Good morning. And welcome to the Intercontinental Exchange Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please also note, today’s event is being recorded. I’d now like to turn the conference over to Warren Gardiner, Vice President of Investor Relations. Please go ahead, sir.

Good morning. ICE’s fourth quarter 2019 earnings release and presentation can be found in the Investors section of the ice.com. These items will be archived and our call will be available for replay.

Thanks, Warren. Good morning, everyone, and thank you for joining us today. I will begin on slide four with some of the key highlights from our solid fourth quarter and record 2019 results. Fourth quarter net revenue totaled $1.3 billion driven by Trading and Clearing revenues of $626 million and Data and Listing s revenues of $672 million. Within Data and Listing s, Data Services revenues totaled $559 million, up 4% on a constant currency basis. For the full year, data services revenues grew 5% on a constant currency basis. Adjusted operating expenses totaled $570 million in the fourth quarter and adjusted earnings per share increased year-over-year to $0.95. For the full year, adjusted EPS were $3.88, up 8% versus 2018. We have grown adjusted EPS every single year since we first listed on the New York Stock Exchange 14 years ago. 2019 operating cash flows of $2.7 billion were up 5% versus 2018, yielding record free cash flow of $2.3 billion. Turning to slide five, you can see that we returned nearly 90% of that $2.3 billion to shareholders, 19% more than in the prior year. This record $2.1 billion of capital return was more than double, the amount we return the year prior to our acquisition of IDC in 2015.

Thank you, Scott, and good morning to everyone on the call. Please turn to slide nine. 2019 marked our 14th consecutive year of record revenues and record adjusted earnings per share. It’s a track record that reflects the quality of our strategy, and more importantly, the execution of that strategy. As growth opportunities emerge around the world, it’s our technology, expertise and culture that enable us to quickly and efficiently capture these opportunities. It’s an approach that empowers product innovation and it’s a proven model that’s yielded both consistent growth and shareholder value creation. In our natural gas markets, sale and production in North America is surging, while legacy LNG contracts across Asia are unwinding. Similar to the evolution of crude oil markets a number of years ago, the liberalization of natural gas is driving demand for a globally recognized benchmark. And our European Natural Gas complex led by our TTF contract is quickly emerging as the Brent of natural gas with average daily volume up over 100% in 2019 and up 56% on average annually over the last five years. As liberalization takes hold, what were once regional markets such as European TTF and our Japan, Korea marker called JKM, are becoming increasingly interconnected in global in nature and it’s this evolution that drove record natural gas revenues up 16% year-over-year in 2019. In our oil markets, we have invested in building our global platform. Today, our oil complex spans over 600 products, including locational spreads, product spreads, refining spreads and products that are built-off our benchmark energy contracts, such as Brent Crude and Gas Oil. We continue to invest in our Energy business. During the fourth quarter, we announced the formation of ICE Futures Abu Dhabi, known as IFAD. In November, the Abu Dhabi Supreme Petroleum Council announced plans to lift designation restrictions on Murban crude, allowing barrels to move more freely and the price against our futures contract, which we plan to launch later this year subject to regulatory approval. Murban crude is a highly fungible and sought after grade of oil and it’s utilized by a wide range of global customers, including over 60 refineries in the Asia-Pacific region.

Thank you, sir. Today’s first question comes from Rich Repetto of Piper Sandler. Please go ahead.

Yeah. Good morning, Jeff, Scott. So, first thank you for the remarks at the conclusion of the prepared remarks. I think, Jeff, everybody looks at you as the most innovative guy in the space, the true visionary in the exchange space at least I do anyway. But I think most of us got caught off guard by the media reports and I know you have made some of the connections just in the prepared remarks, but where I think this caught a little more attention than the normal is that the size of the transaction, the media saying it was over $30 billion, that being almost 60% of your market cap. So I guess the question is, can you say anything to that magnitude of a transaction? And then, maybe if it is true, then just go deeper into the connection that you saw it, and I know you did some of that in the prepared remarks? But why -- what do you see the value here in EBIT, what’s the angle?

Sure. Well, I want to be respectful to eBay, because they are not engaged with us and to a certain degree it’s kind of like a question where you asked me we are standing out in front of my neighbors house and you say if you own that house, how would you redecorate their living room and I was raised to not do that and I also want to have a good relationship with my neighbor. So, I don’t really want to talk about their business too much. But I guess, I was surprised that the market views, just the inquiry as being so unique. This company was for probably more than a decade run by Devon Winnick, who many people on this call know, because prior to that job, Devon ran and built a company that’s now known as Refinitiv, which is a foreign exchange trading platform and a large data distribution network and a company that is now under acquisition by the London Stock Exchange of peer of ours in the industry. And as Devon advanced above the operation of the eBay marketplace to run all of eBay, he was replaced by a fellow known as Scott Cutler. Scott Cutler prior to that job was the right hand of Duncan Niederauer and worked for us at the New York Stock Exchange and now is running a exchange e-commerce platform, Unicorn known as StockX. So the idea that we would reach out to people who I know, who many of you on the phone know, to talk about whether or not there are parallels between their business and our business. I didn’t think is particularly shocking in outrageous. But out of respect to the company, they have their own ideas and agendas and their new CEO, Scott Schenkel is…

Thank you. Our next question today comes from Ken Worthington of JPMorgan. Please go ahead.

Hi. Good morning and thank you for taking my question. Maybe, Scott, on the third quarter call, you said that pricing and analytics revenue and growth would approve again in 4Q on a workflow automation and shift to passive in fixed income. Revenue did grow, but just $1 million and growth fell sequentially from 3Q to 4Q from 5% constant currency to 4% constant currency and you -- again in your prepared remarks said that growth would improve throughout 2020. So maybe why did we see the growth rate fall in 4Q rather than rise? And help us get confidence that the trend will kind of reverse and improve throughout this year? Thanks.

Yeah. That’s a great question, Ken, and a fair one, because I also said on the second quarter call that I thought the pricing and analytics business would see a stronger fourth quarter than we saw. Let me start with the good news. Number one, I think, the key metric that we look at is ASV and from an AVP standpoint, we entered the year with pricing and analytics at 5%. And I will come back to why I think that’s going to get better, so that’s an encouraging fact. Our growth in North America in Pricing And Analytics has been very solid around 5% to 6% for the last three years and we expect that will continue as we move into the year. Asia growth or growth in Asia, which I will admit is only 5% to 6% of the revenues, really took off last year. And it took off, because as we move through ‘18 and ‘19, we recognized that in a much more disaggregated market, an extended sales team was necessary and so we started to make those investments in ‘18, they don’t immediately hit the ground running. But as we move through the back half of ‘19, we saw the productivity of that sales team really grow, the revenue growth really start to take-off and so the investments in ‘18, the hiring in ‘19 and the intent to continue to hire in ‘20, all of which is reflected in our expense guidance, gives us a lot of confidence that Asia growth will continue to accelerate as well. Europe is really where we saw the slowdown in 2019 and I think, there are couple of factors that are at play. One is, Europe is a fairly uncertain business environment right now and so we saw customers who…

Our next question today comes from Alex Kramm of UBS. Please go ahead.

Sorry to stay on the same topic, as Ken just now, on the data, you sound fairly optimistic, but your commentary was all about pricing analytics. If I look about at your overall guidance for data, I think you also commented on the last call to 4% to 6% overall for 2020. I don’t want to stretch here too much, but I think we are going to calculate your guidance, I think 3.6 to 5.4 FX is helping you I think this year. So are you essentially taking that 2020, 4% to 6% off the table and it’s more like, I don’t know, 4% to 5% or where do we end up, so maybe a little bit more commentary about some of the other challenges or tough comps that you are facing in the other businesses, please?

Yes, it’s a good question. This one though, I am going to take credit for having said it correct last quarter. What I mentioned last quarter, is that I was confident that the pricing and analytics business will grow 5% to 6%, I just reiterated that I said I thought we would see solid connectivity growth of around 4%, which again over the last three years on average is about what we have seen capacity, as I said, was up 14% last year, we anticipate it’s going to be up 8% this year. I am very confident in that business and what I said is I thought if you added all that together without me saying anything about the exchange data business, we would be in the 4% to 6% range, and I mentioned consistent with our model. I think the math you did is exactly right. I think if you look at the midpoint of our guidance and where the street is right now, it aligns perfectly. The challenge that we have got on the exchange data side, we have seen softness related to the exchange data at NYSE and as you know from following the company as long as you have, on the exchange data side, we don’t tend to see necessarily meaningful growth every single year, you know, every 18 to 24 months as we add product, as we find opportunities to capture value in our pricing, we do that. There’s not a lot of price change that is coming through the exchange data side for the futures business in 2020 and so if you roll all that together, very strong performance in pricing and analytics as it rebounds from some of the challenges in Europe, I mentioned continued strong demand for capacity, which I have indicated to you, I believe, is the leading indicator just like open interest is for future revenue growth out in ‘21 and ‘22 and beyond, so solid performance in the connectivity business is capacity growth and the challenges in the exchange data space that I don’t think would surprise any of you listening to the call.

Alex, this is Jeff, let me just iterate on that last point because I have mentioned in prior calls, and I want to highlight again for you that at the Securities and Exchange Commission, there is a group of people that have tried to use the rule-making process to lower the fees for equity exchange data, it’s had just the opposite impact which has paralyzed the exchange data pricing debate. You know, there are lawsuits going on rule makings, new filing, so on and so forth. This just sort of freezes time and will in my mind for a very long time going forward as lawsuits are litigated and appealed and what have you. So as Scott is putting a model together and as management is thinking about revenue opportunities there, we just basically say a kind of is going to be, what it’s going to be, I don’t expect it to go up, I don’t expect to go down, it’s really pretty frozen and I don’t think that’s necessarily the intent of the customers that have been trying to advocate for this, because it’s frozen in a sense that we couldn’t even lower prices if we wanted to and so, it’s sort of is what it is and that’s why Scott has mentioned, you know, you all follow this space, can see that.

And our next question today comes from Alex Blostein of Goldman Sachs. Please go ahead.

So, maybe go back to the M&A discussion for a second, so I guess this is the IDC deal, you know, ICE is really kind of focused on more bolt-on deals, to really sort of build on your core capabilities, whether it’s trading, data, connectivity, et cetera, all deals is kind of on the smaller side. Your interest in eBay, albeit early, and you know implied potentially a wide range of things, but including maybe something larger. So, has anything changed and I guess, as we look forward should we anticipate a larger deals from ICE, in the future, including maybe in verticals that are not as obvious to us is what we have seen in the past?

It’s a good question and you and I have spoken publicly about some of our philosophy to some of your clients, but let me just reiterate it for others. We have a great platform and you just look at this first quarter and where we are going, it is phenomenal, the legacy businesses that we have built and the efficiencies that we have plugged into that platform are going to deliver growth and so, you know, I look at my job and the job of the managers that are my colleagues sitting around this table and as we think about whether not we can create additional growth and alpha for investors, we have really landed and in two places that seem to work for this company. One is to buy smaller companies that are earlier in their life, where if we plug them into that platform that I just mentioned, we can accelerate their growth and we have done a number of things like that. If you look at our mortgage business. I think it’s probably the fastest growing part of ICE. These were smaller younger companies that we have put together and put on a very, very efficient new platform that we have tweaked and built, and they are growing double-digits and I think we will continue to do that. I think this acquisition that we announced yesterday bridge to, I mean, you know, when we talk about thinking outside the box. I don’t think any of our investors or peers have ever thought about whether or not you should be listening airline miles on an exchange, but these are the kinds of things that we are thinking about in terms of the second part of your question which is, are you looking at new verticals

The other thing that generates good returns for our investor base is if we buy older larger mature companies, where we can do something and this was like IDC, like NYSE, where we can do something with our platform and technology that would take an otherwise business that may be declining and reinvigorated, and I mean, to a certain degree, and we really believe that by the way to a certain degree, we had a bit of audacity when we bought Interactive Data. We said if we buy this company, we think we can double its growth rate and we did and you should ask us why would you say that, you didn’t even have a sales force in ICE. You didn’t even have a billing platform that could send out an invoice for somebody that wanted to buy data and we were not in the fixed income space and that was a large fixed income platform and you know, what is the audacity of this management team at ICE to say you can buy this business and double it. And the reality is because we really believe in the underpinnings of our platform and this network distribution that we have and we took that company and within a year, we had dramatically improved its top-line growth, while eliminating tremendous cost by getting on the sufficient infrastructure that we have built around here. So, those two ends of the barbells, you know, larger companies, more complicated companies, that could use invigoration and smaller companies where we can improve their distribution tend to be how we best create values. Typically, as you know, Alex, most people come to us to talk about companies in the middle, you know, fully valued and might be really attractive businesses and they are and their businesses we would love to own, but they are at a point where they are doing fine on themselves and there is nothing that we could do that would invigorate them to a degree that would overcome any premium that we might have to pay and we are just not people that want to subject our investor base to those kinds of acquisitions because they tend to be red, black, that’s in the long run and, you know, on either end of the barbell are pretty well sure things for us and we are in the luxurious position, where we don’t have to do anything, because our platform is so strong as designed, that we have the luxury of having these bi-monthly meetings that you and I have talked about in the past to think outside the box.

And our next question today comes from Kyle Voigt of KBW. Please go ahead.

Maybe just a question on the Bakkt. As you mentioned, you are planning to launch consumer app later this year. I guess what are you looking at to evaluate the success of the consumer app and maybe back more broadly. Is it just adoption rates at first and then how should investors really think about the revenue model over the medium-term, from kind of that the consumer-facing part of that business? Thanks,

It’s a good question and we set it up as a separate brand and we set it up as a company with separate investor pool. So that, we could have owned 100% of the company but we elected not to. Because it may have a different growth metric and valuation metric than our core business and that was intentional to give us flexibility at some point, we could pull it all in, at some point we could spend it all out, at some point we could bring in other partners and so we have a Capital Markets flexibility around the way we have organized, the name, the company, and set up the management and in fact we have them within our offices in a unique space that’s key card controlled by them and so that it’s truly allowed to operate within our ecosystem as a start-up. And in that regard, you know, the next big hurdle for the company will be getting that app into consumer hands and we will be looking at consumer adoption, more than revenue or expense. Fortunately, the company is not a particularly big drain on us and with Bridge2, Scott will update you in the next quarter about how the company looks, but we have a lot of financial flexibility now with the company, given that it has a revenue stream both from trading and from operation of all these rewards programs for 4500 companies. And so, I will be looking more towards consumer adoption. We also are engaged with, while we have talked about one consumer-oriented company on this call, we are engaged with a lot of consumer oriented companies and we have been very public about our engagement with Microsoft and how whether or not this platform can deal with digital game pieces and whether there is a market and a marketplace for digital gaming assets and that would fit nicely with other digital assets and so we are having a lot of conversations with larger consumer brands and merchants with some interesting ideas, now that we have got rewards and cryptocurrency and potentially gaming in one ecosystem and what else could plug into that and what are the synergies between various businesses. Is it a case that an airline would like to have a different rewards, relationship with certain kinds of partners, with certain kinds of consumers, is there consumer data that can be shared across a collection of retailers that view a common customer base, that can use that rewards programs and incentives in different ways, can more millennials be attracted to those companies by virtue of having cryptocurrency or gaming assets in that ecosystem, so the conversations that we are having across a broad range of industries really lead me to say, not so much revenue in bottom line, but it’s broad adoption I think for 2020 that will be looking towards.

And our next question today comes from Michael Carrier of Bank of America. Please go ahead.

Maybe one more on more capital allocation and M&A and Jeff, you provide a lot of commentary on strategy and how you think about new transactions which is helpful? And I guess maybe more on the financial aspect, when you are looking at areas that are may be newer or not as straightforward to like the core business, how do you guys think about maybe the potential opportunities, but maybe the potential risks when you are looking at things that aren’t as straightforward and then the timing of maybe like the financial returns versus like those end-market deals, if you can just put some context around it, you know whether it’s you, Jeff or Scott?

Yes, that’s a great question and I really appreciate you asking that, because I think it’s important. Jeff, I think very clearly stated that everything that has been discussed is very consistent with the same structure that we followed for 15 years, the biweekly meetings, the way we have thought strategically about the deal, the thoughts on how we use our platform, our management expertise to think about combinations. The financial approach is exactly the same, it’s very good. In the summer of 2017, we walked you through precisely how we think about the M&A that we expect deals to generate returns on investment above 10%, that we expect synergies to largely be realized in the first three years, that we look for deals that deliver accretion and that’s intentionally, you know, kind of third-down the list, because it’s really that return on investment and the importance of it being above our cost, the capital and above our hurdle rate, that’s really important. And that financial model, that financial discipline, it is how we approach every single deal, whether it’s a bolt-on deal or a big deal, It’s an obvious deal or a less obvious deal, the financial approach is exactly the same. Clearly to the extent that it is deal, that’s a little bit-off the beaten path, it’s really important to be able to get in and due diligence, and yes, we expect we can get synergies, but where might those synergies be and so the important elements of the model with deals that are again a little more off the beaten path, really are we need to go into and validate where we think the cost can come out, where we think the platform synergies will exist, but again the approach to it is no different, the same financial discipline, the same financial model and frankly the same financial hurdles that we have told you guide our capital allocation are exactly the ones we apply to every single deal regardless of the nature of that deal.

And let me just give you, that was a quantitative answer, let me give you a qualitative point, that I hope doesn’t get lost on our investor pool. This is a founder led company and I am surrounded by a management team that we have worked together for a very long time and we really know and I definitely know what this company is and isn’t, like, you know, to a certain degree, I mean, we stitched it together, like I really know what we do well, but more importantly, I know what we don’t do well. I know areas that we are really poor at and there is no illusion that somehow, we are going to magically get better at something and by the way, unless we decide we want to get that expertise, but generally speaking, we know the lane that creates value for us and we have used that same model over and over and over again, and there is no reason to deviate from that model and so when we think about, is there a marketplace for airline miles or swords and sickles that are on a video game, you know, we are not crazy, we didn’t lose our minds. We know what our platform does and we know how to lever it and we feel really good about our ability to continue to find new asset classes and maybe more importantly for this investor group like mortgages, like fixed income create redeem, things that other management teams haven’t touched, but the bolt-on well to our platform and so I just want to reassure everybody that the founders still here and the management team, that is I am a part of, is still together and we know we are, we know what we do and we didn’t lose our minds over the weekend.

Our next question today comes from Dan Fannon of Jefferies. Please go ahead.

Thanks. And I guess just one more on M&A and I appreciate all the commentary thus far, but, I guess just the current context of what you guys are looking at today and how different that might be than say a year ago in terms of your outlook and outreach towards M&A in the number and size of deals and I guess just based on what you have said today and outlined in terms of your track record, I guess point like why wouldn’t eBay engage with you, given the success you have had previously?

Well, it’s easy to ask the second part first, which is I don’t know and I also mentioned that the first outreach to eBay was roughly 20 years ago. So, it’s not one-touch, okay? so we think about things in the long run. By the way, when we bought the New York Stock Exchange, people were shocked and it came as a big surprise, my gosh, we have been talking to the New York Stock Exchange since we were a start-up. So, you know, to a certain degree opportunity has to present itself, timing has to present itself, both management teams feel like it’s the right move, at the right time and you have to respect other people, as a public company, CEO. I am totally respectful that different managements have different agendas, and they have different struggles, and different opportunity sets and we can’t see them and we don’t know what they are. And so I would never be critical if somebody who wants to robust us because we were above people all the time, but we try to stay nice and close because you live long lives and you never know and here we are, you know, 20 years after I sat with Meg Whitman and the fact I asked Meg Whitman to be on my Board of Directors honestly and I ask for a lot of guidance from her and she is lovely and helpful and provided a real incentive and goal for us as a start-up. And so anyway, I think you should assume that we have - that we are not unique with this one leak that there are dozens and dozens of companies that we have had long time touches with that we could talk to and share ideas with that have gone on and will continue to go on.

And our next question today comes from Ken Hill of Rosenblatt. Please go ahead.

I wanted to come back to Bakkt for a minute. You guys have talked about a lot about M&A, but I was wondering if you are considering any partnerships in that space with some of the traditional payment plans because loyalty program seems like a hot area. And I asked because a lot of the payment terms, I cover when they roll out new products, they are doing it over 10s of millions, 100s of millions of customers so could a partnership in that area help jumpstart some customer adoption for Bakkt?

It’s a very good question. If you look at the employee pool and the talent that we have recruited to Bakkt, there’s a lot of people that have come from various payment companies and now people that have come from rewards companies once we close with Bridge2. And so we have a pretty good canvas in terms of having private dialogs with various companies and there is a lot of conversation going on. At that level, a lot of conversation with traditional banking and Wall Street, who are thinking about - what is the Fintech will look like for banking when we go to a zero commission stock trading environment for retail consumers, what - how is been tech going to change the broad financial services landscape and here’s back then, it has a digital wallet with a lot of connectivity right now and what else can be done with it. So there is a tremendous number of conversations going on but importantly, we have built really an industrial scale platform there, that we have been working on now for well over a year with dozens and dozens and dozens of engineers that have built something that we know will scale because we are in a scale business that can hopefully look right out of the box as a company that doesn’t look and feel like a traditional start-up in terms of its ability to deal with some traditional payments, people or banks or merchants, because I have talked to a lot of Fintech entrepreneurs and one of the things that a lot of people don’t understand and rightly so and not to be critical, but financial services has a lot of rules and regulations around the world and we exist in that ecosystem and understand how we are going to be judged and monitored. And successful businesses need to scale and then that’s not easy to do and a lot of younger entrepreneurs building Fintech don’t fully recognize that when you are handling other people’s money, you really need a very powerful ecosystem with internal audits and checks and balances and surrounded by a cyber-security overlay. So, and that’s getting built-in, which gives us flexibility to talk to some of the kinds of companies that you are thinking of because I think it’s going to be an attractive platform.

And our next question today comes from Brian Bedell of Deutsche Bank. Please go ahead.

Maybe just continuing along that, Jeff these - your answers are really insightful here so really appreciate it. Just assuming given your conversation for eBay you are really talking about the marketplace component of eBay, but maybe more broadly what is it that you are - that the ICE platform and why is that uniquely positioned to leverage the consumer marketplace and then, maybe just talk about what are your ambitions longer term to move more into the consumer space versus the B2B space that ICE has always been - especially on financial customers? And then just a quick one for Scott, how much do you think you could raise the debt-to-EBITDA capacity if you are bringing on a more recurring revenue business versus just the ICE legacy business right now?

So let me just say, again I don’t want to comment on eBay and how they run their company or how we would help them run their company. Those are conversations that at some point, we would love to have with eBay management if they are open to it, but I don’t really want to do that in public. But let me just say that, I will tell you that a large platform that we have, which is largely a database management platform doesn’t really know whether or not the top high-frequency trading firm, that’s using a liquid cooled computer and blasting bits and bytes off the in order to interface with us. That’s bit and byte is no different than our retiree sitting in their kitchen clicking on a mouse. Our ability to handle massive amounts of data securely, efficiently, put it in a database, sort it, search it, manipulate it, cleanse it and give it back out to people is a core talent that we have here, that is what ICE is. Just as an aside, I started the company by buying a little failing firm from MidAmerican Energy, which is Warren Buffett’s electric utility and by the way I bought it right before he acquired MidAmerican. So he is a smarter investor than most of us on the call. But I bought this company it was called the Continental Power Exchange. I changed the name, I decided to call it Intercontinental because I thought being Continental was too limiting and I took the word Power out of it, because I thought just focusing on Power was too limiting. And so we end up with the name Intercontinental Exchange. I swear if I were starting this company today, I would probably call it the Intercontinental Massively Scalable Network and Database Company because that’s what we are. That’s what airline miles and gaming sorts and credit default swaps and delivering barges that we manage in Rotterdam for fuel oil, that’s what happens, those endpoints are ubiquitous to that network in my mind.

And just to pick up on that for the more boring part of the question about financial capacity, not bits and bytes, or swords and sickles. I think the key thing I would tell you is our capacity for any deal really rest on I think three key factors. Number one, our commitment to do that by our investors, so the deal has the right return and to be able to present a good deal to the ratings agencies in the bondholders to borrow. And so we have to be able to do that. If we can tell the right story and demonstrate how it meets the needs of all of our important constituents that will generate capacity for us. The second thing is that the deal that we are talking about has to generate the cash to allow us to delever and to do so in a meaningfully fast way and we have done that historically, all of the times that we have decided to lever up, we have committed to lever back down within three years and in most cases, it’s taken 18 months and not much more. And so that’s the second thing, do you have a plan to delever, and by the way, do you have a track record of being able to delever. And so the relationships with our investors with bondholders are important, the ability and the track record of deleveraging important but then the third thing we spend an hour not talking about a volume business that’s crushing at right now. We had some good questions earlier about a data business that is growing at twice the level of the large company we acquired a few years ago at over 50% margins. The combination of that business generates $3.3 billion of EBITDA. It generated last year, $2.3 billion of free cash flow. That’s where capacity comes from. That’s the starting point, it’s the strength of the existing business, the fact that all of our colleagues aren’t listening to this call, but they are running our exchanges, and are clearing houses, and selling data, and building ETF Hub and building a mortgage business, that’s the foundation of capacity because if we don’t have that $3 billion of EBITDA, if that EBITDA hadn’t grown every single year for 14 years, we wouldn’t be able to enter into a conversation about going and levering up. So it’s those three things that drive it with the last one being the fundamentally most important one.

And ladies and gentlemen, this concludes our question-and-answer session. I’d like to turn the conference back over to Jeff Sprecher for any closing remarks.

Thank you, Rocco. Well, this was an interesting call and this management team will go away and think big thoughts and we will be back to share those with you next quarter, but meanwhile, as Scott said, please take a look at our volume and open interest and refine your models and see what’s going on here, because we are very, very proud of where we are year-to-date. And we look forward to talking next quarter.

Thank you, sir. Today’s conference has now concluded and we thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.