CME Group Inc. Reports Strong Third-Quarter 2013 Financial Results

CME Group Inc. (NASDAQ: CME) today reported revenues of $715 million and operating income of $401 million for the third quarter of 2013. Net income attributable to CME Group was $237 million and diluted earnings per share was $0.71. Excluding items noted in the reconciliation, adjusted earnings per share would have been $0.75.¹

"Our business continued to trend positively in the third quarter, as demand for our products increased in several major categories, most notably our over-the-counter interest rate swap clearing," said CME Group Executive Chairman and President Terry Duffy. "We experienced an increase in dealer-to-client market share from 5 percent in the first quarter of this year to 31 percent in the third quarter, in addition to approaching 50 percent of open interest. This is due to our strong value proposition and product expansion. Now that the three waves of the Dodd-Frank clearing mandate are completed, the market is shifting from a compliance phase to an optimization phase. Going forward, our interest rate complex will continue to benefit from our success in OTC clearing."

"Third-quarter 2013 top-line results included substantial progress in our core business as well as expansion in over-the-counter clearing," said CME Group Chief Executive Officer Phupinder Gill. "Average daily volume was up 11 percent, driven primarily by continued strong performance in our interest rate and metal complexes, as well as strong growth in our options products, which increased by 31 percent. In addition, our efforts to grow the business globally continue to take root. Electronic trading volumes outside the United States grew 16 percent, with volumes up 23 percent in Latin America, 22 percent in Asia and 15 percent in Europe compared with third-quarter 2012."

Third-quarter 2013 average daily volume was 12.0 million contracts, up 11 percent from third-quarter 2012, and included 29 percent growth in interest rate volume and 10 percent growth in metal volume. Clearing and transaction fee revenues were $598 million, up 6 percent compared with the same period last year. Third-quarter total average rate per contract was 76.2 cents, up from 74.8 cents in second-quarter 2013, driven primarily by strong higher paying, non-member participation during third-quarter relative to last quarter.

CME Group will hold a conference call to discuss third-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.

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.

CME Group Inc. and Subsidiaries Consolidated Balance Sheets (in millions)

	September 30, 2013		December 31, 2012
ASSETS
Current Assets:
Cash and cash equivalents	$	2,065.0	$	1,604.7
Marketable securities	65.0		56.6
Accounts receivable, net of allowance	311.9		267.5
Other current assets (includes $40.0 in restricted cash)	413.4		204.3
Cash performance bonds and guaranty fund contributions	16,192.8		6,584.8
Total current assets	19,048.1		8,717.9
Property, net of accumulated depreciation and amortization	714.2		724.0
Intangible assets—trading products	17,175.3		17,175.3
Intangible assets—other, net	2,776.2		2,853.7
Goodwill	7,569.0		7,566.9
Other assets (includes $72.8 and $73.0 in restricted cash)	1,697.1		1,825.4
Total Assets	$	48,979.9	$	38,863.2
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	41.0	$	41.7
Short-term debt	749.7		749.7
Other current liabilities	229.7		240.7
Cash performance bonds and guaranty fund contributions	16,192.8		6,584.8
Total current liabilities	17,213.2		7,616.9
Long-term debt	2,107.0		2,106.8
Deferred income tax liabilities, net	7,306.5		7,413.3
Other liabilities	375.3		220.5
Total Liabilities	27,002.0		17,357.5
Redeemable non-controlling interest	—		80.8
CME Group shareholders' equity	21,972.3		21,419.1
Non-controlling interest	5.6		5.8
Total Equity	21,977.9		21,424.9
Total Liabilities and Equity	$	48,979.9	$	38,863.2

CME Group Inc. and Subsidiaries Consolidated Statements of Income (dollars in millions, except per share amounts; shares in thousands)

	Quarter Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenues
Clearing and transaction fees	$	597.9	$	562.2	$	1,883.6	$	1,826.9
Market data and information services	78.6		82.8		238.9		307.8
Access and communication fees	20.3		23.2		62.4		65.5
Other	17.8		15.0		64.4		53.5
Total Revenues	714.6		683.2		2,249.3		2,253.7
Expenses
Compensation and benefits	134.0		117.5		392.3		383.7
Communications	9.2		9.8		26.7		30.8
Technology support services	13.4		11.8		39.6		36.7
Professional fees and outside services	35.6		26.7		85.4		99.2
Amortization of purchased intangibles	25.6		26.2		77.4		90.3
Depreciation and amortization	35.0		34.5		100.8		103.0
Occupancy and building operations	19.2		18.8		56.7		57.8
Licensing and other fee agreements	25.7		19.2		73.8		63.2
Other	16.4		22.7		82.8		72.6
Total Expenses	314.1		287.2		935.5		937.3
Operating Income	400.5		396.0		1,313.8		1,316.4
Non-Operating Income (Expense)
Investment income	12.6		13.1		34.9		31.3
Interest and other borrowing costs	(34.6)		(30.2)		(112.8)		(88.2)
Equity in net gains (losses) of unconsolidated subsidiaries	20.4		16.5		58.1		14.8
Other non-operating income (expense)	—		0.4		—		65.6
Total Non-Operating	(1.6)		(0.2)		(19.8)		23.5
Income before Income Taxes	398.9		395.8		1,294.0		1,339.9
Income tax provision	162.6		176.9		509.0		601.3
Net Income	236.3		218.9		785.0		738.6
Less: net income (loss) attributable to non-controlling interests	(0.4)		0.9		1.3		9.1
Net Income Attributable to CME Group	$	236.7	$	218.0	$	783.7	$	729.5
Earnings per Common Share Attributable to CME Group:
Basic	$	0.71	$	0.66	$	2.36	$	2.20
Diluted	0.71		0.66		2.35		2.20
Weighted Average Number of Common Shares:
Basic	332,763		331,377		332,355		331,091
Diluted	334,674		332,458		334,055		332,147

CME Group Inc. and Subsidiaries Quarterly Operating Statistics

	3Q 2012		4Q 2012		1Q 2013		2Q 2013		3Q 2013
Trading Days	63		64		60		64		64


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

Product Line	3Q 2012		4Q 2012		1Q 2013		2Q 2013		3Q 2013
Interest rate	4,514		4,094		5,656		6,828		5,839
Equity	2,391		2,532		2,608		3,079		2,408
Foreign exchange	846		767		1,010		1,042		792
Energy	1,590		1,489		1,730		1,796		1,609
Agricultural commodity	1,171		982		1,084		1,106		1,009
Metal	327		324		396		471		360
Total	10,839		10,188		12,484		14,323		12,018
Venue
Electronic	9,293		8,899		10,908		12,457		10,199
Open outcry	979		751		885		1,134		1,173
Privately negotiated*	566		539		691		731		646
Total	10,839		10,188		12,484		14,323		12,018


Average Rate Per Contract (RPC) CME Group RPC

Product Line	3Q 2012		4Q 2012		1Q 2013		2Q 2013		3Q 2013
Interest rate	$	0.481	$	0.494	$	0.468	$	0.455	$	0.484
Equity	0.685		0.697		0.691		0.714		0.695
Foreign exchange	0.808		0.835		0.848		0.826		0.819
Energy	1.473		1.487		1.390		1.260		1.300
Agricultural commodity	1.301		1.298		1.318		1.378		1.323
Metal	1.693		1.709		1.656		1.613		1.626
Average RPC	$	0.822	$	0.831	$	0.785	$	0.748	$	0.762

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.

*The privately negotiated venue average daily volume includes both traditional block trades as well as what was historically categorized as CME ClearPort. Going forward there will no longer be a break out for CME ClearPort.

CME Group Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(dollars in millions, except per share amounts; shares in thousands)

	Quarter Ended
	September 30, 2013
GAAP Net Income Attributable to CME Group	$	236.7

Add: Market value adjustment of KCBT building, net of non-controlling interest	0.7

Less: Foreign exchange transaction gains	(12.0)

Add: Increases to tax reserves for uncertain tax positions (2012 and prior) and deferred tax expense for change in state and local apportionment factors less tax benefit accrued for domestic production activities deduction (2012 and prior), and income tax effect related to the KCBT building and foreign exchange transaction gains	24.9

Adjusted Net Income Attributable to CME Group	$	250.3

GAAP Earnings per Common Share Attributable to CME Group:
Basic	$	0.71
Diluted	0.71

Adjusted earnings per Common Share Attributable to CME Group:
Basic	$	0.75
Diluted	0.75

Weighted Average Number of Common Shares:
Basic	332,763
Diluted	334,674

CME-G

SOURCE CME Group Inc.