Business context and reporting period
IntercontinentalExchange Group, Inc. (ICE Group) filed this unaudited Form 10-Q for the quarter ended June 30, 2013. Formed on March 6, 2013 as a wholly owned subsidiary of IntercontinentalExchange, Inc. (ICE), ICE Group was created to facilitate ICE’s proposed acquisition of NYSE Euronext. It had not commenced operations and reported no significant activities beyond formation and acquisition-related matters.
Financial results and position
| Metric | Reported amount |
|---|---|
| Revenue, expenses, pretax income, net income | $0 for the three months ended June 30, 2013 and March 6–June 30, 2013 |
| Operating and investing cash flow | $0 for March 6–June 30, 2013 |
| Financing cash flow | $10, contributed by ICE |
| Cash and total assets at June 30 | $10 |
| Total liabilities and debt | $0 reported |
| Total equity | $10 |
The statements show no earnings, comprehensive income, or expenses. Margins are not meaningful because there was no revenue. The filing presents no operating-company liquidity, debt, or performance metrics for ICE or NYSE Euronext; these are not ICE Group’s consolidated operating results. No prior-year comparable results are provided because ICE Group was newly formed.
Acquisition, outlook, and risks
- ICE’s stock-and-cash acquisition of NYSE Euronext was valued at approximately $9.5 billion based on ICE’s August 1, 2013 closing share price. Final consideration would depend on ICE’s share price at closing.
- Management expected the transaction to close in the second half of 2013, subject to regulatory approvals, including approval by the Euronext College of Regulators, the SEC, and other national financial regulators, plus customary closing conditions.
- ICE Group stated it would not be funded until the acquisition took place and had no current liquidity or capital-resource requirements.
- The company warned that forward-looking statements are subject to risks and uncertainties and referred investors to the acquisition proxy statement and ICE’s 2012 Form 10-K risk factors. It reported no significant risk from its limited activities during the period.
- No legal proceedings were reported. Management concluded disclosure controls were effective; no material change in internal control over financial reporting was reported.
Most important facts for investors to verify
- Whether the acquisition received all required regulatory approvals and closed as anticipated, and the final transaction consideration.
- The eventual combined company’s financing, debt, liquidity, operating results, and integration costs; this filing does not provide those operating-company measures.
- That the reported $10 cash and assets reflect only ICE Group’s formation-stage capitalization, not the financial position of ICE or NYSE Euronext.