Intrinsic value of Intercontinental Exchange Inc. - ICE

Previous Close

$91.67

  Intrinsic Value

$321.11

stock screener

  Rating & Target

str. buy

+250%

Previous close

$91.67

 
Intrinsic value

$321.11

 
Up/down potential

+250%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as ICE.

We calculate the intrinsic value of ICE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 52.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  16.40
  15.26
  14.23
  13.31
  12.48
  11.73
  11.06
  10.45
  9.91
  9.42
  8.97
  8.58
  8.22
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
Revenue, $m
  7,305
  8,420
  9,619
  10,899
  12,259
  13,697
  15,212
  16,802
  18,466
  20,205
  22,019
  23,907
  25,873
  27,916
  30,040
  32,247
  34,540
  36,924
  39,402
  41,979
  44,660
  47,450
  50,355
  53,381
  56,536
  59,825
  63,257
  66,840
  70,580
  74,488
Variable operating expenses, $m
  3,478
  3,650
  3,834
  4,031
  4,240
  4,461
  4,694
  4,939
  5,195
  5,462
  3,387
  3,677
  3,979
  4,294
  4,620
  4,960
  5,313
  5,679
  6,060
  6,457
  6,869
  7,298
  7,745
  8,211
  8,696
  9,202
  9,730
  10,281
  10,856
  11,457
Fixed operating expenses, $m
  390
  399
  408
  417
  426
  435
  445
  455
  465
  475
  485
  496
  507
  518
  529
  541
  553
  565
  578
  590
  603
  617
  630
  644
  658
  673
  687
  703
  718
  734
Total operating expenses, $m
  3,868
  4,049
  4,242
  4,448
  4,666
  4,896
  5,139
  5,394
  5,660
  5,937
  3,872
  4,173
  4,486
  4,812
  5,149
  5,501
  5,866
  6,244
  6,638
  7,047
  7,472
  7,915
  8,375
  8,855
  9,354
  9,875
  10,417
  10,984
  11,574
  12,191
Operating income, $m
  3,437
  4,371
  5,377
  6,451
  7,593
  8,800
  10,073
  11,408
  12,807
  14,268
  18,147
  19,734
  21,386
  23,104
  24,890
  26,746
  28,675
  30,680
  32,764
  34,932
  37,187
  39,535
  41,980
  44,527
  47,182
  49,951
  52,840
  55,856
  59,006
  62,298
EBITDA, $m
  6,286
  7,296
  8,383
  9,544
  10,778
  12,083
  13,458
  14,901
  16,412
  17,991
  19,638
  21,354
  23,139
  24,995
  26,925
  28,930
  31,014
  33,181
  35,433
  37,775
  40,212
  42,749
  45,390
  48,143
  51,011
  54,003
  57,125
  60,384
  63,787
  67,343
Interest expense (income), $m
  32
  402
  1,048
  1,769
  2,545
  3,374
  4,254
  5,185
  6,165
  7,194
  8,272
  9,397
  10,571
  11,793
  13,065
  14,387
  15,762
  17,190
  18,675
  20,217
  21,821
  23,489
  25,224
  27,030
  28,910
  30,869
  32,910
  35,039
  37,260
  39,579
  42,000
Earnings before tax, $m
  3,035
  3,323
  3,607
  3,906
  4,219
  4,546
  4,888
  5,243
  5,613
  5,996
  8,750
  9,164
  9,593
  10,039
  10,503
  10,984
  11,484
  12,005
  12,547
  13,111
  13,698
  14,311
  14,950
  15,617
  16,313
  17,041
  17,801
  18,596
  19,428
  20,298
Tax expense, $m
  819
  897
  974
  1,055
  1,139
  1,228
  1,320
  1,416
  1,515
  1,619
  2,362
  2,474
  2,590
  2,711
  2,836
  2,966
  3,101
  3,241
  3,388
  3,540
  3,699
  3,864
  4,037
  4,217
  4,405
  4,601
  4,806
  5,021
  5,245
  5,480
Net income, $m
  2,215
  2,426
  2,633
  2,851
  3,080
  3,319
  3,568
  3,827
  4,097
  4,377
  6,387
  6,689
  7,003
  7,329
  7,667
  8,018
  8,384
  8,764
  9,159
  9,571
  10,000
  10,447
  10,914
  11,400
  11,909
  12,440
  12,995
  13,575
  14,182
  14,817

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  107,430
  123,824
  141,449
  160,277
  180,279
  201,429
  223,703
  247,086
  271,566
  297,138
  323,806
  351,580
  380,479
  410,528
  441,761
  474,218
  507,946
  543,001
  579,442
  617,337
  656,760
  697,791
  740,514
  785,022
  831,411
  879,786
  930,256
  982,935
  1,037,946
  1,095,417
Adjusted assets (=assets-cash), $m
  107,430
  123,824
  141,449
  160,277
  180,279
  201,429
  223,703
  247,086
  271,566
  297,138
  323,806
  351,580
  380,479
  410,528
  441,761
  474,218
  507,946
  543,001
  579,442
  617,337
  656,760
  697,791
  740,514
  785,022
  831,411
  879,786
  930,256
  982,935
  1,037,946
  1,095,417
Revenue / Adjusted assets
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
  0.068
Average production assets, $m
  14,844
  17,110
  19,545
  22,146
  24,910
  27,833
  30,910
  34,141
  37,524
  41,057
  44,742
  48,580
  52,573
  56,725
  61,041
  65,526
  70,186
  75,030
  80,065
  85,301
  90,749
  96,418
  102,321
  108,471
  114,881
  121,565
  128,539
  135,818
  143,419
  151,360
Working capital, $m
  -394
  -455
  -519
  -589
  -662
  -740
  -821
  -907
  -997
  -1,091
  -1,189
  -1,291
  -1,397
  -1,507
  -1,622
  -1,741
  -1,865
  -1,994
  -2,128
  -2,267
  -2,412
  -2,562
  -2,719
  -2,883
  -3,053
  -3,231
  -3,416
  -3,609
  -3,811
  -4,022
Total debt, $m
  19,407
  32,768
  47,132
  62,477
  78,778
  96,015
  114,169
  133,226
  153,177
  174,019
  195,753
  218,389
  241,941
  266,432
  291,886
  318,339
  345,827
  374,397
  404,096
  434,981
  467,111
  500,550
  535,370
  571,644
  609,451
  648,877
  690,009
  732,943
  777,777
  824,616
Total liabilities, $m
  87,556
  100,917
  115,281
  130,626
  146,927
  164,164
  182,318
  201,375
  221,326
  242,168
  263,902
  286,538
  310,090
  334,581
  360,035
  386,488
  413,976
  442,546
  472,245
  503,130
  535,260
  568,699
  603,519
  639,793
  677,600
  717,026
  758,158
  801,092
  845,926
  892,765
Total equity, $m
  19,875
  22,907
  26,168
  29,651
  33,352
  37,264
  41,385
  45,711
  50,240
  54,971
  59,904
  65,042
  70,389
  75,948
  81,726
  87,730
  93,970
  100,455
  107,197
  114,207
  121,501
  129,091
  136,995
  145,229
  153,811
  162,760
  172,097
  181,843
  192,020
  202,652
Total liabilities and equity, $m
  107,431
  123,824
  141,449
  160,277
  180,279
  201,428
  223,703
  247,086
  271,566
  297,139
  323,806
  351,580
  380,479
  410,529
  441,761
  474,218
  507,946
  543,001
  579,442
  617,337
  656,761
  697,790
  740,514
  785,022
  831,411
  879,786
  930,255
  982,935
  1,037,946
  1,095,417
Debt-to-equity ratio
  0.980
  1.430
  1.800
  2.110
  2.360
  2.580
  2.760
  2.910
  3.050
  3.170
  3.270
  3.360
  3.440
  3.510
  3.570
  3.630
  3.680
  3.730
  3.770
  3.810
  3.840
  3.880
  3.910
  3.940
  3.960
  3.990
  4.010
  4.030
  4.050
  4.070
Adjusted equity ratio
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,215
  2,426
  2,633
  2,851
  3,080
  3,319
  3,568
  3,827
  4,097
  4,377
  6,387
  6,689
  7,003
  7,329
  7,667
  8,018
  8,384
  8,764
  9,159
  9,571
  10,000
  10,447
  10,914
  11,400
  11,909
  12,440
  12,995
  13,575
  14,182
  14,817
Depreciation, amort., depletion, $m
  2,850
  2,925
  3,006
  3,093
  3,185
  3,282
  3,385
  3,493
  3,605
  3,723
  1,491
  1,619
  1,752
  1,891
  2,035
  2,184
  2,340
  2,501
  2,669
  2,843
  3,025
  3,214
  3,411
  3,616
  3,829
  4,052
  4,285
  4,527
  4,781
  5,045
Funds from operations, $m
  5,065
  5,351
  5,639
  5,944
  6,265
  6,601
  6,953
  7,320
  7,703
  8,101
  7,879
  8,309
  8,756
  9,220
  9,702
  10,203
  10,723
  11,265
  11,828
  12,414
  13,025
  13,661
  14,324
  15,016
  15,738
  16,492
  17,279
  18,102
  18,963
  19,863
Change in working capital, $m
  -56
  -60
  -65
  -69
  -73
  -78
  -82
  -86
  -90
  -94
  -98
  -102
  -106
  -110
  -115
  -119
  -124
  -129
  -134
  -139
  -145
  -151
  -157
  -163
  -170
  -178
  -185
  -193
  -202
  -211
Cash from operations, $m
  5,120
  5,411
  5,704
  6,013
  6,338
  6,679
  7,035
  7,406
  7,793
  8,195
  7,977
  8,411
  8,862
  9,330
  9,816
  10,322
  10,847
  11,393
  11,962
  12,553
  13,170
  13,812
  14,481
  15,180
  15,908
  16,670
  17,465
  18,296
  19,165
  20,074
Maintenance CAPEX, $m
  -425
  -495
  -570
  -651
  -738
  -830
  -928
  -1,030
  -1,138
  -1,251
  -1,369
  -1,491
  -1,619
  -1,752
  -1,891
  -2,035
  -2,184
  -2,340
  -2,501
  -2,669
  -2,843
  -3,025
  -3,214
  -3,411
  -3,616
  -3,829
  -4,052
  -4,285
  -4,527
  -4,781
New CAPEX, $m
  -2,093
  -2,265
  -2,435
  -2,602
  -2,764
  -2,922
  -3,078
  -3,231
  -3,382
  -3,533
  -3,685
  -3,838
  -3,993
  -4,152
  -4,316
  -4,485
  -4,660
  -4,844
  -5,035
  -5,236
  -5,447
  -5,669
  -5,903
  -6,150
  -6,410
  -6,684
  -6,974
  -7,279
  -7,601
  -7,941
Cash from investing activities, $m
  -2,518
  -2,760
  -3,005
  -3,253
  -3,502
  -3,752
  -4,006
  -4,261
  -4,520
  -4,784
  -5,054
  -5,329
  -5,612
  -5,904
  -6,207
  -6,520
  -6,844
  -7,184
  -7,536
  -7,905
  -8,290
  -8,694
  -9,117
  -9,561
  -10,026
  -10,513
  -11,026
  -11,564
  -12,128
  -12,722
Free cash flow, $m
  2,603
  2,651
  2,698
  2,760
  2,836
  2,926
  3,029
  3,145
  3,272
  3,410
  2,923
  3,082
  3,249
  3,425
  3,610
  3,802
  4,002
  4,210
  4,425
  4,648
  4,879
  5,117
  5,364
  5,619
  5,883
  6,156
  6,439
  6,732
  7,036
  7,352
Issuance/(repayment) of debt, $m
  11,966
  13,361
  14,364
  15,345
  16,302
  17,237
  18,154
  19,057
  19,951
  20,841
  21,734
  22,636
  23,553
  24,490
  25,455
  26,452
  27,489
  28,569
  29,700
  30,885
  32,130
  33,440
  34,819
  36,274
  37,808
  39,426
  41,133
  42,934
  44,834
  46,839
Issuance/(repurchase) of shares, $m
  458
  607
  627
  632
  620
  594
  553
  498
  432
  353
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  12,424
  13,968
  14,991
  15,977
  16,922
  17,831
  18,707
  19,555
  20,383
  21,194
  21,734
  22,636
  23,553
  24,490
  25,455
  26,452
  27,489
  28,569
  29,700
  30,885
  32,130
  33,440
  34,819
  36,274
  37,808
  39,426
  41,133
  42,934
  44,834
  46,839
Total cash flow (excl. dividends), $m
  15,027
  16,619
  17,690
  18,737
  19,758
  20,757
  21,736
  22,700
  23,654
  24,605
  24,658
  25,718
  26,802
  27,915
  29,065
  30,255
  31,491
  32,779
  34,125
  35,533
  37,009
  38,557
  40,183
  41,893
  43,690
  45,581
  47,572
  49,666
  51,870
  54,190
Retained Cash Flow (-), $m
  -2,674
  -3,033
  -3,261
  -3,483
  -3,700
  -3,913
  -4,121
  -4,326
  -4,529
  -4,731
  -4,934
  -5,138
  -5,346
  -5,559
  -5,778
  -6,005
  -6,240
  -6,485
  -6,742
  -7,011
  -7,293
  -7,591
  -7,904
  -8,234
  -8,582
  -8,949
  -9,337
  -9,746
  -10,177
  -10,632
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  12,353
  13,586
  14,430
  15,254
  16,058
  16,844
  17,615
  18,374
  19,126
  19,874
  19,724
  20,579
  21,455
  22,356
  23,286
  24,250
  25,251
  26,294
  27,383
  28,522
  29,715
  30,966
  32,279
  33,659
  35,108
  36,632
  38,235
  39,920
  41,693
  43,558
Discount rate, %
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
  11,821
  12,388
  12,479
  12,450
  12,304
  12,049
  11,692
  11,243
  10,716
  10,121
  9,059
  8,453
  7,812
  7,148
  6,473
  5,798
  5,135
  4,493
  3,882
  3,309
  2,782
  2,304
  1,878
  1,506
  1,186
  917
  695
  516
  375
  266
Current shareholders' claim on cash, %
  99.1
  98.1
  97.3
  96.5
  95.8
  95.3
  94.8
  94.4
  94.1
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9
  93.9

Intercontinental Exchange, Inc. is an operator of regulated exchanges, clearing houses and listings venues. The Company provides data services for commodity and financial markets. The Company's segments include Trading and Clearing segment, and Data and Listings segment. The Trading and Clearing segment includes the Company's transaction-based execution and clearing businesses. The Company's Data and Listings segment includes its subscription-based data services and securities listings businesses. The Company operates regulated marketplaces for listing, trading and clearing a range of derivatives and securities contracts across the asset classes, including energy and agricultural commodities, interest rates, equities, equity derivatives, exchange traded funds, credit derivatives, bonds and currencies. The Company offers market data services to support the trading, investment, risk management and connectivity needs of customers across a range of asset classes. _tck('aft');

FINANCIAL RATIOS  of  Intercontinental Exchange Inc. (ICE)

Valuation Ratios
P/E Ratio 41.5
Price to Sales 6.3
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 14.3
Price to Free Cash Flow 19
Growth Rates
Sales Growth Rate 22.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 166.2%
Cap. Spend. - 3 Yr. Gr. Rate 30.4%
Financial Strength
Quick Ratio 1
Current Ratio 1
LT Debt to Equity 31.2%
Total Debt to Equity 40.2%
Interest Coverage 17
Management Effectiveness
Return On Assets 0.5%
Ret/ On Assets - 3 Yr. Avg. 1.3%
Return On Total Capital 2.3%
Ret/ On T. Cap. - 3 Yr. Avg. 9.6%
Return On Equity 3.1%
Return On Equity - 3 Yr. Avg. 12.2%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 41.4%
EBITDA Margin - 3 Yr. Avg. 59.9%
Operating Margin 47.2%
Oper. Margin - 3 Yr. Avg. 55.9%
Pre-Tax Margin 29.9%
Pre-Tax Margin - 3 Yr. Avg. 48.4%
Net Profit Margin 15.2%
Net Profit Margin - 3 Yr. Avg. 31.4%
Effective Tax Rate 46%
Eff/ Tax Rate - 3 Yr. Avg. 35.4%
Payout Ratio 29.5%

ICE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ICE stock intrinsic value calculation we used $6276 million for the last fiscal year's total revenue generated by Intercontinental Exchange Inc.. The default revenue input number comes from 0001 income statement of Intercontinental Exchange Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ICE stock valuation model: a) initial revenue growth rate of 16.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.5%, whose default value for ICE is calculated based on our internal credit rating of Intercontinental Exchange Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Intercontinental Exchange Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ICE stock the variable cost ratio is equal to 52.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $382 million in the base year in the intrinsic value calculation for ICE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Intercontinental Exchange Inc..

Corporate tax rate of 27% is the nominal tax rate for Intercontinental Exchange Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ICE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ICE are equal to 203.2%.

Life of production assets of 41.4 years is the average useful life of capital assets used in Intercontinental Exchange Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ICE is equal to -5.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $17201 million for Intercontinental Exchange Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 568.538 million for Intercontinental Exchange Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Intercontinental Exchange Inc. at the current share price and the inputted number of shares is $52.1 billion.

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