ICE each trading day, with more than 840 firms accessing the ICE platform.”

Futures Markets
In 2003, IPE’s volume reached 33 million lots, exceeding the prior year’s record by 10%. Intercontinental delivered its electronic trading platform to the IPE in 2003, allowing the IPE to list digital equivalents of all of its floor-traded futures contracts. The IPE Board of Directors and a consultative transition committee introduced parallel trading in Brent crude and gas oil in the fourth quarter of 2003.

During the year, IPE’s electronically traded Brent crude and gas oil futures volumes began increasing as a percent of floor volume. In January 2004, electronic Brent comprised 4.7% of floor volume, up from 2% in January 2003. The electronically traded Brent and Gas Oil contracts set volume records in January and February 2004, respectively, amidst robust floor volumes. IPE expanded access to its electronic markets in 2003 with additional foreign territory approvals and the availability of order-routing through its ISV program.

Expanding Business Lines: Electronic Confirmations and Market Data
Intercontinental’s electronic trade confirmation business, eConfirm, today connects forty-one of the energy industry’s leading participants, with another nine trading firms in the integration phase. As a result, leading energy trading companies confirm trades electronically using web-based eConfirm as the industry continues the adoption of straight-through-processing. Averaging over 7,250 trades matched per month in the fourth quarter of 2003, the eConfirm platform has become a virtual trade data hub, comprising the single largest repository for North American OTC energy trade data.

Intercontinental’s market data business, The 10x Group (“10x”), led energy data publishers in producing transparent price information by introducing verifiable, transaction-based OTC market indices and other market data. Over 5,000 North American market participants receive the daily ICE/10x indices for Day Ahead gas and power markets. 10x successfully launched its Market Price Validation Service, covering twenty of the largest trading firms in the industry for the purpose of providing them with independent validation of forward price curves and options positions extending 10 years forward for oil, power, gas and metals.

Sprecher concluded, “As we evaluate current trends in OTC and futures markets, we see both ICE and IPE having vital roles for price discovery for a broad cross-section of market participants. Intercontinental is focused on its mission to serve the global energy and metals markets as we continue to develop leading-edge OTC and futures risk management, market data, and straight through processing solutions.”

About this Announcement
Some of the statements above may be "forward-looking statements", which are not statements of fact but of our belief as to possible future developments. Whether they prove to be accurate will depend on a number of factors, some of which we do not control and cannot predict. Actual results may differ from these statements, and you should not rely upon them as assurances about the future.

About IntercontinentalExchange
IntercontinentalExchange operates global OTC marketplaces for the trading of commodities on its Internet-based Interchange trading platform. Its subsidiary, the International Petroleum Exchange of London (IPE) is Europe's leading energy futures and options exchange, providing regulated open-outcry and electronic marketplaces where participants use futures and options to manage their price risk exposure in the physical energy markets.

The Interchange platform is accessed daily by thousands of traders and trading operations professionals to trade hundreds of commodity and derivative contracts including crude oil and refined products, natural gas, power and precious metals. In addition to its electronic trading platform, the company’s innovations support the broader trading and risk management infrastructure, including OTC cleared products and credit management tools, the eConfirm trade confirmation hub, and enhanced market data through The 10x Group. ICE is based in Atlanta, with offices in Chicago, Houston, London, New York and Singapore. For more information, please see www.theinterchange.com.