CHICAGO, July 27,
2022 /PRNewswire/ -- CME Group Inc. (NASDAQ: CME)
today reported financial results for the second quarter of
2022.
The company reported revenue of $1.2
billion and operating income of $750
million for the second quarter of 2022. Net income was
$663 million and diluted earnings per
share were $1.82. On an adjusted
basis, net income was $717 million
and diluted earnings per share were $1.97. Financial results presented on an adjusted
basis for the second quarter of 2022 and 2021 exclude certain
items, which are detailed in the reconciliation of non-GAAP
results.1
"As global market participants continued to navigate
extraordinary economic and geopolitical uncertainties throughout
the second quarter, demand for CME Group hedging tools drove our
strong earnings and revenue growth, with our equity index, interest
rate, foreign exchange and options volumes rising in the U.S. and
internationally," said CME Group Chairman and Chief Executive
Officer Terry Duffy. "We reached our
third highest quarterly average daily volume on record in Q2, and,
in particular, our SOFR futures and options contracts reached new
records in both volume and open interest, driven by the industry's
accelerating transition away from USD LIBOR. Additionally, market
users increasingly turned to our micro and E-mini contracts to
customize their trading strategies. Moving forward, we will remain
focused on providing our clients with the tools they need to manage
risk amid central bank tightening, historic inflation and other
challenging market conditions."
Second-quarter 2022 average daily volume (ADV) was 23.1 million
contracts, including non-U.S. ADV of 6.3 million contracts, led by
40% growth in Latin America, 36%
in Asia and 15% in EMEA.
|
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.
|
Clearing and transaction fees revenue for second-quarter 2022
totaled $1.0 billion. The total
average rate per contract was $0.647.
Market data revenue totaled $152
million for second-quarter 2022.
As of June 30, 2022, the company
had approximately $2.0 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 paid dividends during the
second quarter of approximately $363
million. The company has returned approximately $18.5 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
second-quarter 2022 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 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.
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 and EBS are
trademarks of BrokerTec Europe LTD and EBS Group LTD,
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 programs 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 our OSTTRA joint venture with IHS
Markit (now a part of S&P Global) and our partnership with
Google Cloud; uncertainty related to the transition from
LIBOR; 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 other recent periodic filings, including our
Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the
Securities and Exchange Commission ("SEC") on February 25, 2022, under the caption "Risk
Factors".
|
CME Group Inc. and
Subsidiaries
Consolidated Balance
Sheets
(in
millions)
|
|
|
|
June 30,
2022
|
|
December 31,
2021
|
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,879.5
|
|
$
2,834.9
|
|
Marketable
securities
|
|
95.1
|
|
115.0
|
|
Accounts receivable,
net of allowance
|
|
582.3
|
|
434.5
|
|
Other current assets
(includes $4.7 and $4.8 in restricted cash)
|
|
463.7
|
|
427.8
|
|
Performance bonds and
guaranty fund contributions
|
|
138,430.4
|
|
157,949.6
|
|
Total current
assets
|
|
141,451.0
|
|
161,761.8
|
|
Property, net of
accumulated depreciation and amortization
|
|
481.6
|
|
505.3
|
|
Intangible
assets—trading products
|
|
17,175.3
|
|
17,175.3
|
|
Intangible
assets—other, net
|
|
3,382.1
|
|
3,532.0
|
|
Goodwill
|
|
10,484.1
|
|
10,528.0
|
|
Other assets (includes
$0.4 and $0.5 in restricted cash)
|
|
3,697.2
|
|
3,277.9
|
|
Total Assets
|
|
$
176,671.3
|
|
$
196,780.3
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
80.9
|
|
$
48.8
|
|
Short-term
debt
|
|
—
|
|
749.4
|
|
Other current
liabilities
|
|
488.8
|
|
1,650.6
|
|
Performance bonds and
guaranty fund contributions
|
|
138,430.4
|
|
157,949.6
|
|
Total current
liabilities
|
|
139,000.1
|
|
160,398.4
|
|
Long-term
debt
|
|
3,436.7
|
|
2,695.7
|
|
Deferred income tax
liabilities, net
|
|
5,363.0
|
|
5,390.4
|
|
Other
liabilities
|
|
869.8
|
|
896.5
|
|
Total
Liabilities
|
|
148,669.6
|
|
169,381.0
|
|
Total CME Group
Shareholders' Equity
|
|
28,001.7
|
|
27,399.3
|
|
Total Liabilities and
Equity
|
|
$
176,671.3
|
|
$
196,780.3
|
|
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Clearing and
transaction fees
|
|
$
1,024.6
|
|
$ 929.9
|
|
$
2,162.7
|
|
$
1,936.9
|
|
Market data and
information services
|
|
151.7
|
|
145.2
|
|
303.4
|
|
289.4
|
|
Other
|
|
60.9
|
|
104.1
|
|
117.7
|
|
206.2
|
|
Total
Revenues
|
|
1,237.2
|
|
1,179.2
|
|
2,583.8
|
|
2,432.5
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
185.3
|
|
211.7
|
|
370.5
|
|
436.7
|
|
Technology
|
|
45.9
|
|
49.3
|
|
91.8
|
|
97.5
|
|
Professional fees and
outside services
|
|
32.0
|
|
36.8
|
|
63.8
|
|
74.2
|
|
Amortization of
purchased intangibles
|
|
57.1
|
|
59.4
|
|
115.5
|
|
120.0
|
|
Depreciation and
amortization
|
|
33.0
|
|
37.1
|
|
66.5
|
|
74.7
|
|
Licensing and other
fee agreements
|
|
83.1
|
|
54.2
|
|
164.0
|
|
118.9
|
|
Other
|
|
51.1
|
|
56.0
|
|
102.9
|
|
110.7
|
|
Total
Expenses
|
|
487.5
|
|
504.5
|
|
975.0
|
|
1,032.7
|
|
Operating
Income
|
|
749.7
|
|
674.7
|
|
1,608.8
|
|
1,399.8
|
|
Non-Operating Income
(Expense)
|
|
|
|
|
|
|
|
|
|
Investment
income
|
|
286.9
|
|
62.4
|
|
360.0
|
|
93.3
|
|
Interest and other
borrowing costs
|
|
(39.9)
|
|
(41.7)
|
|
(82.4)
|
|
(83.2)
|
|
Equity in net earnings
of unconsolidated subsidiaries
|
|
87.3
|
|
55.7
|
|
160.6
|
|
111.9
|
|
Other non-operating
income (expense)
|
|
(217.3)
|
|
(25.0)
|
|
(264.0)
|
|
(43.4)
|
|
Total Non-Operating
Income (Expense)
|
|
117.0
|
|
51.4
|
|
174.2
|
|
78.6
|
|
Income before Income
Taxes
|
|
866.7
|
|
726.1
|
|
1,783.0
|
|
1,478.4
|
|
Income tax
provision
|
|
204.2
|
|
215.5
|
|
409.5
|
|
393.0
|
|
Net
Income
|
|
662.5
|
|
510.6
|
|
1,373.5
|
|
1,085.4
|
|
Less: net (income) loss
attributable to non-controlling interests
|
|
—
|
|
(0.3)
|
|
—
|
|
(0.7)
|
|
Net Income
Attributable to CME Group
|
|
$ 662.5
|
|
$ 510.3
|
|
$
1,373.5
|
|
$
1,084.7
|
|
Net Income
Attributable to Common Shareholders of CME Group
|
|
$ 654.1
|
|
$ 510.3
|
|
$
1,356.1
|
|
$
1,084.7
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share
Attributable to Common Shareholders of CME Group:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.82
|
|
$
1.42
|
|
$
3.78
|
|
$
3.03
|
|
Diluted
|
|
1.82
|
|
1.42
|
|
3.78
|
|
3.02
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
358,641
|
|
358,261
|
|
358,625
|
|
358,204
|
|
Diluted
|
|
359,205
|
|
358,888
|
|
359,179
|
|
358,853
|
|
CME Group Inc. and
Subsidiaries
Quarterly Operating
Statistics
|
|
|
|
2Q
2021
|
|
3Q
2021
|
|
4Q
2021
|
|
1Q
2022
|
|
2Q
2022
|
|
Trading
Days
|
|
63
|
|
64
|
|
64
|
|
62
|
|
62
|
|
Quarterly Average
Daily Volume (ADV)(1)
CME Group ADV (in
thousands)
|
|
|
Product
Line
|
|
2Q
2021
|
|
3Q
2021
|
|
4Q
2021
|
|
1Q
2022
|
|
2Q
2022
|
|
Interest
rates
|
|
8,581
|
|
8,111
|
|
9,805
|
|
12,484
|
|
10,630
|
|
Equity
indexes
|
|
4,926
|
|
5,100
|
|
5,943
|
|
7,950
|
|
7,751
|
|
Foreign
exchange
|
|
769
|
|
776
|
|
800
|
|
904
|
|
950
|
|
Energy
|
|
1,963
|
|
2,179
|
|
2,252
|
|
2,515
|
|
1,932
|
|
Agricultural
commodities
|
|
1,631
|
|
1,141
|
|
1,216
|
|
1,474
|
|
1,308
|
|
Metals
|
|
568
|
|
480
|
|
475
|
|
593
|
|
484
|
|
Total
|
|
18,438
|
|
17,786
|
|
20,490
|
|
25,920
|
|
23,055
|
|
Venue
|
|
|
|
|
|
|
|
|
|
|
|
CME Globex
|
|
17,223
|
|
16,652
|
|
19,043
|
|
24,060
|
|
21,531
|
|
Open outcry
|
|
646
|
|
598
|
|
792
|
|
1,030
|
|
725
|
|
Privately
negotiated
|
|
569
|
|
536
|
|
656
|
|
830
|
|
799
|
|
Total
|
|
18,438
|
|
17,786
|
|
20,490
|
|
25,920
|
|
23,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Rate Per Contract (RPC)(1)
CME Group
RPC
|
|
|
Product
Line
|
|
2Q
2021
|
|
3Q
2021
|
|
4Q
2021
|
|
1Q
2022
|
|
2Q
2022
|
|
Interest
rates
|
|
$
0.491
|
|
$
0.483
|
|
$
0.487
|
|
$
0.484
|
|
$
0.493
|
|
Equity
indexes
|
|
0.555
|
|
0.555
|
|
0.526
|
|
0.526
|
|
0.532
|
|
Foreign
exchange
|
|
0.805
|
|
0.803
|
|
0.779
|
|
0.800
|
|
0.767
|
|
Energy
|
|
1.140
|
|
1.127
|
|
1.111
|
|
1.124
|
|
1.171
|
|
Agricultural
commodities
|
|
1.343
|
|
1.319
|
|
1.323
|
|
1.378
|
|
1.411
|
|
Metals
|
|
1.438
|
|
1.463
|
|
1.452
|
|
1.482
|
|
1.506
|
|
Average RPC
|
|
$
0.695
|
|
$
0.677
|
|
$
0.650
|
|
$
0.644
|
|
$
0.647
|
|
|
|
|
|
|
|
|
|
|
|
|
1. ADV and RPC includes
futures and options on futures only.
|
|
|
|
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net Income
Attributable to CME Group
|
|
$ 662.5
|
|
$ 510.3
|
|
$
1,373.5
|
|
$
1,084.7
|
|
Restructuring and
severance
|
|
6.5
|
|
4.4
|
|
10.2
|
|
19.2
|
|
Amortization of
purchased intangibles(1)
|
|
68.1
|
|
59.4
|
|
137.9
|
|
120.0
|
|
Strategic
transaction-related costs(2)
|
|
0.6
|
|
7.1
|
|
2.2
|
|
17.3
|
|
Foreign exchange
transaction (gains) losses
|
|
(8.8)
|
|
1.0
|
|
(13.1)
|
|
3.4
|
|
Unrealized and realized
(gains) losses on investments
|
|
0.5
|
|
(19.7)
|
|
(3.5)
|
|
(21.0)
|
|
Debt costs related to
refinancing
|
|
—
|
|
—
|
|
7.7
|
|
—
|
|
Realized and unrealized
losses on assets
|
|
—
|
|
0.4
|
|
—
|
|
1.2
|
|
Litigation
matters
|
|
—
|
|
(3.1)
|
|
—
|
|
(3.1)
|
|
Trading floor
enhancements
|
|
0.4
|
|
—
|
|
4.8
|
|
—
|
|
Income tax effect
related to above
|
|
(13.0)
|
|
(12.6)
|
|
(28.8)
|
|
(33.3)
|
|
Other income tax
items
|
|
(0.3)
|
|
41.4
|
|
(8.2)
|
|
41.4
|
|
Adjusted Net Income
Attributable to CME Group
|
|
$ 716.5
|
|
$ 588.6
|
|
$
1,482.7
|
|
$
1,229.8
|
|
|
|
|
|
|
—
|
|
—
|
|
Adjusted Net Income
Attributable to Common Shareholders of CME Group
|
|
$ 707.5
|
|
$ 588.6
|
|
$
1,464.1
|
|
$
1,229.8
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share
Attributable to Common Shareholders of CME Group:
|
|
|
|
|
|
Basic
|
|
$
1.82
|
|
$
1.42
|
|
$
3.78
|
|
$
3.03
|
|
Diluted
|
|
1.82
|
|
1.42
|
|
3.78
|
|
3.02
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
per Share Attributable to Common Shareholders of CME
Group:
|
|
|
|
|
|
Basic
|
|
$
1.97
|
|
$
1.64
|
|
$
4.08
|
|
$
3.43
|
|
Diluted
|
|
1.97
|
|
1.64
|
|
4.08
|
|
3.43
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
358,641
|
|
358,261
|
|
358,625
|
|
358,204
|
|
Diluted
|
|
359,205
|
|
358,888
|
|
359,179
|
|
358,853
|
|
Preferred
shares(3)
|
|
4,584
|
|
—
|
|
4,584
|
|
—
|
|
|
|
|
|
|
|
|
|
|
1. Includes $10.9
million and $22.3 million of amortization of purchased intangibles
(net of tax) at OSTTRA, reported in Equity in net earnings of
unconsolidated subsidiaries for the second quarter and first six
months of 2022.
|
|
2. Strategic
transaction-related costs primarily include professional fees
related to the NEX integration.
|
|
3. Preferred shares
have similar rights as common shares without voting
rights.
|
|
Media
Contacts
|
Investor
Contact
|
|
Timothy Barello,
212.299.2256
|
John Peschier,
312.930.8491
|
|
Laurie Bischel,
312.648.8698
|
|
|
news@cmegroup.com
|
|
|
cmegroup.mediaroom.com
|
|
CME-G
View original
content:https://www.prnewswire.com/news-releases/cme-group-inc-reports-second-quarter-2022-financial-results-301593882.html
SOURCE CME Group