CME GROUP INC. Quarterly Report for Q1 Ended Mar 31, 2011

Summary

CME Group Inc. reported strong financial results for the first quarter of 2011, with total revenues increasing by 20% year-over-year to $831.6 million. This growth was primarily driven by a 20% increase in clearing and transaction fees, fueled by a 21% rise in total contract volume. Net income attributable to CME Group surged by 90% to $456.6 million, leading to a significant 88% increase in diluted earnings per share to $6.81. The company also demonstrated robust operational efficiency, with operating income growing by 26% and the operating margin expanding to 63%. A notable factor contributing to the bottom-line improvement was a substantial decrease in the effective tax rate to 10.7% from 39.8% in the prior year, largely due to a favorable change in state tax apportionment and a reduction in valuation allowances on capital losses. Despite increased operating expenses, mainly driven by higher compensation, benefits, and bonus expenses, CME Group's financial performance remained strong, underscoring its leading position in the derivatives market.

Key Highlights

• 1Total revenues increased by 20% to $831.6 million in Q1 2011 compared to Q1 2010.
• 2Clearing and transaction fees, the primary revenue driver, grew by 20% year-over-year, supported by a 21% increase in total contract volume.
• 3Net income attributable to CME Group more than doubled, rising 90% to $456.6 million.
• 4Diluted earnings per share (EPS) saw a substantial increase of 88%, reaching $6.81.
• 5Operating margin improved to 63% from 60% in the prior year period.
• 6The effective tax rate significantly decreased to 10.7% from 39.8%, positively impacting net income.
• 7Cash flows from operating activities remained strong, slightly increasing by 2% to $362.1 million.

Frequently Asked Questions