10-KPeriod: FY2009

CME GROUP INC. Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:CME

Summary

CME Group Inc. (CME) reported solid financial performance for the year ended December 31, 2009, navigating a challenging economic environment. Total revenues reached $2.61 billion, a slight increase from the prior year, driven by strong performance in quotation data fees and stable clearing and transaction fees, despite a notable decline in trading volume, particularly in interest rate products. The company successfully integrated the NYMEX acquisition, contributing to its diverse product portfolio. CME Group demonstrated resilience by maintaining its market leadership and investing in technology, including enhancements to its Globex platform and expansion into over-the-counter markets with services like CME ClearPort. Despite the economic headwinds, the company maintained a strong balance sheet and generated substantial operating cash flow. The focus on growing its core business, globalizing its operations, and serving the over-the-counter markets remains central to its strategy. While the company faced challenges such as increased regulatory scrutiny and market volatility, its robust financial safeguards and clearing operations protected customers from counterparty failures. CME Group ended the year with a healthy liquidity position and continued its commitment to shareholder returns through a consistent quarterly dividend.

Financial Highlights

47 data points
Beta

Revenue

$2.61B

Net Income

$825.80M

31.6% Net Margin

EPS (Diluted)

$2.48

Total Assets

$35.65B

Cash & Equivalents

$260.60M

Free Cash Flow

$925.20M

Financial Statements
Beta
Revenue$2.61B
Operating Expenses$1.02B
Operating Income$1.59B
Net Income$825.80M
EPS (Basic)$2.49
EPS (Diluted)$2.48
Shares Outstanding (Basic)331.83M
Shares Outstanding (Diluted)332.74M

Key Highlights

  • 1Total revenues for 2009 were $2.61 billion, a 2% increase year-over-year, reflecting the company's ability to generate revenue across its diverse product lines.
  • 2Clearing and transaction fees remained the primary revenue driver, totaling $2.16 billion, showing resilience despite an overall decline in trading volume.
  • 3Quotation data fees saw a significant increase of 18% to $331.1 million, demonstrating the growing value of the company's market data services.
  • 4The company continued to expand its over-the-counter services by clearing credit default swaps and growing its CME ClearPort offerings, indicating a strategic move into new markets.
  • 5Despite a 20% decrease in average daily trading volume compared to 2008, the company's open interest grew by 24%, suggesting sustained market participation and liquidity.
  • 6CME Group maintained a strong financial position with $5.98 billion in cash performance bonds and security deposits, underscoring its robust financial safeguards.
  • 7The company announced plans for a joint venture to own Dow Jones Indexes, aiming to diversify revenue streams and expand its index business.
  • 8A regular quarterly dividend of $1.15 per share was maintained, reflecting the company's commitment to shareholder returns.

Frequently Asked Questions

CME Group Inc. reported total revenues of $2.61 billion for 2009, a slight increase from 2008, driven by growth in quotation data fees and stable clearing and transaction fees. Despite a 20% decrease in average daily trading volume, largely due to market volatility and reduced risk appetite from customers, the company maintained strong operating income and a healthy liquidity position.

CME Group's growth strategy focuses on three key areas: growing the core business through product diversification and customer base expansion; globalizing the business by targeting international customers through strategic investments; and serving the over-the-counter markets by developing new products and services and exploring acquisitions and alliances.

The acquisition of NYMEX Holdings in August 2008 contributed to a significant increase in revenues and a broader product portfolio, particularly in energy and metals. While the integration involved restructuring costs, it enhanced CME Group's market position and offering, contributing to the company's overall financial performance in 2009.

CME Group emphasizes strong financial safeguards, including its integrated clearing house (CME Clearing), which acts as the counterparty to all trades. The company requires clearing firms to maintain performance bonds and security deposits, marks positions to market at least twice daily, and has a multi-billion dollar safeguard package. Notably, the report states that no customers incurred financial loss due to a counterparty failure during the crisis period.