10-KPeriod: FY2017

CME GROUP INC. Annual Report, Year Ended Dec 31, 2017

Filed March 1, 2018For Securities:CME

Summary

CME Group Inc. reported solid financial performance in 2017, driven by an increase in average daily contract volume and revenue growth across most product lines. The company experienced a notable surge in interest rate, energy, and metal contracts, reflecting market volatility and evolving economic conditions. Electronic trading continues to dominate, accounting for 89% of total volume, highlighting the company's investment in technology. Financially, CME Group demonstrated strong operational leverage with increased operating income and net income compared to the previous year. The company also returned significant capital to shareholders through dividends, reinforcing its commitment to shareholder value. Despite facing a competitive landscape and evolving regulatory environment, CME Group maintained its leading market position, supported by its diverse product offerings, robust clearing services, and technological capabilities.

Financial Highlights

48 data points
Beta

Revenue

$3.64B

Net Income

$4.06B

111.5% Net Margin

EPS (Diluted)

$11.94

Total Assets

$75.79B

Cash & Equivalents

$1.90B

Free Cash Flow

$1.67B

Financial Statements
Beta
Revenue$3.64B
Operating Expenses$1.33B
Operating Income$2.31B
Net Income$4.06B
EPS (Basic)$12.00
EPS (Diluted)$11.94
Shares Outstanding (Basic)338.71M
Shares Outstanding (Diluted)340.23M

Key Highlights

  • 1Total revenues increased by 1% to $3.64 billion in 2017, primarily driven by a 4% increase in total contract volume.
  • 2Interest rate, energy, and metal product volumes saw significant year-over-year increases (9%, 6%, and 23% respectively), reflecting market volatility.
  • 3Electronic trading continued its dominance, representing 89% of total contract volume, up from 88% in 2016.
  • 4Operating income grew by 5% to $2.31 billion, showcasing strong operational efficiency.
  • 5Net income saw a substantial increase of 165% to $4.06 billion, significantly boosted by a $2.6 billion tax benefit from the Tax Cuts and Jobs Act.
  • 6The company declared regular and variable dividends totaling $6.14 per share in 2017, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

CME Group's total revenues increased by 1% to $3.64 billion in 2017. This growth was primarily driven by an increase in clearing and transaction fees, which rose by 2% to $3.10 billion, supported by a 4% increase in overall contract volume.

Interest rate contracts saw a significant 9% increase in average daily volume, while energy contracts grew by 6% and metal contracts by 23%. Equity contracts experienced a decline of 12% due to lower market volatility.

The Tax Cuts and Jobs Act, enacted in late 2017, led to a significant reduction in the U.S. corporate tax rate. This resulted in a revaluation of deferred tax liabilities, leading to a substantial one-time tax benefit of approximately $2.6 billion, which significantly boosted net income for the year.

CME Group has a policy of paying regular quarterly dividends, aiming for 50% to 60% of the prior year's cash earnings. In 2017, the company declared regular quarterly dividends and an additional annual variable dividend, totaling $6.14 per share, demonstrating a commitment to shareholder returns.