CME Group Inc. (NASDAQ: CME) today reported revenues of $816 million and operating income of $508 million for the second quarter of 2013. Net income attributable to CME Group was $311 million and diluted earnings per share were $0.93.
"We were extremely pleased to see trading volumes in our core business increase 16 percent during the quarter from second-quarter 2012, as clients turned to our products to manage heightened volatility in several markets," said CME Group Executive Chairman and President Terry Duffy. "This significant growth demonstrates the demand for our product offerings, which we continued to expand through new product launches and extensions. Our global footprint also continues to broaden. Notably, we achieved record volume from Asia and Latin America during the quarter, up 28 and 40 percent from the same period last year, respectively. We intend to further strengthen our growth potential overseas with the launch of our new European exchange later this year."
"Our strong second-quarter results were highlighted by quarterly volume records in foreign exchange and metals and many daily and monthly volume and open interest records in other product areas," said CME Group Chief Executive Officer Phupinder Gill. "During the quarter, our interest rates complex performed extremely well, with June volumes up 70 percent from the prior June. Furthermore, our cleared OTC interest rate business tripled from the prior quarter, while we saw open interest jump considerably to a current level of $4 trillion. Dramatic improvements in crude oil fundamentals allowed our WTI futures contract to regain its leadership position among energy benchmarks. I am proud of the efforts of our employees and their commitment to help our customers navigate in this new world with the broadest range of solutions available by far in the marketplace."
Second-quarter 2013 average daily volume was 14.3 million contracts, up 16 percent from second-quarter 2012 and included quarterly records in the foreign exchange and metals product lines. Clearing and transaction fee revenues were $693 million, up 8 percent compared with the same period last year. Second-quarter total average rate per contract was $0.748 cents, down from $0.785 cents in first-quarter 2013, driven primarily by a higher proportion of total volume coming from products with lower average fees, as well as volume discounts and incentives.
Second-quarter 2013 operating expense was $308 million, which resulted in a second-quarter 2013 operating margin of 62 percent. Operating margin is defined as operating income as a percentage of total revenues.
During the second quarter, the effective tax rate was 38.7 percent. As of June 30, the company had more than $2 billion of cash and marketable securities and $2.9 billion of debt.
CME Group will hold a conference call to discuss second-quarter 2013 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.
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CME Group Inc. and Subsidiaries Consolidated Balance Sheets (in millions) |
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June 30, 2013 |
December 31, 2012 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ |
1,968.0 |
$ |
1,604.7 |
||
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Marketable securities |
61.3 |
56.6 |
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Accounts receivable, net of allowance |
359.1 |
267.5 |
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Other current assets (includes $40.0 in restricted cash) |
260.4 |
204.3 |
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Cash performance bonds and guaranty fund contributions |
14,275.8 |
6,584.8 |
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Total current assets |
16,924.6 |
8,717.9 |
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Property, net of accumulated depreciation and amortization |
713.2 |
724.0 |
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Intangible assets—trading products |
17,175.3 |
17,175.3 |
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Intangible assets—other, net |
2,801.9 |
2,853.7 |
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Goodwill |
7,569.0 |
7,566.9 |
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Other assets (includes $70.1 and $73.0 in restricted cash) |
1,698.7 |
1,825.4 |
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Total Assets |
$ |
46,882.7 |
$ |
38,863.2 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current Liabilities: |
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Accounts payable |
$ |
37.0 |
$ |
41.7 |
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Short-term debt |
1,499.4 |
749.7 |
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Other current liabilities |
380.7 |
240.7 |
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Cash performance bonds and guaranty fund contributions |
14,275.8 |
6,584.8 |
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Total current liabilities |
16,192.9 |
7,616.9 |
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Long-term debt |
1,358.2 |
2,106.8 |
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Deferred income tax liabilities, net |
7,248.2 |
7,413.3 |
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Other liabilities |
228.8 |
220.5 |
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Total Liabilities |
25,028.1 |
17,357.5 |
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Redeemable non-controlling interest |
— |
80.8 |
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CME Group shareholders' equity |
21,848.6 |
21,419.1 |
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Non-controlling interest |
6.0 |
5.8 |
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Total Equity |
21,854.6 |
21,424.9 |
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Total Liabilities and Equity |
$ |
46,882.7 |
$ |
38,863.2 |
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CME Group Inc. and Subsidiaries Consolidated Statements of Income (dollars in millions, except per share amounts; shares in thousands) |
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Quarter Ended |
Six Months Ended |
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June 30, |
June 30, |
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2013 |
2012 |
2013 |
2012 |
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Revenues |
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Clearing and transaction fees |
$ |
692.5 |
$ |
643.6 |
$ |
1,285.7 |
$ |
1,264.7 |
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Market data and information services |
79.4 |
110.8 |
160.3 |
225.0 |
||||||||
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Access and communication fees |
20.6 |
22.6 |
42.1 |
42.3 |
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Other |
23.6 |
18.9 |
46.6 |
38.5 |
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Total Revenues |
816.1 |
795.9 |
1,534.7 |
1,570.5 |
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Expenses |
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Compensation and benefits |
128.9 |
131.1 |
258.3 |
266.2 |
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Communications |
8.6 |
10.7 |
17.5 |
21.0 |
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Technology support services |
13.8 |
12.1 |
26.2 |
24.9 |
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Professional fees and outside services |
27.9 |
40.3 |
49.8 |
72.5 |
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Amortization of purchased intangibles |
25.9 |
31.3 |
51.8 |
64.1 |
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Depreciation and amortization |
33.2 |
33.6 |
65.8 |
68.5 |
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Occupancy and building operations |
19.0 |
18.7 |
37.5 |
39.0 |
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Licensing and other fee agreements |
26.9 |
23.3 |
48.1 |
44.0 |
||||||||
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Other |
24.1 |
25.6 |
66.4 |
49.9 |
||||||||
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Total Expenses |
308.3 |
326.7 |
621.4 |
650.1 |
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Operating Income |
507.8 |
469.2 |
913.3 |
920.4 |
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Non-Operating Income (Expense) |
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Investment income |
18.7 |
6.1 |
22.3 |
18.2 |
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Interest and other borrowing costs |
(39.2) |
(28.9) |
(78.2) |
(58.0) |
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Equity in net gains (losses) of unconsolidated subsidiaries |
20.2 |
(0.9) |
37.7 |
(1.7) |
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Other non-operating income (expense) |
— |
65.2 |
— |
65.2 |
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Total Non-Operating |
(0.3) |
41.5 |
(18.2) |
23.7 |
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Income before Income Taxes |
507.5 |
510.7 |
895.1 |
944.1 |
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Income tax provision |
196.2 |
257.3 |
346.4 |
424.4 |
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Net Income |
311.3 |
253.4 |
548.7 |
519.7 |
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Less: net income (loss) attributable to non-controlling interests |
0.1 |
8.5 |
1.7 |
8.2 |
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Net Income Attributable to CME Group |
$ |
311.2 |
$ |
244.9 |
$ |
547.0 |
$ |
511.5 |
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Earnings per Common Share Attributable to CME Group: |
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Basic |
$ |
0.94 |
$ |
0.74 |
$ |
1.65 |
$ |
1.55 |
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Diluted |
0.93 |
0.74 |
1.64 |
1.54 |
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Weighted Average Number of Common Shares: |
||||||||||||
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Basic |
332,341 |
331,078 |
332,148 |
330,946 |
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Diluted |
334,073 |
332,162 |
333,739 |
332,009 |
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CME Group Inc. and Subsidiaries |
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Quarterly Operating Statistics |
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2Q 2012 |
3Q 2012 |
4Q 2012 |
1Q 2013 |
2Q 2013 |
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Trading Days |
64 |
63 |
64 |
60 |
64 |
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Quarterly Average Daily Volume (ADV) |
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CME Group ADV (in thousands) |
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Product Line |
2Q 2012 |
3Q 2012 |
4Q 2012 |
1Q 2013 |
2Q 2013 |
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Interest rates |
5,136 |
4,514 |
4,094 |
5,656 |
6,828 |
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Equities |
2,919 |
2,391 |
2,532 |
2,608 |
3,079 |
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Foreign exchange |
920 |
846 |
767 |
1,010 |
1,042 |
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Energy |
1,741 |
1,590 |
1,489 |
1,730 |
1,796 |
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Agricultural commodities |
1,288 |
1,171 |
982 |
1,084 |
1,106 |
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Metals |
372 |
327 |
324 |
396 |
471 |
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Total |
12,376 |
10,839 |
10,188 |
12,484 |
14,323 |
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Venue |
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Electronic |
10,595 |
9,293 |
8,899 |
10,908 |
12,457 |
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Open outcry |
1,109 |
979 |
751 |
885 |
1,134 |
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Privately negotiated |
238 |
208 |
210 |
275 |
304 |
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Exchange-traded Total |
11,942 |
10,481 |
9,859 |
12,068 |
13,895 |
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CME ClearPort |
434 |
358 |
329 |
416 |
427 |
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Total |
12,376 |
10,839 |
10,188 |
12,484 |
14,323 |
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Average Rate Per Contract (RPC) |
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CME Group RPC |
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Product Line |
2Q 2012 |
3Q 2012 |
4Q 2012 |
1Q 2013 |
2Q 2013 |
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Interest rates |
$ |
0.485 |
$ |
0.481 |
$ |
0.494 |
$ |
0.468 |
$ |
0.455 |
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Equities |
0.674 |
0.685 |
0.697 |
0.691 |
0.714 |
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Foreign exchange |
0.807 |
0.808 |
0.835 |
0.848 |
0.826 |
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Energy |
1.496 |
1.473 |
1.487 |
1.390 |
1.260 |
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Agricultural commodities |
1.264 |
1.301 |
1.298 |
1.318 |
1.378 |
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Metals |
1.649 |
1.693 |
1.709 |
1.656 |
1.613 |
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Average RPC |
$ |
0.812 |
$ |
0.822 |
$ |
0.831 |
$ |
0.785 |
$ |
0.748 |
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Venue |
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Exchange-traded |
$ |
0.750 |
$ |
0.757 |
$ |
0.771 |
$ |
0.730 |
$ |
0.710 |
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CME ClearPort |
2.510 |
2.719 |
2.646 |
2.360 |
1.969 |
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Note: Fourth-quarter 2012 and first-quarter 2013 volume and RPC data does not include volume and revenue from our acquisition of the Kansas City Board of Trade completed on November 30, 2012. Kansas City Board of Trade average daily volume for first-quarter 2013 totaled 24,579.
CME-G
SOURCE CME Group Inc.
