01—Abstract
Summary
Summary of the 10-Q/A filed August 9, 2013. Cited figures are marked; the original filing is the authoritative source.
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%a 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%b 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.
02—Key points
Key Highlights
- Total 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.
- Net income attributable to CME Group shareholders surged by 27% to $311.2 million in Q2 2013, compared to $244.9 million in Q2 2012.
- Diluted earnings per share (EPS) grew by 26% to $0.93 in Q2 2013, from $0.74 in the prior year's quarter.
- Total 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.
- Contract 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.
- Cash flows from operating activities for the six months ended June 30, 2013, increased by 17% to $768.8 million, reflecting strong operational performance.
- The company maintained a strong balance sheet with cash and cash equivalents of $1.97 billion as of June 30, 2013.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-Q/AQ2 FY2013filed August 9, 2013Financial Statements
Q2 FY2013 against Q2 FY2012
| Line item | Q2 FY2013Q2 FY2012 | Change |
|---|---|---|
| Revenue | $816.10M$795.90M | +2.5% |
| Operating Expenses | $308.30M$326.70M | −5.6% |
| Operating Income | $507.80M$469.20M | +8.2% |
| Net Income | $311.20M$244.90M | +27.1% |
| EPS (Basic) | $0.94$0.74 | +27.0% |
| EPS (Diluted) | $0.93$0.74 | +25.7% |
| Shares Outstanding (Basic) | 332.34M331.08M | +0.4% |
| Shares Outstanding (Diluted) | 334.07M332.16M | +0.6% |
05—Questions
Frequently Asked Questions
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.
06—Continue