What drove the increase in CME Group's revenue in Q2 2013?

The primary driver for the revenue increase was a rise in clearing and transaction fees, up 8% year-over-year, due to higher contract volumes, particularly in interest rate and equity products. This growth was partially offset by a decline in market data and information services revenue, which was impacted by the prior de-consolidation of the company's index business and the sale of Credit Market Analysis Ltd.

How did CME Group manage its expenses during the quarter?

CME Group successfully reduced its total expenses by 6% in Q2 2013 compared to the same period in 2012. This reduction was largely attributed to the ongoing impact of the de-consolidation of its index business and the sale of its Credit Market Analysis Ltd. business, which reduced associated operating costs.

What is the outlook for contract volumes, and what factors are influencing them?

Contract volumes saw a significant 16% increase in Q2 2013. This growth was primarily driven by increased volatility in interest rate markets due to shifting expectations about the Federal Reserve's monetary policy (quantitative easing and zero interest rate policy). Equity and metal product volumes also saw notable increases, influenced by periods of market volatility and macroeconomic factors.

What is the company's financial position regarding debt and liquidity?

CME Group maintained a healthy liquidity position, with cash and cash equivalents totaling $1.97 billion as of June 30, 2013. The company had $1.499 billion in short-term debt and $1.358 billion in long-term debt. It also maintained significant borrowing capacity under its revolving credit facilities, indicating strong financial flexibility.

CME 10-Q Quarterly Report Q2 FY2013 — Revenue, Net Income, EPS

Summary

CME Group Inc.'s Q2 2013 filing reveals a solid operational quarter with revenue growth driven by increased clearing and transaction fees, primarily fueled by higher contract volumes, especially in interest rate and equity products. Despite a decline in market data revenues due to prior divestitures, overall revenues saw a 3% increase year-over-year. Expenses were managed effectively, decreasing by 6%, largely attributed to the impact of prior business consolidations and sales. This resulted in a significant 27% increase in net income attributable to CME Group shareholders and a corresponding 26% rise in diluted earnings per share compared to the same period in 2012. The company also demonstrated strong operating cash flow, indicating robust financial health and operational efficiency during the period.

Financial Highlights

47 data points

Beta

Revenue

$816.10M

Net Income

$311.20M

0.4% Net Margin

EPS (Diluted)

$0.93

Total Assets

$46.88B

Cash & Equivalents

$1.97B

Free Cash Flow

$337.20M

Financial Statements

Beta

Revenue	$816.10M
Operating Expenses	$308.30M
Operating Income	$507.80M
Net Income	$311.20M
EPS (Basic)	$0.94
EPS (Diluted)	$0.93
Shares Outstanding (Basic)	332.34M
Shares Outstanding (Diluted)	334.07M

Key Highlights

1Total revenues increased by 3% to $816.1 million in Q2 2013 compared to Q2 2012, primarily driven by an 8% increase in clearing and transaction fees due to higher contract volumes.
2Net income attributable to CME Group shareholders surged by 27% to $311.2 million in Q2 2013, compared to $244.9 million in Q2 2012.
3Diluted earnings per share (EPS) grew by 26% to $0.93 in Q2 2013, from $0.74 in the prior year's quarter.
4Total expenses decreased by 6% to $308.3 million in Q2 2013, largely due to the impact of de-consolidation of the index business and the sale of Credit Market Analysis Ltd.
5Contract volume increased by 16% in Q2 2013, with significant growth in interest rate (33%) and metal (27%) products, driven by market volatility and macroeconomic factors.
6Cash flows from operating activities for the six months ended June 30, 2013, increased by 17% to $768.8 million, reflecting strong operational performance.
7The company maintained a strong balance sheet with cash and cash equivalents of $1.97 billion as of June 30, 2013.

CME GROUP INC. Quarterly Report (Amendment) for Q2 Ended Jun 30, 2013

Summary

Financial Highlights

Key Highlights

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