CHICAGO, Feb. 8, 2023
/PRNewswire/ -- CME Group Inc. (NASDAQ: CME) today reported
financial results for the fourth quarter and full year of 2022.
The company reported revenue of $1.2
billion and operating income of $668
million for the fourth quarter of 2022. Net income was
$638 million and diluted earnings per
common share were $1.75. On an
adjusted basis, net income was $698
million and diluted earnings per common share were
$1.92. Financial results
presented on an adjusted basis for the fourth quarter of 2022 and
2021 exclude certain items, which are detailed in the
reconciliation of non-GAAP results.1
Total revenue for full-year 2022 was $5.0
billion and operating income was $3.0
billion. Net income was $2.7
billion and diluted earnings per common share were
$7.40. On an adjusted basis,
net income was $2.9 billion, and
diluted earnings per common share were $7.97.
"Last year was the best year in our history as global market
participants turned to CME Group to navigate tremendous economic
and geopolitical uncertainty, generating a 19% increase in average
daily volume to a record 23.3 million contracts," said Terry Duffy, CME Group Chairman and Chief
Executive Officer. "Our 2022 performance was driven by new
records in financial products, options on futures, and volume from
outside the United States. In addition, CME Group had its
best Q4 ever, with record ADV of 21.8 million contracts resulting
from double-digit growth in equity index and foreign
exchange. Significantly, our SOFR futures and options also
hit new highs during what was a historic year for the LIBOR
transition, and these contracts now serve as the leading tools for
hedging short-term interest rates. As we kick off this new
year, we remain focused on delivering the products and services our
clients need to manage risk and invest in new opportunities in
2023."
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.
|
Fourth-quarter 2022 average daily volume (ADV) was 21.8 million
contracts, up 6% versus fourth-quarter 2021. Non-U.S. ADV for
full-year 2022 reached a record 6.3 million contracts, up 15%
compared with the same period in 2021.
Clearing and transaction fees revenue for fourth-quarter 2022
totaled $981 million. The total
average rate per contract was $0.651. Market data revenue totaled
$153 million for fourth-quarter
2022.
As of December 31, 2022, the
company had approximately $2.8
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 2022 of $3.0 billion, including the annual
variable dividend of $1.6 billion.
The company has returned over $20.5
billion to shareholders in the form of dividends since the
implementation of the variable dividend policy in early 2012. In
addition, on February 2, 2023, the
company declared a first-quarter dividend of $1.10 per share, a 10% increase from the prior
level of $1.00 per share.
CME Group will hold a Q&A conference call to discuss
fourth-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. The S&P 500 Index is a
product of S&P Dow Jones Indices LLC ("S&P DJI").
"S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are
trademarks of Standard & Poor's Financial Services LLC; Dow
Jones®, DJIA® and Dow Jones Industrial Average are service and/or
trademarks of Dow Jones Trademark Holdings LLC. These trademarks
have been licensed for use by Chicago Mercantile Exchange Inc.
Futures contracts based on the S&P 500 Index are not sponsored,
endorsed, marketed, or promoted by S&P DJI, and S&P DJI
makes no representation regarding the advisability of investing in
such products. 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 the performance of our joint ventures with S&P
Dow Jones (S&P Dow Jones Indices LLC) in index services and in
trade processing/post trade services (OSTTRA), our primary data
distribution partners' actions and our partnership with Google
Cloud; volatility in our collateral income and non-cash collateral
that we hold for clients; customer demand elasticity/reaction to
our pricing and incentive changes; impact of aggregation services
and internalization on trade flow and volumes; any negative
financial impacts from changes to the terms of intellectual
property and index rights; uncertainty related to the adoption and
growth of SOFR and its impact on our business; our ability to
continue to generate funds and/or manage our indebtedness to allow
us to continue to invest in our business; industry, channel partner
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)
|
|
|
|
December 31,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,720.1
|
|
$
2,834.9
|
Marketable
securities
|
|
96.0
|
|
115.0
|
Accounts receivable,
net of allowance
|
|
483.2
|
|
434.5
|
Other current assets
(includes $4.9 and $4.8 in restricted cash)
|
|
529.8
|
|
427.8
|
Performance bonds and
guaranty fund contributions
|
|
135,249.2
|
|
157,949.6
|
Total current
assets
|
|
139,078.3
|
|
161,761.8
|
Property, net of
accumulated depreciation and amortization
|
|
455.5
|
|
505.3
|
Intangible
assets—trading products
|
|
17,175.3
|
|
17,175.3
|
Intangible
assets—other, net
|
|
3,269.7
|
|
3,532.0
|
Goodwill
|
|
10,482.5
|
|
10,528.0
|
Other assets (includes
$0.1 and $0.5 in restricted cash)
|
|
3,714.4
|
|
3,277.9
|
Total Assets
|
|
$
174,175.7
|
|
$
196,780.3
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
121.4
|
|
$
48.8
|
Short-term
debt
|
|
16.0
|
|
749.4
|
Other current
liabilities
|
|
2,300.9
|
|
1,650.6
|
Performance bonds and
guaranty fund contributions
|
|
135,249.2
|
|
157,949.6
|
Total current
liabilities
|
|
137,687.5
|
|
160,398.4
|
Long-term
debt
|
|
3,422.4
|
|
2,695.7
|
Deferred income tax
liabilities, net
|
|
5,361.1
|
|
5,390.4
|
Other
liabilities
|
|
826.0
|
|
896.5
|
Total
Liabilities
|
|
147,297.0
|
|
169,381.0
|
CME Group Shareholders'
Equity
|
|
26,878.7
|
|
27,399.3
|
Total Liabilities and
Equity
|
|
$
174,175.7
|
|
$
196,780.3
|
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
|
Clearing and
transaction fees
|
|
$
981.4
|
|
$
949.3
|
|
$
4,142.7
|
|
$
3,765.1
|
Market data and
information services
|
|
153.2
|
|
142.1
|
|
610.9
|
|
576.9
|
Other
|
|
73.2
|
|
55.9
|
|
265.8
|
|
347.7
|
Total
Revenues
|
|
1,207.8
|
|
1,147.3
|
|
5,019.4
|
|
4,689.7
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
193.0
|
|
201.7
|
|
753.1
|
|
837.0
|
Technology
|
|
50.0
|
|
45.8
|
|
188.6
|
|
192.6
|
Professional fees and
outside services
|
|
38.5
|
|
32.3
|
|
137.4
|
|
151.7
|
Amortization of
purchased intangibles
|
|
56.7
|
|
58.6
|
|
227.7
|
|
237.6
|
Depreciation and
amortization
|
|
33.9
|
|
35.9
|
|
134.9
|
|
147.8
|
Licensing and other
fee agreements
|
|
72.4
|
|
60.4
|
|
320.0
|
|
236.9
|
Other
|
|
95.0
|
|
80.9
|
|
241.8
|
|
240.9
|
Total
Expenses
|
|
539.5
|
|
515.6
|
|
2,003.5
|
|
2,044.5
|
Operating
Income
|
|
668.3
|
|
631.7
|
|
3,015.9
|
|
2,645.2
|
Non-Operating Income
(Expense)
|
|
|
|
|
|
|
|
|
Investment
income
|
|
1,152.2
|
|
67.8
|
|
2,198.4
|
|
306.9
|
Interest and other
borrowing costs
|
|
(39.9)
|
|
(41.9)
|
|
(162.7)
|
|
(166.9)
|
Equity in net earnings
(losses) of unconsolidated subsidiaries
|
|
64.0
|
|
67.5
|
|
301.1
|
|
245.8
|
Other non-operating
income (expense)
|
|
(1,017.3)
|
|
74.2
|
|
(1,862.4)
|
|
342.6
|
Total Non-Operating
Income (Expense)
|
|
159.0
|
|
167.6
|
|
474.4
|
|
728.4
|
Income before Income
Taxes
|
|
827.3
|
|
799.3
|
|
3,490.3
|
|
3,373.6
|
Income tax
provision
|
|
189.4
|
|
174.1
|
|
799.3
|
|
736.7
|
Net
Income
|
|
637.9
|
|
625.2
|
|
2,691.0
|
|
2,636.9
|
Less: net (income) loss
attributable to non-controlling interests
|
|
—
|
|
—
|
|
—
|
|
(0.5)
|
Net Income
Attributable to CME Group
|
|
637.9
|
|
625.2
|
|
2,691.0
|
|
2,636.4
|
Net Income
Attributable to Common Shareholders of CME Group
|
|
$
629.9
|
|
$
613.3
|
|
$
2,657.2
|
|
$
2,617.1
|
|
|
|
|
|
|
|
|
|
Earnings per Share
Attributable to Common Shareholders of CME Group:
|
Basic
|
|
$
1.76
|
|
$
1.71
|
|
$
7.41
|
|
$
7.30
|
Diluted
|
|
1.75
|
|
1.71
|
|
7.40
|
|
7.29
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
358,885
|
|
358,582
|
|
358,713
|
|
358,340
|
Diluted
|
|
359,190
|
|
359,019
|
|
359,181
|
|
358,929
|
CME Group Inc. and
Subsidiaries Quarterly Operating
Statistics
|
|
|
|
4Q
2021
|
|
1Q
2022
|
|
2Q
2022
|
|
3Q
2022
|
|
4Q
2022
|
Trading
Days
|
|
64
|
|
62
|
|
62
|
|
64
|
|
63
|
|
|
Quarterly Average
Daily Volume (ADV)(1) CME Group ADV (in
thousands)
|
|
Product
Line
|
|
4Q
2021
|
|
1Q
2022
|
|
2Q
2022
|
|
3Q
2022
|
|
4Q
2022
|
Interest
rates
|
|
9,805
|
|
12,484
|
|
10,630
|
|
10,357
|
|
9,832
|
Equity
indexes
|
|
5,943
|
|
7,950
|
|
7,751
|
|
7,445
|
|
7,465
|
Foreign
exchange
|
|
800
|
|
904
|
|
950
|
|
1,091
|
|
1,000
|
Energy
|
|
2,252
|
|
2,515
|
|
1,932
|
|
1,837
|
|
1,829
|
Agricultural
commodities
|
|
1,216
|
|
1,474
|
|
1,308
|
|
1,208
|
|
1,171
|
Metals
|
|
475
|
|
593
|
|
484
|
|
498
|
|
508
|
Total
|
|
20,490
|
|
25,920
|
|
23,055
|
|
22,437
|
|
21,803
|
Venue
|
|
|
|
|
|
|
|
|
|
|
CME Globex
|
|
19,043
|
|
24,060
|
|
21,531
|
|
21,021
|
|
20,279
|
Open outcry
|
|
792
|
|
1,030
|
|
725
|
|
704
|
|
746
|
Privately
negotiated
|
|
656
|
|
830
|
|
799
|
|
711
|
|
778
|
Total
|
|
20,490
|
|
25,920
|
|
23,055
|
|
22,437
|
|
21,803
|
|
|
Quarterly Average
Rate Per Contract (RPC)(1) CME Group
RPC
|
|
Product
Line
|
|
4Q
2021
|
|
1Q
2022
|
|
2Q
2022
|
|
3Q
2022
|
|
4Q
2022
|
Interest
rates
|
|
$
0.487
|
|
$
0.484
|
|
$
0.493
|
|
$
0.479
|
|
$
0.500
|
Equity
indexes
|
|
0.526
|
|
0.526
|
|
0.532
|
|
0.524
|
|
0.535
|
Foreign
exchange
|
|
0.779
|
|
0.800
|
|
0.767
|
|
0.729
|
|
0.756
|
Energy
|
|
1.111
|
|
1.124
|
|
1.171
|
|
1.140
|
|
1.181
|
Agricultural
commodities
|
|
1.323
|
|
1.378
|
|
1.411
|
|
1.351
|
|
1.356
|
Metals
|
|
1.452
|
|
1.482
|
|
1.506
|
|
1.520
|
|
1.519
|
Average RPC
|
|
$
0.650
|
|
$
0.644
|
|
$
0.647
|
|
$
0.631
|
|
$
0.651
|
|
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
December
31,
|
|
Year
Ended
December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net Income
Attributable to CME Group
|
|
$
637.9
|
|
$
625.2
|
|
$
2,691.0
|
|
$ 2,636.4
|
Restructuring and
severance
|
|
1.0
|
|
10.1
|
|
11.2
|
|
35.9
|
Amortization of
purchased intangibles(1)
|
|
69.6
|
|
69.9
|
|
276.0
|
|
253.0
|
Litigation
matters
|
|
—
|
|
(15.7)
|
|
—
|
|
(18.8)
|
Strategic
transaction-related costs(2)
|
|
(3.7)
|
|
5.3
|
|
(0.3)
|
|
41.3
|
Foreign exchange
transaction (gains) losses
|
|
10.5
|
|
(0.6)
|
|
(13.1)
|
|
(0.4)
|
Unrealized and realized
(gains) losses on investments
|
|
(0.7)
|
|
(62.5)
|
|
(5.3)
|
|
(518.0)
|
Gain on sale of real
estate
|
|
—
|
|
(30.4)
|
|
—
|
|
(30.4)
|
Debt costs related to
refinancing
|
|
—
|
|
—
|
|
7.7
|
|
—
|
Realized and unrealized
losses on assets
|
|
—
|
|
0.3
|
|
0.7
|
|
2.0
|
Trading floor
enhancements
|
|
—
|
|
4.6
|
|
4.8
|
|
6.0
|
Income tax effect
related to above
|
|
(15.4)
|
|
6.6
|
|
(55.5)
|
|
(27.5)
|
Other income tax
items
|
|
(1.2)
|
|
(5.3)
|
|
(17.4)
|
|
32.2
|
Adjusted Net Income
Attributable to CME Group
|
|
$
698.0
|
|
$
607.5
|
|
$
2,899.8
|
|
$ 2,411.7
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
Attributable to Common Shareholders of CME Group
|
|
$
689.1
|
|
$
595.7
|
|
$
2,863.2
|
|
$ 2,392.8
|
|
|
|
|
|
|
|
|
|
Earnings per Share
Attributable to Common Shareholders of CME Group:
|
Basic
|
|
$
1.76
|
|
$
1.71
|
|
$
7.41
|
|
$
7.30
|
Diluted
|
|
1.75
|
|
1.71
|
|
7.40
|
|
7.29
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
per Share Attributable to Common Shareholders of CME
Group:
|
Basic
|
|
$
1.92
|
|
$
1.66
|
|
$
7.98
|
|
$
6.68
|
Diluted
|
|
1.92
|
|
1.66
|
|
7.97
|
|
6.67
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares:
|
|
|
|
|
|
|
|
|
Basic common
shares
|
|
358,885
|
|
358,582
|
|
358,713
|
|
358,340
|
Diluted common
shares
|
|
359,190
|
|
359,019
|
|
359,181
|
|
358,929
|
Preferred
shares(3)
|
|
4,584
|
|
2,890
|
|
4,584
|
|
728
|
|
|
1. Includes $10.5
million of amortization of purchased intangibles (net of tax) at
OSTTRA and $2.4 million of amortization of purchased intangibles at
S&P Dow Jones Indices LLC, reported in Equity in net earnings
of unconsolidated subsidiaries on the Consolidated Statements of
Income.
|
2. Strategic
transaction-related costs primarily include costs related to the
NEX transaction and the formation of the OSTTRA joint
venture.
|
3. Preferred shares
have similar rights as common shares without voting
rights.
|
CME-G
View original
content:https://www.prnewswire.com/news-releases/cme-group-inc-reports-fourth-quarter-and-full-year-2022-financial-results-301741382.html
SOURCE CME Group