CME GROUP INC. CHICAGO, April 30, 2015 /PRNewswire/ -- CME Group Inc. (NASDAQ: CME) today reported revenues of $843 million and operating income of $507 million for the first quarter of 2015. Net income attributable to CME Group was $330 million. GAAP and adjusted diluted earnings per share were $0.98(1).
"We delivered strong revenue growth in the first quarter driven primarily by interest rate, energy and foreign exchange products, with double-digit average daily volume growth coming from Europe and North America and 22 percent growth from Asia," said CME Group Executive Chairman and President Terry Duffy. "Total average daily volume was 15 million contracts, up 10 percent, which was the second highest quarter in our history. We recorded solid revenue growth in our core futures products, swaps clearing and market data. This clearly demonstrates the value of the unparalleled diversity of our product set."
"In addition to globalization, we made progress with our swaps clearing and options business," said CME Group Chief Executive Officer Phupinder Gill. "Interest rate swaps clearing revenue grew 57 percent, and we are seeing additional signs that our 500+ swaps clients are increasing their usage of our core futures products. Options volume reached a record 2.8 million contracts per day during the quarter. Also, the combination of top-line growth and our internal efficiency and productivity enhancements led to significant operating margin expansion and earnings growth during the first quarter."
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 2015 average daily volume was 15.0 million contracts, up 10 percent from first-quarter 2014, representing the second-highest quarterly volume, and included average daily volume records in energy and options. Clearing and transaction fee revenues were $708.2 million, up 9 percent compared with first-quarter 2014. Market data revenue was $98 million, up 10 percent. First-quarter 2015 total average rate per contract was 75.3 cents, up from 73.1 cents in fourth-quarter 2014, driven primarily by a higher proportion of total volume coming from commodities products, which have higher average fees.
As of March 31, 2015, the company had $1.8 billion of cash and marketable securities and $2.9 billion of long-term debt. In January, we paid out $671 million in our variable dividend of $2 per share. In March, we paid out $168 million in our regular quarterly dividend of 50 cents per share.
CME Group will hold a conference call to discuss first-quarter 2015 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, its trading facilities in New York and Chicago, and through its London-based CME Europe derivatives exchange. 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 contracts and over-the-counter derivatives transactions. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk.
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. KCBOT, KCBT and Kansas City Board of Trade are trademarks of The Board of Trade of Kansas City, Missouri, 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; the unfavorable resolution of material legal proceedings; and the seasonality of the futures business. 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, 2015 December 31,
2014
-------------- -------------
ASSETS
Current Assets:
Cash and cash
equivalents $1,694.8 $1,366.1
Marketable
securities 78.8 74.7
Accounts
receivable, net
of allowance 383.4 341.2
Other current
assets
(includes $32.0
and $37.0 in
restricted
cash) 154.8 196.5
Performance
bonds and
guaranty fund
contributions 45,174.2 40,566.8
-------- --------
Total current
assets 47,486.0 42,545.3
Property, net of
accumulated
depreciation
and
amortization 503.3 508.9
Intangible
assets-trading
products 17,175.3 17,175.3
Intangible
assets-other,
net 2,612.5 2,637.4
Goodwill 7,569.0 7,569.0
Other assets
(includes $70.1
and $72.4 in
restricted
cash) 1,782.3 1,805.6
------- -------
Total Assets $77,128.4 $72,241.5
========= =========
LIABILITIES AND
EQUITY
Current
Liabilities:
Accounts payable $34.0 $36.9
Other current
liabilities 286.9 927.5
Performance
bonds and
guaranty fund
contributions 45,174.2 40,566.8
-------- --------
Total current
liabilities 45,495.1 41,531.2
Long-term debt 2,851.9 2,107.9
Deferred income
tax
liabilities,
net 7,299.7 7,302.7
Other
liabilities 386.2 376.2
----- -----
Total
Liabilities 56,032.9 51,318.0
CME Group
shareholders'
equity 21,095.5 20,923.5
Total
Liabilities and
Equity $77,128.4 $72,241.5
========= =========
CME Group Inc. and Subsidiaries
Consolidated Statements of Income
(dollars in millions, except per share amounts; shares in thousands)
Quarter Ended
March 31,
---------
2015 2014
---- ----
Revenues
Clearing and transaction
fees $708.2 $652.2
Market data and information
services 98.0 89.4
Access and communication
fees 21.3 20.4
Other 15.2 15.4
---- ----
Total Revenues 842.7 777.4
Expenses
Compensation and benefits 141.3 135.5
Communications 7.6 8.2
Technology support services 15.6 13.9
Professional fees and
outside services 29.1 29.6
Amortization of purchased
intangibles 24.9 25.2
Depreciation and
amortization 31.8 34.1
Occupancy and building
operations 22.8 23.2
Licensing and other fee
agreements 30.6 29.0
Other 31.7 24.2
---- ----
Total Expenses 335.4 322.9
----- -----
Operating Income 507.3 454.5
Non-Operating Income
(Expense)
Investment income 5.7 3.2
Gains (losses) on
derivative investments (1.8) -
Interest and other
borrowing costs (31.6) (33.7)
Equity in net earnings
(losses) of unconsolidated
subsidiaries 22.5 22.4
Other non-operating income
(expense) 21.7 -
---- ---
Total Non-Operating 16.5 (8.1)
---- ----
Income before Income Taxes 523.8 446.4
Income tax provision 193.4 179.8
----- -----
Net Income 330.4 266.6
Less: net income (loss)
attributable to non-
controlling interests - (0.2)
--- ----
Net Income Attributable to
CME Group $330.4 $266.8
====== ======
Earnings per Common Share
Attributable to CME Group:
Basic $0.98 $0.80
Diluted 0.98 0.79
Weighted Average Number of
Common Shares:
Basic 335,680 333,905
Diluted 337,416 335,644
CME Group Inc. and Subsidiaries
Quarterly Operating Statistics
1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015
------- ------- ------- ------- -------
Trading Days 61 63 64 64 61
Quarterly Average Daily Volume (ADV)
CME Group ADV (in thousands)
Product Line 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015
------- ------- ------- ------- -------
Interest rate 6,725 6,668 7,181 7,445 7,564
Equity 2,890 2,465 2,586 3,114 2,772
Foreign exchange 817 638 797 959 954
Energy 1,705 1,457 1,562 1,797 2,142
Agricultural commodity 1,168 1,084 1,058 1,173 1,189
Metal 355 323 308 361 369
--- --- --- --- ---
Total 13,659 12,636 13,493 14,848 14,990
Venue
-----
Electronic 11,703 10,888 11,627 12,982 13,034
Open outcry 1,179 1,100 1,208 1,218 1,291
Privately negotiated 778 647 657 648 665
--- --- --- --- ---
Total 13,659 12,636 13,493 14,848 14,990
Average Rate Per Contract (RPC)
CME Group RPC
Product Line 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015
------- ------- ------- ------- -------
Interest rate $0.481 $0.473 $0.473 $0.472 $0.480
Equity 0.712 0.714 0.687 0.697 0.721
Foreign exchange 0.804 0.861 0.788 0.760 0.831
Energy 1.364 1.298 1.291 1.279 1.250
Agricultural commodity 1.369 1.430 1.362 1.321 1.324
Metal 1.707 1.715 1.707 1.664 1.662
----- ----- ----- ----- -----
Average RPC $0.767 $0.749 $0.725 $0.731 $0.753
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, 2015
--------------
GAAP Net Income Attributable to CME
Group $330.4
Foreign exchange transaction losses(1) 10.0
Acquisition-related costs 0.9
Severance 5.5
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 2.9
Adjusted Net Income Attributable to CME
Group $329.5
======
GAAP Earnings per Common Share
Attributable to CME Group:
Basic $0.98
Diluted 0.98
Adjusted Earnings per Common Share
Attributable to CME Group:
Basic $0.98
Diluted 0.98
Weighted Average Number of Common
Shares:
Basic 335,680
Diluted 337,416
1. First-quarter 2015 results
included 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
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SOURCE CME Group Inc.
