CHICAGO, April 28, 2016 /PRNewswire/ -- CME Group Inc.
(NASDAQ: CME) today reported record revenue of $934 million and record operating income of
$574 million for the first quarter of
2016. Net income was $368 million and
diluted earnings per share were $1.09. Adjusted for non-recurring items,
net income would have been $390
million and diluted earnings per share would have been
$1.151.
"Our record first-quarter financial performance was driven by
our highest quarterly average daily volume to date, including
record volumes in energy, overall options and electronic options,"
said CME Group Executive Chairman and President Terry Duffy. "We delivered record revenue
and operating income, and 17 percent growth in adjusted diluted
earnings per share. These strong results reflect our
continued progress in executing on our long-term growth
initiatives. At the same time, we are committed to returning
cash to our shareholders, as evidenced by $1.2 billion in dividends being paid out during
the quarter."
"Strong, balanced performance across our diverse product
portfolio, coupled with a continued focus on expense discipline,
allowed us to expand our operating margin in the first quarter,"
said CME Group Chief Executive Officer Phupinder Gill.
"We saw a significant increase in global participation in our
markets, with average daily volume of 3.7 million contracts traded
from outside of the United States,
up 24 percent from first-quarter 2015. The solid quarterly
activity was underscored by continued momentum in open interest, as
we reached a record daily level of 116 million contracts in the
first quarter, and open interest remains elevated."
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.
First-quarter 2016 average daily volume was a record 16.9
million contracts, up 13 percent from first-quarter 2015, and
included quarterly records in energy, total options and electronic
options. Clearing and transaction fee revenue was
$796 million, up 12 percent compared
with first-quarter 2015. First-quarter 2016 total average
rate per contract was 75.6 cents,
down from 78.9 cents in
fourth-quarter 2015, driven primarily by a sequential product mix
shift with an increased proportion of the volume from financial
contracts which capture lower fees. Market data revenue was
$102 million, up 5 percent compared
with the first quarter last year.
As of March 31, 2016, the company
had $1.2 billion of cash and
marketable securities and $2.2
billion of long-term debt. The quarter-end cash
balance includes $130 million from
the company's sale/leaseback transaction with CyrusOne, Inc.
related to the company's suburban Chicago data center. The company paid
dividends during the first quarter of nearly $1.2 billion, consisting of the annual variable
dividend for 2015 of $977 million and
the regular first-quarter dividend of $203
million. The company has returned more than
$5.8 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
first-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, the Chicago Board of Trade, KCBOT, KCBT and
Kansas City 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)
|
|
|
|
March 31,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,146.0
|
|
$
|
1,692.6
|
Marketable
securities
|
|
79.2
|
|
72.5
|
Accounts receivable,
net of allowance
|
|
389.3
|
|
357.8
|
Other current assets
(includes $32.0 in restricted cash in both periods)
|
|
141.5
|
|
228.6
|
Performance bonds and
guaranty fund contributions
|
|
37,497.3
|
|
35,553.0
|
Total current
assets
|
|
39,253.3
|
|
37,904.5
|
Property, net of
accumulated depreciation and amortization
|
|
449.8
|
|
491.7
|
Intangible
assets—trading products
|
|
17,175.3
|
|
17,175.3
|
Intangible
assets—other, net
|
|
2,513.9
|
|
2,537.9
|
Goodwill
|
|
7,569.0
|
|
7,569.0
|
Other assets
(includes $69.1 and $70.5 in restricted cash)
|
|
1,806.9
|
|
1,681.0
|
Total
Assets
|
|
$
|
68,768.2
|
|
$
|
67,359.4
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
32.2
|
|
$
|
28.7
|
Other current
liabilities
|
|
321.6
|
|
1,242.8
|
Performance bonds and
guaranty fund contributions
|
|
37,494.3
|
|
35,553.0
|
Total current
liabilities
|
|
37,848.1
|
|
36,824.5
|
Long-term
debt
|
|
2,229.8
|
|
2,229.3
|
Deferred income tax
liabilities, net
|
|
7,330.8
|
|
7,358.3
|
Other
liabilities
|
|
518.1
|
|
395.5
|
Total
Liabilities
|
|
47,926.8
|
|
46,807.6
|
Shareholders'
equity
|
|
20,841.4
|
|
20,551.8
|
Total Liabilities and
Equity
|
|
$
|
68,768.2
|
|
$
|
67,359.4
|
CME Group Inc. and
Subsidiaries
Consolidated
Statements of Income
(dollars in millions,
except per share amounts; shares in thousands)
|
|
|
|
Quarter
Ended March
31,
|
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
Clearing and
transaction fees
|
|
$
|
796.1
|
|
$
|
708.2
|
Market data and
information services
|
|
102.4
|
|
98.0
|
Access and
communication fees
|
|
21.6
|
|
21.3
|
Other
|
|
14.1
|
|
15.2
|
Total
Revenues
|
|
934.2
|
|
842.7
|
Expenses
|
|
|
|
|
Compensation and
benefits
|
|
131.9
|
|
141.3
|
Communications
|
|
6.7
|
|
7.6
|
Technology support
services
|
|
17.4
|
|
15.6
|
Professional fees and
outside services
|
|
31.7
|
|
29.1
|
Amortization of
purchased intangibles
|
|
24.0
|
|
24.9
|
Depreciation and
amortization
|
|
33.9
|
|
31.8
|
Occupancy and
building operations
|
|
21.3
|
|
22.8
|
Licensing and other
fee agreements
|
|
39.0
|
|
30.6
|
Other
|
|
54.4
|
|
31.7
|
Total
Expenses
|
|
360.3
|
|
335.4
|
Operating
Income
|
|
573.9
|
|
507.3
|
Non-Operating
Income (Expense)
|
|
|
|
|
Investment
income
|
|
17.6
|
|
5.7
|
Gains (losses) on
derivative investments
|
|
—
|
|
(1.8)
|
Interest and other
borrowing costs
|
|
(29.8)
|
|
(31.6)
|
Equity in net
earnings (losses) of unconsolidated subsidiaries
|
|
26.8
|
|
22.5
|
Other non-operating
income (expense)
|
|
(10.0)
|
|
21.7
|
Total
Non-Operating
|
|
4.6
|
|
16.5
|
Income before
Income Taxes
|
|
578.5
|
|
523.8
|
Income tax
provision
|
|
210.7
|
|
193.4
|
Net
Income
|
|
367.8
|
|
330.4
|
Earnings per
Common Share:
|
|
|
|
|
Basic
|
|
$
|
1.09
|
|
$
|
0.98
|
Diluted
|
|
1.09
|
|
0.98
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
Basic
|
|
337,014
|
|
335,680
|
Diluted
|
|
338,549
|
|
337,416
|
CME Group Inc. and
Subsidiaries
Quarterly
Operating Statistics
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2015
|
|
2Q
2015
|
|
3Q
2015
|
|
4Q
2015
|
|
1Q
2016
|
Trading
Days
|
|
61
|
|
64
|
|
64
|
|
64
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Daily Volume (ADV)
CME Group ADV (in
thousands)
|
|
Product
Line
|
|
1Q
2015
|
|
2Q
2015
|
|
3Q
2015
|
|
4Q
2015
|
|
1Q
2016
|
Interest
rate
|
|
7,564
|
|
6,599
|
|
6,658
|
|
6,097
|
|
8,246
|
Equity
|
|
2,772
|
|
2,364
|
|
3,287
|
|
2,743
|
|
3,557
|
Foreign
exchange
|
|
954
|
|
903
|
|
855
|
|
779
|
|
944
|
Energy
|
|
2,142
|
|
1,749
|
|
1,965
|
|
2,032
|
|
2,536
|
Agricultural
commodity
|
|
1,189
|
|
1,400
|
|
1,267
|
|
1,200
|
|
1,206
|
Metal
|
|
369
|
|
331
|
|
353
|
|
326
|
|
454
|
Total
|
|
14,990
|
|
13,347
|
|
14,384
|
|
13,178
|
|
16,944
|
Venue
|
|
|
|
|
|
|
|
|
|
|
Electronic
|
|
13,034
|
|
11,705
|
|
12,620
|
|
11,420
|
|
14,713
|
Open
outcry
|
|
1,291
|
|
1,108
|
|
1,110
|
|
1,055
|
|
1,423
|
Privately
negotiated
|
|
665
|
|
534
|
|
653
|
|
704
|
|
807
|
Total
|
|
14,990
|
|
13,347
|
|
14,384
|
|
13,178
|
|
16,944
|
|
|
Average Rate Per
Contract (RPC)
CME Group
RPC
|
|
Product
Line
|
|
1Q
2015
|
|
2Q
2015
|
|
3Q
2015
|
|
4Q
2015
|
|
1Q
2016
|
Interest
rate
|
|
$
|
0.480
|
|
$
|
0.502
|
|
$
|
0.506
|
|
$
|
0.517
|
|
$
|
0.501
|
Equity
|
|
0.721
|
|
0.725
|
|
0.708
|
|
0.718
|
|
0.726
|
Foreign
exchange
|
|
0.831
|
|
0.816
|
|
0.785
|
|
0.813
|
|
0.767
|
Energy
|
|
1.250
|
|
1.277
|
|
1.197
|
|
1.232
|
|
1.203
|
Agricultural
commodity
|
|
1.324
|
|
1.311
|
|
1.290
|
|
1.339
|
|
1.321
|
Metal
|
|
1.662
|
|
1.634
|
|
1.600
|
|
1.644
|
|
1.597
|
Average
RPC
|
|
$
|
0.753
|
|
$
|
0.777
|
|
$
|
0.759
|
|
$
|
0.789
|
|
$
|
0.756
|
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,
|
|
|
2016
|
|
2015
|
Net
Income
|
|
$
|
367.8
|
|
$
|
330.4
|
|
|
|
|
|
Restructuring and
severance
|
|
—
|
|
5.5
|
|
|
|
|
|
Loss on disposal of
building assets
|
|
1.3
|
|
—
|
|
|
|
|
|
Loss and expenses
related to sale-leaseback of data center
|
|
28.6
|
|
—
|
|
|
|
|
|
Acquisition-related
costs
|
|
—
|
|
0.9
|
|
|
|
|
|
Foreign exchange
transaction losses1
|
|
3.9
|
|
10.0
|
|
|
|
|
|
Loss on derivatives
and debt costs for refinancing
|
|
—
|
|
2.3
|
|
|
|
|
|
GFI termination fee -
net of the portion paid to outside advisers
|
|
—
|
|
(22.5)
|
|
|
|
|
|
Income tax effect
related to above
|
|
(11.7)
|
|
2.9
|
|
|
|
|
|
Adjusted Net
Income
|
|
$
|
389.9
|
|
$
|
329.5
|
|
|
|
|
|
GAAP Earnings per
Common Share:
|
|
|
|
|
Basic
|
|
$
|
1.09
|
|
$
|
0.98
|
Diluted
|
|
1.09
|
|
0.98
|
|
|
|
|
|
Adjusted Earnings
per Common Share:
|
|
|
|
|
Basic
|
|
$
|
1.16
|
|
$
|
0.98
|
Diluted
|
|
1.15
|
|
0.98
|
|
|
|
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
Basic
|
|
337,014
|
|
335,680
|
Diluted
|
|
338,549
|
|
337,416
|
|
|
|
|
|
|
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.
|
CME-G
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cme-group-inc-reports-strong-first-quarter-2016-financial-results-300259059.html
SOURCE CME Group Inc.