CHICAGO, Aug. 1, 2017 /PRNewswire/ -- CME Group Inc.
(NASDAQ: CME) today reported revenue of $925
million and operating income of $606
million for the second quarter of 2017. Net income was
$416 million and diluted earnings per
share were $1.22. On an
adjusted basis, net income was a record $419
million and diluted earnings per share were a record
$1.23. Financial results
presented on an adjusted basis for the second quarters of 2017 and
2016 exclude certain items, which are detailed in the
reconciliation of non-GAAP results.1
"We drove strong growth in key product areas, with average daily
volume up nine percent for the second quarter," said CME Group
Chairman and Chief Executive Officer Terry
Duffy. "We delivered double-digit increases in our
interest rate and energy product lines, and, for the third quarter
in a row, we had record volume in metals. Globally, volumes
from outside the United States
grew 16 percent, with record quarterly volume from both
Europe and Asia. In
addition, our focus on expense discipline resulted in peak levels
of adjusted net income and earnings per share for the
quarter."
Second-quarter 2017 average daily volume was a record 16.5
million contracts, up 9 percent compared with second-quarter
2016. Clearing and transaction fee revenue was $792 million, up 3 percent compared with
second-quarter 2016. Second-quarter 2017 total average rate
per contract was 74.9 cents, up 2
percent from first-quarter 2017, 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 $96 million, down 7
percent compared with the second quarter last year, but relatively
in line with the first quarter of this year.
As of June 30, 2017, the company
had $1.4 billion of cash and
marketable securities and $2.2
billion of long-term debt. The company paid the
regular second-quarter dividend of $223
million in June, and has returned approximately $8.0 billion to shareholders in the form of
dividends since the implementation of the variable dividend policy
in early 2012.
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.
CME Group will hold a conference call to discuss
second-quarter 2017 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. Through its exchanges, CME Group offers 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. CME Group provides electronic trading globally on its
CME Globex platform. The company also offers clearing
and settlement services across asset classes for exchange-traded
and over-the-counter derivatives through its clearinghouses CME
Clearing and CME Clearing Europe. CME Group's 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; 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,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,362.3
|
|
|
$
|
1,868.6
|
|
Marketable
securities
|
|
84.3
|
|
|
83.3
|
|
Accounts receivable,
net of allowance
|
|
416.4
|
|
|
364.4
|
|
Other current assets
(includes $30.0 in restricted cash)
|
|
228.9
|
|
|
171.7
|
|
Performance bonds and
guaranty fund contributions
|
|
47,405.0
|
|
|
37,543.5
|
|
Total current
assets
|
|
49,496.9
|
|
|
40,031.5
|
|
Property, net of
accumulated depreciation and amortization
|
|
399.5
|
|
|
425.2
|
|
Intangible
assets—trading products
|
|
17,175.3
|
|
|
17,175.3
|
|
Intangible
assets—other, net
|
|
2,393.8
|
|
|
2,441.8
|
|
Goodwill
|
|
7,569.0
|
|
|
7,569.0
|
|
Other assets
(includes $22.1 and $61.7 in restricted cash)
|
|
1,509.3
|
|
|
1,726.6
|
|
Total
Assets
|
|
$
|
78,543.8
|
|
|
$
|
69,369.4
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
25.5
|
|
|
$
|
26.2
|
|
Other current
liabilities
|
|
239.1
|
|
|
1,376.7
|
|
Performance bonds and
guaranty fund contributions
|
|
47,405.0
|
|
|
37,542.7
|
|
Total current
liabilities
|
|
47,669.6
|
|
|
38,945.6
|
|
Long-term
debt
|
|
2,232.1
|
|
|
2,231.2
|
|
Deferred income tax
liabilities, net
|
|
7,318.8
|
|
|
7,291.0
|
|
Other
liabilities
|
|
546.5
|
|
|
560.9
|
|
Total
Liabilities
|
|
57,767.0
|
|
|
49,028.7
|
|
Shareholders'
equity
|
|
20,776.8
|
|
|
20,340.7
|
|
Total Liabilities and
Equity
|
|
$
|
78,543.8
|
|
|
$
|
69,369.4
|
|
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,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
|
|
|
|
|
Clearing and
transaction fees
|
|
$
|
792.0
|
|
|
$
|
767.6
|
|
|
$
|
1,584.0
|
|
|
$
|
1,563.7
|
|
Market data and
information services
|
|
96.1
|
|
|
102.9
|
|
|
192.9
|
|
|
205.3
|
|
Access and
communication fees
|
|
24.9
|
|
|
22.3
|
|
|
49.2
|
|
|
43.9
|
|
Other
|
|
11.6
|
|
|
13.6
|
|
|
27.8
|
|
|
27.7
|
|
Total
Revenues
|
|
924.6
|
|
|
906.4
|
|
|
1,853.9
|
|
|
1,840.6
|
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
139.3
|
|
|
131.7
|
|
|
281.6
|
|
|
263.6
|
|
Communications
|
|
6.0
|
|
|
6.3
|
|
|
12.3
|
|
|
13.0
|
|
Technology support
services
|
|
18.2
|
|
|
17.7
|
|
|
36.9
|
|
|
35.1
|
|
Professional fees and
outside services
|
|
28.6
|
|
|
39.0
|
|
|
57.2
|
|
|
70.7
|
|
Amortization of
purchased intangibles
|
|
24.0
|
|
|
24.0
|
|
|
48.0
|
|
|
48.0
|
|
Depreciation and
amortization
|
|
28.8
|
|
|
30.4
|
|
|
58.2
|
|
|
64.3
|
|
Occupancy and
building operations
|
|
19.2
|
|
|
24.4
|
|
|
39.3
|
|
|
45.7
|
|
Licensing and other
fee agreements
|
|
32.9
|
|
|
32.8
|
|
|
66.7
|
|
|
71.8
|
|
Other
|
|
22.0
|
|
|
36.8
|
|
|
46.9
|
|
|
91.2
|
|
Total
Expenses
|
|
319.0
|
|
|
343.1
|
|
|
647.1
|
|
|
703.4
|
|
Operating
Income
|
|
605.6
|
|
|
563.3
|
|
|
1,206.8
|
|
|
1,137.2
|
|
Non-Operating
Income (Expense)
|
|
|
|
|
|
|
|
|
Investment
income
|
|
112.4
|
|
|
17.2
|
|
|
251.3
|
|
|
34.8
|
|
Interest and other
borrowing costs
|
|
(29.0)
|
|
|
(31.0)
|
|
|
(58.8)
|
|
|
(60.8)
|
|
Equity in net
earnings (losses) of unconsolidated subsidiaries
|
|
31.8
|
|
|
27.0
|
|
|
62.6
|
|
|
53.8
|
|
Other non-operating
income (expense)
|
|
(83.5)
|
|
|
(10.4)
|
|
|
(117.6)
|
|
|
(20.4)
|
|
Total
Non-Operating Income (Expense)
|
|
31.7
|
|
|
2.8
|
|
|
137.5
|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
Income Taxes
|
|
637.3
|
|
|
566.1
|
|
|
1,344.3
|
|
|
1,144.6
|
|
Income tax
provision
|
|
221.5
|
|
|
246.0
|
|
|
528.7
|
|
|
456.7
|
|
Net
Income
|
|
$
|
415.8
|
|
|
$
|
320.1
|
|
|
$
|
815.6
|
|
|
$
|
687.9
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.23
|
|
|
$
|
0.95
|
|
|
$
|
2.41
|
|
|
$
|
2.04
|
|
Diluted
|
|
1.22
|
|
|
0.95
|
|
|
2.40
|
|
|
2.03
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
338,556
|
|
|
337,289
|
|
|
338,448
|
|
|
337,152
|
|
Diluted
|
|
340,020
|
|
|
338,706
|
|
|
339,974
|
|
|
338,599
|
|
CME Group Inc. and
Subsidiaries
|
Quarterly
Operating Statistics
|
|
|
|
2Q
2016
|
|
3Q
2016
|
|
4Q
2016
|
|
1Q
2017
|
|
2Q
2017
|
Trading
Days
|
|
64
|
|
64
|
|
63
|
|
62
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Daily Volume (ADV)
|
CME Group ADV (in
thousands)
|
|
Product
Line
|
|
2Q
2016
|
|
3Q
2016
|
|
4Q
2016
|
|
1Q
2017
|
|
2Q
2017
|
Interest
rate
|
|
6,776
|
|
|
6,791
|
|
|
8,300
|
|
|
9,169
|
|
|
8,210
|
|
Equity
|
|
2,957
|
|
|
2,876
|
|
|
2,875
|
|
|
2,766
|
|
|
2,707
|
|
Foreign
exchange
|
|
838
|
|
|
772
|
|
|
883
|
|
|
894
|
|
|
879
|
|
Energy
|
|
2,322
|
|
|
2,294
|
|
|
2,586
|
|
|
2,496
|
|
|
2,632
|
|
Agricultural
commodity
|
|
1,722
|
|
|
1,156
|
|
|
1,193
|
|
|
1,261
|
|
|
1,491
|
|
Metal
|
|
468
|
|
|
431
|
|
|
488
|
|
|
512
|
|
|
533
|
|
Total
|
|
15,082
|
|
|
14,319
|
|
|
16,325
|
|
|
17,098
|
|
|
16,453
|
|
Venue
|
|
|
|
|
|
|
|
|
|
|
Electronic
|
|
13,355
|
|
|
12,672
|
|
|
14,375
|
|
|
14,947
|
|
|
14,582
|
|
Open
outcry
|
|
1,075
|
|
|
982
|
|
|
1,130
|
|
|
1,362
|
|
|
1,115
|
|
Privately
negotiated
|
|
651
|
|
|
665
|
|
|
820
|
|
|
789
|
|
|
756
|
|
Total
|
|
15,082
|
|
|
14,319
|
|
|
16,325
|
|
|
17,098
|
|
|
16,453
|
|
Average Rate Per
Contract (RPC)
|
CME Group
RPC
|
|
Product
Line
|
|
2Q
2016
|
|
3Q
2016
|
|
4Q
2016
|
|
1Q
2017
|
|
2Q
2017
|
Interest
rate
|
|
$
|
0.496
|
|
|
$
|
0.508
|
|
|
$
|
0.491
|
|
|
$
|
0.492
|
|
|
$
|
0.491
|
|
Equity
|
|
0.709
|
|
|
0.676
|
|
|
0.691
|
|
|
0.718
|
|
|
0.731
|
|
Foreign
exchange
|
|
0.798
|
|
|
0.806
|
|
|
0.804
|
|
|
0.823
|
|
|
0.807
|
|
Energy
|
|
1.168
|
|
|
1.097
|
|
|
1.099
|
|
|
1.130
|
|
|
1.096
|
|
Agricultural
commodity
|
|
1.291
|
|
|
1.335
|
|
|
1.336
|
|
|
1.334
|
|
|
1.300
|
|
Metal
|
|
1.562
|
|
|
1.542
|
|
|
1.486
|
|
|
1.496
|
|
|
1.449
|
|
Average
RPC
|
|
$
|
0.782
|
|
|
$
|
0.750
|
|
|
$
|
0.731
|
|
|
$
|
0.731
|
|
|
$
|
0.749
|
|
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,
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
Income
|
|
$
|
415.8
|
|
|
$
|
320.1
|
|
|
$
|
815.6
|
|
|
$
|
687.9
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
severance
|
|
2.1
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles
|
|
24.0
|
|
|
24.0
|
|
|
48.0
|
|
|
48.0
|
|
|
|
|
|
|
|
|
|
|
Loss on disposal of
assets
|
|
0.6
|
|
|
4.0
|
|
|
0.6
|
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
Loss and expenses
related to sale-leaseback of data center
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.6
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange
transaction losses (gains)1
|
|
(4.6)
|
|
|
11.6
|
|
|
(7.1)
|
|
|
15.5
|
|
|
|
|
|
|
|
|
|
|
Net (gains) losses on
CME Venture investments
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
|
|
|
|
|
|
|
|
(Gains) losses on
sale of BM&FBOVESPA shares
|
|
—
|
|
|
—
|
|
|
(86.5)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
related to above2
|
|
(9.1)
|
|
|
(13.7)
|
|
|
(18.0)
|
|
|
(34.2)
|
|
|
|
|
|
|
|
|
|
|
Other income tax
item3
|
|
(9.9)
|
|
|
37.5
|
|
|
77.9
|
|
|
37.5
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
|
$
|
418.9
|
|
|
$
|
387.3
|
|
|
$
|
834.4
|
|
|
$
|
792.4
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings per
Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.23
|
|
|
$
|
0.95
|
|
|
$
|
2.41
|
|
|
$
|
2.04
|
|
Diluted
|
|
1.22
|
|
|
0.95
|
|
|
2.40
|
|
|
2.03
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
per Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.24
|
|
|
$
|
1.15
|
|
|
$
|
2.47
|
|
|
$
|
2.35
|
|
Diluted
|
|
1.23
|
|
|
1.14
|
|
|
2.45
|
|
|
2.34
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
338,556
|
|
|
337,289
|
|
|
338,448
|
|
|
337,152
|
|
Diluted
|
|
340,020
|
|
|
338,706
|
|
|
339,974
|
|
|
338,599
|
|
|
|
|
|
|
|
|
|
|
1. Results include
foreign exchange transaction net gains and losses principally
related to cash held in British pounds within foreign entities
whose functional currency is the U.S. dollar.
|
2. Income tax effect
related to all of the above includes all of the items above except
for the tax impact related to the gain on sale of BM&FBOVESPA
shares.
|
3. In the second
quarter of 2017, we recognized the favorable settlements of federal
and state examinations offset by tax charges related to the closure
of the U.K. Exchange and Clearinghouse.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CME-G
View original
content:http://www.prnewswire.com/news-releases/cme-group-inc-reports-strong-second-quarter-2017-financial-results-300497097.html
SOURCE CME Group