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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CME Group Inc | NASDAQ:CME | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.17 | 0.08% | 207.65 | 198.00 | 219.00 | 207.92 | 202.775 | 205.86 | 2,065,363 | 05:00:02 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
|
|
36-4459170
|
(State or other jurisdiction of
incorporation or organization)
|
|
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
20 South Wacker Drive
|
Chicago
|
Illinois
|
|
60606
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
Class A Common Stock
|
CME
|
Nasdaq
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
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|
|
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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•
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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;
|
•
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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 policy 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 novel coronavirus (COVID-19) outbreak 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 the acquisition of 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.
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
851.7
|
|
|
$
|
1,551.4
|
|
Marketable securities
|
|
77.5
|
|
|
83.2
|
|
||
Accounts receivable, net of allowance of $4.8 and $3.4
|
|
799.7
|
|
|
491.8
|
|
||
Other current assets (includes $4.3 and $4.3 in restricted cash)
|
|
315.9
|
|
|
364.4
|
|
||
Performance bonds and guaranty fund contributions
|
|
100,371.8
|
|
|
37,077.0
|
|
||
Total current assets
|
|
102,416.6
|
|
|
39,567.8
|
|
||
Property, net of accumulated depreciation and amortization of $885.6 and $867.5
|
|
538.4
|
|
|
544.0
|
|
||
Intangible assets—trading products
|
|
17,175.3
|
|
|
17,175.3
|
|
||
Intangible assets—other, net
|
|
4,997.9
|
|
|
5,117.7
|
|
||
Goodwill
|
|
10,742.5
|
|
|
10,742.5
|
|
||
Other assets (includes $0.8 and $0.9 in restricted cash)
|
|
2,061.6
|
|
|
2,068.0
|
|
||
Total Assets
|
|
$
|
137,932.3
|
|
|
$
|
75,215.3
|
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
74.3
|
|
|
$
|
61.9
|
|
Other current liabilities
|
|
607.9
|
|
|
1,384.8
|
|
||
Performance bonds and guaranty fund contributions
|
|
100,371.5
|
|
|
37,075.8
|
|
||
Total current liabilities
|
|
101,053.7
|
|
|
38,522.5
|
|
||
Long-term debt
|
|
3,539.8
|
|
|
3,743.2
|
|
||
Deferred income tax liabilities, net
|
|
5,622.1
|
|
|
5,635.2
|
|
||
Other liabilities
|
|
1,118.0
|
|
|
1,155.1
|
|
||
Total Liabilities
|
|
111,333.6
|
|
|
49,056.0
|
|
||
|
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000 shares authorized at March 31, 2020 and December 31, 2019; none issued
|
|
—
|
|
|
—
|
|
||
Class A common stock, $0.01 par value, 1,000,000 shares authorized at March 31, 2020 and December 31, 2019; 357,677 and 357,469 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
|
|
3.6
|
|
|
3.6
|
|
||
Class B common stock, $0.01 par value, 3 shares authorized, issued and outstanding as of March 31, 2020 and December 31, 2019
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
21,120.4
|
|
|
21,113.2
|
|
||
Retained earnings
|
|
5,469.9
|
|
|
5,008.7
|
|
||
Accumulated other comprehensive income (loss)
|
|
(26.2
|
)
|
|
3.4
|
|
||
Total CME Group Shareholders’ Equity
|
|
26,567.7
|
|
|
26,128.9
|
|
||
Non-controlling interests
|
|
31.0
|
|
|
30.4
|
|
||
Total Equity
|
|
26,598.7
|
|
|
26,159.3
|
|
||
Total Liabilities and Equity
|
|
$
|
137,932.3
|
|
|
$
|
75,215.3
|
|
|
Quarter Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
||||
Clearing and transaction fees
|
$
|
1,278.8
|
|
|
$
|
952.6
|
|
Market data and information services
|
131.5
|
|
|
130.1
|
|
||
Other
|
111.8
|
|
|
96.9
|
|
||
Total Revenues
|
1,522.1
|
|
|
1,179.6
|
|
||
Expenses
|
|
|
|
||||
Compensation and benefits
|
207.5
|
|
|
230.3
|
|
||
Technology
|
47.7
|
|
|
47.1
|
|
||
Professional fees and outside services
|
41.7
|
|
|
39.4
|
|
||
Amortization of purchased intangibles
|
77.3
|
|
|
80.7
|
|
||
Depreciation and amortization
|
35.3
|
|
|
32.9
|
|
||
Licensing and other fee agreements
|
73.9
|
|
|
40.5
|
|
||
Other
|
78.8
|
|
|
77.7
|
|
||
Total Expenses
|
562.2
|
|
|
548.6
|
|
||
Operating Income
|
959.9
|
|
|
631.0
|
|
||
|
|
|
|
||||
Non-Operating Income (Expense)
|
|
|
|
||||
Investment income
|
95.9
|
|
|
178.7
|
|
||
Interest and other borrowing costs
|
(40.9
|
)
|
|
(48.1
|
)
|
||
Equity in net earnings of unconsolidated subsidiaries
|
51.2
|
|
|
40.5
|
|
||
Other non-operating income (expense)
|
(76.8
|
)
|
|
(161.9
|
)
|
||
Total Non-Operating Income (Expense)
|
29.4
|
|
|
9.2
|
|
||
Income before Income Taxes
|
989.3
|
|
|
640.2
|
|
||
Income tax provision
|
222.5
|
|
|
144.3
|
|
||
Net Income
|
766.8
|
|
|
495.9
|
|
||
Less: net (income) loss attributable to non-controlling interests
|
(0.6
|
)
|
|
1.0
|
|
||
Net Income Attributable to CME Group
|
$
|
766.2
|
|
|
$
|
496.9
|
|
|
|
|
|
||||
Earnings per Common Share Attributable to CME Group:
|
|
|
|
||||
Basic
|
$
|
2.14
|
|
|
$
|
1.39
|
|
Diluted
|
2.14
|
|
|
1.39
|
|
||
Weighted Average Number of Common Shares:
|
|
|
|
||||
Basic
|
357,524
|
|
|
356,886
|
|
||
Diluted
|
358,455
|
|
|
358,047
|
|
|
|
Quarter Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
766.8
|
|
|
$
|
495.9
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Investment securities:
|
|
|
|
|
||||
Net unrealized holding gains (losses) arising during the period
|
|
(0.6
|
)
|
|
0.8
|
|
||
Income tax benefit (expense)
|
|
0.2
|
|
|
(0.2
|
)
|
||
Investment securities, net
|
|
(0.4
|
)
|
|
0.6
|
|
||
Defined benefit plans:
|
|
|
|
|
||||
Net change in defined benefit plans arising during the period
|
|
(2.0
|
)
|
|
(2.7
|
)
|
||
Amortization of net actuarial (gains) losses included in compensation and benefits expense
|
|
1.2
|
|
|
1.2
|
|
||
Income tax benefit (expense)
|
|
0.2
|
|
|
0.4
|
|
||
Defined benefit plans, net
|
|
(0.6
|
)
|
|
(1.1
|
)
|
||
Derivative investments:
|
|
|
|
|
||||
Net unrealized holding gains (losses) arising during the period
|
|
—
|
|
|
0.3
|
|
||
Reclassification of net unrealized (gains) losses to interest expense and other non-operating income (expense)
|
|
(1.8
|
)
|
|
(0.3
|
)
|
||
Income tax benefit (expense)
|
|
0.4
|
|
|
—
|
|
||
Derivative investments, net
|
|
(1.4
|
)
|
|
—
|
|
||
Foreign currency translation:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
(27.8
|
)
|
|
(4.0
|
)
|
||
Reclassification of net currency (gains) losses from foreign entities to other expenses
|
|
0.6
|
|
|
—
|
|
||
Income tax benefit (expense)
|
|
—
|
|
|
—
|
|
||
Foreign currency translation, net
|
|
(27.2
|
)
|
|
(4.0
|
)
|
||
Other comprehensive income (loss), net of tax
|
|
(29.6
|
)
|
|
(4.5
|
)
|
||
Comprehensive income
|
|
737.2
|
|
|
491.4
|
|
||
Less: comprehensive (income) loss attributable to non-controlling interests
|
|
(0.6
|
)
|
|
1.0
|
|
||
Comprehensive income attributable to CME Group
|
|
$
|
736.6
|
|
|
$
|
492.4
|
|
|
Class A
Common
Stock
(Shares)
|
|
Class B
Common
Stock
(Shares)
|
|
Common
Stock and
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total CME Group Shareholders' Equity
|
|
Non-controlling Interest
|
|
Total
Equity
|
||||||||||||||
Balance at December 31, 2019
|
357,469
|
|
|
3
|
|
|
$
|
21,116.8
|
|
|
$
|
5,008.7
|
|
|
$
|
3.4
|
|
|
$
|
26,128.9
|
|
|
$
|
30.4
|
|
|
$
|
26,159.3
|
|
Net income
|
|
|
|
|
|
|
766.2
|
|
|
|
|
766.2
|
|
|
0.6
|
|
|
766.8
|
|
||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(29.6
|
)
|
|
(29.6
|
)
|
|
—
|
|
|
(29.6
|
)
|
||||||||||
Dividends on common stock of $0.85 per share
|
|
|
|
|
|
|
(304.7
|
)
|
|
|
|
(304.7
|
)
|
|
|
|
(304.7
|
)
|
|||||||||||
Impact of adoption of accounting standards updates on credit losses
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
(0.3
|
)
|
|
|
|
(0.3
|
)
|
|||||||||||
Exercise of stock options
|
55
|
|
|
|
|
3.2
|
|
|
|
|
|
|
3.2
|
|
|
|
|
3.2
|
|
||||||||||
Vesting of issued restricted Class A common stock
|
153
|
|
|
|
|
(19.1
|
)
|
|
|
|
|
|
(19.1
|
)
|
|
|
|
(19.1
|
)
|
||||||||||
Stock-based compensation
|
|
|
|
|
23.1
|
|
|
|
|
|
|
23.1
|
|
|
|
|
23.1
|
|
|||||||||||
Balance at March 31, 2020
|
357,677
|
|
|
3
|
|
|
$
|
21,124.0
|
|
|
$
|
5,469.9
|
|
|
$
|
(26.2
|
)
|
|
$
|
26,567.7
|
|
|
$
|
31.0
|
|
|
$
|
26,598.7
|
|
|
Class A
Common
Stock
(Shares)
|
|
Class B
Common
Stock
(Shares)
|
|
Common
Stock and
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total CME Group Shareholders' Equity
|
|
Non-controlling Interest
|
|
Total
Equity |
||||||||||||||
Balance at December 31, 2018
|
356,824
|
|
|
3
|
|
|
$
|
21,057.9
|
|
|
$
|
4,855.3
|
|
|
$
|
5.3
|
|
|
$
|
25,918.5
|
|
|
$
|
46.8
|
|
|
$
|
25,965.3
|
|
Net income
|
|
|
|
|
|
|
496.9
|
|
|
|
|
496.9
|
|
|
(1.0
|
)
|
|
495.9
|
|
||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(4.5
|
)
|
|
(4.5
|
)
|
|
|
|
(4.5
|
)
|
|||||||||||
Dividends on common stock of $0.75 per share
|
|
|
|
|
|
|
(268.0
|
)
|
|
|
|
(268.0
|
)
|
|
|
|
(268.0
|
)
|
|||||||||||
Impact of adoption of standards updates on leasing
|
|
|
|
|
|
|
6.9
|
|
|
|
|
6.9
|
|
|
|
|
6.9
|
|
|||||||||||
Changes in non-controlling interest due to measurement period
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(16.9
|
)
|
|
(16.9
|
)
|
|||||||||||
Exercise of stock options
|
64
|
|
|
|
|
3.3
|
|
|
|
|
|
|
3.3
|
|
|
|
|
3.3
|
|
||||||||||
Vesting of issued restricted Class A common stock
|
125
|
|
|
|
|
(13.8
|
)
|
|
|
|
|
|
(13.8
|
)
|
|
|
|
(13.8
|
)
|
||||||||||
Stock-based compensation
|
|
|
|
|
18.3
|
|
|
|
|
|
|
18.3
|
|
|
|
|
18.3
|
|
|||||||||||
Balance at March 31, 2019
|
357,013
|
|
|
3
|
|
|
$
|
21,065.7
|
|
|
$
|
5,091.1
|
|
|
$
|
0.8
|
|
|
$
|
26,157.6
|
|
|
$
|
28.9
|
|
|
$
|
26,186.5
|
|
|
|
Quarter Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
766.8
|
|
|
$
|
495.9
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Stock-based compensation
|
|
23.1
|
|
|
18.3
|
|
||
Amortization of purchased intangibles
|
|
77.3
|
|
|
80.7
|
|
||
Depreciation and amortization
|
|
35.3
|
|
|
32.9
|
|
||
Net losses on impaired assets
|
|
23.1
|
|
|
—
|
|
||
Net (gain) loss on derivative contracts
|
|
(1.5
|
)
|
|
14.4
|
|
||
Net realized and unrealized losses (gains) on investments
|
|
(2.9
|
)
|
|
3.4
|
|
||
Undistributed net earnings of unconsolidated subsidiaries
|
|
(0.2
|
)
|
|
(22.6
|
)
|
||
Deferred income taxes
|
|
(9.7
|
)
|
|
(0.6
|
)
|
||
Change in:
|
|
|
|
|
||||
Accounts receivable
|
|
(309.5
|
)
|
|
(5.5
|
)
|
||
Other current assets
|
|
(14.5
|
)
|
|
45.4
|
|
||
Other assets
|
|
18.8
|
|
|
(9.8
|
)
|
||
Accounts payable
|
|
12.4
|
|
|
(50.6
|
)
|
||
Income taxes payable
|
|
186.1
|
|
|
141.3
|
|
||
Other current liabilities
|
|
(22.1
|
)
|
|
(73.1
|
)
|
||
Other liabilities
|
|
(29.5
|
)
|
|
0.3
|
|
||
Other
|
|
4.1
|
|
|
(1.2
|
)
|
||
Net Cash Provided by Operating Activities
|
|
757.1
|
|
|
669.2
|
|
||
|
|
|
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
|
||||
Proceeds from maturities of available-for-sale marketable securities
|
|
2.2
|
|
|
6.1
|
|
||
Purchases of available-for-sale marketable securities
|
|
(2.4
|
)
|
|
(5.6
|
)
|
||
Purchases of property, net
|
|
(42.8
|
)
|
|
(49.1
|
)
|
||
Net Cash Used in Investing Activities
|
|
(43.0
|
)
|
|
(48.6
|
)
|
||
|
|
|
|
|
||||
Cash Flows from Financing Activities
|
|
|
|
|
||||
Issuance of commercial paper, net of maturities
|
|
(204.6
|
)
|
|
462.3
|
|
||
Repayment of debt
|
|
—
|
|
|
(569.2
|
)
|
||
Cash dividends
|
|
(1,197.6
|
)
|
|
(892.1
|
)
|
||
Settlement of derivative contracts
|
|
—
|
|
|
16.0
|
|
||
Employee taxes paid on restricted stock vesting
|
|
(19.1
|
)
|
|
(13.8
|
)
|
||
Other
|
|
7.4
|
|
|
(0.9
|
)
|
||
Net Cash Used in Financing Activities
|
|
(1,413.9
|
)
|
|
(997.7
|
)
|
|
|
Quarter Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Net change in cash, cash equivalents and restricted cash
|
|
$
|
(699.8
|
)
|
|
$
|
(377.1
|
)
|
Cash, cash equivalents and restricted cash, beginning of period
|
|
1,556.6
|
|
|
1,377.2
|
|
||
Cash, Cash Equivalents and Restricted Cash, End of Period
|
|
$
|
856.8
|
|
|
$
|
1,000.1
|
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents and restricted cash:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
851.7
|
|
|
$
|
997.4
|
|
Short-term restricted cash
|
|
4.3
|
|
|
1.6
|
|
||
Long-term restricted cash
|
|
0.8
|
|
|
1.1
|
|
||
Total
|
|
$
|
856.8
|
|
|
$
|
1,000.1
|
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
||||
Income taxes paid
|
|
$
|
39.0
|
|
|
$
|
—
|
|
Interest paid
|
|
42.4
|
|
|
55.4
|
|
|
|
Quarter Ended
March 31, |
||||||
(in millions)
|
|
2020
|
|
2019
|
||||
Interest rates
|
|
$
|
418.3
|
|
|
$
|
302.8
|
|
Equity indexes
|
|
248.2
|
|
|
145.9
|
|
||
Foreign exchange
|
|
48.2
|
|
|
41.2
|
|
||
Agricultural commodities
|
|
117.7
|
|
|
105.0
|
|
||
Energy
|
|
221.8
|
|
|
165.0
|
|
||
Metals
|
|
78.8
|
|
|
51.0
|
|
||
Cash markets business
|
|
124.4
|
|
|
122.9
|
|
||
Interest rate swap
|
|
21.4
|
|
|
18.8
|
|
||
Total clearing and transaction fees
|
|
1,278.8
|
|
|
952.6
|
|
||
Market data and information services
|
|
131.5
|
|
|
130.1
|
|
||
Other
|
|
111.8
|
|
|
96.9
|
|
||
Total revenues
|
|
$
|
1,522.1
|
|
|
$
|
1,179.6
|
|
|
|
|
|
|
||||
Timing of Revenue Recognition
|
|
|
|
|
||||
Services transferred at a point in time
|
|
$
|
1,211.2
|
|
|
$
|
892.9
|
|
Services transferred over time
|
|
307.5
|
|
|
277.7
|
|
||
One-time charges and miscellaneous revenues
|
|
3.4
|
|
|
9.0
|
|
||
Total revenues
|
|
$
|
1,522.1
|
|
|
$
|
1,179.6
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(in millions)
|
|
Assigned Value
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Assigned Value
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
Amortizable Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Clearing firm, market data and other customer relationships
|
|
$
|
5,756.6
|
|
|
$
|
(1,411.4
|
)
|
|
$
|
4,345.2
|
|
|
$
|
5,797.1
|
|
|
$
|
(1,346.0
|
)
|
|
$
|
4,451.1
|
|
Technology-related intellectual property
|
|
170.1
|
|
|
(51.0
|
)
|
|
119.1
|
|
|
174.3
|
|
|
(46.6
|
)
|
|
127.7
|
|
||||||
Other
|
|
100.9
|
|
|
(17.3
|
)
|
|
83.6
|
|
|
103.8
|
|
|
(14.9
|
)
|
|
88.9
|
|
||||||
Total amortizable intangible assets
|
|
$
|
6,027.6
|
|
|
$
|
(1,479.7
|
)
|
|
4,547.9
|
|
|
$
|
6,075.2
|
|
|
$
|
(1,407.5
|
)
|
|
4,667.7
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-Lived Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
|
|
|
|
|
450.0
|
|
|
|
|
|
|
450.0
|
|
||||||||||
Total intangible assets – other, net
|
|
|
|
|
|
$
|
4,997.9
|
|
|
|
|
|
|
$
|
5,117.7
|
|
||||||||
Trading products (1)
|
|
|
|
|
|
$
|
17,175.3
|
|
|
|
|
|
|
$
|
17,175.3
|
|
(1)
|
Trading products represent futures and options products acquired in our business combinations with CBOT Holdings, Inc., NYMEX Holdings, Inc. and The Board of Trade of Kansas City, Missouri, Inc. Clearing and transaction fees are generated through the trading of these products. These trading products, most of which have traded for decades, require authorization from the Commodity Futures Trading Commission (CFTC). Product authorizations from the CFTC have no term limits.
|
(in millions)
|
Amortization Expense
|
||
Remainder of 2020
|
$
|
231.7
|
|
2021
|
308.9
|
|
|
2022
|
308.5
|
|
|
2023
|
307.2
|
|
|
2024
|
300.5
|
|
|
2025
|
300.3
|
|
|
Thereafter
|
2,790.8
|
|
(in millions)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
$750.0 million fixed rate notes due September 2022, stated rate of 3.00% (1)
|
|
$
|
747.9
|
|
|
$
|
747.7
|
|
€15.0 million fixed rate notes due May 2023, stated rate of 4.30%
|
|
16.2
|
|
|
16.4
|
|
||
$750.0 million fixed rate notes due March 2025, stated rate of 3.00% (2)
|
|
746.5
|
|
|
746.3
|
|
||
$500.0 million fixed rate notes due June 2028, stated rate of 3.75%
|
|
496.5
|
|
|
496.4
|
|
||
$750.0 million fixed rate notes due September 2043, stated rate of 5.30% (3)
|
|
742.8
|
|
|
742.8
|
|
||
$700.0 million fixed rate notes due June 2048, stated rate of 4.15%
|
|
689.9
|
|
|
689.8
|
|
||
Commercial paper (4)
|
|
100.0
|
|
|
303.8
|
|
||
Total long-term debt
|
|
$
|
3,539.8
|
|
|
$
|
3,743.2
|
|
(1)
|
The company maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 3.32%.
|
(2)
|
The company maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 3.11%.
|
(3)
|
The company maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 4.73%.
|
(4)
|
The commercial paper is backed by the five-year multi-currency revolving credit facility.
|
(in millions)
|
Par Value
|
||
2021
|
$
|
—
|
|
2022
|
850.0
|
|
|
2023
|
16.6
|
|
|
2024
|
—
|
|
|
2025
|
750.0
|
|
|
Thereafter
|
1,950.0
|
|
|
Quarter Ended
March 31, |
||||||
(in millions)
|
2020
|
|
2019
|
||||
Operating lease expense:
|
|
|
|
||||
Operating lease cost
|
$
|
14.9
|
|
|
$
|
18.4
|
|
Short-term lease cost
|
0.2
|
|
|
3.4
|
|
||
Total operating lease expense included in other expense
|
$
|
15.1
|
|
|
$
|
21.8
|
|
|
|
|
|
||||
Finance lease expense:
|
|
|
|
||||
Interest expense
|
$
|
0.9
|
|
|
$
|
0.9
|
|
Depreciation expense
|
2.2
|
|
|
2.2
|
|
||
Total finance lease expense
|
$
|
3.1
|
|
|
$
|
3.1
|
|
|
|
|
|
||||
Sublease revenue included in other revenue
|
$
|
3.6
|
|
|
$
|
3.3
|
|
|
Quarter Ended
March 31, |
||||||
(in millions)
|
2020
|
|
2019
|
||||
Cash outflows for operating leases
|
$
|
15.9
|
|
|
$
|
15.2
|
|
Cash outflows for finance leases
|
4.2
|
|
|
4.2
|
|
(in millions)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Operating lease right-of-use assets
|
$
|
406.7
|
|
|
$
|
417.1
|
|
|
|
|
|
||||
Operating lease liabilities:
|
|
|
|
||||
Other current liabilities
|
$
|
41.6
|
|
|
$
|
42.3
|
|
Other liabilities
|
496.3
|
|
|
514.8
|
|
||
Total operating lease liabilities
|
$
|
537.9
|
|
|
$
|
557.1
|
|
|
|
|
|
||||
Weighted average remaining lease term (in months)
|
145
|
|
|
146
|
|
||
Weighted average discount rate
|
4.0
|
%
|
|
4.0
|
%
|
(in millions)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Finance lease right-of-use assets
|
$
|
95.3
|
|
|
$
|
97.5
|
|
|
|
|
|
||||
Finance lease liabilities:
|
|
|
|
||||
Other current liabilities
|
$
|
7.5
|
|
|
$
|
7.4
|
|
Other liabilities
|
89.6
|
|
|
91.5
|
|
||
Total finance lease liabilities
|
$
|
97.1
|
|
|
$
|
98.9
|
|
|
|
|
|
||||
Weighted average remaining lease term (in months)
|
132
|
|
|
135
|
|
||
Weighted average discount rate
|
3.5
|
%
|
|
3.5
|
%
|
(in millions)
|
Operating Leases
|
||
Remainder of 2020
|
$
|
47.9
|
|
2021
|
61.2
|
|
|
2022
|
64.2
|
|
|
2023
|
60.5
|
|
|
2024
|
55.1
|
|
|
2025
|
53.5
|
|
|
Thereafter
|
345.3
|
|
|
Total lease payments
|
687.7
|
|
|
Less: imputed interest
|
(149.8
|
)
|
|
Present value of lease liability
|
$
|
537.9
|
|
(in millions)
|
Finance Leases
|
||
Remainder of 2020
|
$
|
12.7
|
|
2021
|
17.0
|
|
|
2022
|
17.1
|
|
|
2023
|
17.2
|
|
|
2024
|
17.4
|
|
|
2025
|
17.5
|
|
|
Thereafter
|
94.3
|
|
|
Total lease payments
|
193.2
|
|
|
Less: imputed interest
|
(96.1
|
)
|
|
Present value of lease liability
|
$
|
97.1
|
|
(in millions)
|
Investment Securities
|
|
Defined Benefit Plans
|
|
Derivative Investments
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||
Balance at December 31, 2019
|
$
|
0.8
|
|
|
$
|
(55.1
|
)
|
|
$
|
69.0
|
|
|
$
|
(11.3
|
)
|
|
$
|
3.4
|
|
Other comprehensive income (loss) before reclassifications and income tax benefit (expense)
|
(0.6
|
)
|
|
(2.0
|
)
|
|
—
|
|
|
(27.8
|
)
|
|
(30.4
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
1.2
|
|
|
(1.8
|
)
|
|
0.6
|
|
|
—
|
|
|||||
Income tax benefit (expense)
|
0.2
|
|
|
0.2
|
|
|
0.4
|
|
|
—
|
|
|
0.8
|
|
|||||
Net current period other comprehensive income (loss)
|
(0.4
|
)
|
|
(0.6
|
)
|
|
(1.4
|
)
|
|
(27.2
|
)
|
|
(29.6
|
)
|
|||||
Balance at March 31, 2020
|
$
|
0.4
|
|
|
$
|
(55.7
|
)
|
|
$
|
67.6
|
|
|
$
|
(38.5
|
)
|
|
$
|
(26.2
|
)
|
(in millions)
|
Investment Securities
|
|
Defined Benefit Plans
|
|
Derivative Investments
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||
Balance at December 31, 2018
|
$
|
0.1
|
|
|
$
|
(53.8
|
)
|
|
$
|
69.7
|
|
|
$
|
(10.7
|
)
|
|
$
|
5.3
|
|
Other comprehensive income (loss) before reclassifications and income tax benefit (expense)
|
0.8
|
|
|
(2.7
|
)
|
|
0.3
|
|
|
(4.0
|
)
|
|
(5.6
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
1.2
|
|
|
(0.3
|
)
|
|
—
|
|
|
0.9
|
|
|||||
Income tax benefit (expense)
|
(0.2
|
)
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Net current period other comprehensive income (loss)
|
0.6
|
|
|
(1.1
|
)
|
|
—
|
|
|
(4.0
|
)
|
|
(4.5
|
)
|
|||||
Balance at March 31, 2019
|
$
|
0.7
|
|
|
$
|
(54.9
|
)
|
|
$
|
69.7
|
|
|
$
|
(14.7
|
)
|
|
$
|
0.8
|
|
•
|
Level 1 inputs, which are considered the most reliable evidence of fair value, consist of quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2 inputs consist of observable market data, such as quoted prices for similar assets and liabilities in active markets, or inputs other than quoted prices that are directly observable.
|
•
|
Level 3 inputs consist of unobservable inputs which are derived and cannot be corroborated by market data or other entity-specific inputs.
|
|
|
March 31, 2020
|
||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets at Fair Value:
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
|
$
|
17.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.3
|
|
Mutual funds
|
|
59.9
|
|
|
—
|
|
|
—
|
|
|
59.9
|
|
||||
Equity securities
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Asset-backed securities
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Total Marketable Securities
|
|
77.3
|
|
|
0.2
|
|
|
—
|
|
|
77.5
|
|
||||
Performance bonds and guaranty fund contributions (1):
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
1,369.9
|
|
|
—
|
|
|
—
|
|
|
1,369.9
|
|
||||
U.S. government agency securities
|
|
1,838.4
|
|
|
—
|
|
|
—
|
|
|
1,838.4
|
|
||||
Total Assets at Fair Value
|
|
$
|
3,285.6
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
3,285.8
|
|
(in millions)
|
Fair Value
|
|
Level
|
||
$750.0 million fixed rate notes due September 2022
|
$
|
760.7
|
|
|
Level 2
|
€15.0 million fixed rate notes due May 2023
|
17.6
|
|
|
Level 2
|
|
$750.0 million fixed rate notes due March 2025
|
774.7
|
|
|
Level 2
|
|
$500.0 million fixed rate notes due June 2028
|
560.2
|
|
|
Level 2
|
|
$750.0 million fixed rate notes due September 2043
|
1,095.1
|
|
|
Level 2
|
|
$700.0 million fixed rate notes due June 2048
|
918.0
|
|
|
Level 2
|
|
Commercial paper
|
100.0
|
|
|
Level 3
|
|
|
Quarter Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Net Income Attributable to CME Group (in millions)
|
|
$
|
766.2
|
|
|
$
|
496.9
|
|
Weighted Average Number of Common Shares (in thousands):
|
|
|
|
|
||||
Basic
|
|
357,524
|
|
|
356,886
|
|
||
Effect of stock options, restricted stock and performance shares
|
|
931
|
|
|
1,161
|
|
||
Diluted
|
|
358,455
|
|
|
358,047
|
|
||
Earnings per Common Share Attributable to CME Group:
|
|
|
|
|
||||
Basic
|
|
$
|
2.14
|
|
|
$
|
1.39
|
|
Diluted
|
|
2.14
|
|
|
1.39
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||||
(dollars in millions, except per share data)
|
|
|
2020
|
|
2019
|
|
Change
|
|||||
Total revenues
|
|
|
$
|
1,522.1
|
|
|
$
|
1,179.6
|
|
|
29
|
%
|
Total expenses
|
|
|
562.2
|
|
|
548.6
|
|
|
2
|
|
||
Operating margin
|
|
|
63.1
|
%
|
|
53.5
|
%
|
|
|
|||
Non-operating income (expense)
|
|
|
$
|
29.4
|
|
|
$
|
9.2
|
|
|
n.m.
|
|
Effective tax rate
|
|
|
22.5
|
%
|
|
22.5
|
%
|
|
|
|||
Net income attributable to CME Group
|
|
|
$
|
766.2
|
|
|
$
|
496.9
|
|
|
54
|
|
Diluted earnings per common share attributable to CME Group
|
|
|
2.14
|
|
|
1.39
|
|
|
54
|
|
||
Cash flows from operating activities
|
|
|
757.1
|
|
|
669.2
|
|
|
13
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
Change
|
|||||
Clearing and transaction fees
|
|
$
|
1,278.8
|
|
|
$
|
952.6
|
|
|
34
|
%
|
Market data and information services
|
|
131.5
|
|
|
130.1
|
|
|
1
|
|
||
Other
|
|
111.8
|
|
|
96.9
|
|
|
15
|
|
||
Total Revenues
|
|
$
|
1,522.1
|
|
|
$
|
1,179.6
|
|
|
29
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||||
|
|
2020
|
|
2019
|
|
Change
|
|||||
Total contract volume (in millions)
|
|
1,674.8
|
|
|
1,136.6
|
|
|
47
|
%
|
||
Clearing and transaction fees (in millions)
|
|
$
|
1,133.0
|
|
|
$
|
810.9
|
|
|
40
|
|
Average rate per contract
|
|
$
|
0.676
|
|
|
$
|
0.713
|
|
|
(5
|
)
|
(in millions)
|
|
Quarter Ended
|
||
Increase due to change in total contract volume
|
|
$
|
364.1
|
|
Decrease due to change in average rate per contract
|
|
(42.0
|
)
|
|
Net increase in clearing and transaction fees
|
|
$
|
322.1
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||
(amounts in thousands)
|
|
2020
|
|
2019
|
|
Change
|
|||
Average Daily Volume by Product Line:
|
|
|
|
|
|
|
|||
Interest rates
|
|
13,813
|
|
|
10,314
|
|
|
34
|
%
|
Equity indexes
|
|
6,498
|
|
|
3,161
|
|
|
106
|
|
Foreign exchange
|
|
1,079
|
|
|
885
|
|
|
22
|
|
Agricultural commodities
|
|
1,506
|
|
|
1,381
|
|
|
9
|
|
Energy
|
|
3,228
|
|
|
2,331
|
|
|
38
|
|
Metals
|
|
889
|
|
|
561
|
|
|
58
|
|
Aggregate average daily volume
|
|
27,013
|
|
|
18,633
|
|
|
45
|
|
Average Daily Volume by Venue:
|
|
|
|
|
|
|
|||
CME Globex
|
|
24,582
|
|
|
16,576
|
|
|
48
|
|
Open outcry
|
|
1,281
|
|
|
1,284
|
|
|
—
|
|
Privately negotiated
|
|
1,150
|
|
|
773
|
|
|
49
|
|
Aggregate average daily volume
|
|
27,013
|
|
|
18,633
|
|
|
45
|
|
Electronic Volume as a Percentage of Total Volume
|
|
91
|
%
|
|
89
|
%
|
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||
(amounts in thousands)
|
|
2020
|
|
2019
|
|
Change
|
|||
Eurodollar futures and options:
|
|
|
|
|
|
|
|||
Front 8 futures
|
|
2,596
|
|
|
2,099
|
|
|
24
|
%
|
Back 32 futures
|
|
892
|
|
|
720
|
|
|
24
|
|
Options
|
|
2,384
|
|
|
1,720
|
|
|
39
|
|
U.S. Treasury futures and options:
|
|
|
|
|
|
|
|||
10-Year
|
|
3,191
|
|
|
2,269
|
|
|
41
|
|
5-Year
|
|
1,699
|
|
|
1,373
|
|
|
24
|
|
2-Year
|
|
945
|
|
|
694
|
|
|
36
|
|
Treasury bond
|
|
638
|
|
|
459
|
|
|
39
|
|
Federal Funds futures and options
|
|
501
|
|
|
274
|
|
|
83
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||
(amounts in thousands)
|
|
2020
|
|
2019
|
|
Change
|
|||
E-mini S&P 500 futures and options
|
|
4,251
|
|
|
2,166
|
|
|
96
|
%
|
E-mini NASDAQ 100 futures and options
|
|
1,293
|
|
|
491
|
|
|
163
|
|
E-mini Russell 2000 futures and options
|
|
310
|
|
|
150
|
|
|
107
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||
(amounts in thousands)
|
|
2020
|
|
2019
|
|
Change
|
|||
Euro
|
|
285
|
|
|
239
|
|
|
19
|
%
|
Japanese yen
|
|
198
|
|
|
133
|
|
|
48
|
|
British pound
|
|
133
|
|
|
140
|
|
|
(5
|
)
|
Australian dollar
|
|
131
|
|
|
111
|
|
|
18
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||
(amounts in thousands)
|
|
2020
|
|
2019
|
|
Change
|
|||
Corn
|
|
436
|
|
|
484
|
|
|
(10
|
)%
|
Soybean
|
|
289
|
|
|
231
|
|
|
25
|
|
Wheat
|
|
251
|
|
|
234
|
|
|
8
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||
(amounts in thousands)
|
|
2020
|
|
2019
|
|
Change
|
|||
WTI crude oil
|
|
1,792
|
|
|
1,346
|
|
|
33
|
%
|
Natural gas
|
|
742
|
|
|
485
|
|
|
53
|
|
Refined products
|
|
497
|
|
|
382
|
|
|
30
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||
(amounts in thousands)
|
|
2020
|
|
2019
|
|
Change
|
|||
Gold
|
|
608
|
|
|
340
|
|
|
79
|
%
|
Silver
|
|
125
|
|
|
85
|
|
|
47
|
|
Copper
|
|
121
|
|
|
105
|
|
|
15
|
|
|
|
Quarter Ended
March 31, |
||||||
(amounts in millions)
|
|
2020
|
|
2019
|
||||
BrokerTec U.S.'s fixed income transaction fees
|
|
$
|
50.3
|
|
|
$
|
47.6
|
|
EBS's foreign exchange transaction fees
|
|
52.5
|
|
|
48.9
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||||
(amounts in billions)
|
|
2020
|
|
2019
|
|
Change
|
|||||
U.S. Treasury
|
|
$
|
192.8
|
|
|
$
|
172.4
|
|
|
12
|
%
|
European Repo (in euros)
|
|
262.6
|
|
|
271.4
|
|
|
(3
|
)
|
||
Spot FX
|
|
97.9
|
|
|
81.5
|
|
|
20
|
|
|
|
Quarter Ended
March 31, |
|
|
|||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
Change
|
|||||
Compensation and benefits
|
|
$
|
207.5
|
|
|
$
|
230.3
|
|
|
(10
|
)%
|
Technology
|
|
47.7
|
|
|
47.1
|
|
|
1
|
|
||
Professional fees and outside services
|
|
41.7
|
|
|
39.4
|
|
|
6
|
|
||
Amortization of purchased intangibles
|
|
77.3
|
|
|
80.7
|
|
|
(4
|
)
|
||
Depreciation and amortization
|
|
35.3
|
|
|
32.9
|
|
|
8
|
|
||
Licensing and other fee agreements
|
|
73.9
|
|
|
40.5
|
|
|
83
|
|
||
Other
|
|
78.8
|
|
|
77.7
|
|
|
1
|
|
||
Total Expenses
|
|
$
|
562.2
|
|
|
$
|
548.6
|
|
|
2
|
|
|
Quarter Ended March 31, 2020
|
|||||
|
Amount of
Change
|
|
Change as a
Percentage of Total Expenses |
|||
(dollars in millions)
|
||||||
Licensing and other fee agreements
|
$
|
33.4
|
|
|
6
|
%
|
Intangible and fixed asset impairments
|
23.5
|
|
|
4
|
|
|
Salaries, benefits and employer taxes
|
(3.2
|
)
|
|
(1
|
)
|
|
Marketing
|
(4.9
|
)
|
|
(1
|
)
|
|
Foreign currency exchange rate fluctuation
|
(11.2
|
)
|
|
(2
|
)
|
|
Non-qualified deferred compensation plans
|
(14.7
|
)
|
|
(3
|
)
|
|
Other expenses, net
|
(9.3
|
)
|
|
(1
|
)
|
|
Total increase
|
$
|
13.6
|
|
|
2
|
%
|
•
|
Licensing and other fee agreements increased primarily due to stronger volume across equity products.
|
•
|
In the first quarter of 2020, we recognized impairment charges on certain intangibles and fixed assets related to a subsidiary. These charges contributed to an increase in other expenses during the first quarter of 2020.
|
•
|
A decrease in our non-qualified deferred compensation liability, the impact of which does not affect net income because of an equal and offsetting change in investment income, contributed to a decrease in compensation and benefits expense.
|
•
|
Compensation and benefits expense also decreased as a result of lower headcount throughout the first quarter of 2020 compared to the same period in 2019.
|
•
|
In the first quarter of 2020, we recognized a net gain of $3.6 million primarily due to the decline in the British pound versus U.S. dollar exchange rate, compared with a net loss of $7.6 million in the first quarter of 2019 when the British pound appreciated versus the U.S dollar. Gains and losses from exchange rate fluctuations result when subsidiaries with a U.S. dollar functional currency hold cash as well as certain other monetary assets and liabilities denominated in foreign currencies.
|
•
|
Marketing expense decreased in the first quarter of 2020 compared to the same period in 2019 due to the timing of planned advertising and media campaigns.
|
|
|
Quarter Ended
March 31, |
|
|
|||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
Change
|
|||||
Investment income
|
|
$
|
95.9
|
|
|
$
|
178.7
|
|
|
(46
|
)%
|
Interest and other borrowing costs
|
|
(40.9
|
)
|
|
(48.1
|
)
|
|
(15
|
)
|
||
Equity in net earnings (losses) of unconsolidated subsidiaries
|
|
51.2
|
|
|
40.5
|
|
|
26
|
|
||
Other non-operating income (expense)
|
|
(76.8
|
)
|
|
(161.9
|
)
|
|
(53
|
)
|
||
Total Non-Operating
|
|
$
|
29.4
|
|
|
$
|
9.2
|
|
|
n.m.
|
|
|
|
2020
|
|
2019
|
||
Quarter ended March 31
|
|
22.5
|
%
|
|
22.5
|
%
|
|
|
||
(in millions)
|
Par Value
|
||
Fixed rate notes due September 2022, stated rate of 3.00% (1)
|
$
|
750.0
|
|
Fixed rate notes due May 2023, stated rate of 4.30%
|
€
|
15.0
|
|
Fixed rate notes due March 2025, stated rate of 3.00% (2)
|
$
|
750.0
|
|
Fixed rate notes due June 2028, stated rate of 3.75%
|
$
|
500.0
|
|
Fixed rate notes due September 2043, stated rate of 5.30% (3)
|
$
|
750.0
|
|
Fixed rate notes due June 2048, stated rate of 4.15%
|
$
|
700.0
|
|
Commercial Paper
|
$
|
100.0
|
|
(1)
|
We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 3.32%.
|
(2)
|
We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 3.11%.
|
(3)
|
We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable effectively became fixed at a rate of 4.73%.
|
|
|
Short-Term
|
|
Long-Term
|
|
|
Rating Agency
|
|
Debt Rating
|
|
Debt Rating
|
|
Outlook
|
Standard & Poor’s
|
|
A1+
|
|
AA-
|
|
Stable
|
Moody’s Investors Service
|
|
P1
|
|
Aa3
|
|
Stable
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
Interruptions to our business and operations;
|
•
|
Key members of senior management or a significant number of our employees unable to work as a result of contracting COVID-19 or related illnesses;
|
•
|
Reduced productivity and operating effectiveness as a result of our employees working remotely and impacts on our clients encountering similar circumstances;
|
•
|
Impacts on our third-party suppliers and their ability to fulfill their obligations to us;
|
•
|
Unprecedented volatility and market stresses in global financial markets;
|
•
|
Reduced economic activity generally could cause businesses to have less need to hedge in our markets;
|
•
|
Delays to our expansion, investment and strategic initiatives and system integrations;
|
•
|
Impacts to our ability to expand our client base, grow our business and generate new revenue due to the inability to hold in person meetings, events and conferences and other impacts from social distancing;
|
•
|
Impacts on our brand and reputation due to negative investor sentiment in the overall financial markets;
|
•
|
Increased financial and operational stress experienced by our clearing firm members due to unprecedented volatility, including significant losses that may result in a reduction of business or a default;
|
•
|
Market access or trading limitations imposed by governmental authorities; and
|
•
|
Increased technology and cyber-security risks, social engineering and phishing campaigns.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
(a) Total Number of
Class A
Shares Purchased (1)
|
|
(b) Average Price
Paid Per Share
|
|
(c) Total Number of Class A Shares Purchased as
Part of Publicly Announced Plans or Programs
|
|
(d) Maximum Number (or Approximate Value) that
May Yet Be Purchased
Under the Plans or Programs
(in millions)
|
||||||
January 1 to January 31
|
|
121
|
|
|
$
|
204.86
|
|
|
—
|
|
|
$
|
—
|
|
February 1 to February 29
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
March 1 to March 31
|
|
104,922
|
|
|
182.01
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
105,043
|
|
|
|
|
|
—
|
|
|
|
(1)
|
Shares purchased consist of an aggregate of 105,043 shares of Class A common stock surrendered in the first quarter of 2020 to satisfy employees’ tax obligations upon the vesting of restricted stock.
|
ITEM 6.
|
EXHIBITS
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101
|
|
The following materials from CME Group Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Unaudited Consolidated Financial Statements, tagged as blocks of text.
|
|
|
|
104
|
|
The cover page from CME Group Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline XBRL.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CME Group Inc.
(Registrant)
|
||
|
|
|
|
|||
Dated: May 6, 2020
|
|
|
|
By:
|
|
/s/ John W. Pietrowicz
|
|
|
|
|
|
|
Chief Financial Officer & Senior Managing
Director Finance
|
1 Year CME Chart |
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