CME Group Inc. Reports Fourth-Quarter And Full-Year 2021 Financial Results

CME Group Inc. (NASDAQ: CME) today reported financial results for the fourth quarter and full year of 2021.

The company reported revenue of $1.1 billion and operating income of $632 million for the fourth quarter of 2021. Net income was $625 million and diluted earnings per common share were $1.71. On an adjusted basis, net income was $608 million and diluted earnings per common share were $1.66. Financial results presented on an adjusted basis for the fourth quarter of 2021 and 2020 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1

Total revenue for full-year 2021 was $4.7 billion and operating income was $2.6 billion. Net income was $2.6 billion and diluted earnings per common share were $7.29. On an adjusted basis, net income was $2.4 billion, and diluted earnings per common share were $6.67.

"We achieved record trading volume in 2021, driven by client demand for tools to hedge against continued economic uncertainty across markets," said CME Group Chairman and Chief Executive Officer Terry Duffy. "We delivered strong performance across core benchmarks, new products and international business during 2021. Additionally, we announced a 10-year strategic partnership with Google Cloud to transform global derivatives markets through cloud adoption, and introduced several innovative, new micro-sized and ESG-focused products and services. We are pleased 2022 is off to a strong start with our highest January average daily volume on record of 24.6 million contracts, led by strong equity index and interest rate volumes, including numerous SOFR futures and options records, and 10% year-over-year growth in overall open interest. Moving ahead, we will continue to focus on providing the risk management tools our clients need to navigate ongoing uncertainties around the world."

Fourth-quarter 2021 average daily volume (ADV) was 20.5 million contracts, up 26% versus fourth-quarter 2020. Non-U.S. ADV for full-year 2021 reached a record 5.5 million contracts, up 4% compared with the same period in 2020.

Clearing and transaction fees revenue for fourth-quarter 2021 totaled $949 million. The total average rate per contract was $0.650. Market data revenue totaled $142 million for fourth-quarter 2021.

As of December 31, 2021, the company had approximately $2.9 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 2021 of $2.5 billion, including the annual variable dividend of $1.2 billion. The company has returned over $17.5 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 fourth-quarter 2021 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.

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, 2021	December 31, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$ 2,834.9	$ 1,633.2
Marketable securities	115.0	100.9
Accounts receivable, net of allowance	434.5	461.3
Other current assets (includes $4.8 and $4.7 in restricted cash)	427.8	306.7
Performance bonds and guaranty fund contributions	157,949.6	86,781.8
Total current assets	161,761.8	89,283.9
Property, net of accumulated depreciation and amortization	505.3	579.2
Intangible assets—trading products	17,175.3	17,175.3
Intangible assets—other, net	3,532.0	4,865.3
Goodwill	10,528.0	10,798.8
Other assets (includes $0.5 and $0.6 in restricted cash)	3,277.9	1,957.1
Total Assets	$ 196,780.3	$ 124,659.6
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$ 48.8	$ 69.3
Short-term debt	749.4	—
Other current liabilities	1,650.6	1,346.8
Performance bonds and guaranty fund contributions	157,949.6	86,781.8
Total current liabilities	160,398.4	88,197.9
Long-term debt	2,695.7	3,443.8
Deferred income tax liabilities, net	5,390.4	5,607.0
Other liabilities	896.5	1,059.4
Total Liabilities	169,381.0	98,308.1
CME Group Shareholders' Equity	27,399.3	26,319.9
Non-controlling interests	—	31.6
Total Equity	27,399.3	26,351.5
Total Liabilities and Equity	$ 196,780.3	$ 124,659.6

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,
	2021	2020	2021	2020
Revenues
Clearing and transaction fees	$ 949.3	$ 843.0	$ 3,765.1	$ 3,897.4
Market data and information services	142.1	139.8	576.9	545.4
Other	55.9	115.7	347.7	440.8
Total Revenues	1,147.3	1,098.5	4,689.7	4,883.6
Expenses
Compensation and benefits	201.7	215.6	837.0	856.5
Technology	45.8	53.6	192.6	198.5
Professional fees and outside services	32.3	50.0	151.7	191.3
Amortization of purchased intangibles	58.6	79.0	237.6	311.2
Depreciation and amortization	35.9	41.5	147.8	153.2
Licensing and other fee agreements	60.4	57.9	236.9	244.9
Other	80.9	85.9	240.9	290.6
Total Expenses	515.6	583.5	2,044.5	2,246.2
Operating Income	631.7	515.0	2,645.2	2,637.4
Non-Operating Income (Expense)
Investment income	67.8	31.1	306.9	182.7
Interest and other borrowing costs	(41.9)	(41.7)	(166.9)	(166.2)
Equity in net earnings (losses) of unconsolidated subsidiaries	67.5	46.6	245.8	190.6
Other non-operating income (expense)	74.2	(16.0)	342.6	(122.4)
Total Non-Operating Income (Expense)	167.6	20.0	728.4	84.7
Income before Income Taxes	799.3	535.0	3,373.6	2,722.1
Income tax provision	174.1	110.2	736.7	615.7
Net Income	625.2	424.8	2,636.9	2,106.4
Less: net (income) loss attributable to non-controlling interests	—	(0.8)	(0.5)	(1.2)
Net Income Attributable to CME Group	625.2	424.0	2,636.4	2,105.2
Net Income Attributable to Common Shareholders of CME Group	$ 613.3	$ 424.0	$ 2,617.1	$ 2,105.2

Earnings per Share Attributable to Common Shareholders of CME Group:
Basic	$ 1.71	$ 1.18	$ 7.30	$ 5.88
Diluted	1.71	1.18	7.29	5.87
Weighted Average Number of Common Shares:
Basic	358,582	358,047	358,340	357,764
Diluted	359,019	358,612	358,929	358,524

CME Group Inc. and Subsidiaries
Quarterly Operating Statistics

	4Q 2020	1Q 2021	2Q 2021	3Q 2021	4Q 2021
Trading Days	64	61	63	64	64

Quarterly Average Daily Volume (ADV)(1)
CME Group ADV (in thousands)

Product Line	4Q 2020	1Q 2021	2Q 2021	3Q 2021	4Q 2021
Interest rates	6,273	10,349	8,581	8,111	9,805
Equity indexes	5,148	6,117	4,926	5,100	5,943
Foreign exchange	818	852	769	776	800
Energy	1,940	2,363	1,963	2,179	2,252
Agricultural commodities	1,478	1,471	1,631	1,141	1,216
Metals	568	675	568	480	475
Total	16,225	21,827	18,438	17,786	20,490
Venue
CME Globex	15,469	20,436	17,223	16,652	19,043
Open outcry	273	678	646	598	792
Privately negotiated	483	713	569	536	656
Total	16,225	21,827	18,438	17,786	20,490

Quarterly Average Rate Per Contract (RPC)(1)
CME Group RPC

Product Line	4Q 2020	1Q 2021	2Q 2021	3Q 2021	4Q 2021
Interest rates	$ 0.490	$ 0.475	$ 0.491	$ 0.483	$ 0.487
Equity indexes	0.523	0.532	0.555	0.555	0.526
Foreign exchange	0.739	0.779	0.805	0.803	0.779
Energy	1.165	1.097	1.140	1.127	1.111
Agricultural commodities	1.301	1.343	1.343	1.319	1.323
Metals	1.389	1.415	1.438	1.463	1.452
Average RPC	$ 0.699	$ 0.658	$ 0.695	$ 0.677	$ 0.650

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,
	2021	2020	2021	2020
Net Income Attributable to CME Group	$ 625.2	$ 424.0	$ 2,636.4	$ 2,105.2
Restructuring and severance	10.1	5.5	35.9	22.1
Amortization of purchased intangibles(1)	69.9	79.0	253.0	311.2
Litigation matters	(15.7)	0.8	(18.8)	8.2
Strategic transaction-related costs(2)	5.3	16.2	41.3	42.6
Foreign exchange transaction losses	(0.6)	6.9	(0.4)	9.3
Unrealized and realized (gains) losses on investments	(62.5)	0.5	(518.0)	6.8
Gain on sale of real estate	(30.4)	—	(30.4)	—
(Gains) Losses on derivatives	—	—	—	(1.5)
Realized and unrealized losses on assets(3)	0.3	4.3	2.0	33.1
Trading floor enhancements	4.6	—	6.0	2.5
Income tax effect related to above	6.6	(24.2)	(27.5)	(109.9)
Other income tax items	(5.3)	(15.9)	32.2	(18.5)
Adjusted Net Income Attributable to CME Group	$ 607.5	$ 497.1	$ 2,411.7	$ 2,411.1

Adjusted Net Income Attributable to Common Shareholders of CME Group	$ 595.7	$ 497.1	$ 2,392.8	$ 2,411.1

Earnings per Share Attributable to Common Shareholders of CME Group:
Basic	$ 1.71	$ 1.18	$ 7.30	$ 5.88
Diluted	1.71	1.18	7.29	5.87

Adjusted Earnings per Share Attributable to Common Shareholders of CME Group:
Basic	$ 1.66	$ 1.39	$ 6.68	$ 6.74
Diluted	1.66	1.39	6.67	6.72

Weighted Average Number of Shares:
Basic common shares	358,582	358,047	358,340	357,764
Diluted common shares	359,019	358,612	358,929	358,524
Preferred shares(4)	2,890	—	728	—

1. Includes $11.2 million of amortization of purchased intangibles (net of tax) at OSTTRA, reported in Equity in net earnings of unconsolidated subsidiaries.
2. Strategic transaction-related costs primarily include professional fees related to the NEX integration and Google transaction.
3. Results include net gains and losses on intangible assets, fixed assets and assets held for sale.
4. Preferred shares have similar rights as common shares without voting rights. A total of 4.6 million shares were issued and outstanding as of December 31, 2021.