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Form 8-K CME GROUP INC. For: Apr 28

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April 28, 2021 7:21 AM EDT





                                             Exhibit 99.1
cmegpressreleasea021.jpg
Media contactInvestor contact
Chris Grams, 312.930.3435John Peschier, 312.930.8491
Laurie Bischel, 312.648.8698CME-G
news@cmegroup.com
www.cmegroup.mediaroom.com

FOR IMMEDIATE RELEASE
CME Group Inc. Reports First-Quarter 2021 Financial Results
    CHICAGO, April 28, 2021 - CME Group Inc. (NASDAQ: CME) today reported financial results for the first quarter of 2021.
    The company reported revenue of $1.3 billion and operating income of $725 million for the first quarter of 2021. Net income was $574 million and diluted earnings per share were $1.60. On an adjusted basis, net income was $641 million and diluted earnings per share were $1.79. Financial results presented on an adjusted basis for the first quarter of 2021 and 2020 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1
    "Since the start of 2021, we have experienced strong demand for our products as clients looked to manage risks associated with the potential for a post-pandemic economic recovery," said CME Group Chairman and Chief Executive Officer Terry Duffy. "Trading volumes in Q1 have returned to pre-pandemic levels, with ADV in the first quarter representing our third-highest quarterly ADV ever, and open interest climbing above 100 million contracts. Additionally, we continue to deliver against our growth objectives, introducing several innovative, new products, completing migration of BrokerTec to CME Globex and agreeing to form a joint venture for post-trade services in OTC markets."
First-quarter 2021 ADV was 21.8 million contracts, including non-U.S. ADV of 6.1 million contracts.














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.

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    Clearing and transaction fees revenue for first-quarter 2021 totaled $1.0 billion. The total average rate per contract was $0.658. Market data revenue totaled $144 million for first-quarter 2021.
    As of March 31, 2021, the company had approximately $1.0 billion in cash (including $111 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 first quarter of $1.2 billion, including the annual variable dividend for 2020 of $895 million. The company has returned over $15.6 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 first-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.

    As the world's leading and most diverse 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. With a range of pre- and post-trade products and services underpinning the entire lifecycle of a trade, CME Group also offers optimization and reconciliation services through TriOptima, and trade processing services through Traiana.
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, EBS, TriOptima, and Traiana are trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB, and Traiana, Inc., 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. 












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    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 methods 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 NEX; 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, 2020, as filed with the Securities and Exchange Commission ("SEC") on February 26, 2021, under the caption "Risk Factors".


# # #






CME Group Inc. and Subsidiaries
Consolidated Balance Sheets
(in millions)
 
March 31, 2021December 31, 2020
ASSETS
Current Assets:
Cash and cash equivalents$936.4 $1,633.2 
Marketable securities105.2 100.9 
Accounts receivable, net of allowance547.0 461.3 
Assets held for sale1,447.5 — 
Other current assets (includes $4.5 and $4.7 in restricted cash)295.4 306.7 
Performance bonds and guaranty fund contributions123,414.0 86,781.8 
Total current assets126,745.5 89,283.9 
Property, net of accumulated depreciation and amortization528.6 579.2 
Intangible assets—trading products17,175.3 17,175.3 
Intangible assets—other, net3,716.8 4,865.3 
Goodwill10,534.3 10,798.8 
Other assets (includes $3.1 and $0.6 in restricted cash)1,951.6 1,957.1 
Total Assets$160,652.1 $124,659.6 
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable$51.6 $69.3 
Liabilities held for sale278.8 — 
Other current liabilities478.1 1,346.8 
Performance bonds and guaranty fund contributions123,414.0 86,781.8 
Total current liabilities124,222.5 88,197.9 
Long-term debt3,443.6 3,443.8 
Deferred income tax liabilities, net5,371.9 5,607.0 
Other liabilities1,058.2 1,059.4 
Total Liabilities134,096.2 98,308.1 
CME Group Shareholders’ Equity26,527.9 26,319.9 
Non-controlling interests28.0 31.6 
Total Equity26,555.9 26,351.5 
Total Liabilities and Equity$160,652.1 $124,659.6 
















CME Group Inc. and Subsidiaries
Consolidated Statements of Income
(dollars in millions, except per share amounts; shares in thousands)
Quarter Ended,
March 31,
 20212020
Revenues
Clearing and transaction fees$1,007.0 $1,278.8 
Market data and information services144.2 131.5 
Other102.1 111.8 
Total Revenues1,253.3 1,522.1 
Expenses
Compensation and benefits225.0 207.5 
Technology48.2 47.7 
Professional fees and outside services37.4 41.7 
Amortization of purchased intangibles60.6 77.3 
Depreciation and amortization37.6 35.3 
Licensing and other fee agreements64.7 73.9 
Other54.7 78.8 
Total Expenses528.2 562.2 
Operating Income725.1 959.9 
Non-Operating Income (Expense)
Investment income30.9 95.9 
Interest and other borrowing costs(41.5)(40.9)
Equity in net earnings of unconsolidated subsidiaries56.2 51.2 
Other non-operating income (expense)(18.4)(76.8)
Total Non-Operating Income (Expense)27.2 29.4 
Income before Income Taxes752.3 989.3 
Income tax provision 177.5 222.5 
Net Income574.8 766.8 
Less: net (income) loss attributable to non-controlling interests(0.4)(0.6)
Net Income Attributable to CME Group$574.4 $766.2 
Earnings per Common Share Attributable to CME Group:
Basic$1.60 $2.14 
Diluted1.60 2.14 
Weighted Average Number of Common Shares:
Basic358,147 357,524 
Diluted358,817 358,455 








CME Group Inc. and Subsidiaries
Quarterly Operating Statistics
 
1Q 20202Q 20203Q 20204Q 20201Q 2021
Trading Days62 63 64 64 61 
Quarterly Average Daily Volume (ADV)(1)
CME Group ADV (in thousands)
 
Product Line1Q 20202Q 20203Q 20204Q 20201Q 2021
Interest rates13,813 6,890 5,315 6,273 10,349 
Equity indexes6,498 5,568 5,410 5,148 6,117 
Foreign exchange1,079 725 829 818 852 
Energy3,228 2,586 1,852 1,940 2,363 
Agricultural commodities1,506 1,311 1,372 1,478 1,471 
Metals889 519 825 568 675 
Total27,013 17,599 15,603 16,225 21,827 
Venue
CME Globex24,582 16,992 15,054 15,469 20,436 
Open outcry (2)
1,281 — 108 273 678 
Privately negotiated1,149 607 441 483 713 
Total27,013 17,599 15,603 16,225 21,827 
Quarterly Average Rate Per Contract (RPC)(1)
CME Group RPC
 
Product Line1Q 20202Q 20203Q 20204Q 20201Q 2021
Interest rates$0.488 $0.510 $0.506 $0.490 $0.475 
Equity indexes0.616 0.574 0.525 0.523 0.532 
Foreign exchange0.721 0.786 0.763 0.739 0.779 
Energy1.108 1.191 1.171 1.165 1.097 
Agricultural commodities1.260 1.316 1.284 1.301 1.343 
Metals1.429 1.518 1.309 1.389 1.415 
Average RPC$0.676 $0.731 $0.716 $0.699 $0.658 
1. ADV and RPC includes futures and options on futures only.
2. Due to the COVID-19 pandemic, in March 2020 we closed our open outcry trading floor and reopened it in August 2020 for Eurodollar options. Currently, the remainder of the trading floor is closed.










CME Group Inc. and Subsidiaries
Reconciliation of GAAP to non-GAAP Measures
(dollars in millions, except per share amounts; shares in thousands)
Quarter Ended,
March 31,
20212020
Net Income Attributable to CME Group$574.4 $766.2 
Restructuring and severance14.8 5.9 
Amortization of purchased intangibles60.6 77.3 
Acquisition-related costs(1)
10.2 8.1 
Foreign exchange transaction (gains) losses2.4 (3.6)
Unrealized and realized (gains) on investments(1.3)(2.9)
(Gains) losses on derivatives— (1.5)
Realized and unrealized losses on assets(2)
0.8 22.6 
Income tax effect related to above(20.7)(36.3)
Adjusted Net Income Attributable to CME Group$641.2 $835.8 
GAAP Earnings per Common Share Attributable to CME Group:
     Basic$1.60 $2.14 
     Diluted1.60 2.14 
Adjusted Earnings per Common Share Attributable to CME Group:
     Basic$1.79 $2.34 
     Diluted1.79 2.33 
Weighted Average Number of Common Shares:
     Basic358,147 357,524 
     Diluted358,817 358,455 
1. Acquisition-related costs primarily include professional fees related to the NEX transaction.
2. Results include net gains and losses on intangible assets and fixed assets.


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