CHICAGO, Feb. 10, 2021 /PRNewswire/ -- CME Group Inc.
(NASDAQ: CME) today reported financial results for the fourth
quarter and full year of 2020.
The company reported revenue of $1.1
billion and operating income of $515
million for the fourth quarter of 2020. Net income was
$424 million and diluted earnings per
share were $1.18. On an
adjusted basis, net income was $497
million and diluted earnings per share were $1.39. Financial results presented on an
adjusted basis for the fourth quarter of 2020 and 2019 exclude
certain items, which are detailed in the reconciliation of non-GAAP
results.1
Total revenue for full-year 2020 was $4.9
billion and operating income was $2.6
billion. Net income was $2.1
billion and diluted earnings per share were $5.87. On an adjusted basis, net income was
$2.4 billion, and diluted earnings
per share were $6.72.
"As the ongoing global pandemic created an environment of
extreme uncertainty and market volatility, we remained highly
focused on helping our clients manage risk that was impacting their
businesses," said CME Group Chairman and Chief Executive Officer
Terry Duffy. "Despite the
challenges, we achieved record international volume during
full-year 2020 and saw strong, double-digit, year-over-year growth
in the fourth quarter across our Equity Index and Agricultural
businesses. Since the start of 2021, we completed the migration of
our BrokerTec business to CME Globex, unlocking additional value
and cost efficiencies for our clients who can now access listed
derivatives, cash and repo markets on a common platform. Looking
ahead, we will continue to deliver innovative products that can
address our clients' evolving needs, including Q1 launches for
Ether futures, Global Emissions Offset futures and Japanese energy
futures."
Fourth-quarter 2020 average daily volume (ADV) was 16.2 million
contracts. Non-U.S. ADV for full-year 2020 reached a record 5.3
million contracts.
Clearing and transaction fees revenue for fourth-quarter 2020
totaled $843 million. The total
average rate per contract was $0.699. Market data revenue totaled
$140 million for fourth-quarter
2020.
As of December 31, 2020, the
company had approximately $1.7
billion in cash (including $100
million deposited with Fixed Income Clearing Corporation
(FICC) and included in other current assets) and $3.4 billion of debt. The company declared
dividends during 2020 of
$2.1 billion, including the annual
variable dividend of $895
million. The company has returned over $15.3 billion to shareholders in the form of
dividends since the implementation of the variable dividend policy
in early 2012.
CME Group will hold a Q&A conference call to discuss
fourth-quarter 2020 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 website 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) enables clients to trade futures,
options, cash and OTC markets, optimize portfolios, and analyze
data - empowering market participants worldwide to efficiently
manage risk and capture opportunities. CME Group exchanges offer
the widest range of global benchmark products across all major
asset classes based on interest rates, equity
indexes, foreign exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's leading
central counterparty clearing providers, CME Clearing. With a range
of pre- and post-trade products and services underpinning the
entire lifecycle of a trade, CME Group also offers optimization and
reconciliation services through TriOptima, and trade processing
services through Traiana.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and, E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago 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. BrokerTec, EBS, TriOptima, and Traiana are
trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB,
and Traiana, Inc., respectively. 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 at
substantially similar trading levels, develop strategic
relationships and attract new customers; our ability to expand and
globally offer our products and services; changes in regulations,
including the impact of any changes in laws or government policies
with respect to our products or services or 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 or changes to
regulations in various jurisdictions; 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 credit and liquidity risk management
practices to adequately protect us from the credit risks of
clearing members and other counterparties, and to satisfy the
margin and liquidity requirements associated with the BrokerTec
matched principal business; 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; our dependence on third-party
providers and exposure to risk through third parties, including
risks related to the performance, reliability and security of
technology used by our third-party providers; volatility in
commodity, equity and fixed income prices, and price volatility of
financial benchmarks and instruments such as interest rates, credit
spreads, equity indices, fixed income instruments and foreign
exchange rates; economic, social, 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; the impact of the
COVID-19 pandemic and response by governments and other third
parties; 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,
control the costs and achieve the synergies associated with our
strategy for acquisitions, investments and alliances, including
those associated with NEX; 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 transactions
and/or repeal of the 60/40 tax treatment of such transactions; our
ability to maintain our brand and reputation; and the unfavorable
resolution of material legal proceedings. For a detailed
discussion and additional information concerning 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.
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 Inc. and
Subsidiaries Consolidated Balance Sheets (in
millions)
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,633.2
|
|
|
$
|
1,551.4
|
|
Marketable
securities
|
|
100.9
|
|
|
83.2
|
|
Accounts receivable,
net of allowance
|
|
461.3
|
|
|
491.8
|
|
Other current assets
(includes $4.7 and $4.3 in restricted cash)
|
|
306.7
|
|
|
364.4
|
|
Performance bonds and
guaranty fund contributions
|
|
86,781.8
|
|
|
37,077.0
|
|
Total current
assets
|
|
89,283.9
|
|
|
39,567.8
|
|
Property, net of
accumulated depreciation and amortization
|
|
579.2
|
|
|
544.0
|
|
Intangible
assets—trading products
|
|
17,175.3
|
|
|
17,175.3
|
|
Intangible
assets—other, net
|
|
4,865.3
|
|
|
5,117.7
|
|
Goodwill
|
|
10,798.8
|
|
|
10,742.5
|
|
Other assets
(includes $0.6 and $0.9 in restricted cash)
|
|
1,957.1
|
|
|
2,068.0
|
|
Total
Assets
|
|
$
|
124,659.6
|
|
|
$
|
75,215.3
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
69.3
|
|
|
$
|
61.9
|
|
Other current
liabilities
|
|
1,346.8
|
|
|
1,384.8
|
|
Performance bonds and
guaranty fund contributions
|
|
86,781.8
|
|
|
37,075.8
|
|
Total current
liabilities
|
|
88,197.9
|
|
|
38,522.5
|
|
Long-term
debt
|
|
3,443.8
|
|
|
3,743.2
|
|
Deferred income tax
liabilities, net
|
|
5,607.0
|
|
|
5,635.2
|
|
Other
liabilities
|
|
1,059.4
|
|
|
1,155.1
|
|
Total
Liabilities
|
|
98,308.1
|
|
|
49,056.0
|
|
CME Group
Shareholders' Equity
|
|
26,319.9
|
|
|
26,128.9
|
|
Non-controlling
interests
|
|
31.6
|
|
|
30.4
|
|
Total
Equity
|
|
26,351.5
|
|
|
26,159.3
|
|
Total Liabilities and
Equity
|
|
$
|
124,659.6
|
|
|
$
|
75,215.3
|
|
CME Group Inc. and
Subsidiaries Consolidated Statements of
Income (dollars in millions, except per share amounts;
shares in thousands)
|
|
|
|
Quarter
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
|
Clearing and
transaction fees
|
|
$
|
843.0
|
|
|
$
|
901.0
|
|
|
$
|
3,897.4
|
|
|
$
|
3,946.1
|
|
Market data and
information services
|
|
139.8
|
|
|
130.3
|
|
|
545.4
|
|
|
518.5
|
|
Other
|
|
115.7
|
|
|
107.1
|
|
|
440.8
|
|
|
403.4
|
|
Total
Revenues
|
|
1,098.5
|
|
|
1,138.4
|
|
|
4,883.6
|
|
|
4,868.0
|
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
215.6
|
|
|
217.6
|
|
|
856.5
|
|
|
898.7
|
|
Technology
|
|
53.6
|
|
|
53.1
|
|
|
198.5
|
|
|
201.5
|
|
Professional fees and
outside services
|
|
50.0
|
|
|
49.8
|
|
|
191.3
|
|
|
174.1
|
|
Amortization of
purchased intangibles
|
|
79.0
|
|
|
78.1
|
|
|
311.2
|
|
|
314.7
|
|
Depreciation and
amortization
|
|
41.5
|
|
|
38.0
|
|
|
153.2
|
|
|
158.6
|
|
Licensing and other
fee agreements
|
|
57.9
|
|
|
41.3
|
|
|
244.9
|
|
|
172.2
|
|
Other
|
|
85.9
|
|
|
87.5
|
|
|
290.6
|
|
|
360.4
|
|
Total
Expenses
|
|
583.5
|
|
|
565.4
|
|
|
2,246.2
|
|
|
2,280.2
|
|
Operating
Income
|
|
515.0
|
|
|
573.0
|
|
|
2,637.4
|
|
|
2,587.8
|
|
Non-Operating
Income (Expense)
|
|
|
|
|
|
|
|
|
Investment
income
|
|
31.1
|
|
|
147.6
|
|
|
182.7
|
|
|
637.9
|
|
Interest and other
borrowing costs
|
|
(41.7)
|
|
|
(42.0)
|
|
|
(166.2)
|
|
|
(178.0)
|
|
Equity in net earnings
(losses) of unconsolidated subsidiaries
|
|
46.6
|
|
|
44.5
|
|
|
190.6
|
|
|
176.8
|
|
Other non-operating
income (expense)
|
|
(16.0)
|
|
|
(99.0)
|
|
|
(122.4)
|
|
|
(534.9)
|
|
Total Non-Operating
Income (Expense)
|
|
20.0
|
|
|
51.1
|
|
|
84.7
|
|
|
101.8
|
|
Income before
Income Taxes
|
|
535.0
|
|
|
624.1
|
|
|
2,722.1
|
|
|
2,689.6
|
|
Income tax
provision
|
|
110.2
|
|
|
155.1
|
|
|
615.7
|
|
|
573.8
|
|
Net
Income
|
|
424.8
|
|
|
469.0
|
|
|
2,106.4
|
|
|
2,115.8
|
|
Less: net (income)
loss attributable to non-controlling interests
|
|
(0.8)
|
|
|
0.5
|
|
|
(1.2)
|
|
|
0.7
|
|
Net Income
Attributable to CME Group
|
|
$
|
424.0
|
|
|
$
|
469.5
|
|
|
$
|
2,105.2
|
|
|
$
|
2,116.5
|
|
Earnings per
Common Share Attributable to CME
Group:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.18
|
|
|
$
|
1.31
|
|
|
$
|
5.88
|
|
|
$
|
5.93
|
|
Diluted
|
|
1.18
|
|
|
1.31
|
|
|
5.87
|
|
|
5.91
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
358,047
|
|
|
357,456
|
|
|
357,764
|
|
|
357,155
|
|
Diluted
|
|
358,612
|
|
|
358,354
|
|
|
358,524
|
|
|
358,239
|
|
CME Group Inc. and
Subsidiaries Quarterly Operating
Statistics
|
|
|
|
4Q
2019
|
|
1Q
2020
|
|
2Q
2020
|
|
3Q
2020
|
|
4Q
2020
|
Trading
Days
|
|
64
|
|
|
62
|
|
|
63
|
|
|
64
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Daily Volume (ADV)(1) CME Group ADV (in
thousands)
|
|
Product
Line
|
|
4Q
2019
|
|
1Q
2020
|
|
2Q
2020
|
|
3Q
2020
|
|
4Q
2020
|
Interest
rates
|
|
8,638
|
|
|
13,813
|
|
|
6,890
|
|
|
5,315
|
|
|
6,273
|
|
Equity
indexes
|
|
3,252
|
|
|
6,498
|
|
|
5,568
|
|
|
5,410
|
|
|
5,148
|
|
Foreign
exchange
|
|
839
|
|
|
1,079
|
|
|
725
|
|
|
829
|
|
|
818
|
|
Energy
|
|
2,213
|
|
|
3,228
|
|
|
2,586
|
|
|
1,852
|
|
|
1,940
|
|
Agricultural
commodities
|
|
1,278
|
|
|
1,506
|
|
|
1,311
|
|
|
1,372
|
|
|
1,478
|
|
Metals
|
|
652
|
|
|
889
|
|
|
519
|
|
|
825
|
|
|
568
|
|
Total
|
|
16,872
|
|
|
27,013
|
|
|
17,599
|
|
|
15,603
|
|
|
16,225
|
|
Venue
|
|
|
|
|
|
|
|
|
|
|
CME Globex
|
|
15,356
|
|
|
24,582
|
|
|
16,992
|
|
|
15,054
|
|
|
15,469
|
|
Open
outcry(2)
|
|
867
|
|
|
1,281
|
|
|
—
|
|
|
108
|
|
|
273
|
|
Privately
negotiated
|
|
650
|
|
|
1,149
|
|
|
607
|
|
|
441
|
|
|
483
|
|
Total
|
|
16,872
|
|
|
27,013
|
|
|
17,599
|
|
|
15,603
|
|
|
16,225
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Rate Per Contract (RPC)(1) CME Group
RPC
|
|
Product
Line
|
|
4Q
2019
|
|
1Q
2020
|
|
2Q
2020
|
|
3Q
2020
|
|
4Q
2020
|
Interest
rates
|
|
$
|
0.507
|
|
|
$
|
0.488
|
|
|
$
|
0.510
|
|
|
$
|
0.506
|
|
|
$
|
0.490
|
|
Equity
indexes
|
|
0.654
|
|
|
0.616
|
|
|
0.574
|
|
|
0.525
|
|
|
0.523
|
|
Foreign
exchange
|
|
0.732
|
|
|
0.721
|
|
|
0.786
|
|
|
0.763
|
|
|
0.739
|
|
Energy
|
|
1.133
|
|
|
1.108
|
|
|
1.191
|
|
|
1.171
|
|
|
1.165
|
|
Agricultural
commodities
|
|
1.242
|
|
|
1.260
|
|
|
1.316
|
|
|
1.284
|
|
|
1.301
|
|
Metals
|
|
1.344
|
|
|
1.429
|
|
|
1.518
|
|
|
1.309
|
|
|
1.389
|
|
Average
RPC
|
|
$
|
0.717
|
|
|
$
|
0.676
|
|
|
$
|
0.731
|
|
|
$
|
0.716
|
|
|
$
|
0.699
|
|
|
|
|
|
|
|
|
|
|
|
|
1. ADV and RPC
includes futures and options on futures only.
|
|
|
2. Due to the
COVID-19 pandemic, in March 2020 we closed our open outcry trading
floor and reopened it in August
2020 for Eurodollar options. Currently, the remainder of the
trading floor is closed.
|
|
CME Group Inc. and
Subsidiaries
|
Reconciliation of
GAAP to non-GAAP Measures
|
(dollars in millions,
except per share amounts; shares in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net Income
Attributable to CME Group
|
|
$
|
424.0
|
|
|
$
|
469.5
|
|
|
$
|
2,105.2
|
|
|
$
|
2,116.5
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
severance
|
|
5.5
|
|
|
6.4
|
|
|
22.1
|
|
|
20.8
|
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles
|
|
79.0
|
|
|
78.1
|
|
|
311.2
|
|
|
314.7
|
|
|
|
|
|
|
|
|
|
|
Litigation
matters
|
|
0.8
|
|
|
—
|
|
|
8.2
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs(1)
|
|
16.2
|
|
|
8.6
|
|
|
42.6
|
|
|
31.3
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange
transaction losses
|
|
6.9
|
|
|
5.5
|
|
|
9.3
|
|
|
7.2
|
|
|
|
|
|
|
|
|
|
|
Acceleration of
contractual commitments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3)
|
|
|
|
|
|
|
|
|
|
|
Unrealized and
realized (gains) losses on investments
|
|
0.5
|
|
|
(18.3)
|
|
|
6.8
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
Loss on real estate
sublease and related costs
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
5.9
|
|
|
|
|
|
|
|
|
|
|
(Gains) Losses on
derivatives
|
|
—
|
|
|
(0.2)
|
|
|
(1.5)
|
|
|
17.7
|
|
|
|
|
|
|
|
|
|
|
Realized and
unrealized losses on assets(2)
|
|
4.3
|
|
|
2.9
|
|
|
33.1
|
|
|
81.7
|
|
|
|
|
|
|
|
|
|
|
Trading floor
enhancements
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
related to above
|
|
(24.2)
|
|
|
(6.4)
|
|
|
(109.9)
|
|
|
(99.7)
|
|
|
|
|
|
|
|
|
|
|
Other income tax
items(3)
|
|
(15.9)
|
|
|
(2.2)
|
|
|
(18.5)
|
|
|
(62.2)
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income Attributable to CME Group
|
|
$
|
497.1
|
|
|
$
|
544.4
|
|
|
$
|
2,411.1
|
|
|
$
|
2,434.4
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings per
Common Share Attributable to
CME Group:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.18
|
|
|
$
|
1.31
|
|
|
$
|
5.88
|
|
|
$
|
5.93
|
|
Diluted
|
|
1.18
|
|
|
1.31
|
|
|
5.87
|
|
|
5.91
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
per Common Share Attributable
to CME Group:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.39
|
|
|
$
|
1.52
|
|
|
$
|
6.74
|
|
|
$
|
6.82
|
|
Diluted
|
|
1.39
|
|
|
1.52
|
|
|
6.72
|
|
|
6.80
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
358,047
|
|
|
357,456
|
|
|
357,764
|
|
|
357,155
|
|
Diluted
|
|
358,612
|
|
|
358,354
|
|
|
358,524
|
|
|
358,239
|
|
|
|
|
|
|
|
|
|
|
1.
Acquisition-related costs primarily include professional fees
related to the NEX transaction.
|
2. Results include
net gains and losses on intangible assets, fixed assets and assets
held for sale.
|
3. Other income tax
items include the income tax impacts related primarily to the
remeasurement of tax positions
resulting from state and local income tax changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CME-G
View original
content:http://www.prnewswire.com/news-releases/cme-group-inc-reports-fourth-quarter-and-full-year-2020-financial-results-301225505.html
SOURCE CME Group