What was the primary driver of CME Group's revenue decline in 2012?

The primary driver for the revenue decline in 2012 was a decrease in contract volume across most product lines, particularly in interest rate and equity products. This was influenced by lower market volatility and a challenging economic environment. Additionally, the contribution of certain assets to the S&P/Dow Jones Indices joint venture and the sale of CMA impacted market data revenue.

How did the company's strategic acquisitions and joint ventures in 2012 impact its business?

In 2012, CME Group made significant strategic moves. The acquisition of KCBT expanded its agricultural commodity offerings. The formation of S&P/Dow Jones Indices LLC with McGraw-Hill diversified revenue streams into index services and provided licensing opportunities. These initiatives aimed to enhance product diversity, expand customer reach, and strengthen its market position.

What is CME Group's outlook on the regulatory environment, particularly the Dodd-Frank Act?

CME Group views the regulatory environment, including the Dodd-Frank Act, as both a challenge and an opportunity. While acknowledging the costs and complexities associated with new regulations, the company believes that initiatives like mandatory clearing for certain OTC derivatives create significant growth opportunities for its business. CME actively participates in the rulemaking process to influence regulations that foster competition and innovation.

How did CME Group's operational structure change with its recent acquisitions and ventures?

CME Group has been actively expanding its global presence and diversifying its offerings. This included the acquisition of KCBT to strengthen its agricultural commodity business and the formation of S&P/Dow Jones Indices LLC to enter the index services market. The company also launched CME Clearing Europe to expand its European clearing services and is developing a London-based derivatives exchange. These moves reflect a strategy to become a more broadly diversified financial exchange.

CME 10-K FY2012 Annual Report — Revenue, Net Income, EPS

Summary

CME Group Inc. (CME) reported its 2012 fiscal year results, showcasing a resilient business despite a challenging economic environment marked by uncertainty in the U.S. and Europe. The company demonstrated its ability to adapt and grow through strategic acquisitions, such as the integration of KCBT, and the formation of new joint ventures like S&P/Dow Jones Indices LLC, which diversifies its revenue streams into index services. CME's core business remains strong, driven by its diverse product lines across major asset classes and its leading electronic trading platform, CME Globex. The company navigated a complex regulatory landscape, including the ongoing implementation of the Dodd-Frank Act, which it views as an opportunity for growth, particularly in over-the-counter (OTC) clearing services. CME's strategic focus on globalization, expanding its customer base internationally, and enhancing its technology infrastructure positions it for continued success. While facing competition and potential regulatory shifts, CME's integrated approach to trading, clearing, and market data services, coupled with a commitment to innovation and risk management, underpins its market leadership.

Financial Highlights

49 data points

Beta

Revenue

$2.91B

Net Income

$896.30M

0.3% Net Margin

EPS (Diluted)

$2.70

Total Assets

$38.86B

Cash & Equivalents

$1.60B

Free Cash Flow

$1.08B

Financial Statements

Beta

Revenue	$2.91B
Operating Expenses	$1.22B
Operating Income	$1.69B
Net Income	$896.30M
EPS (Basic)	$2.71
EPS (Diluted)	$2.70
Shares Outstanding (Basic)	331.25M
Shares Outstanding (Diluted)	332.32M

Key Highlights

1Total revenues for 2012 were $2.91 billion, a decrease of 11% from $3.28 billion in 2011, primarily due to lower contract volumes and reduced market data revenue after divesting certain assets.
2Net income attributable to CME Group decreased by 51% to $896.3 million in 2012, compared to $1.81 billion in 2011, impacted by lower revenues and higher tax provisions.
3Contract volume saw a significant decline, with average daily volume decreasing by 15% to 11,423 thousand contracts in 2012 from 13,439 thousand in 2011, reflecting reduced trading activity across most product lines, particularly interest rates and equities.
4The company completed several strategic initiatives in 2012, including the acquisition of KCBT, the formation of S&P/Dow Jones Indices LLC with McGraw-Hill, and the expansion of its co-location business, contributing to revenue diversification and enhanced service offerings.
5Electronic trading continued to dominate CME's revenue mix, accounting for 84% of contract volume, underscoring the importance of its CME Globex platform.
6CME Group maintained a strong balance sheet with total assets of $38.9 billion and shareholder equity of $21.4 billion as of December 31, 2012.
7The company paid a regular quarterly dividend of $0.45 per share and an annual variable dividend of $1.30 per share, reflecting its commitment to returning capital to shareholders.

CME GROUP INC. Annual Report, Year Ended Dec 31, 2012

Summary

Financial Highlights

Key Highlights

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