CHICAGO, April 26, 2012 /PRNewswire/ -- CME Group
Inc. (NASDAQ: CME) today reported first-quarter 2012 revenues of
$775 million and operating income of
$451 million. First-quarter net
income attributable to CME Group was $267
million and diluted earnings per share were $4.02.
"During the first quarter, global trading volumes were impacted
by low levels of volatility, particularly in financial
instruments," said CME Group Executive Chairman Terry Duffy. "The uncertainty about market
direction has led to a greater focus on the release of economic
data that measures the overall health of the economy. While
concerns remain, there are some positive signs that an improving
economy would bode well for our product set as the trading
community responds to better news."
"We have accomplished a great deal during the first 90 days of
the year as we build our business by investing in our product,
technology and clearing offerings," said CME Chief Executive
Officer Craig Donohue. "Our
over-the-counter clearing momentum has continued, as customers have
utilized our multi-asset class platform well ahead of the
regulatory mandate. To date, more than 1,800 buy side
accounts have cleared more than $515
billion in total notional value in interest rate swaps and
credit default swaps, with $283
billion cleared during the first quarter."
"We continue to successfully execute in a number of key areas,
which includes deepening and strengthening our partnerships,
enhancing our capital return policy and maintaining strong expense
discipline," said CME President Phupinder Gill. "Areas of focus have
included launching our co-location facility, increasing our stake
in the Dubai Mercantile Exchange and announcing several innovative
new products. The strengths that are embedded in this company
provide a foundation that allows us to continue to lead the
industry with the breadth of our product innovation and our global
relationships."
First-quarter 2012 average daily volume was 12.3 million
contracts, up 5 percent from fourth-quarter 2011, but down 11
percent compared with 13.8 million contracts during the first
quarter of 2011. Average daily volume in first-quarter 2011
was exceptionally strong driven by the impact of significant unrest
in the Middle East and a natural
disaster in Japan.
Clearing and transaction fee revenues of $621 million were up 4 percent from
fourth-quarter 2011, but down 10 percent from the strong first
quarter in 2011. First-quarter market data and information
services revenue was $114 million, up
8 percent from fourth-quarter 2011 and up 7 percent compared with
the same quarter last year. First-quarter total average rate
per contract was 81.1 cents, in line
with fourth-quarter 2011, and up slightly from first-quarter
2011.
First-quarter 2012 operating expense was $323 million, up 5 percent from first-quarter
2011, and down 7 percent sequentially. During the first
quarter the effective tax rate was 38.6 percent, which included a
one-time adjustment. The company expects the effective tax
rate to be 41 percent for the remaining quarters of the year,
representing the lower end of the original guidance range. As
of March 31, the company had
$1.1 billion of cash and marketable
securities and $2.1 billion of
long-term debt.
CME Group will hold a conference call to discuss
first-quarter 2012 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 commodities, metals, weather
and real estate. CME Group brings buyers and sellers
together through its CME Globex® electronic trading platform and
its trading facilities in New York
and Chicago. CME Group also operates CME Clearing, one of the
world's leading central counterparty clearing providers, which
offers clearing and settlement services for exchange-traded
contracts, as well as for over-the-counter derivatives transactions
through CME ClearPort®. These products and services ensure that
businesses everywhere can substantially mitigate counterparty
credit risk in both listed and over-the-counter derivatives
markets.
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. 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; 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 over-the-counter 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; changes in government policy,
including policies relating to common or directed clearing and
changes as a result of legislation stemming from the implementation
of the Dodd-Frank Act; the costs associated with protecting our
intellectual property rights and our ability to operate our
business without violating the intellectual property rights of
others; our ability to generate revenue from our market data that
may be reduced or eliminated by the growth of electronic trading,
the state of the overall economy or declines
in subscriptions; changes in our average
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 fixed income, 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
stemming from the financial crisis that began in 2008 and any other
future crises; our ability to accommodate increases in trading
volume and order transaction traffic without failure or degradation
of 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 acquisition, investment and alliance strategy; 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 the repeal of the 60/40 tax
treatment of such transactions; the unfavorable resolution of
material legal proceedings and the seasonality of the futures
business. More detailed information about factors that may affect
our performance may be found in our filings with the Securities and
Exchange Commission, including our most recent periodic reports
filed on Form 10-K and Form 10-Q, which are available in the
Investor Relations section of the CME Group Web site. We undertake
no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
CME
Group Inc. and Subsidiaries
|
Consolidated Balance Sheets
|
(in
millions)
|
|
|
|
|
|
March
31, 2012
|
|
December 31, 2011
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,061.7
|
|
$
1,042.3
|
Marketable
securities
|
45.4
|
|
47.6
|
Accounts receivable, net of
allowance
|
360.0
|
|
289.4
|
Other current assets
(includes $0.0 and $40.0 in restricted cash)
|
149.7
|
|
232.6
|
Cash performance bonds and
guaranty fund contributions
|
7,737.8
|
|
9,333.9
|
Total
current assets
|
9,354.6
|
|
10,945.8
|
Property,
net of accumulated depreciation and amortization
|
816.5
|
|
821.9
|
Intangible
assets - trading products
|
17,040.5
|
|
17,040.5
|
Intangible
assets - other, net of accumulated amortization
|
3,280.3
|
|
3,312.8
|
Goodwill
|
7,984.7
|
|
7,984.0
|
Other
assets (includes $60.5 and $20.5 in restricted cash)
|
812.5
|
|
653.7
|
Total
Assets
|
$
39,289.1
|
|
$
40,758.7
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts payable
|
$
29.0
|
|
$
31.1
|
Other current
liabilities
|
343.1
|
|
250.2
|
Cash performance bonds and
guaranty fund contributions
|
7,737.8
|
|
9,333.9
|
Total
current liabilities
|
8,109.9
|
|
9,615.2
|
Long-term
debt
|
2,107.2
|
|
2,106.8
|
Deferred
income tax liabilities, net
|
7,256.5
|
|
7,226.8
|
Other
liabilities
|
196.4
|
|
187.6
|
Total
Liabilities
|
17,670.0
|
|
19,136.4
|
Redeemable
non-controlling interest
|
70.0
|
|
70.3
|
Shareholders' equity
|
21,549.1
|
|
21,552.0
|
Total
Liabilities and Shareholders' Equity
|
$
39,289.1
|
|
$
40,758.7
|
|
|
|
|
CME
Group Inc. and Subsidiaries
|
Consolidated Statements of Income
|
(dollars
in millions, except per share amounts; shares in
thousands)
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
March
31,
|
|
|
2012
|
|
2011
|
|
Revenues
|
|
|
|
|
Clearing and transaction
fees
|
$621.1
|
|
$691.3
|
|
Market data and information
services
|
114.2
|
|
107.0
|
|
Access and communication
fees
|
19.7
|
|
11.5
|
|
Other
|
19.6
|
|
21.8
|
|
Total
Revenues
|
774.6
|
|
831.6
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Compensation and
benefits
|
135.1
|
|
122.3
|
|
Communications
|
10.3
|
|
9.9
|
|
Technology support
services
|
12.8
|
|
12.0
|
|
Professional fees and
outside services
|
32.2
|
|
30.7
|
|
Amortization of purchased
intangibles
|
32.8
|
|
33.2
|
|
Depreciation and
amortization
|
34.9
|
|
31.0
|
|
Occupancy and building
operations
|
20.3
|
|
19.4
|
|
Licensing and other fee
agreements
|
20.7
|
|
23.5
|
|
Other
|
24.3
|
|
25.5
|
|
Total
Expenses
|
323.4
|
|
307.5
|
|
|
|
|
|
|
Operating Income
|
451.2
|
|
524.1
|
|
|
|
|
|
|
Non-Operating Income (Expense)
|
|
|
|
|
Investment income
|
12.1
|
|
18.8
|
|
Gains (losses) on derivative
investments
|
-
|
|
(0.1)
|
|
Interest and other borrowing
costs
|
(29.1)
|
|
(30.1)
|
|
Equity in net losses of
unconsolidated subsidiaries
|
(0.8)
|
|
(1.1)
|
|
Total
Non-Operating
|
(17.8)
|
|
(12.5)
|
|
|
|
|
|
|
Income
Before Income Taxes
|
433.4
|
|
511.6
|
|
|
|
|
|
|
Income tax
provision
|
167.1
|
|
54.5
|
|
Net
Income
|
266.3
|
|
457.1
|
|
Less: Net
income (loss) attributable to redeemable non-controlling
interest
|
(0.3)
|
|
0.5
|
|
Net
Income Attributable to CME Group
|
$266.6
|
|
$456.6
|
|
|
|
|
|
|
Earnings per Common Share Attributable to CME
Group:
|
|
|
|
|
Basic
|
$
4.03
|
|
$
6.83
|
|
Diluted
|
4.02
|
|
6.81
|
|
|
|
|
|
|
Weighted Average Number of Common
Shares:
|
|
|
|
|
Basic
|
66,163
|
|
66,857
|
|
Diluted
|
66,370
|
|
67,062
|
|
Notes:
|
Q1 2011
results include a tax adjustment reflecting a $164 million benefit
within income tax provision associated with a change in our
expected effective tax rate and its impact on our deferred tax
expense and the release of reserves related to a foreign
investment.
|
|
CME
Group Inc.
|
Quarterly Operating Statistics
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2011
|
|
2Q
2011
|
|
3Q
2011
|
|
4Q
2011
|
|
1Q
2012
|
Trading
Days
|
62
|
|
63
|
|
64
|
|
63
|
|
62
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average Daily Volume
(ADV)
|
|
|
|
|
|
|
|
|
|
|
CME
Group ADV (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Product
Line
|
1Q
2011
|
|
2Q
2011
|
|
3Q
2011
|
|
4Q
2011
|
|
1Q
2012
|
Interest
rates
|
6,424
|
|
6,449
|
|
6,518
|
|
4,729
|
|
5,613
|
Equities
|
2,906
|
|
2,842
|
|
4,040
|
|
3,147
|
|
2,390
|
Foreign
exchange
|
961
|
|
918
|
|
988
|
|
820
|
|
846
|
Energy
|
1,973
|
|
1,757
|
|
1,670
|
|
1,704
|
|
1,952
|
Agricultural commodities
|
1,154
|
|
1,159
|
|
1,032
|
|
1,004
|
|
1,122
|
Metals
|
376
|
|
403
|
|
454
|
|
315
|
|
385
|
Total
|
13,794
|
|
13,528
|
|
14,702
|
|
11,719
|
|
12,308
|
|
|
|
|
|
|
|
|
|
|
Venue
|
|
|
|
|
|
|
|
|
|
Electronic
|
11,605
|
|
11,454
|
|
12,463
|
|
9,864
|
|
10,177
|
Open
outcry
|
1,467
|
|
1,393
|
|
1,557
|
|
1,173
|
|
1,348
|
Privately
negotiated
|
224
|
|
242
|
|
257
|
|
204
|
|
229
|
Exchange-traded Total
|
13,296
|
|
13,090
|
|
14,276
|
|
11,240
|
|
11,754
|
CME
ClearPort
|
498
|
|
438
|
|
426
|
|
479
|
|
554
|
Total
|
13,794
|
|
13,528
|
|
14,702
|
|
11,719
|
|
12,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Rate Per Contract (RPC)
|
|
|
|
|
|
|
|
|
|
|
CME
Group RPC
|
|
|
|
|
|
|
|
|
|
|
Product
Line
|
1Q
2011
|
|
2Q
2011
|
|
3Q
2011
|
|
4Q
2011
|
|
1Q
2012
|
Interest
rates
|
$
0.481
|
|
$
0.486
|
|
$
0.479
|
|
$
0.480
|
|
$
0.475
|
Equities
|
0.705
|
|
0.709
|
|
0.703
|
|
0.705
|
|
0.692
|
Foreign
exchange
|
0.823
|
|
0.868
|
|
0.801
|
|
0.828
|
|
0.841
|
Energy
|
1.573
|
|
1.595
|
|
1.580
|
|
1.507
|
|
1.517
|
Agricultural commodities
|
1.271
|
|
1.303
|
|
1.264
|
|
1.230
|
|
1.216
|
Metals
|
1.732
|
|
1.636
|
|
1.649
|
|
1.706
|
|
1.647
|
Average RPC
|
$
0.808
|
|
$
0.807
|
|
$
0.779
|
|
$
0.811
|
|
$
0.811
|
|
|
|
|
|
|
|
|
|
|
Venue
|
|
|
|
|
|
|
|
|
|
Exchange-traded
|
$
0.740
|
|
$
0.745
|
|
$
0.724
|
|
$
0.748
|
|
$
0.737
|
CME
ClearPort
|
2.630
|
|
2.665
|
|
2.621
|
|
2.290
|
|
2.388
|
|
|
|
|
|
|
|
|
|
|
CME-E
SOURCE CME Group Inc.