CHICAGO, July 28, 2016 /PRNewswire/ -- CME Group Inc.
(NASDAQ: CME) today reported revenue of $906
million and operating income of $563
million for the second quarter of 2016. Net income was
$320 million and diluted earnings per
share were $0.95. On an
adjusted basis, net income would have been $387 million and diluted earnings per share would
have been $1.14. Financial
results presented on an adjusted basis for the second quarter of
2016 and 2015 exclude certain items, which are detailed in the
reconciliation of non-GAAP results.1
"Our second-quarter results reflect steady and balanced growth
across our diverse set of products, with four of our six product
lines delivering more than 20 percent year-over-year increases in
volume and transaction fee revenue," said CME Group Executive
Chairman and President Terry
Duffy. "Total revenue growth of 11 percent, combined
with strong expense management, allowed us to further improve
margins and expand adjusted earnings per share by 15 percent.
Total open interest reached an all-time high of more than 116
million contracts on June 9,
demonstrating how market participants increasingly rely on CME
Group to meet their risk management needs."
"Working in collaboration with customers and intermediaries, we
continue to deliver innovative products and services in all of our
business lines," said CME Group Chief Executive
Officer Phupinder Gill. "As a result, many of our
offerings have outperformed comparable products traded
elsewhere. During the second quarter, we became the first
exchange to offer swaptions clearing. It followed the highly
successful launch of our Ultra 10-Year Treasury futures in the
first quarter. Last week, we announced the launch of S&P
500 Total Return Index futures. This comes in advance of the
uncleared swap margin rules scheduled to go into effect on
September 1, which we view as a
catalyst for developing more specialized products going forward –
particularly in our interest rate, foreign exchange and equity
lines."
1. A
reconciliation of the non-GAAP financial results mentioned to the
respective GAAP figures can be found within the Reconciliation of
GAAP to non-GAAP Measures chart at the end of the financial
statements and earnings presentation materials.
|
Second-quarter 2016 average daily volume was 15.1 million
contracts, up 13 percent from second-quarter 2015, and included a
quarterly record for agricultural commodities. Clearing and
transaction fee revenue was $768
million, up 13 percent compared with second-quarter
2015. Second-quarter 2016 total average rate per contract was
78.2 cents, up from 75.6 cents in first-quarter 2016, driven
primarily by a sequential product mix shift with an increased
proportion of the volume from commodity contracts which capture
higher fees. Market data revenue was $103 million, up slightly compared with the
second quarter last year.
As of June 30, 2016, the company
had $1.2 billion of cash and
marketable securities and $2.2
billion of long-term debt. The company paid the
regular second-quarter dividend of approximately $202 million at the end of June, bringing the
amount paid in dividends to shareholders to date in 2016 to
$1.4 billion. The company has
returned more than $6 billion to
shareholders in the form of dividends since the implementation of
the variable dividend policy in early 2012.
CME Group will hold a conference call to discuss
second-quarter 2016 results at 8:30 a.m.
Eastern Time today. A live audio Webcast of the call
will be available on the Investor Relations section of CME Group's
Web site at www.cmegroup.com. An archived recording will be
available for up to two months after the call.
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) is where the world comes to manage
risk. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes, including
futures and options based on interest rates, equity indexes,
foreign exchange, energy, agricultural products and metals.
Around the world, CME Group brings buyers and sellers together
through its CME Globex® electronic trading platform and its
exchanges based in Chicago,
New York and London. CME
Group also operates one of the world's leading central counterparty
clearing providers through CME Clearing and CME Clearing Europe,
which offer clearing and settlement services across asset classes
for exchange-traded and over-the-counter derivatives. CME
Group's products and services ensure that businesses around the
world can effectively manage risk and achieve growth.
CME Group is a trademark of CME Group Inc. The Globe Logo, CME,
Globex and Chicago Mercantile Exchange are trademarks of Chicago
Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the
Board of Trade of the City of
Chicago, Inc. NYMEX, New York Mercantile Exchange and
ClearPort are registered trademarks of New York Mercantile
Exchange, Inc. COMEX is a trademark of Commodity Exchange,
Inc. All other trademarks are the property of their
respective owners. Further information about CME Group
(NASDAQ: CME) and its products can be found at
www.cmegroup.com.
Statements in this press release that are not historical
facts are forward-looking statements. These statements are not
guarantees of future performance and involve risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed
or implied in any forward-looking statements. We want to caution
you not to place undue reliance on any forward-looking statements.
We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events
or otherwise. Among the factors that might affect our performance
are increasing competition by foreign and domestic entities,
including increased competition from new entrants into our markets
and consolidation of existing entities; our ability to keep pace
with rapid technological developments, including our ability to
complete the development, implementation and maintenance of the
enhanced functionality required by our customers while
maintaining reliability and ensuring that such technology is not
vulnerable to security risks; our ability to continue introducing
competitive new products and services on a timely, cost-effective
basis, including through our electronic trading capabilities, and
our ability to maintain the competitiveness of our existing
products and services, including our ability to provide effective
services to the swaps market; our ability to adjust our fixed costs
and expenses if our revenues decline; our ability to maintain
existing customers, develop strategic relationships and attract new
customers; our ability to expand and offer our products outside
the United States; changes in
domestic and non-U.S. regulations, including the impact of any
changes in domestic and foreign laws or government policy with
respect to our industry, such as any changes to regulations and
policies that require increased financial and operational resources
from us or our customers; the costs associated with protecting our
intellectual property rights and our ability to operate our
business without violating the intellectual property rights of
others; decreases in revenue from our market data as a result of
decreased demand; changes in our rate per contract due to shifts in
the mix of the products traded, the trading venue and the mix of
customers (whether the customer receives member or non-member fees
or participates in one of our various incentive programs) and the
impact of our tiered pricing structure; the ability of our
financial safeguards package to adequately protect us from the
credit risks of clearing members; the ability of our compliance and
risk management methods to effectively monitor and manage our
risks, including our ability to prevent errors and misconduct and
protect our infrastructure against security breaches and
misappropriation of our intellectual property assets; changes in
price levels and volatility in the derivatives markets and in
underlying equity, foreign exchange, interest rate and commodities
markets; economic, political and market conditions, including the
volatility of the capital and credit markets and the impact of
economic conditions on the trading activity of our current and
potential customers; our ability to accommodate increases in
contract volume and order transaction traffic and to implement
enhancements without failure or degradation of the performance of
our trading and clearing systems; our ability to execute our growth
strategy and maintain our growth effectively; our ability to manage
the risks and control the costs associated with our strategy for
acquisitions, investments and alliances; our ability to
continue to generate funds and/or manage our indebtedness to allow
us to continue to invest in our business; industry and customer
consolidation; decreases in trading and clearing activity; the
imposition of a transaction tax or user fee on futures and options
on futures transactions and/or repeal of the 60/40 tax treatment of
such transactions; and the unfavorable resolution of material legal
proceedings. For a detailed discussion of these and other
factors that might affect our performance, see our filings with the
Securities and Exchange Commission, including our most recent
periodic reports filed on Form 10-K and Form 10-Q.
|
CME Group Inc. and
Subsidiaries
Consolidated
Balance Sheets
(in
millions)
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,161.1
|
|
|
$
|
1,692.6
|
|
Marketable
securities
|
|
79.8
|
|
|
72.5
|
|
Accounts receivable,
net of allowance
|
|
427.0
|
|
|
357.8
|
|
Other current assets
(includes $30.0 and $32.0 in restricted cash)
|
|
220.7
|
|
|
228.6
|
|
Performance bonds and
guaranty fund contributions
|
|
36,138.6
|
|
|
35,553.0
|
|
Total current
assets
|
|
38,027.2
|
|
|
37,904.5
|
|
Property, net of
accumulated depreciation and amortization
|
|
437.9
|
|
|
491.7
|
|
Intangible
assets—trading products
|
|
17,175.3
|
|
|
17,175.3
|
|
Intangible
assets—other, net
|
|
2,489.9
|
|
|
2,537.9
|
|
Goodwill
|
|
7,569.0
|
|
|
7,569.0
|
|
Other assets
(includes $65.7 and $70.5 in restricted cash)
|
|
1,926.3
|
|
|
1,681.0
|
|
Total
Assets
|
|
$
|
67,625.6
|
|
|
$
|
67,359.4
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
35.6
|
|
|
$
|
28.7
|
|
Other current
liabilities
|
|
246.8
|
|
|
1,242.8
|
|
Performance bonds and
guaranty fund contributions
|
|
36,137.4
|
|
|
35,553.0
|
|
Total current
liabilities
|
|
36,419.8
|
|
|
36,824.5
|
|
Long-term
debt
|
|
2,230.2
|
|
|
2,229.3
|
|
Deferred income tax
liabilities, net
|
|
7,352.7
|
|
|
7,358.3
|
|
Other
liabilities
|
|
549.0
|
|
|
395.5
|
|
Total
Liabilities
|
|
46,551.7
|
|
|
46,807.6
|
|
Shareholders'
equity
|
|
21,073.9
|
|
|
20,551.8
|
|
Total Liabilities and
Equity
|
|
$
|
67,625.6
|
|
|
$
|
67,359.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CME Group Inc. and
Subsidiaries
Consolidated
Statements of Income
(dollars in millions,
except per share amounts; shares in thousands)
|
|
|
|
Quarter
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
|
Clearing and
transaction fees
|
|
$
|
767.6
|
|
|
$
|
681.8
|
|
|
$
|
1,563.7
|
|
|
$
|
1,390.0
|
|
Market data and
information services
|
|
102.9
|
|
|
102.8
|
|
|
205.3
|
|
|
200.8
|
|
Access and
communication fees
|
|
22.3
|
|
|
21.5
|
|
|
43.9
|
|
|
42.8
|
|
Other
|
|
13.6
|
|
|
13.9
|
|
|
27.7
|
|
|
29.1
|
|
Total
Revenues
|
|
906.4
|
|
|
820.0
|
|
|
1,840.6
|
|
|
1,662.7
|
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
131.7
|
|
|
141.5
|
|
|
263.6
|
|
|
282.8
|
|
Communications
|
|
6.3
|
|
|
6.6
|
|
|
13.0
|
|
|
14.2
|
|
Technology support
services
|
|
17.7
|
|
|
16.1
|
|
|
35.1
|
|
|
31.7
|
|
Professional fees and
outside services
|
|
39.0
|
|
|
27.7
|
|
|
70.7
|
|
|
56.8
|
|
Amortization of
purchased intangibles
|
|
24.0
|
|
|
25.0
|
|
|
48.0
|
|
|
49.9
|
|
Depreciation and
amortization
|
|
30.4
|
|
|
33.3
|
|
|
64.3
|
|
|
65.1
|
|
Occupancy and
building operations
|
|
24.4
|
|
|
23.5
|
|
|
45.7
|
|
|
46.3
|
|
Licensing and other
fee agreements
|
|
32.8
|
|
|
28.8
|
|
|
71.8
|
|
|
59.4
|
|
Other
|
|
36.8
|
|
|
22.4
|
|
|
91.2
|
|
|
54.1
|
|
Total
Expenses
|
|
343.1
|
|
|
324.9
|
|
|
703.4
|
|
|
660.3
|
|
Operating
Income
|
|
563.3
|
|
|
495.1
|
|
|
1,137.2
|
|
|
1,002.4
|
|
Non-Operating
Income (Expense)
|
|
|
|
|
|
|
|
|
Investment
income
|
|
17.2
|
|
|
18.5
|
|
|
34.8
|
|
|
24.2
|
|
Gains (losses) on
derivative investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8)
|
|
Interest and other
borrowing costs
|
|
(31.0)
|
|
|
(28.6)
|
|
|
(60.8)
|
|
|
(60.2)
|
|
Equity in net
earnings (losses) of unconsolidated subsidiaries
|
|
27.0
|
|
|
26.0
|
|
|
53.8
|
|
|
48.5
|
|
Other non-operating
income (expense)
|
|
(10.4)
|
|
|
(62.9)
|
|
|
(20.4)
|
|
|
(41.2)
|
|
Total
Non-Operating
|
|
2.8
|
|
|
(47.0)
|
|
|
7.4
|
|
|
(30.5)
|
|
Income before
Income Taxes
|
|
566.1
|
|
|
448.1
|
|
|
1,144.6
|
|
|
971.9
|
|
Income tax
provision
|
|
246.0
|
|
|
183.1
|
|
|
456.7
|
|
|
376.5
|
|
Net
Income
|
|
$
|
320.1
|
|
|
$
|
265.0
|
|
|
$
|
687.9
|
|
|
$
|
595.4
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.95
|
|
|
$
|
0.79
|
|
|
$
|
2.04
|
|
|
$
|
1.77
|
|
Diluted
|
|
0.95
|
|
|
0.78
|
|
|
2.03
|
|
|
1.76
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
337,289
|
|
|
336,036
|
|
|
337,152
|
|
|
335,859
|
|
Diluted
|
|
338,706
|
|
|
337,796
|
|
|
338,599
|
|
|
337,574
|
|
|
CME Group Inc. and
Subsidiaries
Quarterly
Operating Statistics
|
|
|
|
2Q
2015
|
|
3Q
2015
|
|
4Q
2015
|
|
1Q
2016
|
|
2Q
2016
|
Trading
Days
|
|
64
|
|
64
|
|
64
|
|
61
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Daily Volume (ADV)
CME Group ADV (in
thousands)
|
|
Product
Line
|
|
2Q
2015
|
|
3Q
2015
|
|
4Q
2015
|
|
1Q
2016
|
|
2Q
2016
|
Interest
rate
|
|
6,599
|
|
|
6,658
|
|
|
6,097
|
|
|
8,246
|
|
|
6,776
|
|
Equity
|
|
2,364
|
|
|
3,287
|
|
|
2,743
|
|
|
3,557
|
|
|
2,957
|
|
Foreign
exchange
|
|
903
|
|
|
855
|
|
|
779
|
|
|
944
|
|
|
838
|
|
Energy
|
|
1,749
|
|
|
1,965
|
|
|
2,032
|
|
|
2,536
|
|
|
2,322
|
|
Agricultural
commodity
|
|
1,400
|
|
|
1,267
|
|
|
1,200
|
|
|
1,206
|
|
|
1,722
|
|
Metal
|
|
331
|
|
|
353
|
|
|
326
|
|
|
454
|
|
|
468
|
|
Total
|
|
13,347
|
|
|
14,384
|
|
|
13,178
|
|
|
16,944
|
|
|
15,082
|
|
Venue
|
|
|
|
|
|
|
|
|
|
|
Electronic
|
|
11,705
|
|
|
12,620
|
|
|
11,420
|
|
|
14,713
|
|
|
13,355
|
|
Open
outcry
|
|
1,108
|
|
|
1,110
|
|
|
1,055
|
|
|
1,423
|
|
|
1,075
|
|
Privately
negotiated
|
|
534
|
|
|
653
|
|
|
704
|
|
|
807
|
|
|
651
|
|
Total
|
|
13,347
|
|
|
14,384
|
|
|
13,178
|
|
|
16,944
|
|
|
15,082
|
|
|
Average Rate Per
Contract (RPC)
CME Group
RPC
|
|
Product
Line
|
|
2Q
2015
|
|
3Q
2015
|
|
4Q
2015
|
|
1Q
2016
|
|
2Q
2016
|
Interest
rate
|
|
$
|
0.502
|
|
|
$
|
0.506
|
|
|
$
|
0.517
|
|
|
$
|
0.501
|
|
|
$
|
0.496
|
|
Equity
|
|
0.725
|
|
|
0.708
|
|
|
0.718
|
|
|
0.726
|
|
|
0.709
|
|
Foreign
exchange
|
|
0.816
|
|
|
0.785
|
|
|
0.813
|
|
|
0.767
|
|
|
0.798
|
|
Energy
|
|
1.277
|
|
|
1.197
|
|
|
1.232
|
|
|
1.203
|
|
|
1.168
|
|
Agricultural
commodity
|
|
1.311
|
|
|
1.290
|
|
|
1.339
|
|
|
1.321
|
|
|
1.291
|
|
Metal
|
|
1.634
|
|
|
1.600
|
|
|
1.644
|
|
|
1.597
|
|
|
1.562
|
|
Average
RPC
|
|
$
|
0.777
|
|
|
$
|
0.759
|
|
|
$
|
0.789
|
|
|
$
|
0.756
|
|
|
$
|
0.782
|
|
CME Group Inc. and
Subsidiaries
|
Reconciliation of
GAAP to non-GAAP Measures
|
(dollars in millions,
except per share amounts; shares in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2016,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
Income
|
|
$
|
320.1
|
|
|
$
|
265.0
|
|
|
$
|
687.9
|
|
|
$
|
595.4
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
severance
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles
|
|
24.0
|
|
|
25.0
|
|
|
48.0
|
|
|
49.9
|
|
|
|
|
|
|
|
|
|
|
Loss on disposal of
building assets
|
|
4.0
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Loss and expenses
related to sale-leaseback of data center
|
|
—
|
|
|
—
|
|
|
28.6
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes and
fees
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
10.0
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange
transaction (losses) gains1
|
|
11.6
|
|
|
(11.1)
|
|
|
15.5
|
|
|
(1.1)
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on
investment
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
BM&FBOVESPA shares
|
|
—
|
|
|
(5.9)
|
|
|
—
|
|
|
(5.9)
|
|
|
|
|
|
|
|
|
|
|
Debt prepayment
costs
|
|
—
|
|
|
61.8
|
|
|
—
|
|
|
64.1
|
|
|
|
|
|
|
|
|
|
|
GFI termination fee -
net of the portion paid to outside advisers
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.5)
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
related to above
|
|
(13.7)
|
|
|
(28.3)
|
|
|
(34.2)
|
|
|
(34.5)
|
|
|
|
|
|
|
|
|
|
|
Other income tax
items2
|
|
37.5
|
|
|
17.4
|
|
|
37.5
|
|
|
17.4
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
|
$
|
387.3
|
|
|
$
|
335.8
|
|
|
$
|
792.4
|
|
|
$
|
681.1
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings per
Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.95
|
|
|
$
|
0.79
|
|
|
$
|
2.04
|
|
|
$
|
1.77
|
|
Diluted
|
|
0.95
|
|
|
0.78
|
|
|
2.03
|
|
|
1.76
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
per Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.15
|
|
|
$
|
1.00
|
|
|
$
|
2.35
|
|
|
$
|
2.03
|
|
Diluted
|
|
1.14
|
|
|
0.99
|
|
|
2.34
|
|
|
2.02
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
337,289
|
|
|
336,036
|
|
|
337,152
|
|
|
335,859
|
|
Diluted
|
|
338,706
|
|
|
337,796
|
|
|
338,599
|
|
|
337,574
|
|
|
|
|
|
|
|
|
|
|
1. Results include
foreign exchange transaction net losses principally related to cash
held in British pounds within foreign entities whose functional
currency is the U.S. dollar.
|
2. Income tax expense
recognized primarily from the remeasurement of tax positions
resulting from state and local income tax law changes in
second-quarter 2016.
|
CME-G
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cme-group-inc-reports-strong-second-quarter-2016-financial-results-300305420.html
SOURCE CME Group Inc.