洲際交易所 (ICE) 2006 Q1 法說會逐字稿

Good day, ladies and gentlemen and welcome to the first quarter 2006 Intercontinental Exchange conference call. My name is Alexis and I will be your coordinator for today. [OPERATOR INSTRUCTIONS]

I would now like to turn the presentation over to your host for today's call, Miss Kelly Loeffler, Vice President of Investor and Public Relations. You may proceed, ma'am.

Good morning and welcome to the Intercontinental Exchange conference call. To obtain a copy of the Company's first quarter earnings release issued this morning please visit our Web site at theice.com, where you'll also find a copy of our presentation.

Before we begin, you should be aware that our comments this morning may contain forward-looking statements, which represent our current judgment and are subject to various risks, assumptions, and uncertainties as outlined in the Company's filing with the SEC. Actual results may differ materially from those that are expressed or anticipated in any forward-looking statement.

I now would like to turn the call over to Jeff.

Good morning and thank you for joining us on ICE's first quarter 2006 earnings conference call. I'd like to begin the discussion tody by providing financial and operating highlights. We'll then review our progress to date on our growth strategies for the year. Chuck Vice, our President and Chief Operating Officer, will provide an update on our technology and Richard Spencer, our Chief Financial Officer, will present more detail on ICE's financial results. . We'll then take you questions from all participants on the call.

I'm pleased to present our first quarter results which represent record level revenues, operating margin and net income. These results provide a strong foundation for what we believe will prove to be another year of expansion in the energy commodities and derivates sector.

In the first quarter of 2006, our consolidated revenues grew 58% to $50 million, up from $32 million in the first quarter of 2005. Our consolidated operates expenses grew only 17% to 23 million, primarily driven by noncash compensation expenses of $2.2 million, which result from SFAS 123R.

This financial discipline drove an operating income increase of 123% to $28 million compared to $12 million one year ago. As a result, we saw a steep ramp in our operating margin, which rose to 55% compared to 39% operating margins in the first quarter of last year.

Net income increased 122% to $20 million in the first quarter from $9 million in last year's first quarter. Finally, diluted earnings per share totalled $0.33 in the first quarter, representing a 94% increase compared to our $0.17 in Q1 '05. These strong results were driven by record volume in both futures and OTC contracts.

Average daily volume at ICE futures in the first quarter grew 82% compared to the first quarter of 2005 to 260,000 contracts per day and it marked ICE future's highest volume quarter ever. If you exclude the new WTI Crude futures contract that we introduced in February, future's volume grew 64%.

Just one year following our transition to fully electronic trading, our energy future's business grew by nearly 8 million contracts during the first quarter. In ICE's OTC segment, average daily commissions increased 58% when compared to the first quarter of 2005 up to $381,000 a day.

The increases in commission were a continuation of the growth in traded volume in our cleared North American natural gas and power contracts as well as new participants entering ICE's marketplaces. Our cleared contract franchise continues to expand with the introduction of 34 new cleared contracts already this year. This brings our total cleared contracts to nearly 70 and we plan to introduce another 15 to 20 new contracts over the next few months. While the bulk of the new products were introduced late in the quarter, these contracts should be meaningful contributes to our OTC revenue in the second half of 2006.

On a contract basis at ICE futures the volume benchmark ICE Brent Crude futures contract in the first quarter increased 65% compared to the same quarter last year at 10 million contracts. Brent Crude, which is a light sweet grade of crude that's delivered in the North Sea posted daily and monthly volume and open interest records during the first quarter. Open interest in Brent Crude currently stands at 453,000 contracts.

And the ICE gas oils futures contract which has become the leading global benchmark for heating oil following its transition to screen trading also set daily and monthly volume records as well as open interest records. Volume in gas oil increased 62% during the first quarter compared to the first quarter last year to 4 million contracts and open interest stands at 222,000 contracts.

The ICE WTI crude future's contract which is also a grade of light sweet crude grew rapidly from its February 3rd launch to a record 143,000 contracts last week on April 25th. Open interest today stands at 188,000 contracts.

As many of you know, two weeks ago, we introduced the ICE heating oil and unleaded gasoline contracts at our FSA regulated ICE future subsidiary under our existing no action letter which was granted by the SFCC.

This morning, we also issued our April volume press release. In short, we continued to see solid volume increases last month with ICE futures average daily volume up 123% over last April. I'd like to note that despite the expiration of the fee waiver on our WTI crude future's contract at the end of March, in April we saw average daily volume of WTI rise 36% sequentially compared to the month of March to an average daily volume of 93,000 contracts a day.

Importantly, ICE's combined average daily volume in the global crude future's complex was 247,000 contracts per day during the month of April, which is up 146% compared to our average daily volume in crude oil futures business in April of 2005.

Also during April, the average daily commissions in our OTC segment were up 75% to $483,000 a day, compared to $276,000 a day last April. Notable in April was the growth in our cleared business with the addition of our new natural gas and power contracts. Though many of these new cleared contracts have been available for less than a month, we're seeing solid activity and we believe that these will be long-term growth drivers for our business.

While we're capitalizing on the secular growth trends that exist in energy, we're also creating opportunities for growth and we plan to remain the leader in developing products and technology for this global energy marketplace.

I'd like to quickly update you on the initiatives we laid out in our last earnings call. Most of these initiatives are underway and you're seeing the results, at least the early returns today. These include new products, new participants, and an enhanced market data business.

We discussed our new product offerings extensively this morning. In our OTC segment, we're rolling out dozens of new cleared contract and at ICE futures, three new contracts have been launched in 2006. Not to mention several popular one-click spread trading offerings between our contracts. We continue to evaluate new products and we maintain a very solid pipeline.

Secondly, we continue to see growth in new market participants. We believe we're serving to expand the size of the overall energy marketplace. Today, our markets serve energy majors, investment banks, electronic locals, funds, industrial users, and utilities.

We've said it many times, but we continue to believe that we're in the early phase of adoption of energy commodities as a traded asset class. Energy will likely become more mainstream as issues relating to the geopolitical landscape, supply and demand, and global production continue to playout against the backdrop of economic growth around the world.

The third area where we're realizing growth is in our market data business. There's a strong demand for data by market participants who place a high value on accurate and timely data. We're able to cost efficiently meet the demand for transparent and audible energy market transaction data because it's a by-product of our execution business. While it accounted for only 12% of our consolidated revenue during the quarter, we saw 73% growth in ICE's market data revenues compared to the first quarter of 2005.

Finally, I'd like to briefly address the upcoming expiration of the lockup restrictions from our initial public offering. The original lockup restrictions are scheduled to expire on May 20th, but we're working closely with our founding shareholders to negotiate an extension of their lockup restrictions for not less than 80% of the holdings of our founding shareholders. We're doing this with a view towards possibly conducting a secondary offering in the near future, but to be clear, we're still in discussions regarding the extension of the lockup.

With that I'd like to turn the discussion over to Chuck Vice who will provide you with a brief update on our technology.

Thank you, Jeff.

This morning I wanted to provide you with a brief update on our technology initiative. As you know, our own ICE trading platform serves as the foundation for integrated futures in OTC energy markets. Since our start nearly six years ago, we've been listening and responding to the needs of the energy marketplace.

As such we've built our business around the technology and tools that are [inaudible] traders worldwide. The product of this six-year effort is the ICE platform and the systems that surround it. As we continue investing in our technology, we maintain an intense focus on the platform's distribution and performance.

First, our distribution among the global energy community is extensive and long standing and driven largely by the proliferation of our proprietary front end known as Web ICE. Easy to install and use, Web ICE can connect to our platform over the Internet or private lines by traders with comprehensive access to all of our futures and OTC markets.

As one of the only exchanges today to offer a low cost but highly functional proprietary front end, ICE preserves its direct link to many end-users desktop. Nonetheless, we've also worked hard to ensure that our customers has an abundance of other front-end to choose from with 12 ISP's now offering access to the exchange.

In the first quarter, we continue to see strong interest from the growing number of algorithmic or black box traders buying directly to the exchange. Increasingly popular with this segment is our fix ATI which provides an industry standard protocol for connecting to the platform.

From a connectivity standpoint, we offer a number of private line alternatives with most of those interested choosing to connect to our newly open telecommunication hubs in Chicago and London. Later this month, we'll be adding hubs in New York and Singapore.

Second, continuing advances in system performance is always a high priority. In the first quarter of 2006, we lowered round trip times on the ICE platform despite a three-fold increase in messaging traffic. We also set new records for a number of users and connections to the platform.

In the second quarter, we will complete other technology products that will handle ever higher levels of messaging traffic while further reducing round trip times.

As you can see, we're maintaining an intense focus on them to enhance our offering amid a highly competitive marketplace.

And with that I'll turn it back over to Richard Spencer for more financial details.

Thanks, Chuck.

Turning back to the financial record, performances that we had in the first quarter, as you can see on slide 6 highlighted as Financial Highlights - First Quarter of 2006. Net income that we earned in the first quarter is more than double our net income in the first quarter of '05. Importantly, while revenues increased by 58%, expenses increased only 17% to $23 million.

Since Jeff went through the high level numbers, I'd like to provide some detail. In the first quarter of 2006 as you can see on slide 7, transaction revenues increased 60% to $43 million from $27 million in the first quarter of 2005 and accounted for 86% of our consolidated revenues. This increase was driven by a combination of volume increases in both the OTC and future business segments during the quarter and the entry of new participants in the Company's OTC and future's markets.

While we did not implement any price changes in future's or OTC in the first quarter, we did announce a new transaction fee schedule that applies to our crude oil and refined future's contracts that began April 1. Also, following an initial fee waiver, ICE future's implemented its standard pricing on its ICE WTI crude future contract at the first of April.

Looking at our revenue segment by segment for the first quarter, transaction revenues at ICE future's totalled $19 million. This is an increase of 57% over $12 million in the first quarter of the prior year as ICE futures markets showed strong volume and membership expansion following the transition to all electronic trading completed in April of 2005.

ICE futures track record of offering highly regulated and liquid future markets combined with no seat purchase or lease requirements have attracted participants seeking market access and greater price transparency.

In the first quarter of2006, transaction revenue in the OTC business segment increased 62% to $24 million compared to $15 million in the same period in '05. The OTC segment accounted for 56% of transaction revenues.

Contract volume on ICE's cleared OTC markets rose 110% to 16 million contracts in the first quarter. That compared to 8 million contracts in the first quarter of '05.

Consolidated market data revenues through the ICE data business segment increased 73% during the first quarter of 2006 to $6 million compared to $3.5 million in the same period last year. This increase was driven by new customers and a new pricing structure implemented during the quarter.

Slide 8 presents the consolidated operating expenses during the first quarter of 2006 and as you can see, it increased 17% to $23 million compared to $19 million in the same period of '05. However, it's important to note that a large component of the increase comprised stock based non-cash compensation expense, which totalled $2.2 million compared to $400,000 in the quarter of '05.

First quarter 2006 consolidated operating income was $28 million, up 123% compared to $12 million in the same period in '05. This produced a Q1 operating margin of 55% compared to an operating margin of 39% in the first quarter of '05.

Consolidated net income in the first quarter of this year was $20 million, up 122% compared to $9 million in the first quarter of last year. Consolidated cash flows from operations were $17 million in the first quarter, up 105% from $8 million in Q1 of '05.

As seen on slide 9, CapEx expenditures in the first quarter of '06 totalled $1.9 million compared to $200,000 in Q1 of '05. This increase in capital expenditures primarily relates to the hardware purchases to enhance the electronic trading platform. It should be noted that capitalized software development costs totalled $1.5 million in the first quarter.

Moving on to the balance sheet on slide 10, you can see the Company is well capitalized. As of March 31, 2006, we had $164 million in cash and investments, of which $13 million is restricted under regulatory requirements of our ICE futures subsidiary. This compared to $146 million in cash and investments as of December 31, 2005.

You should note that we remain debt free and have full availability of the $50 million on our revolving credit facility. We use an independent investment manager to manage our excess cash and as of March 31, we had $141 million in investment grade marketable debt securities and municipal tax-free bonds.

While we do not provide earnings guidance, we are very pleased with the strong start to 2006 and would like to take this opportunity to provide an update on our expense base.

In the first quarter, our primary variable costs related to the Wagner patent which totalled $1 million. This patent expires in the first quarter of 2007.

With respect to SFAS 123R, we have begun expensing stock options in 2006 and refer you to the footnotes of our forthcoming financials to be filed on form 10-Q for greater detail. However, as we said on our fourth quarter call we expect these noncash compensation expenses to be in the range of $9 to $10 million for 2006.

On the topic of taxes, our income tax rate is expected to be approximately 35% for the remainder of 2006.

We are forecasting diluted share count for the second quarter of 2006 to be in the range of 59.1 million shares to 59.6 million shares with basic shares outstanding in the range of 55.6 to 56 million shares.

I'd like to summarize by noting that while we are focused on building our track record of growth, we're maintaining a focus on expense discipline to leverage our fixed cost operating model. We continue to seek excellent cash flow and combined with our strong balance sheet, will continue to invest in our business.

With that, I'll turn it back to Jeff.

Thank you, Richard.

The first quarter gives us a strong foundation for 2006 and beyond. To date, our trading volume and financial performance is exceeding our expectations and we're excited about the opportunities in front of us. I'd now like to take any questions that you may have.

[OPERATOR INSTRUCTIONS] Your first question comes from the line of Daniel Goldberg with Bear Stearns. You may proceed.

Yes, good morning.

Good morning.

Can you elaborate a little bit more on the market data. I mean, that was a big difference in what we were looking for for the quarter. You said you had new pricing and addition of new customers. If you could give us more color there, that might be helpful.

Sure. I think probably the easiest way to describe it is our screen is available over the internet, and as such, we can make a view-only version of our trading platform easily available to people.

In the early days of ICE, we would gladly give that screen away to people in order to try to encourage them to come trade and also to learn how to use the ICE platform. And more recently, we've been actually starting to charge for that view-only screen. It's basically a realtime data feed to a lot of our customers.

Do you have a number in terms of new customers maybe during the quarter?

I don't think we're going to give that out, but I would say that there are a lot of -- there's a lot of interest in observing the realtime pricing in energy, Daniel, as we've talked about, it's such a volatile commodity that the ability to see the future's and all of these OTC markets and the way they interplay in realtime has proved to be a very valuable offering and as such, we've now been able to charge for it.

Okay. In terms of the comp also that was, the difference in terms of what we were looking for, it was lighter than expected typically the first quarter, I guess higher than other quarters, but if you can give us a sense there. I know you said 9 to $10 million on SFAS 123R, but is that a decent run rate where we were in the first quarter?

It's Richard Spencer, we took a -- if you look at our stock compensation, we have ongoing options and we also have a performance-based slice of compensation. And as you are probably aware, with performance-based, you start amortizing it when you have the profitability of achieving those performance targets.

We actually had a hurdle rate that we hit in the first quarter that caused amortization to kick in, which is a little heavier than normal, but I think the 9 to 10 amortized throughout the year is going to be good for a model.

Okay, that's helpful. Can you just comment, I guess, Jeff, CME and NIMEX obviously teaming up as new competition. I'm assuming you've talked to several of your customers. If you could elaborate on what the response has been in terms of when CME and NIMEX start to trade the competitive products?

Sure. I guess I would start by saying there's a lot of noise in the marketplace right now. First, traders are being told that up to 20 firms will receive a $0.15 NIMEX member rate for as long as two years. In this business, your top 20 customers represent a disproportionately large amount of the overall volume and at the same time the street is being told that the system cost are $0.35 to $0.50 a trade. So you know just stepping back you look at that and say that's a recipe for financial disaster unless the facts are not really as advertised. Or in the alternative, there's no plan to do any volume.

And secondly, traders on the floor are being promised that they're going to launch financial look alike contracts to protect the floor interest and the traders away from the floor are being told that the contracts are going to be physically delivered floor equivalents that will be fungible. So it's really uncertain to what they're going to offer.

And lastly, it's being privately whispered that NIMEX plans to announce a quick IPO on the back of that agreement and that the real decisions regarding the potential closer of their floor will be made in the third quarter by a public company board.

So all of that noise is in the system. And it's really to us just noise. And because of that, we do what any good company would do, and that's that we just work with our customers to try to understand their needs and we try to remind them of the fact that we're an open transparent marketplace, that it's designed to really originally to manage the risk of the commercial energy players, the hedgers, and the customer order flow aggregates.

So therefore, it's really an excellent market for volatility speculators and proprietary traders which are these new class of customers coming into the marketplace for them to accept short term risk. And so we're just out there doing the basic blocking and tackling and I think you can see the results are definitely coming to ICE and they're definitely falling to the bottom line.

And in terms of how sensitive pricing is, is that something, if they were to undercut you in terms of pricing, would you expect a certain number of customers to leave, or is that not an issue?

Well, I mean, first of all, the price talk that's in the market as I suggested is obviously flawed in that people are being offered a price that's below the cost for an extraordinarily long period of time and an extraordinarily large number of people are being offered that, so you've got to take that all with a grain of salt, frankly.

We offer a really strong value proposition and we just continue to talk to our customers about what we're providing them. And the reality is that we have very, very tight markets and really big size on our spread markets and it is very, very appealing right now, the value population that we have for these large customer aggregators banks, and the energy firms to do business on this platform.

It was designed by them, it was designed for them and it's heavily integrated into their systems and into the ethos of the way their desk works. There's a lot there that transcends just the simple price. We will continue to work with those people, get the value proposition right so that the class of price sensitive customers which tend to be the volatility speculators that are in just for short periods of time have a market that is really robust. I would tell you anecdotally when we had our floor open and we had side by side trading and we had these volatility speculators trading on the screen, the minuet our floor opened the screen went dark and because the commercial paper went to the floor.

And volatility speculators trading against volatility speculators is ultimately a zero sum gain game. There's somebody wins, somebody loses.

Really what you need are hedgers to interact with speculators and speculators to take the short term risks waiting for other hedgers to come back and forth. And that's the kind of market we've built here and you can see it in the amazing growth we've had. So there's a lot there to display simply with a competitor trying to offer price.

I would add just one other point to that. This is the not the first time that we've competed against CME and NIMEX. For three years NIMEX and CME gas and crude oil contracts traded on [globe-ex] and we competed with that and during that time, there were some pretty heavy incentive programs in place and various fee waivers, including even then, discounts for CME members trading NIMEX products.

So this competition, both the platform and the marketing approach there is not unfamiliar to us.

Okay. And then just a very last question in terms of consolidation, your updated thoughts in how ICE might fit in.

I guess I would remind you that we are one of the the few companies that are actually participated in consolidation by virtue of us buying the IPE and changing its business model organically and blowing up the idea of membership and moving it from floor to screen.

So I've been a strong advocate that there will be consolidation in the space and we will participate. As to whether or not one of the larger entities has an interest in ICE, there's nothing I can say. That's somebody else's decisions.

Okay, thank you.

Sure. Thank you, Daniel.

Your next question comes from the line of Josh Carter with Goldman Sachs. You may proceed.

Hi, thank you, just a quick question for Richard on SG&A. You spoke about the Wagner patent being about $2 million, it was still a little higher than we expected even with that. Was there anything else going on there in SG&A line?

No, that was primarily the biggest variable we had. Nothing else really stands out per se.

And do you expect the $6 million level is a decent run rate? Assuming volumes where they were in the quarter?

Again, depending upon the variable cost, yes, the baseline is a good number.

Okay, great. And then, Jeff, maybe a little bit on OTC volumes, the April number was obviously very impressive and I think this is also a critical issue for the competitive landscape with CME AND NIMEX.

I'm wondering if you could talk a little bit about what you have on the OTC side and more specifically about your key competitor advantages relative to CME and NIMEX. . They've obviously got the Henry Hub contract which competes with your Clear contract but it doesn't appear to me that they're aggressively pursuing the other OTC products you have, especially the variance on the natural gas products. A little more color on your competitive advantages there?

Sure. First of all, just mathematically in the first quarter of '05, we had, I think,19 cleared OTC contracts and today I think we have 52 or so with more to come.

Speaking let's start, let's say Henry Hub since you brought it up. Henry Hub is the primary benchmark delivery point for natural gas in North America, but there are 100 other delivery points in North America that trade mostly as derivatives to Henry Hub or as a minimum, very highly correlated to the price of Henry Hub. And many of those are liquid enough that we've laid clearing over our formal bilateral traded contracts.

And that whole suite and that whole interplay of the various ways that natural gas moves throughout the country, the pricing dislocations that can happen, regionally and the interplay of natural gas with electric power, which is also regional and also heavily traded on ICE and also has many cleared contracts is an entire suite of offering you can get with one view and can relate on the ICE platform. And that's how the energy market trades.

We're a little different than, let's say, an interest rate environment where there maybe one short-term and one long-term marker. Here we have so many different delivery points, so many different grades of products, so many different types of products that come out of a barrel of oil that it's -- I think, really the whole offering that get's the attention.

And that that was part of the original concept when we formed up ICE and it seems to be working quite well for us and you can see the results as you say in our April number by simply the fact that we've brought a few more of these tangental markets into the cleared fold and allowed them the fun community and the volatility speculators more easily access them.

That's great, Jeff. Do you know anything that prevents CME or NIMEX from entering that market more fully or do you expect them to do so?

I don't know what they're going to do, but I mean, people like to trade where they have some comfortableness in trading, where they have confidence in the market and the systems that surround the market and the regulation that surrounds the market. And as we've said before, a lot of traders grew up understanding how these markets work by using the ICE platform and the ICE front-end. And it's going to, I think, be hard to dislodge.

Makes sense. Could you give us a little more color on April volumes? Do you have a number for Henry Hub, so we could have a sense of how much came from new products versus the core, apples to apples comparison from the past.

Let me -- I don't think we broken that out yet in the press release and I don't think we're going to offer that on a monthly basis, so let me avoid the question, if I may.

Okay, I'm sorry for --

You're welcome to ask.

That's great. A final housekeeping item. The CapEx was a little lower than I expected. I just wanted to ask Richard, when he had talked about CapEx guidance in the past, number one where you including capitalized software? And number two, do you have an update on your views on what CapEx might be over the next year and then in '07? I think it was a similar rate for both years in respect?

That's a good question. If you remember our first call for the year end numbers, we do point people to capitalized software expenses because we think that while nonGAAP quote unquote it is a good barometer to see what we're spending on the actual platform itself. The only guidance that we've given, Daniel, is going forward over the next '06 and '07 is $15 to $20 million in CapEx.

Okay, so that's ex, that's 15 to $20 ex capitalized software?

Yes, 15 to $20 million in capitalized, yes. expenses, I beg your pardon. In hardware.

In hardware, and additional for capitalized software.

Yes.

Great. Thanks very much.

Your next question comes from the line of Rich Repetto with Sandler O'Neil. You may proceed.

Hi, guys. Congrats on a strong quarter.

Thanks, I guess, on behalf of the 200 people that really made it happen here. I appreciate the comment.

First question for Richard, I'm just still wondering, I looked at that you included the cash flow and I'm trying to see, the cash flow went down quarter to quarter. That is just peculiar to me and I just can't seem to figure it out on why given the solid quarter that just the cash flow --?

If you look, Rich, on the cash flow basis, we are seasonal in primarily the end of the year fourth quarter to first quarter, that's primarily bonus driven.

In other words, we pay last year's bonuses in the first quarter.

Okay, because I was trying to look at the accrued comp, and that, I guess, quarter to quarter there, and that didn't -- okay, that did go down. Accrued salaries, okay, you're right, went down by 4 or 5 million here. So I guess that would be, that would be the big thing right there, the accrued comp going down?

Yes, one component there and that brings up a good point on the first quarter this year. You're going to have us running a little bit lower -- you'll see us running a little bit lower than norm.

And one of the things that we've told you -- what you might consider norm in your model -- one of the things we told you all was our, the management of the head count. And while we're staying in the range of the 209 we talked about, there's going to be some fluctuations in between as we transition out some Legacy folks associated with the open outcry's systems and then bring on head count that we talked about for new marketing initiatives on the ICE futures side. So there's going to be -- it's not going to be a smooth line quarter over quarter as we balance that.

Okay. Next question, a follow up. I guess on the market data, Jeff, I heard the explanation. So that almost accounted, the internet availability because the line almost doubled. So that -- any way to quantify this screen availability, the view-only screens, I guess?

Let me just say it's two-fold. One is the number of screens that are going up and secondly, we've changed the pricing formula so essentially the rate per screen that we receive is going up.

So there's a two-fold impact in that number. And what we charge for data and how we package data, that is dynamic. We've mentioned a number of times it's an area we're focusing on, so I expect it will continue to change going forward as our data set becomes more robust and more confidence is built in ICE.

In terms of how to build that up in model, I think -- let me, we don't have that here, so let me take the question and maybe that's something we can address on the next call or in some other form that the rules would allow.

And when you say it's dynamic and expect to change, I would assume change to the upside?

Yes. When we started ICE on the first day when you do one trade, that one data point is not all that valuable and over a period of time, we've built a very robust data base of historical trade data. As well as the volume in our contracts are growing the confidence level that people have that the price discovery on ICE is actually the market, if you will, helps to drive more interest in the data.

And one of the things we did which is a little different than maybe some of the other companies that are 150 years old that you're used to covering is that we sell a realtime tape to the major redistributors, like Reuters and Bloomberg and such. But we also package our data up ourselves in various different offerings and directly market them.

And because we have the Internet as our network and because we have such an intimate relationship with the trade, we're able to come up with some unique data offerings. And a lot of those need either the broad based historical data base of trades, or they need the confidence of the market.

So we're going to continue to exploit that. It's something we continue to invest in and talk to our customer base about and we're trying to find the right value proposition there as to what is this stuff worth and frankly, the goal is to take the same data set and repackage it as many ways as you can for different audiences to extract the most revenue that we're able to.

I understood, that helps. And the last question, people already been asking on the topic, but the WTI, April solid, great showing considered you started charging as well in the month. And I guess Good Friday, when the markets here were closed, it was good volume there.

And I guess I'm just trying to get a feel, is there any either a way you could give us color, maybe on this call or later on, that the customers that are trading WTI, like what percentage of trade and spreads to the Brent or what percentage come from existing, I guess, IPE type customers? So we could make a judgment on even if it langley electronic how much stays on the -- if it launches away electronic, how much stays on your platform to try to get more comfort there?

Right. Well, yes, I'll take the point and see if there's a way we can slice and dice the data to give you that in the future, but I will say anecdotally, you did notice something that is quite interesting that does say something about our market, and that is, for example, yesterday was a U.K. holiday. Around Easter, they celebrate Easter Monday and Good Friday in the U.K. And obviously Asia has its own unique set of holidays.

So we've talked extensively about the fact that roughly half of our revenue comes from outside the United States and because we're distributed on the internet and because that's a global network and easy to get people set up, we really have a strong global interplay, and it's why it makes it difficult to look at serial days volumes against one another, or even serial months volumes. It's best to look quarter over quarter or year-to-date over year-to-date kind of looks to see that.

But you are seeing a global marketplace here and that's one strong advantage that we have.

Understood, congrats again.

Thank you.

Your next question comes from the line of Joel Gomberg with William Blair. You may proceed.

Good morning.

Good morning.

Jeff, maybe you can comment a little bit about the regulatory backdrop, the no-action letter, and some of the interplay between the CFTC and the FSA, just to flesh that out for us. And then talk about you'd rollout of a couple new future's products couple weeks ago. Obviously not like WTI, but how's that progressing relative to plan and customer response?

Let me take the second one first since it's the freshest one. We're very pleased with the rollout of those contracts. We rolled out a gasoline contract. You should understand that the gasoline market in North America is really going through a transition right now. The country is moving off of this MTBE additive gasoline and into reformulated blends.

And so we launched this contract called RBOB in the hopes of possibly having an electronic futures benchmark alternative would help to drive consensus around what gasoline markers should exist. And so this will be complicated getting gasoline going in North America for anybody. The underlying physical markets are in a state of flux, so it's hard for a future's market to organize up.

So there's nothing unexpected about that for us, but we wanted to put a stake in the ground to have a marker out there to see if electronic RBOB would be something that would help drive consensus.

The other contract that we launched was heating oil, U.S. heating oil as mentioned in our prepared remarks. We have gas oil, which is European heating oil. There is an east west [arb] that is traded and that's what you're starting to see trading on ICE.

And we're doing a lot of marketing now to try to get the U.S. traders that have traditionally traded heating oil on open outcry to take a look what it looks like electronically. There will be some education involved there, it's going to take a while because this is a kind of a nichey group that we're asking to change their trading behavior. But because we've done that very successfully with the European and Asia community and that's already trading on our gas oil contracts, we think that we'll be able to get that interplay moving and lever off our current liquidity.

Jumping to the regulatory question, first of all, it's important to note that our futures business, ICE futures is a recognized investment exchange and it's regulated in the U.K. and it's overseen by their regulator, the Financial Services Authority, which embodies the work that is done in the U.S. by the SEC and the CFTC.

It's a very well known regulator, very well established, very well respected around the world and we're in 37 other regulatory or 36 other regulatory jurisdictions that respect CFTC oversight -- excuse me, SFA oversight of those markets.

The CFTC has given us a no-action letter. It was originally given in 1999 and whenever we launch a new contract in the U.S., we contact the CFTC and let them know what we're intending to do and give them an opportunity to understand it and object to it. And that's the process that went on with all these new contracts. There was a lot of discussion and the CFTC agreed to let us go forward.

What is going on globally with regulation, as the markets that are going global and something like energy which is so in the news right now and affects so many ultimate consumers. The global regulatory environment is trying to figure out how in a electronic world people's local interests can be protected and local markets can be monitored and maintained while at the same time interacting with a global environment.

And that's the discussion that's going on right now with the CFTC and with the FSA. Their very very far along in that discussion. What it really implies is a lot of information sharing so that people that have the information they need to correctly oversee local markets, we are very much a part of that dialogue. We are very open to providing information to regulators. We benefit when markets are viewed as being transparent and also robust and that there is some confidence in them. And regulation plays a strong part in that particularly in futures markets.

So there's really a lot of good news there. And we enjoy such a good relationship with both the CFTC and the FSA and we're cooperating as need be. I think some very good things will come out of that.

Notwithstanding, the fact that others for competitive interest are trying to use that to try to slow our progress and they have been very unsuccessful at that, other than getting a lot of attention in the press for their efforts.

Thank you.

Sure.

Ladies and gentlemen, this concludes our question and answer session. I would now like to turn the presentation over to Mr. Jeff Spencer, Intercontinental Exchange Chairman and CEO for closing remarks.

Great. Thank you all very much and we look forward to seeing you in the future and on our next call.

Ladies and gentlemen, I would like to thank you for your participation in today's presentation. This concludes the conference, you may now all disconnect and have a wonderful day.