- First-quarter 2015 revenues rose 8 percent from first-quarter 2014 and represented second highest quarterly revenue
- First-quarter 2015 net income attributable to CME Group and diluted earnings per share both grew more than 15 percent from first-quarter 2014
CME Group Inc. (NASDAQ: CME) today reported revenues of $843 million and operating income of $507 million for the first quarter of 2015. Net income attributable to CME Group was $330 million. GAAP and adjusted diluted earnings per share were $0.981.
"We delivered strong revenue growth in the first quarter driven primarily by interest rate, energy and foreign exchange products, with double-digit average daily volume growth coming from Europe and North America and 22 percent growth from Asia," said CME Group Executive Chairman and President Terry Duffy. "Total average daily volume was 15 million contracts, up 10 percent, which was the second highest quarter in our history. We recorded solid revenue growth in our core futures products, swaps clearing and market data. This clearly demonstrates the value of the unparalleled diversity of our product set."
"In addition to globalization, we made progress with our swaps clearing and options business," said CME Group Chief Executive Officer Phupinder Gill. "Interest rate swaps clearing revenue grew 57 percent, and we are seeing additional signs that our 500+ swaps clients are increasing their usage of our core futures products. Options volume reached a record 2.8 million contracts per day during the quarter. Also, the combination of top-line growth and our internal efficiency and productivity enhancements led to significant operating margin expansion and earnings growth during the first quarter."
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.
First-quarter 2015 average daily volume was 15.0 million contracts, up 10 percent from first-quarter 2014, representing the second-highest quarterly volume, and included average daily volume records in energy and options. Clearing and transaction fee revenues were $708.2 million, up 9 percent compared with first-quarter 2014. Market data revenue was $98 million, up 10 percent. First-quarter 2015 total average rate per contract was 75.3 cents, up from 73.1 cents in fourth-quarter 2014, driven primarily by a higher proportion of total volume coming from commodities products, which have higher average fees.
As of March 31, 2015, the company had $1.8 billion of cash and marketable securities and $2.9 billion of long-term debt. In January, we paid out $671 million in our variable dividend of $2 per share. In March, we paid out $168 million in our regular quarterly dividend of 50 cents per share.
CME Group will hold a conference call to discuss first-quarter 2015 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.
CME Group Inc. and Subsidiaries Consolidated Balance Sheets (in millions) |
||||||
March 31, 2015 |
December 31, 2014 |
|||||
ASSETS |
||||||
Current Assets: |
||||||
Cash and cash equivalents |
$ |
1,694.8 |
$ |
1,366.1 |
||
Marketable securities |
78.8 |
74.7 |
||||
Accounts receivable, net of allowance |
383.4 |
341.2 |
||||
Other current assets (includes $32.0 and $37.0 in restricted cash) |
154.8 |
196.5 |
||||
Performance bonds and guaranty fund contributions |
45,174.2 |
40,566.8 |
||||
Total current assets |
47,486.0 |
42,545.3 |
||||
Property, net of accumulated depreciation and amortization |
503.3 |
508.9 |
||||
Intangible assets—trading products |
17,175.3 |
17,175.3 |
||||
Intangible assets—other, net |
2,612.5 |
2,637.4 |
||||
Goodwill |
7,569.0 |
7,569.0 |
||||
Other assets (includes $70.1 and $72.4 in restricted cash) |
1,782.3 |
1,805.6 |
||||
Total Assets |
$ |
77,128.4 |
$ |
72,241.5 |
||
LIABILITIES AND EQUITY |
||||||
Current Liabilities: |
||||||
Accounts payable |
$ |
34.0 |
$ |
36.9 |
||
Other current liabilities |
286.9 |
927.5 |
||||
Performance bonds and guaranty fund contributions |
45,174.2 |
40,566.8 |
||||
Total current liabilities |
45,495.1 |
41,531.2 |
||||
Long-term debt |
2,851.9 |
2,107.9 |
||||
Deferred income tax liabilities, net |
7,299.7 |
7,302.7 |
||||
Other liabilities |
386.2 |
376.2 |
||||
Total Liabilities |
56,032.9 |
51,318.0 |
||||
CME Group shareholders' equity |
21,095.5 |
20,923.5 |
||||
Total Liabilities and Equity |
$ |
77,128.4 |
$ |
72,241.5 |
CME Group Inc. and Subsidiaries Consolidated Statements of Income (dollars in millions, except per share amounts; shares in thousands) |
||||||
Quarter Ended |
||||||
2015 |
2014 |
|||||
Revenues |
||||||
Clearing and transaction fees |
$ |
708.2 |
$ |
652.2 |
||
Market data and information services |
98.0 |
89.4 |
||||
Access and communication fees |
21.3 |
20.4 |
||||
Other |
15.2 |
15.4 |
||||
Total Revenues |
842.7 |
777.4 |
||||
Expenses |
||||||
Compensation and benefits |
141.3 |
135.5 |
||||
Communications |
7.6 |
8.2 |
||||
Technology support services |
15.6 |
13.9 |
||||
Professional fees and outside services |
29.1 |
29.6 |
||||
Amortization of purchased intangibles |
24.9 |
25.2 |
||||
Depreciation and amortization |
31.8 |
34.1 |
||||
Occupancy and building operations |
22.8 |
23.2 |
||||
Licensing and other fee agreements |
30.6 |
29.0 |
||||
Other |
31.7 |
24.2 |
||||
Total Expenses |
335.4 |
322.9 |
||||
Operating Income |
507.3 |
454.5 |
||||
Non-Operating Income (Expense) |
||||||
Investment income |
5.7 |
3.2 |
||||
Gains (losses) on derivative investments |
(1.8) |
— |
||||
Interest and other borrowing costs |
(31.6) |
(33.7) |
||||
Equity in net earnings (losses) of unconsolidated subsidiaries |
22.5 |
22.4 |
||||
Other non-operating income (expense) |
21.7 |
— |
||||
Total Non-Operating |
16.5 |
(8.1) |
||||
Income before Income Taxes |
523.8 |
446.4 |
||||
Income tax provision |
193.4 |
179.8 |
||||
Net Income |
330.4 |
266.6 |
||||
Less: net income (loss) attributable to non-controlling interests |
— |
(0.2) |
||||
Net Income Attributable to CME Group |
$ |
330.4 |
$ |
266.8 |
||
Earnings per Common Share Attributable to CME Group: |
||||||
Basic |
$ |
0.98 |
$ |
0.80 |
||
Diluted |
0.98 |
0.79 |
||||
Weighted Average Number of Common Shares: |
||||||
Basic |
335,680 |
333,905 |
||||
Diluted |
337,416 |
335,644 |
CME Group Inc. and Subsidiaries Quarterly Operating Statistics |
|||||||||||||||
1Q 2014 |
2Q 2014 |
3Q 2014 |
4Q 2014 |
1Q 2015 |
|||||||||||
Trading Days |
61 |
63 |
64 |
64 |
61 |
||||||||||
Quarterly Average Daily Volume (ADV) CME Group ADV (in thousands) |
|||||||||||||||
Product Line |
1Q 2014 |
2Q 2014 |
3Q 2014 |
4Q 2014 |
1Q 2015 |
||||||||||
Interest rate |
6,725 |
6,668 |
7,181 |
7,445 |
7,564 |
||||||||||
Equity |
2,890 |
2,465 |
2,586 |
3,114 |
2,772 |
||||||||||
Foreign exchange |
817 |
638 |
797 |
959 |
954 |
||||||||||
Energy |
1,705 |
1,457 |
1,562 |
1,797 |
2,142 |
||||||||||
Agricultural commodity |
1,168 |
1,084 |
1,058 |
1,173 |
1,189 |
||||||||||
Metal |
355 |
323 |
308 |
361 |
369 |
||||||||||
Total |
13,659 |
12,636 |
13,493 |
14,848 |
14,990 |
||||||||||
Venue |
|||||||||||||||
Electronic |
11,703 |
10,888 |
11,627 |
12,982 |
13,034 |
||||||||||
Open outcry |
1,179 |
1,100 |
1,208 |
1,218 |
1,291 |
||||||||||
Privately negotiated |
778 |
647 |
657 |
648 |
665 |
||||||||||
Total |
13,659 |
12,636 |
13,493 |
14,848 |
14,990 |
||||||||||
Average Rate Per Contract (RPC) CME Group RPC |
|||||||||||||||
Product Line |
1Q 2014 |
2Q 2014 |
3Q 2014 |
4Q 2014 |
1Q 2015 |
||||||||||
Interest rate |
$ |
0.481 |
$ |
0.473 |
$ |
0.473 |
$ |
0.472 |
$ |
0.480 |
|||||
Equity |
0.712 |
0.714 |
0.687 |
0.697 |
0.721 |
||||||||||
Foreign exchange |
0.804 |
0.861 |
0.788 |
0.760 |
0.831 |
||||||||||
Energy |
1.364 |
1.298 |
1.291 |
1.279 |
1.250 |
||||||||||
Agricultural commodity |
1.369 |
1.430 |
1.362 |
1.321 |
1.324 |
||||||||||
Metal |
1.707 |
1.715 |
1.707 |
1.664 |
1.662 |
||||||||||
Average RPC |
$ |
0.767 |
$ |
0.749 |
$ |
0.725 |
$ |
0.731 |
$ |
0.753 |
CME Group Inc. and Subsidiaries |
|||
Reconciliation of GAAP to Non-GAAP Measures |
|||
(dollars in millions, except per share amounts; shares in thousands) |
|||
Quarter Ended |
|||
GAAP Net Income Attributable to CME Group |
$ |
330.4 |
|
Foreign exchange transaction losses1 |
10.0 |
||
Acquisition-related costs |
0.9 |
||
Severance |
5.5 |
||
Loss on derivatives and debt costs for refinancing |
2.3 |
||
GFI termination fee - net of the portion paid to outside advisers |
(22.5) |
||
Income tax effect related to above |
2.9 |
||
Adjusted Net Income Attributable to CME Group |
$ |
329.5 |
|
GAAP Earnings per Common Share Attributable to CME Group: |
|||
Basic |
$ |
0.98 |
|
Diluted |
0.98 |
||
Adjusted Earnings per Common Share Attributable to CME Group: |
|||
Basic |
$ |
0.98 |
|
Diluted |
0.98 |
||
Weighted Average Number of Common Shares: |
|||
Basic |
335,680 |
||
Diluted |
337,416 |
||
1. |
First-quarter 2015 results included foreign exchange transaction net losses principally related to cash held in British pounds within foreign entities whose functional currency is the U.S. dollar. |