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CME Group Inc. Reports First-Quarter 2022 Financial Results

·9 min read

CHICAGO, April 27, 2022 /PRNewswire/ -- CME Group Inc. (NASDAQ: CME) today reported financial results for the first quarter of 2022.

The company reported revenue of $1.3 billion and operating income of $859 million for the first quarter of 2022. Net income was $711 million and diluted earnings per share were $1.95. On an adjusted basis, net income was $766 million and diluted earnings per share were $2.11. Financial results presented on an adjusted basis for the first quarter of 2022 and 2021 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1

"During this period of extreme geopolitical and economic uncertainty, our continued focus on helping clients manage their risk resulted in strong earnings and revenue growth during the first quarter," said CME Group Chairman and Chief Executive Officer Terry Duffy. "Average daily volume was robust with double-digit increases in equity index, interest rate and options products, as well as significant volume outside the U.S. In addition, we are pleased with the accelerated growth of our SOFR futures and options since the start of the year, including record quarterly volume and open interest. Looking ahead, we will continue to provide the benchmark products, services and data our clients need as they continue to navigate through evolving central bank policies, inflation, supply chain constraints and other economic challenges."

First-quarter 2022 average daily volume (ADV) was 25.9 million contracts, including non-U.S. ADV of 7.3 million contracts, led by 28% growth in Latin America, 22% in Asia and 17% in EMEA.

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.

Clearing and transaction fees revenue for first-quarter 2022 totaled $1.1 billion. The total average rate per contract was $0.644. Market data revenue totaled $152 million for first-quarter 2022.

As of March 31, 2022, the company had approximately $2.1 billion in cash (including $100 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 $1.5 billion, which included the annual variable dividend for 2021 of $1.2 billion. The company has returned approximately $18 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 2022 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 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.

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 and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, 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.

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 programs 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 our joint venture with IHS Markit and our partnership with Google Cloud; uncertainty related to the transition from LIBOR; 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, 2021, as filed with the Securities and Exchange Commission ("SEC") on February 25, 2022, under the caption "Risk Factors".

CME Group Inc. and Subsidiaries

Consolidated Balance Sheets

(in millions)




March 31, 2022


December 31, 2021

ASSETS





Current Assets:





Cash and cash equivalents


$ 2,045.7


$ 2,834.9

Marketable securities


109.6


115.0

Accounts receivable, net of allowance


608.9


434.5

Other current assets (includes $4.8 and $4.8 in restricted cash)


503.4


427.8

Performance bonds and guaranty fund contributions


167,736.7


157,949.6

Total current assets


171,004.3


161,761.8

Property, net of accumulated depreciation and amortization


493.9


505.3

Intangible assets—trading products


17,175.3


17,175.3

Intangible assets—other, net


3,463.2


3,532.0

Goodwill


10,515.8


10,528.0

Other assets (includes $0.5 and $0.5 in restricted cash)


3,265.2


3,277.9

Total Assets


$ 205,917.7


$ 196,780.3

LIABILITIES AND EQUITY





Current Liabilities:





Accounts payable


$ 80.8


$ 48.8

Short-term debt



749.4

Other current liabilities


641.1


1,650.6

Performance bonds and guaranty fund contributions


167,736.7


157,949.6

Total current liabilities


168,458.6


160,398.4

Long-term debt


3,437.1


2,695.7

Deferred income tax liabilities, net


5,381.7


5,390.4

Other liabilities


903.5


896.5

Total Liabilities


178,180.9


169,381.0

Total CME Group Shareholders' Equity


27,736.8


27,399.3

Total Liabilities and Equity


$ 205,917.7


$ 196,780.3

CME Group Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in millions, except per share amounts; shares in thousands)




Quarter Ended

March 31



2022


2021

Revenues





Clearing and transaction fees


$ 1,138.1


$ 1,007.0

Market data and information services


151.7


144.2

Other


56.8


102.1

Total Revenues


1,346.6


1,253.3

Expenses





Compensation and benefits


185.2


225.0

Technology


45.9


48.2

Professional fees and outside services


31.8


37.4

Amortization of purchased intangibles


58.4


60.6

Depreciation and amortization


33.5


37.6

Licensing and other fee agreements


80.9


64.7

Other


51.8


54.7

Total Expenses


487.5


528.2

Operating Income


859.1


725.1

Non-Operating Income (Expense)





Investment income


73.1


30.9

Interest and other borrowing costs


(42.5)


(41.5)

Equity in net earnings of unconsolidated subsidiaries


73.3


56.2

Other non-operating income (expense)


(46.7)


(18.4)

Total Non-Operating Income (Expense)


57.2


27.2

Income before Income Taxes


916.3


752.3

Income tax provision


205.3


177.5

Net Income


711.0


574.8

Less: net (income) loss attributable to non-controlling interests



(0.4)

Net Income Attributable to CME Group


$ 711.0


$ 574.4

Net Income Attributable to Common Shareholders of CME Group


$ 702.0


$ 574.4






Earnings per Share Attributable to Common Shareholders of CME Group:





Basic


$ 1.96


$ 1.60

Diluted


1.95


1.60

Weighted Average Number of Common Shares:





Basic


358,609


358,147

Diluted


359,180


358,817

CME Group Inc. and Subsidiaries

Quarterly Operating Statistics




1Q 2021


2Q 2021


3Q 2021


4Q 2021


1Q 2022

Trading Days


61


63


64


64


62

Quarterly Average Daily Volume (ADV)(1)

CME Group ADV (in thousands)


Product Line


1Q 2021


2Q 2021


3Q 2021


4Q 2021


1Q 2022

Interest rates


10,349


8,581


8,111


9,805


12,484

Equity indexes


6,117


4,926


5,100


5,943


7,950

Foreign exchange


852


769


776


800


904

Energy


2,363


1,963


2,179


2,252


2,515

Agricultural commodities


1,471


1,631


1,141


1,216


1,474

Metals


675


568


480


475


593

Total


21,827


18,438


17,786


20,490


25,920

Venue











CME Globex


20,436


17,223


16,652


19,043


24,060

Open outcry


678


646


598


792


1,030

Privately negotiated


713


569


536


656


830

Total


21,827


18,438


17,786


20,490


25,920

Quarterly Average Rate Per Contract (RPC)(1)

CME Group RPC


Product Line


1Q 2021


2Q 2021


3Q 2021


4Q 2021


1Q 2022

Interest rates


$ 0.475


$ 0.491


$ 0.483


$ 0.487


$ 0.484

Equity indexes


0.532


0.555


0.555


0.526


0.526

Foreign exchange


0.779


0.805


0.803


0.779


0.800

Energy


1.097


1.140


1.127


1.111


1.124

Agricultural commodities


1.343


1.343


1.319


1.323


1.378

Metals


1.415


1.438


1.463


1.452


1.482

Average RPC


$ 0.658


$ 0.695


$ 0.677


$ 0.650


$ 0.644












1. ADV and RPC includes futures and options on futures only.



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



2022


2021

Net Income Attributable to CME Group


$ 711.0


$ 574.4

Restructuring and severance


3.7


14.8

Amortization of purchased intangibles(1)


69.8


60.6

Strategic transaction-related costs(2)


1.6


10.2

Foreign exchange transaction (gains) losses


(4.3)


2.4

Unrealized and realized gains on investments


(4.0)


(1.3)

Debt costs related to refinancing


7.7


Realized and unrealized losses on assets



0.8

Trading floor enhancements


4.4


Income tax effect related to above


(15.8)


(20.7)

Other income tax items(3)


(7.9)


Adjusted Net Income Attributable to CME Group


$ 766.2


$ 641.2






Adjusted Net Income Attributable to Common Shareholders of CME Group


$ 756.6


$ 641.2






Earnings per Share Attributable to Common Shareholders of CME Group:

Basic


$ 1.96


$ 1.60

Diluted


1.95


1.60






Adjusted Earnings per Share Attributable to Common Shareholders of CME Group:

Basic


$ 2.11


$ 1.79

Diluted


2.11


1.79






Weighted Average Number of Common Shares:





Basic


358,609


358,147

Diluted


359,180


358,817

Preferred shares(4)


4,584







1. Includes $11.4 million of amortization of purchased intangibles (net of tax) at OSTTRA, reported in Equity in net earnings of unconsolidated subsidiaries.

2. Strategic transaction-related costs primarily include professional fees related to the NEX integration.

3. Other income tax items include benefits recognized for the settlement of various tax audits.

4. Preferred shares have similar rights as common shares without voting rights.

Media contact

Investor contact

Chris Grams, 312.930.3435

John Peschier, 312.930.8491

Laurie Bischel, 312.648.8698


news@cmegroup.com


www.cmegroup.mediaroom.com


CME-G

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View original content:https://www.prnewswire.com/news-releases/cme-group-inc-reports-first-quarter-2022-financial-results-301533710.html

SOURCE CME Group