CHICAGO, April 26, 2018 /PRNewswire/ -- CME Group
Inc. (NASDAQ: CME) today reported record revenue of $1.1 billion and operating income of $741 million for the first quarter of 2018.
Net income was $599 million and
diluted earnings per share were $1.76. On an adjusted basis, net income was
$634 million and diluted earnings per
share were $1.86. Financial
results presented on an adjusted basis for the first quarters of
2018 and 2017 exclude certain items, which are detailed in the
reconciliation of non-GAAP results.1
"Broad-based strength across all of our asset classes drove
first-quarter revenue to more than $1.1
billion, up nearly 20 percent compared with a strong first
quarter last year," said CME Group Chairman and Chief Executive
Officer Terry Duffy. "We
achieved quarterly average daily volume records in five of our six
product lines, as well as records in total options and electronic
options. From a global perspective, we had growth of 41
percent in Asia and 37 percent in
Europe during the quarter, with
each product line experiencing increases of more than 30 percent
from non-U.S. customers. In addition to significant revenue
growth, our focus on expense efficiency contributed to a 50 percent
increase in net income compared with the same quarter last
year."
First-quarter 2018 average daily volume was an all-time high of
22.2 million contracts, up 30 percent compared with first-quarter
2017. Clearing and transaction fee revenue was $974 million, up 23 percent compared with
first-quarter 2017. First-quarter 2018 total average rate per
contract was $0.706, compared with
$0.736 in fourth-quarter 2017, driven
primarily by a higher proportion of volume from lower priced
financial products, which grew by 49 percent while higher
priced commodities rose 15 percent. Market data revenue
was $95 million, down 2 percent
compared with the first quarter last year.
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.
As of March 31, 2018, the company
had $875 million of cash and
marketable securities, excluding $491
million held in escrow related to the potential NEX Group
plc acquisition, and $2.2 billion of
long-term debt. The company paid dividends during the first
quarter of $1.4 billion, consisting
of the annual variable dividend for 2017 of $1.2 billion and the regular first-quarter
dividend of $238 million. The
company has returned more than $9.8
billion to shareholders in the form of dividends since
implementing the variable dividend policy in early 2012.
CME Group will hold a Q&A conference call to discuss
first-quarter 2018 results at 8:30 a.m.
Eastern Time today. A live audio Webcast of the
Q&A 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. CME Group also operates one of
the world's leading central counterparty clearing providers
through CME Clearing, which offers clearing and settlement
services across asset classes for exchange-traded and
over-the-counter derivatives. CME Group products and services
ensure that businesses around the world can effectively manage risk
and achieve growth.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex and E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT, Chicago Board of
Trade, KCBT and Kansas City Board
of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are trademarks of New York
Mercantile Exchange, Inc. COMEX is a trademark of Commodity
Exchange, Inc. Dow Jones, Dow Jones Industrial Average,
S&P 500 and S&P are service and/or trademarks of Dow Jones
Trademark Holdings LLC, Standard & Poor's Financial Services
LLC and S&P/Dow Jones Indices LLC, as the case may be, and have
been licensed for use by Chicago Mercantile Exchange Inc. All
other trademarks are the property of their respective owners.
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
regulations, including the impact of any changes in 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; our failure to
maintain our brand's reputation; the unfavorable resolution of
material legal proceedings and the uncertainties of the ultimate
impact of the Tax Cuts and Jobs Act. 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)
|
|
|
|
March 31,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
784.6
|
|
|
$
|
1,903.6
|
|
Marketable
securities
|
|
90.4
|
|
|
90.1
|
|
Accounts receivable,
net of allowance
|
|
444.1
|
|
|
359.7
|
|
Other current assets
(includes $492.3 and $0 in restricted cash)
|
|
646.8
|
|
|
367.8
|
|
Performance bonds and
guaranty fund contributions
|
|
39,088.9
|
|
|
44,185.3
|
|
Total current
assets
|
|
41,054.8
|
|
|
46,906.5
|
|
Property, net of
accumulated depreciation and amortization
|
|
387.2
|
|
|
399.7
|
|
Intangible
assets—trading products
|
|
17,175.3
|
|
|
17,175.3
|
|
Intangible
assets—other, net
|
|
2,322.6
|
|
|
2,346.3
|
|
Goodwill
|
|
7,569.0
|
|
|
7,569.0
|
|
Other assets
(includes $1.4 and $2.4 in restricted cash)
|
|
1,410.4
|
|
|
1,394.4
|
|
Total
Assets
|
|
$
|
69,919.3
|
|
|
$
|
75,791.2
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
25.0
|
|
|
$
|
31.3
|
|
Other current
liabilities
|
|
331.4
|
|
|
1,456.3
|
|
Performance bonds and
guaranty fund contributions
|
|
39,088.9
|
|
|
44,185.3
|
|
Total current
liabilities
|
|
39,445.3
|
|
|
45,672.9
|
|
Long-term
debt
|
|
2,233.5
|
|
|
2,233.1
|
|
Deferred income tax
liabilities, net
|
|
4,846.6
|
|
|
4,857.7
|
|
Other
liabilities
|
|
621.1
|
|
|
615.7
|
|
Total
Liabilities
|
|
47,146.5
|
|
|
53,379.4
|
|
Shareholders'
equity
|
|
22,772.8
|
|
|
22,411.8
|
|
Total Liabilities and
Equity
|
|
$
|
69,919.3
|
|
|
$
|
75,791.2
|
|
CME Group Inc. and
Subsidiaries
|
Consolidated
Statements of Income
|
(dollars in millions,
except per share amounts; shares in thousands)
|
|
|
|
Quarter
Ended March 31,
|
|
|
2018
|
|
2017
|
Revenues
|
|
|
|
|
Clearing and
transaction fees
|
|
$
|
973.6
|
|
|
$
|
792.0
|
|
Market data and
information services
|
|
94.9
|
|
|
96.8
|
|
Access and
communication fees
|
|
26.0
|
|
|
24.3
|
|
Other
|
|
14.5
|
|
|
16.2
|
|
Total
Revenues
|
|
1,109.0
|
|
|
929.3
|
|
Expenses
|
|
|
|
|
Compensation and
benefits
|
|
152.7
|
|
|
142.6
|
|
Communications
|
|
5.9
|
|
|
6.3
|
|
Technology support
services
|
|
19.6
|
|
|
18.7
|
|
Professional fees and
outside services
|
|
42.6
|
|
|
28.6
|
|
Amortization of
purchased intangibles
|
|
23.7
|
|
|
24.0
|
|
Depreciation and
amortization
|
|
28.1
|
|
|
29.4
|
|
Occupancy and
building operations
|
|
20.0
|
|
|
20.1
|
|
Licensing and other
fee agreements
|
|
49.5
|
|
|
33.8
|
|
Other
|
|
26.0
|
|
|
24.9
|
|
Total
Expenses
|
|
368.1
|
|
|
328.4
|
|
Operating
Income
|
|
740.9
|
|
|
600.9
|
|
Non-Operating
Income (Expense)
|
|
|
|
|
Investment
income
|
|
156.4
|
|
|
138.9
|
|
Interest and other
borrowing costs
|
|
(30.1)
|
|
|
(29.8)
|
|
Equity in net
earnings of unconsolidated subsidiaries
|
|
40.1
|
|
|
30.8
|
|
Other non-operating
income (expense)
|
|
(118.6)
|
|
|
(33.8)
|
|
Total
Non-Operating Income (Expense)
|
|
47.8
|
|
|
106.1
|
|
Income before
Income Taxes
|
|
788.7
|
|
|
707.0
|
|
Income tax
provision
|
|
189.9
|
|
|
307.2
|
|
Net
Income
|
|
$
|
598.8
|
|
|
$
|
399.8
|
|
Earnings per
Common Share:
|
|
|
|
|
Basic
|
|
$
|
1.76
|
|
|
$
|
1.18
|
|
Diluted
|
|
1.76
|
|
|
1.18
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
Basic
|
|
339,305
|
|
|
338,339
|
|
Diluted
|
|
340,747
|
|
|
339,946
|
|
CME Group Inc. and
Subsidiaries
|
Quarterly
Operating Statistics
|
|
|
|
1Q
2017
|
|
2Q
2017
|
|
3Q
2017
|
|
4Q
2017
|
|
1Q
2018
|
Trading
Days
|
|
62
|
|
|
63
|
|
|
63
|
|
|
63
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Daily Volume (ADV)
|
CME Group ADV (in
thousands)
|
|
Product
Line
|
|
1Q
2017
|
|
2Q
2017
|
|
3Q
2017
|
|
4Q
2017
|
|
1Q
2018
|
Interest
rate
|
|
9,169
|
|
|
8,210
|
|
|
7,424
|
|
|
7,970
|
|
|
11,948
|
|
Equity
|
|
2,766
|
|
|
2,707
|
|
|
2,624
|
|
|
2,632
|
|
|
4,096
|
|
Foreign
exchange
|
|
894
|
|
|
879
|
|
|
971
|
|
|
941
|
|
|
1,100
|
|
Energy
|
|
2,496
|
|
|
2,632
|
|
|
2,693
|
|
|
2,489
|
|
|
2,754
|
|
Agricultural
commodity
|
|
1,261
|
|
|
1,491
|
|
|
1,381
|
|
|
1,278
|
|
|
1,593
|
|
Metal
|
|
512
|
|
|
533
|
|
|
611
|
|
|
616
|
|
|
713
|
|
Total
|
|
17,098
|
|
|
16,453
|
|
|
15,704
|
|
|
15,925
|
|
|
22,204
|
|
Venue
|
|
|
|
|
|
|
|
|
|
|
Electronic
|
|
14,947
|
|
|
14,582
|
|
|
14,264
|
|
|
14,265
|
|
|
19,796
|
|
Open
outcry
|
|
1,362
|
|
|
1,115
|
|
|
889
|
|
|
1,066
|
|
|
1,556
|
|
Privately
negotiated
|
|
789
|
|
|
756
|
|
|
551
|
|
|
594
|
|
|
851
|
|
Total
|
|
17,098
|
|
|
16,453
|
|
|
15,704
|
|
|
15,925
|
|
|
22,204
|
|
Average Rate Per
Contract (RPC)
|
CME Group
RPC
|
|
Product
Line
|
|
1Q
2017
|
|
2Q
2017
|
|
3Q
2017
|
|
4Q
2017
|
|
1Q
2018
|
Interest
rate
|
|
$
|
0.492
|
|
|
$
|
0.491
|
|
|
$
|
0.485
|
|
|
$
|
0.467
|
|
|
$
|
0.464
|
|
Equity
|
|
0.718
|
|
|
0.731
|
|
|
0.738
|
|
|
0.768
|
|
|
0.781
|
|
Foreign
exchange
|
|
0.823
|
|
|
0.807
|
|
|
0.796
|
|
|
0.785
|
|
|
0.762
|
|
Energy
|
|
1.130
|
|
|
1.096
|
|
|
1.072
|
|
|
1.133
|
|
|
1.140
|
|
Agricultural
commodity
|
|
1.334
|
|
|
1.300
|
|
|
1.251
|
|
|
1.251
|
|
|
1.246
|
|
Metal
|
|
1.496
|
|
|
1.449
|
|
|
1.376
|
|
|
1.315
|
|
|
1.367
|
|
Average
RPC
|
|
$
|
0.731
|
|
|
$
|
0.749
|
|
|
$
|
0.749
|
|
|
$
|
0.736
|
|
|
$
|
0.706
|
|
CME Group Inc. and
Subsidiaries
|
Reconciliation of
GAAP to non-GAAP Measures
|
(dollars in millions,
except per share amounts; shares in thousands)
|
|
|
|
|
|
|
|
Quarter
Ended March 31,
|
|
|
2018
|
|
2017
|
Net
Income
|
|
$
|
598.8
|
|
|
$
|
399.8
|
|
|
|
|
|
|
Restructuring and
severance
|
|
1.4
|
|
|
1.8
|
|
|
|
|
|
|
Amortization of
purchased intangibles
|
|
23.7
|
|
|
24.0
|
|
|
|
|
|
|
Litigation
matters
|
|
8.9
|
|
|
—
|
|
|
|
|
|
|
Acquisition-related
costs(1)
|
|
9.5
|
|
|
—
|
|
|
|
|
|
|
Foreign exchange
transaction (gains) losses(2)
|
|
1.6
|
|
|
(2.5)
|
|
|
|
|
|
|
Gains on CME Ventures
investments
|
|
(1.1)
|
|
|
—
|
|
|
|
|
|
|
Gains on sale of
BM&FBOVESPA shares
|
|
—
|
|
|
(86.5)
|
|
|
|
|
|
|
Income tax effect
related to above
|
|
(9.3)
|
|
|
(8.9)
|
|
|
|
|
|
|
Other income tax
item
|
|
—
|
|
|
87.8
|
|
|
|
|
|
|
Adjusted Net
Income
|
|
$
|
633.5
|
|
|
$
|
415.5
|
|
|
|
|
|
|
GAAP Earnings per
Common Share:
|
|
|
|
|
Basic
|
|
$
|
1.76
|
|
|
$
|
1.18
|
|
Diluted
|
|
1.76
|
|
|
1.18
|
|
|
|
|
|
|
Adjusted Earnings
per Common Share:
|
|
|
|
|
Basic
|
|
$
|
1.87
|
|
|
$
|
1.23
|
|
Diluted
|
|
1.86
|
|
|
1.22
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
Basic
|
|
339,305
|
|
|
338,339
|
|
Diluted
|
|
340,747
|
|
|
339,946
|
|
|
|
|
|
|
1.
Acquisition-related costs include professional fees related to the
proposed acquisition with NEX Group plc.
|
2. Results include
foreign exchange transaction net gains and losses principally
related to cash held in British pounds within entities whose
functional currency is the U.S. dollar.
|
CME-G
View original
content:http://www.prnewswire.com/news-releases/cme-group-inc-reports-record-first-quarter-2018-financial-results-300636021.html
SOURCE CME Group