ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-4459170
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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20 South Wacker Drive, Chicago, Illinois
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60606
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 4.
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Item 6.
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•
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increasing competition by foreign and domestic entities, including increased competition from new entrants into our markets and consolidation of existing entities;
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•
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our ability to keep pace with rapid technological developments, including our ability to complete the development, implementation and maintenance of the enhanced functionality required by our customers while maintaining reliability and ensuring that such technology is not vulnerable to security risks;
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•
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our ability to continue introducing competitive new products and services on a timely, cost-effective basis, including through our electronic trading capabilities, and our ability to maintain the competitiveness of our existing products and services, including our ability to provide effective services to the swaps market;
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•
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our ability to adjust our fixed costs and expenses if our revenues decline;
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•
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our ability to maintain existing customers, develop strategic relationships and attract new customers;
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•
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our ability to expand and offer our products outside the United States;
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•
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changes in domestic and non-U.S. regulations, including the impact of any changes in domestic and non-U.S. laws or government policy with respect to our industry, such as any changes to regulations and policies that require increased financial and operational resources from us or our customers;
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•
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the costs associated with protecting our intellectual property rights and our ability to operate our business without violating the intellectual property rights of others;
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•
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decreases in revenue from our market data as a result of decreased demand;
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•
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changes in our rate per contract due to shifts in the mix of the products traded, the trading venue and the mix of customers (whether the customer receives member or non-member fees or participates in one of our various incentive programs) and the impact of our tiered pricing structure;
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•
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the ability of our financial safeguards package to adequately protect us from the credit risks of clearing members;
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•
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the ability of our compliance and risk management methods to effectively monitor and manage our risks, including our ability to prevent errors and misconduct and protect our infrastructure against security breaches and misappropriation of our intellectual property assets;
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•
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changes in price levels and volatility in the derivatives markets and in underlying equity, foreign exchange, interest rate and commodities markets;
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•
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economic, political and market conditions, including the volatility of the capital and credit markets and the impact of economic conditions on the trading activity of our current and potential customers;
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•
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our ability to accommodate increases in contract volume and order transaction traffic and to implement enhancements without failure or degradation of the performance of our trading and clearing systems;
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•
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our ability to execute our growth strategy and maintain our growth effectively;
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•
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our ability to manage the risks and control the costs associated with our strategy for acquisitions, investments and alliances;
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•
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our ability to continue to generate funds and/or manage our indebtedness to allow us to continue to invest in our business;
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•
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industry and customer consolidation;
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•
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decreases in trading and clearing activity;
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•
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the imposition of a transaction tax or user fee on futures and options on futures transactions and/or repeal of the 60/40 tax treatment of such transactions;
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•
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the unfavorable resolution of material legal proceedings; and
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•
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the seasonality of the futures business.
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ITEM 1.
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FINANCIAL STATEMENTS
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September 30, 2015
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December 31, 2014
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Assets
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Current Assets:
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Cash and cash equivalents
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$
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1,434.3
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$
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1,366.1
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Marketable securities
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72.4
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74.7
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Accounts receivable, net of allowance of $1.0 and $1.2
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363.8
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341.2
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Other current assets (includes $32.0 and $37.0 in restricted cash)
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267.1
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196.5
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Performance bonds and guaranty fund contributions
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49,321.2
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40,566.8
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Total current assets
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51,458.8
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42,545.3
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Property, net of accumulated depreciation and amortization of $777.2 and $741.0
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496.1
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508.9
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Intangible assets—trading products
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17,175.3
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17,175.3
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Intangible assets—other, net
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2,562.7
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2,637.4
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Goodwill
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7,569.0
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7,569.0
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Other assets (includes $71.6 and $72.4 in restricted cash)
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1,687.7
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1,805.6
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Total Assets
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$
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80,949.6
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$
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72,241.5
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Liabilities and Equity
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Current Liabilities:
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Accounts payable
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$
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38.1
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$
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36.9
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Other current liabilities
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239.5
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927.5
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Performance bonds and guaranty fund contributions
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49,321.2
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40,566.8
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Total current liabilities
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49,598.8
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41,531.2
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Long-term debt
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2,241.2
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2,107.9
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Deferred income tax liabilities, net
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7,341.5
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7,302.7
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Other liabilities
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391.3
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376.2
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Total Liabilities
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59,572.8
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51,318.0
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Shareholders’ Equity:
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Preferred stock, $0.01 par value, 10,000 shares authorized at September 30, 2015 and December 31, 2014; none issued
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—
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—
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Class A common stock, $0.01 par value, 1,000,000 shares authorized at September 30, 2015 and December 31, 2014; 336,736 and 335,452 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively
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3.4
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3.4
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Class B common stock, $0.01 par value, 3 shares authorized, issued and outstanding as of September 30, 2015 and December 31, 2014
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—
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—
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Additional paid-in capital
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17,696.2
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17,596.6
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Retained earnings
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3,771.8
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3,317.3
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Accumulated other comprehensive income (loss)
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(94.6
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)
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6.2
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Total shareholders’ equity
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21,376.8
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20,923.5
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Total Liabilities and Equity
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$
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80,949.6
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$
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72,241.5
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Quarter Ended
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Nine Months Ended
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September 30,
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September 30,
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2015
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2014
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2015
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2014
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Revenues
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Clearing and transaction fees
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$
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715.0
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$
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641.8
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$
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2,105.0
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$
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1,903.3
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Market data and information services
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99.5
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87.7
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300.3
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266.7
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Access and communication fees
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21.6
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20.8
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64.4
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61.6
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Other
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14.2
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12.1
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43.3
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39.8
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Total Revenues
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850.3
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762.4
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2,513.0
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2,271.4
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Expenses
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||||||||
Compensation and benefits
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136.4
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132.1
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419.2
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407.3
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Communications
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7.1
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7.8
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21.3
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24.3
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Technology support services
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15.4
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13.8
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47.1
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42.3
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Professional fees and outside services
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33.8
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32.2
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90.6
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99.3
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Amortization of purchased intangibles
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24.9
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25.3
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74.8
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75.7
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Depreciation and amortization
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32.4
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32.7
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97.5
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101.1
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Occupancy and building operations
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23.1
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24.7
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69.4
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71.1
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Licensing and other fee agreements
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33.1
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25.5
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92.5
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80.2
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Other
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27.7
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37.9
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81.8
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73.2
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||||
Total Expenses
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333.9
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332.0
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994.2
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974.5
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|
||||
Operating Income
|
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516.4
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|
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430.4
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1,518.8
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1,296.9
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||||
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Non-Operating Income (Expense)
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Investment income
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2.5
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7.4
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26.7
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25.7
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|
||||
Gains (losses) on derivative investments
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—
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—
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(1.8
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)
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—
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|
||||
Interest and other borrowing costs
|
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(28.3
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)
|
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(28.7
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)
|
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(88.5
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)
|
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(90.7
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)
|
||||
Equity in net earnings (losses) of unconsolidated subsidiaries
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26.6
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20.0
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|
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75.1
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|
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63.9
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|
||||
Other non-operating income (expense)
|
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(0.8
|
)
|
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—
|
|
|
(42.0
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)
|
|
1.8
|
|
||||
Total Non-Operating
|
|
—
|
|
|
(1.3
|
)
|
|
(30.5
|
)
|
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0.7
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|
||||
Income before Income Taxes
|
|
516.4
|
|
|
429.1
|
|
|
1,488.3
|
|
|
1,297.6
|
|
||||
Income tax provision
|
|
156.5
|
|
|
139.1
|
|
|
533.0
|
|
|
477.2
|
|
||||
Net Income
|
|
359.9
|
|
|
290.0
|
|
|
955.3
|
|
|
820.4
|
|
||||
Less: net income (loss) attributable to non-controlling interest
|
|
—
|
|
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—
|
|
|
—
|
|
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(0.2
|
)
|
||||
Net Income Attributable to CME Group
|
|
$
|
359.9
|
|
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$
|
290.0
|
|
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$
|
955.3
|
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$
|
820.6
|
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|
||||||||
Earnings per Common Share Attributable to CME Group:
|
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||||||||
Basic
|
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$
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1.07
|
|
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$
|
0.87
|
|
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$
|
2.84
|
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$
|
2.46
|
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Diluted
|
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1.06
|
|
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0.86
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2.83
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2.44
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|
||||
Weighted Average Number of Common Shares:
|
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|
|
|
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||||||||
Basic
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336,323
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334,424
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336,015
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334,144
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|
||||
Diluted
|
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338,139
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336,172
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337,804
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335,820
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Quarter Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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||||||||||||
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2015
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2014
|
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2015
|
|
2014
|
||||||||
Net income
|
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$
|
359.9
|
|
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$
|
290.0
|
|
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$
|
955.3
|
|
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$
|
820.4
|
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Other comprehensive income, net of tax:
|
|
|
|
|
|
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|
||||||||
Investment securities:
|
|
|
|
|
|
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|
||||||||
Net unrealized holding gains (losses) arising during the period
|
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(100.2
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)
|
|
(66.6
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)
|
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(91.0
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)
|
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(10.7
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)
|
||||
Reclassification of net (gains) losses on sales included in investment income
|
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2.6
|
|
|
—
|
|
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(3.4
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)
|
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—
|
|
||||
Income tax benefit (expense)
|
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—
|
|
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(5.0
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)
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1.2
|
|
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(6.5
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)
|
||||
Investment securities, net
|
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(97.6
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)
|
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(71.6
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)
|
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(93.2
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)
|
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(17.2
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)
|
||||
Defined benefit plans:
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|
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|
|
|
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|
||||||||
Net change in defined benefit plans arising during the period
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—
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|
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—
|
|
|
(0.3
|
)
|
|
(3.2
|
)
|
||||
Amortization of net actuarial (gains) losses included in compensation and benefits expense
|
|
0.6
|
|
|
—
|
|
|
2.0
|
|
|
0.2
|
|
||||
Income tax benefit (expense)
|
|
(0.2
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
1.1
|
|
||||
Defined benefit plans, net
|
|
0.4
|
|
|
—
|
|
|
1.1
|
|
|
(1.9
|
)
|
||||
Derivative investments:
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding gains (losses) arising during the period
|
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|
—
|
|
||||
Ineffectiveness on cash flow hedges included in (gains) losses on derivative investments
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
||||
Amortization of effective portion of net (gains) losses on cash flow hedges included in interest expense
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(0.9
|
)
|
|
(1.1
|
)
|
||||
Income tax benefit (expense)
|
|
0.1
|
|
|
0.1
|
|
|
1.5
|
|
|
0.4
|
|
||||
Derivative investments, net
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(2.3
|
)
|
|
(0.7
|
)
|
||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
(3.4
|
)
|
|
(6.9
|
)
|
|
(10.0
|
)
|
|
(2.7
|
)
|
||||
Income tax benefit (expense)
|
|
1.1
|
|
|
2.6
|
|
|
3.6
|
|
|
1.0
|
|
||||
Foreign currency translation, net
|
|
(2.3
|
)
|
|
(4.3
|
)
|
|
(6.4
|
)
|
|
(1.7
|
)
|
||||
Other comprehensive income, net of tax
|
|
(99.7
|
)
|
|
(76.2
|
)
|
|
(100.8
|
)
|
|
(21.5
|
)
|
||||
Comprehensive income
|
|
260.2
|
|
|
213.8
|
|
|
854.5
|
|
|
798.9
|
|
||||
Less: comprehensive income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||
Comprehensive Income Attributable to CME Group
|
|
$
|
260.2
|
|
|
$
|
213.8
|
|
|
$
|
854.5
|
|
|
$
|
799.1
|
|
|
|
Class A
Common
Stock
(Shares)
|
|
Class B
Common
Stock
(Shares)
|
|
Common
Stock and
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders’
Equity
|
||||||||||
Balance at December 31, 2014
|
|
335,452
|
|
|
3
|
|
|
$
|
17,600.0
|
|
|
$
|
3,317.3
|
|
|
$
|
6.2
|
|
|
$
|
20,923.5
|
|
Net income attributable to CME Group
|
|
|
|
|
|
|
|
955.3
|
|
|
|
|
955.3
|
|
||||||||
Other comprehensive income attributable to CME Group
|
|
|
|
|
|
|
|
|
|
(100.8
|
)
|
|
(100.8
|
)
|
||||||||
Dividends on common stock of $1.50 per share
|
|
|
|
|
|
|
|
(500.8
|
)
|
|
|
|
(500.8
|
)
|
||||||||
Tax effect related to prior year purchase of non-controlling interest
|
|
|
|
|
|
9.3
|
|
|
|
|
|
|
9.3
|
|
||||||||
Exercise of stock options
|
|
798
|
|
|
|
|
51.8
|
|
|
|
|
|
|
51.8
|
|
|||||||
Excess tax benefits from option exercises and restricted stock vesting
|
|
|
|
|
|
6.7
|
|
|
|
|
|
|
6.7
|
|
||||||||
Vesting of issued restricted Class A common stock
|
|
450
|
|
|
|
|
(16.8
|
)
|
|
|
|
|
|
(16.8
|
)
|
|||||||
Shares issued to Board of Directors
|
|
26
|
|
|
|
|
2.4
|
|
|
|
|
|
|
2.4
|
|
|||||||
Shares issued under Employee Stock Purchase Plan
|
|
10
|
|
|
|
|
1.0
|
|
|
|
|
|
|
1.0
|
|
|||||||
Stock-based compensation
|
|
|
|
|
|
45.2
|
|
|
|
|
|
|
45.2
|
|
||||||||
Balance at September 30, 2015
|
|
336,736
|
|
|
3
|
|
|
$
|
17,699.6
|
|
|
$
|
3,771.8
|
|
|
$
|
(94.6
|
)
|
|
$
|
21,376.8
|
|
|
Class A
Common
Stock
(Shares)
|
|
Class B
Common
Stock
(Shares)
|
|
Common
Stock and
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total CME Group
Shareholders’
Equity
|
|
Non-Controlling Interest
|
|
Total
Shareholders’ Equity |
||||||||||||||
Balance at December 31, 2013
|
333,852
|
|
|
3
|
|
|
$
|
17,508.2
|
|
|
$
|
3,494.6
|
|
|
$
|
152.0
|
|
|
$
|
21,154.8
|
|
|
$
|
5.7
|
|
|
$
|
21,160.5
|
|
Net income attributable to CME Group and non-controlling interest
|
|
|
|
|
|
|
820.6
|
|
|
|
|
820.6
|
|
|
(0.2
|
)
|
|
820.4
|
|
||||||||||
Other comprehensive income attributable to CME Group
|
|
|
|
|
|
|
|
|
(21.5
|
)
|
|
(21.5
|
)
|
|
|
|
(21.5
|
)
|
|||||||||||
Dividends on common stock of $1.41 per share
|
|
|
|
|
|
|
(473.2
|
)
|
|
|
|
(473.2
|
)
|
|
|
|
(473.2
|
)
|
|||||||||||
Tax effect and gain related to purchase of non-controlling interests
|
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
(1.5
|
)
|
|
(5.5
|
)
|
|
(7.0
|
)
|
||||||||||
Exercise of stock options
|
590
|
|
|
|
|
26.6
|
|
|
|
|
|
|
26.6
|
|
|
|
|
26.6
|
|
||||||||||
Excess tax benefits from option exercises and restricted stock vesting
|
|
|
|
|
3.3
|
|
|
|
|
|
|
3.3
|
|
|
|
|
3.3
|
|
|||||||||||
Vesting of issued restricted Class A common stock
|
496
|
|
|
|
|
(16.2
|
)
|
|
|
|
|
|
(16.2
|
)
|
|
|
|
(16.2
|
)
|
||||||||||
Shares issued to Board of Directors
|
34
|
|
|
|
|
2.4
|
|
|
|
|
|
|
2.4
|
|
|
|
|
2.4
|
|
||||||||||
Shares issued under Employee Stock Purchase Plan
|
13
|
|
|
|
|
0.9
|
|
|
|
|
|
|
0.9
|
|
|
|
|
0.9
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
40.9
|
|
|
|
|
|
|
40.9
|
|
|
|
|
40.9
|
|
|||||||||||
Balance at September 30, 2014
|
334,985
|
|
|
3
|
|
|
$
|
17,564.6
|
|
|
$
|
3,842.0
|
|
|
$
|
130.5
|
|
|
$
|
21,537.1
|
|
|
$
|
—
|
|
|
$
|
21,537.1
|
|
|
|
Nine Months Ended
September 30, |
||||||
|
|
2015
|
|
2014
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
955.3
|
|
|
$
|
820.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Stock-based compensation
|
|
45.2
|
|
|
40.9
|
|
||
Amortization of purchased intangibles
|
|
74.8
|
|
|
75.7
|
|
||
Depreciation and amortization
|
|
97.5
|
|
|
101.1
|
|
||
Gain on sale of BM&FBOVESPA shares
|
|
(3.4
|
)
|
|
—
|
|
||
Debt prepayment costs
|
|
61.8
|
|
|
—
|
|
||
Undistributed earnings, net of losses, of unconsolidated subsidiaries
|
|
(15.2
|
)
|
|
(39.2
|
)
|
||
Deferred income taxes
|
|
49.8
|
|
|
63.1
|
|
||
Change in:
|
|
|
|
|
||||
Accounts receivable
|
|
(22.3
|
)
|
|
(41.9
|
)
|
||
Other current assets
|
|
12.4
|
|
|
(9.4
|
)
|
||
Other assets
|
|
(18.4
|
)
|
|
(10.9
|
)
|
||
Accounts payable
|
|
1.3
|
|
|
(1.2
|
)
|
||
Income taxes payable
|
|
(70.1
|
)
|
|
(141.4
|
)
|
||
Other current liabilities
|
|
(31.3
|
)
|
|
(62.6
|
)
|
||
Other liabilities
|
|
(0.5
|
)
|
|
(11.2
|
)
|
||
Other
|
|
4.3
|
|
|
5.5
|
|
||
Net Cash Provided by Operating Activities
|
|
1,141.2
|
|
|
788.9
|
|
||
|
|
|
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
|
||||
Proceeds from maturities of available-for-sale marketable securities
|
|
29.3
|
|
|
28.5
|
|
||
Purchases of available-for-sale marketable securities
|
|
(29.3
|
)
|
|
(29.3
|
)
|
||
Purchases of property, net
|
|
(90.3
|
)
|
|
(104.2
|
)
|
||
Proceeds from sale of building property
|
|
—
|
|
|
7.9
|
|
||
Investments in business ventures
|
|
(7.0
|
)
|
|
(10.5
|
)
|
||
Proceeds from sale of BM&FBOVESPA shares
|
|
69.0
|
|
|
—
|
|
||
Settlement of derivative related to debt issuance
|
|
7.0
|
|
|
—
|
|
||
Net Cash Used in Investing Activities
|
|
(21.3
|
)
|
|
(107.6
|
)
|
||
|
|
|
|
|
||||
Cash Flows from Financing Activities
|
|
|
|
|
||||
Proceeds from debt, net of issuance costs
|
|
743.7
|
|
|
—
|
|
||
Repayment of debt
|
|
(673.0
|
)
|
|
(750.0
|
)
|
||
Cash dividends
|
|
(1,174.9
|
)
|
|
(1,339.2
|
)
|
||
Purchase of non-controlling interest
|
|
—
|
|
|
(4.7
|
)
|
||
Proceeds from exercise of stock options
|
|
51.8
|
|
|
26.6
|
|
||
Excess tax benefits related to employee option exercises and restricted stock vesting
|
|
6.7
|
|
|
3.3
|
|
||
Settlement of contingent consideration
|
|
(7.0
|
)
|
|
—
|
|
||
Other
|
|
1.0
|
|
|
0.9
|
|
||
Net Cash Used in Financing Activities
|
|
(1,051.7
|
)
|
|
(2,063.1
|
)
|
||
|
|
|
|
|
||||
Net change in cash and cash equivalents
|
|
68.2
|
|
|
(1,381.8
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
1,366.1
|
|
|
2,469.7
|
|
||
Cash and Cash Equivalents, End of Period
|
|
$
|
1,434.3
|
|
|
$
|
1,087.9
|
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
||||
Income taxes paid
|
|
$
|
548.5
|
|
|
$
|
523.9
|
|
Interest paid
|
|
89.1
|
|
|
111.4
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
(in millions)
|
|
Assigned Value
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Assigned Value
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
Amortizable Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Clearing firm, market data and other customer relationships
|
|
$
|
2,838.8
|
|
|
$
|
(730.7
|
)
|
|
$
|
2,108.1
|
|
|
$
|
2,838.8
|
|
|
$
|
(658.8
|
)
|
|
$
|
2,180.0
|
|
Technology-related intellectual property
|
|
29.4
|
|
|
(26.3
|
)
|
|
3.1
|
|
|
29.4
|
|
|
(23.5
|
)
|
|
5.9
|
|
||||||
Other
|
|
2.4
|
|
|
(0.9
|
)
|
|
1.5
|
|
|
2.4
|
|
|
(0.9
|
)
|
|
1.5
|
|
||||||
Total amortizable intangible assets
|
|
$
|
2,870.6
|
|
|
$
|
(757.9
|
)
|
|
2,112.7
|
|
|
$
|
2,870.6
|
|
|
$
|
(683.2
|
)
|
|
2,187.4
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-Lived Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
|
|
|
|
|
450.0
|
|
|
|
|
|
|
450.0
|
|
||||||||||
Total intangible assets – other, net
|
|
|
|
|
|
$
|
2,562.7
|
|
|
|
|
|
|
$
|
2,637.4
|
|
||||||||
Trading products
(1)
|
|
|
|
|
|
$
|
17,175.3
|
|
|
|
|
|
|
$
|
17,175.3
|
|
(1)
|
Trading products represent futures and options products acquired in our business combinations with CBOT Holdings, Inc., NYMEX Holdings, Inc. and The Board of Trade of Kansas City, Missouri, Inc. Clearing and transaction fees are generated through the trading of these products. These trading products, most of which have traded for decades, require authorization from the Commodity Futures Trading Commission (CFTC). Product authorizations from the CFTC have no term limits.
|
(in millions)
|
Amortization Expense
|
||
Remainder of 2015
|
$
|
24.7
|
|
2016
|
96.1
|
|
|
2017
|
95.5
|
|
|
2018
|
94.7
|
|
|
2019
|
94.7
|
|
|
2020
|
94.7
|
|
|
Thereafter
|
1,612.3
|
|
(in millions)
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
$612.5 million fixed rate notes due March 2018, stated rate of 4.40%
(1)
|
|
$
|
—
|
|
|
$
|
611.0
|
|
$750.0 million fixed rate notes due September 2022, stated rate of 3.00%
(2)
|
|
748.4
|
|
|
748.2
|
|
||
$750.0 million fixed rate notes due March 2025, stated rate of 3.00%
(3)
|
|
744.1
|
|
|
—
|
|
||
$750.0 million fixed rate notes due September 2043, stated rate of 5.30%
(4)
|
|
748.7
|
|
|
748.7
|
|
||
Total long-term debt
|
|
$
|
2,241.2
|
|
|
$
|
2,107.9
|
|
(1)
|
In February 2010, the company entered into a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of
4.46%
.
|
(2)
|
In August 2012, the company entered into a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of
3.32%
.
|
(3)
|
In December 2014, the company entered into a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of
3.11%
.
|
(4)
|
In August 2012, the company entered into a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of
4.73%
.
|
(in millions)
|
Par Value
|
||
2016
|
$
|
—
|
|
2017
|
—
|
|
|
2018
|
—
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
Thereafter
|
2,250.0
|
|
(in millions)
|
Investment Securities
|
|
Defined Benefit Plans
|
|
Derivative Investments
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||
Balance at December 31, 2014
|
$
|
(22.9
|
)
|
|
$
|
(31.3
|
)
|
|
$
|
62.6
|
|
|
$
|
(2.2
|
)
|
|
$
|
6.2
|
|
Other comprehensive income before reclassifications and income tax benefit (expense)
|
(91.0
|
)
|
|
(0.3
|
)
|
|
(4.7
|
)
|
|
(10.0
|
)
|
|
(106.0
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
(3.4
|
)
|
|
2.0
|
|
|
0.9
|
|
|
—
|
|
|
(0.5
|
)
|
|||||
Income tax benefit (expense)
|
1.2
|
|
|
(0.6
|
)
|
|
1.5
|
|
|
3.6
|
|
|
5.7
|
|
|||||
Net current period other comprehensive income attributable to CME Group
|
(93.2
|
)
|
|
1.1
|
|
|
(2.3
|
)
|
|
(6.4
|
)
|
|
(100.8
|
)
|
|||||
Balance at September 30, 2015
|
$
|
(116.1
|
)
|
|
$
|
(30.2
|
)
|
|
$
|
60.3
|
|
|
$
|
(8.6
|
)
|
|
$
|
(94.6
|
)
|
(in millions)
|
Investment Securities
|
|
Defined Benefit Plans
|
|
Derivative Investments
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||
Balance at December 31, 2013
|
$
|
98.9
|
|
|
$
|
(12.8
|
)
|
|
$
|
65.0
|
|
|
$
|
0.9
|
|
|
$
|
152.0
|
|
Other comprehensive income before reclassifications and income tax benefit (expense)
|
(10.7
|
)
|
|
(3.2
|
)
|
|
(1.1
|
)
|
|
(2.7
|
)
|
|
(17.7
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Income tax benefit (expense)
|
(6.5
|
)
|
|
1.1
|
|
|
0.4
|
|
|
1.0
|
|
|
(4.0
|
)
|
|||||
Net current period other comprehensive income attributable to CME Group
|
(17.2
|
)
|
|
(1.9
|
)
|
|
(0.7
|
)
|
|
(1.7
|
)
|
|
(21.5
|
)
|
|||||
Balance at September 30, 2014
|
$
|
81.7
|
|
|
$
|
(14.7
|
)
|
|
$
|
64.3
|
|
|
$
|
(0.8
|
)
|
|
$
|
130.5
|
|
•
|
Level 1 inputs, which are considered the most reliable evidence of fair value, consist of quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2 inputs consist of observable market data, such as quoted prices for similar assets and liabilities in active markets, or inputs other than quoted prices that are directly observable.
|
•
|
Level 3 inputs consist of unobservable inputs which are derived and cannot be corroborated by market data or other entity-specific inputs.
|
|
|
September 30, 2015
|
||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets at Fair Value:
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
19.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19.2
|
|
Mutual funds
|
|
52.8
|
|
|
—
|
|
|
—
|
|
|
52.8
|
|
||||
Equity securities
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Asset-backed securities
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Total Marketable Securities
|
|
72.1
|
|
|
0.3
|
|
|
—
|
|
|
72.4
|
|
||||
Performance bonds and guaranty fund contributions:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
(1)
|
|
15,105.0
|
|
|
—
|
|
|
—
|
|
|
15,105.0
|
|
||||
Equity investments
|
|
271.8
|
|
|
—
|
|
|
—
|
|
|
271.8
|
|
||||
Total Assets at Fair Value
|
|
$
|
15,448.9
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
15,449.2
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities at Fair Value:
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
Total Liabilities at Fair Value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
(in millions)
|
Contingent Consideration
|
||
Fair value of liability at December 31, 2014
|
$
|
17.7
|
|
Realized and unrealized (gains) losses:
|
|
||
Included in other expenses
|
1.4
|
|
|
Settlements
|
(18.7
|
)
|
|
Fair value of liability at September 30, 2015
|
$
|
0.4
|
|
(in millions)
|
Fair Value
|
||
$750.0 million fixed rate notes due September 2022, stated rate of 3.00%
|
$
|
753.9
|
|
$750.0 million fixed rate notes due March 2025, stated rate of 3.00%
|
733.8
|
|
|
$750.0 million fixed rates notes due September 2043, stated rate of 5.30%
|
851.7
|
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
(in thousands)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Stock options
|
432
|
|
|
1,461
|
|
|
432
|
|
|
1,463
|
|
Restricted stock and performance shares
|
—
|
|
|
700
|
|
|
538
|
|
|
700
|
|
Total
|
432
|
|
|
2,161
|
|
|
970
|
|
|
2,163
|
|
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net Income Attributable to CME Group (in millions)
|
|
$
|
359.9
|
|
|
$
|
290.0
|
|
|
$
|
955.3
|
|
|
$
|
820.6
|
|
Weighted Average Number of Common Shares (in thousands):
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
336,323
|
|
|
334,424
|
|
|
336,015
|
|
|
334,144
|
|
||||
Effect of stock options, restricted stock and performance shares
|
|
1,816
|
|
|
1,748
|
|
|
1,789
|
|
|
1,676
|
|
||||
Diluted
|
|
338,139
|
|
|
336,172
|
|
|
337,804
|
|
|
335,820
|
|
||||
Earnings per Common Share Attributable to CME Group:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.07
|
|
|
$
|
0.87
|
|
|
$
|
2.84
|
|
|
$
|
2.46
|
|
Diluted
|
|
1.06
|
|
|
0.86
|
|
|
2.83
|
|
|
2.44
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||||||
(dollars in millions, except per share data)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||
Total revenues
|
|
$
|
850.3
|
|
|
$
|
762.4
|
|
|
12
|
%
|
|
$
|
2,513.0
|
|
|
$
|
2,271.4
|
|
|
11
|
%
|
Total expenses
|
|
333.9
|
|
|
332.0
|
|
|
1
|
|
|
994.2
|
|
|
974.5
|
|
|
2
|
|
||||
Operating margin
|
|
60.7
|
%
|
|
56.5
|
%
|
|
|
|
60.4
|
%
|
|
57.1
|
%
|
|
|
||||||
Non-operating income (expense)
|
|
$
|
—
|
|
|
$
|
(1.3
|
)
|
|
(92
|
)
|
|
$
|
(30.5
|
)
|
|
$
|
0.7
|
|
|
n.m.
|
|
Effective tax rate
|
|
30.3
|
%
|
|
32.4
|
%
|
|
|
|
35.8
|
%
|
|
36.8
|
%
|
|
|
||||||
Net income attributable to CME Group
|
|
$
|
359.9
|
|
|
$
|
290.0
|
|
|
24
|
|
|
$
|
955.3
|
|
|
$
|
820.6
|
|
|
16
|
|
Diluted earnings per common share attributable to CME Group
|
|
1.06
|
|
|
0.86
|
|
|
23
|
|
|
2.83
|
|
|
2.44
|
|
|
16
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
1,141.2
|
|
|
788.9
|
|
|
45
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||||||
(dollars in millions)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||
Clearing and transaction fees
|
|
$
|
715.0
|
|
|
$
|
641.8
|
|
|
11
|
%
|
|
$
|
2,105.0
|
|
|
$
|
1,903.3
|
|
|
11
|
%
|
Market data and information services
|
|
99.5
|
|
|
87.7
|
|
|
13
|
|
|
300.3
|
|
|
266.7
|
|
|
13
|
|
||||
Access and communication fees
|
|
21.6
|
|
|
20.8
|
|
|
4
|
|
|
64.4
|
|
|
61.6
|
|
|
5
|
|
||||
Other
|
|
14.2
|
|
|
12.1
|
|
|
17
|
|
|
43.3
|
|
|
39.8
|
|
|
9
|
|
||||
Total Revenues
|
|
$
|
850.3
|
|
|
$
|
762.4
|
|
|
12
|
|
|
$
|
2,513.0
|
|
|
$
|
2,271.4
|
|
|
11
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||||||
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||
Total contract volume (in millions)
|
|
920.6
|
|
|
863.4
|
|
|
7
|
%
|
|
2,689.1
|
|
|
2,492.6
|
|
|
8
|
%
|
||||
Clearing and transaction fees (in millions)
|
|
$
|
698.7
|
|
|
$
|
626.3
|
|
|
12
|
|
|
$
|
2,051.2
|
|
|
$
|
1,861.6
|
|
|
10
|
|
Average rate per contract
|
|
$
|
0.759
|
|
|
$
|
0.725
|
|
|
5
|
|
|
$
|
0.763
|
|
|
$
|
0.747
|
|
|
2
|
|
(in millions)
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||
Increases due to changes in total contract volume
|
|
$
|
43.4
|
|
|
$
|
149.9
|
|
Increases due to changes in average rate per contract
|
|
29.0
|
|
|
39.7
|
|
||
Increases in clearing and transaction fees
|
|
$
|
72.4
|
|
|
$
|
189.6
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||
(amounts in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||
Average Daily Volume by Product Line:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate
|
|
6,658
|
|
|
7,181
|
|
|
(7
|
)%
|
|
6,930
|
|
|
6,861
|
|
|
1
|
%
|
Equity
|
|
3,287
|
|
|
2,586
|
|
|
27
|
|
|
2,808
|
|
|
2,644
|
|
|
6
|
|
Foreign exchange
|
|
855
|
|
|
797
|
|
|
7
|
|
|
903
|
|
|
750
|
|
|
20
|
|
Agricultural commodity
|
|
1,266
|
|
|
1,058
|
|
|
20
|
|
|
1,287
|
|
|
1,103
|
|
|
17
|
|
Energy
|
|
1,965
|
|
|
1,562
|
|
|
26
|
|
|
1,949
|
|
|
1,573
|
|
|
24
|
|
Metal
|
|
353
|
|
|
309
|
|
|
14
|
|
|
351
|
|
|
328
|
|
|
7
|
|
Aggregate average daily volume
|
|
14,384
|
|
|
13,493
|
|
|
7
|
|
|
14,228
|
|
|
13,259
|
|
|
7
|
|
Average Daily Volume by Venue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electronic
|
|
12,620
|
|
|
11,627
|
|
|
9
|
|
|
12,444
|
|
|
11,404
|
|
|
9
|
|
Open outcry
|
|
1,111
|
|
|
1,208
|
|
|
(8
|
)
|
|
1,168
|
|
|
1,162
|
|
|
—
|
|
Privately negotiated
|
|
653
|
|
|
658
|
|
|
(1
|
)
|
|
616
|
|
|
693
|
|
|
(11
|
)
|
Aggregate average daily volume
|
|
14,384
|
|
|
13,493
|
|
|
7
|
|
|
14,228
|
|
|
13,259
|
|
|
7
|
|
Electronic Volume as a Percentage of Total Volume
|
|
88
|
%
|
|
86
|
%
|
|
|
|
87
|
%
|
|
86
|
%
|
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||
(amounts in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||
Eurodollar futures and options:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Front 8 futures
|
|
1,544
|
|
|
1,619
|
|
|
(5
|
)%
|
|
1,640
|
|
|
1,502
|
|
|
9
|
%
|
Back 32 futures
|
|
692
|
|
|
1,082
|
|
|
(36
|
)
|
|
760
|
|
|
1,046
|
|
|
(27
|
)
|
Options
|
|
959
|
|
|
919
|
|
|
4
|
|
|
926
|
|
|
841
|
|
|
10
|
|
U.S. Treasury futures and options:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
10-Year
|
|
1,548
|
|
|
1,671
|
|
|
(7
|
)
|
|
1,701
|
|
|
1,683
|
|
|
1
|
|
5-Year
|
|
829
|
|
|
914
|
|
|
(9
|
)
|
|
846
|
|
|
888
|
|
|
(5
|
)
|
Treasury bond
|
|
362
|
|
|
437
|
|
|
(17
|
)
|
|
377
|
|
|
418
|
|
|
(10
|
)
|
2-Year
|
|
346
|
|
|
308
|
|
|
12
|
|
|
358
|
|
|
281
|
|
|
27
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||
(amounts in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||
E-mini S&P 500 futures and options
|
|
2,593
|
|
|
2,035
|
|
|
27
|
%
|
|
2,208
|
|
|
2,057
|
|
|
7
|
%
|
E-mini NASDAQ 100 futures and options
|
|
315
|
|
|
278
|
|
|
13
|
|
|
274
|
|
|
301
|
|
|
(9
|
)
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||
(amounts in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||
Euro
|
|
279
|
|
|
231
|
|
|
21
|
%
|
|
319
|
|
|
219
|
|
|
46
|
%
|
Japanese yen
|
|
162
|
|
|
144
|
|
|
13
|
|
|
159
|
|
|
144
|
|
|
10
|
|
British pound
|
|
101
|
|
|
120
|
|
|
(16
|
)
|
|
112
|
|
|
113
|
|
|
(1
|
)
|
Australian dollar
|
|
101
|
|
|
105
|
|
|
(3
|
)
|
|
103
|
|
|
91
|
|
|
13
|
|
Canadian dollar
|
|
79
|
|
|
65
|
|
|
22
|
|
|
76
|
|
|
64
|
|
|
19
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||
(amounts in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||
Corn
|
|
448
|
|
|
321
|
|
|
40
|
%
|
|
436
|
|
|
356
|
|
|
23
|
%
|
Soybean
|
|
266
|
|
|
249
|
|
|
7
|
|
|
283
|
|
|
243
|
|
|
16
|
|
Wheat
|
|
174
|
|
|
135
|
|
|
29
|
|
|
190
|
|
|
154
|
|
|
23
|
|
Soybean oil
|
|
117
|
|
|
92
|
|
|
27
|
|
|
118
|
|
|
98
|
|
|
20
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||
(amounts in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||
WTI crude oil
|
|
1,001
|
|
|
719
|
|
|
39
|
%
|
|
1,000
|
|
|
680
|
|
|
47
|
%
|
Natural gas
|
|
414
|
|
|
383
|
|
|
8
|
|
|
450
|
|
|
449
|
|
|
—
|
|
Refined products
|
|
323
|
|
|
294
|
|
|
10
|
|
|
327
|
|
|
289
|
|
|
13
|
|
Brent crude oil
|
|
110
|
|
|
91
|
|
|
21
|
|
|
112
|
|
|
73
|
|
|
53
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||
(amounts in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||
Gold
|
|
205
|
|
|
177
|
|
|
16
|
%
|
|
202
|
|
|
187
|
|
|
8
|
%
|
Copper
|
|
68
|
|
|
54
|
|
|
26
|
|
|
68
|
|
|
58
|
|
|
17
|
|
Silver
|
|
57
|
|
|
56
|
|
|
1
|
|
|
60
|
|
|
63
|
|
|
(5
|
)
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||||||
(dollars in millions)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||
Compensation and benefits
|
|
$
|
136.4
|
|
|
$
|
132.1
|
|
|
3
|
%
|
|
$
|
419.2
|
|
|
$
|
407.3
|
|
|
3
|
%
|
Communications
|
|
7.1
|
|
|
7.8
|
|
|
(10
|
)
|
|
21.3
|
|
|
24.3
|
|
|
(12
|
)
|
||||
Technology support services
|
|
15.4
|
|
|
13.8
|
|
|
11
|
|
|
47.1
|
|
|
42.3
|
|
|
11
|
|
||||
Professional fees and outside services
|
|
33.8
|
|
|
32.2
|
|
|
5
|
|
|
90.6
|
|
|
99.3
|
|
|
(9
|
)
|
||||
Amortization of purchased intangibles
|
|
24.9
|
|
|
25.3
|
|
|
(1
|
)
|
|
74.8
|
|
|
75.7
|
|
|
(1
|
)
|
||||
Depreciation and amortization
|
|
32.4
|
|
|
32.7
|
|
|
(1
|
)
|
|
97.5
|
|
|
101.1
|
|
|
(3
|
)
|
||||
Occupancy and building operations
|
|
23.1
|
|
|
24.7
|
|
|
(6
|
)
|
|
69.4
|
|
|
71.1
|
|
|
(2
|
)
|
||||
Licensing and other fee agreements
|
|
33.1
|
|
|
25.5
|
|
|
29
|
|
|
92.5
|
|
|
80.2
|
|
|
15
|
|
||||
Other
|
|
27.7
|
|
|
37.9
|
|
|
(27
|
)
|
|
81.8
|
|
|
73.2
|
|
|
12
|
|
||||
Total Expenses
|
|
$
|
333.9
|
|
|
$
|
332.0
|
|
|
1
|
|
|
$
|
994.2
|
|
|
$
|
974.5
|
|
|
2
|
|
|
|
Quarter Ended,
September 30, 2015 |
|
Nine Months Ended,
September 30, 2015 |
||||||||||
|
|
Amount of
Change
|
|
Change as a
Percentage of
Total Expenses
|
|
Amount of
Change
|
|
Change as a
Percentage of
Total Expenses
|
||||||
(dollars in millions)
|
|
|||||||||||||
MF Global bankruptcy claim
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
14.5
|
|
|
2
|
%
|
Reorganization costs and voluntary exit incentive plan
|
|
13.6
|
|
|
4
|
|
|
14.0
|
|
|
2
|
|
||
License and other fee agreements
|
|
7.4
|
|
|
2
|
|
|
12.3
|
|
|
1
|
|
||
Real estate taxes and fees
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|
1
|
|
||
Bonus expense
|
|
6.8
|
|
|
2
|
|
|
8.5
|
|
|
1
|
|
||
Stock-based compensation
|
|
(3.6
|
)
|
|
(1
|
)
|
|
4.3
|
|
|
—
|
|
||
Foreign currency exchange rate fluctuation
|
|
(5.6
|
)
|
|
(1
|
)
|
|
1.8
|
|
|
—
|
|
||
Non-qualified deferred compensation plan
|
|
(3.3
|
)
|
|
(1
|
)
|
|
(3.8
|
)
|
|
—
|
|
||
Salaries, benefits and employer taxes
|
|
(6.8
|
)
|
|
(2
|
)
|
|
(15.0
|
)
|
|
(2
|
)
|
||
Other expenses, net
|
|
(6.6
|
)
|
|
(2
|
)
|
|
(26.9
|
)
|
|
(3
|
)
|
||
Total increase
|
|
$
|
1.9
|
|
|
1
|
%
|
|
$
|
19.7
|
|
|
2
|
%
|
•
|
In the second quarter of 2014, we recognized our claim from the MF Global bankruptcy filing, which occurred in the fourth quarter of 2011, as a reduction of other expenses.
|
•
|
In 2015, we recognized severance and other costs related to the closing of the trading floor in the second quarter and a reorganization in the third quarter. In the second quarter of 2014, we recognized expenses associated with our voluntary exit incentive plan.
|
•
|
An increase in licensing and other fee sharing agreements expense in the third quarter and first nine months of 2015 when compared with the same periods in 2014 resulted from higher volumes for equity contracts as well as higher revenue for interest rate swap products.
|
•
|
In the second quarter of 2015, we recognized additional real estate taxes and fees related to the transfer of the ownership of the NYMEX building, which was acquired in 2008 and sold in 2013.
|
•
|
Bonus expense increased due to performance relative to our 2015 cash earnings target when compared with 2014 performance relative to our 2014 cash earnings target.
|
•
|
Performance awards based on company performance that were issued as part of our stock-based compensation program resulted in an increase in stock-based compensation expense in the first nine months of 2015 when compared
|
•
|
In the third quarter of 2015, we recognized a net foreign currency loss of $7.2 million, compared with a net loss of $12.8 million in the third quarter of 2014. The reduction in net loss was due to a favorable change in exchange rates on foreign cash balances. Gains and losses from exchange rate fluctuations primarily result when subsidiaries with a U.S. dollar functional currency hold cash as well as certain other monetary assets and liabilities denominated in foreign currencies. We expect to continue to incur gains and losses from exchange rate fluctuations.
|
•
|
A decrease in our non-qualified deferred compensation liability, the impact of which does not affect net income because of an equal and offsetting change in investment income, contributed to a decrease in operating expenses.
|
•
|
Compensation and benefits expenses decreased as a result of declines in average headcount largely related to reorganizations announced in the fourth quarter of 2014 and the third quarter of 2015 as well as the closing of the trading floor in the second quarter of 2015.
|
•
|
Overall operating expenses decreased in the third quarter and first nine months of 2015 due to continued efforts towards overall expense reductions.
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||||||
(dollars in millions)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||
Investment income
|
|
$
|
2.5
|
|
|
$
|
7.4
|
|
|
(65
|
)%
|
|
$
|
26.7
|
|
|
$
|
25.7
|
|
|
4
|
%
|
Gains (losses) on derivative investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
n.m.
|
|
||||
Interest and other borrowing costs
|
|
(28.3
|
)
|
|
(28.7
|
)
|
|
(1
|
)
|
|
(88.5
|
)
|
|
(90.7
|
)
|
|
(2
|
)
|
||||
Equity in net earnings (losses) of unconsolidated subsidiaries
|
|
26.6
|
|
|
20.0
|
|
|
33
|
|
|
75.1
|
|
|
63.9
|
|
|
18
|
|
||||
Other non-operating income (expense)
|
|
(0.8
|
)
|
|
—
|
|
|
n.m.
|
|
|
(42.0
|
)
|
|
1.8
|
|
|
n.m.
|
|
||||
Total Non-Operating
|
|
$
|
—
|
|
|
$
|
(1.3
|
)
|
|
(92
|
)
|
|
$
|
(30.5
|
)
|
|
$
|
0.7
|
|
|
n.m.
|
|
|
|
Quarter Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
|
||||||||||||||||
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Weighted average borrowings outstanding (in millions)
|
|
$
|
2,250.0
|
|
|
$
|
2,112.5
|
|
|
$
|
137.5
|
|
|
$
|
2,283.4
|
|
|
$
|
2,236.6
|
|
|
$
|
46.8
|
|
Weighted average effective yield
|
|
3.71
|
%
|
|
4.15
|
%
|
|
(0.44
|
)%
|
|
3.83
|
%
|
|
4.24
|
%
|
|
(0.41
|
)%
|
||||||
Average cost of borrowings
(1)
|
|
3.86
|
|
|
4.36
|
|
|
(0.50
|
)
|
|
4.05
|
|
|
4.42
|
|
|
(0.37
|
)
|
(1)
|
Average cost of borrowings includes interest, the effective portion of interest rate hedges, discount accretion and debt issuance costs. Commitment fees on line of credit agreements are not included in the average cost of borrowings.
|
|
|
2015
|
|
2014
|
||
Quarter Ended September 30
|
|
30.3
|
%
|
|
32.4
|
%
|
Nine Months Ended September 30
|
|
35.8
|
|
|
36.8
|
|
(in millions)
|
Par Value
|
||
Fixed rate notes due September 2022, stated rate of 3.00%
(1)
|
$
|
750.0
|
|
Fixed rate notes due March 2025, stated rate of 3.00%
(2)
|
750.0
|
|
|
Fixed rate notes due September 2043, stated rate of 5.30%
(3)
|
750.0
|
|
(1)
|
In August 2012, we entered into a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable effectively became fixed at a rate of 3.32%.
|
(2)
|
In December 2014, we entered into a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable effectively became fixed at a rate of 3.11%
|
(3)
|
In August 2012, we entered into a forward starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable effectively became fixed at a rate of 4.73%.
|
|
|
Short-Term
|
|
Long-Term
|
|
|
Rating Agency
|
|
Debt Rating
|
|
Debt Rating
|
|
Outlook
|
Standard & Poor’s
|
|
A1+
|
|
AA-
|
|
Stable
|
Moody’s Investors Service
|
|
P1
|
|
Aa3
|
|
Stable
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
(a) Total Number of
Class A
Shares Purchased (1)
|
|
(b) Average Price
Paid Per Share
|
|
(c) Total Number of Class A Shares Purchased as
Part of Publicly Announced Plans or Programs
|
|
(d) Maximum Number (or Approximate Value) that
May Yet Be Purchased
Under the Plans or Programs
(in millions)
|
||||||
July 1 to July 31
|
|
873
|
|
|
$
|
99.43
|
|
|
—
|
|
|
$
|
—
|
|
August 1 to August 31
|
|
1,867
|
|
|
93.97
|
|
|
—
|
|
|
—
|
|
||
September 1 to September 30
|
|
153,558
|
|
|
95.01
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
156,298
|
|
|
$
|
95.02
|
|
|
—
|
|
|
|
(1)
|
Shares purchased consist of an aggregate of
156,298
shares of Class A common stock surrendered in the third quarter of
2015
to satisfy employees’ tax obligations upon the vesting of restricted stock.
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 6.
|
EXHIBITS
|
|
|
|
10.1*
|
|
Amendment to the Recognition and Retention Plan for Members of the COMEX Division of the New York Mercantile Exchange, dated October 22, 2015.
|
|
|
|
31.1
|
|
Section 302 Certification—Phupinder S. Gill
|
|
|
|
31.2
|
|
Section 302 Certification—John W. Pietrowicz
|
|
|
|
32.1
|
|
Section 906 Certification
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CME Group Inc.
(Registrant)
|
||
|
|
|
|
|||
Dated: November 6, 2015
|
|
|
|
By:
|
|
/s/ John W. Pietrowicz
|
|
|
|
|
|
|
Chief Financial Officer & Senior Managing
Director Finance
|
A.
|
WHEREAS, pursuant to Article VI, Section 3 of the Plan, the Board has the power to amend the Plan upon the affirmative vote of a majority of the members of the Board; and
|
B.
|
WHEREAS, the Board has determined that, in compliance with Article V, Section 3(f) of the Plan, that this Amendment is not “to the detriment of the benefits” of any Participant (as defined in the Plan); and
|
C.
|
WHEREAS, Article V, Section 3(c) requires NYMEX to pay certain amounts on an annual basis into the Account (as defined in the Plan) and the Board desires to amend such requirements and replace such annual requirements with a current lump sum payment intended to preserve the assets of the Account at an actuarially determined level to cover all future payments to Participants (as defined in the Plan) and/or their Beneficiaries (as defined in the Plan) under the Plan; and
|
D.
|
WHEREAS the Board now wishes to amend the terms of the Plan as provided hereto.
|
1.
|
No Annual Payments
. Beginning on the Amendment Date and as a result of the payment described in Section 2 below but subject to Section 3 below, NYMEX shall no longer be required to make any annual payments to the Account in connection with the provisions of Article V, Section 3(c) of the Plan.
|
2.
|
Lump Sum Payment
. Before December 31, 2015, NYMEX shall make a one-time payment to the Account in an amount intended to preserve the assets of the Account at an actuarially determined level to cover all future payments to Participants (as defined in the Plan) and/or their Beneficiaries (as defined in the Plan) under the Plan.
|
3.
|
Resumption of Annual Payments; Availability of General Corporate Funds
. In the event of a future shortfall in the Account as payments under the Plan become due, NYMEX shall resume annual payments required by Article V, Section 3(c) of the Plan until the plan is funded to an amount capable of preserving the assets of the Account at an actuarially determined level to cover all future payments to Participants (as defined in the Plan) and/or their Beneficiaries (as defined in the Plan) under the Plan. In addition, before the Account is fully funded, NYMEX may pay any amounts owed to Participants from the general corporate funds of NYMEX or make any additional contributions to the Account at their discretion. To the extent the Account is fully funded pursuant to Sections 2 and 3 hereto, Article V, Section 3(g) shall be of no further force and effect.
|
4.
|
Plan Otherwise Unaffected.
Except as specifically set forth above in this Amendment, the Plan is otherwise unaffected and shall continue in full force and effect in accordance with its terms and the recitals set forth above are hereby incorporated into this Amendment. To the extent that there is a conflict between this Amendment and the Plan, the terms of this Amendment will prevail.
|
5.
|
Counterparts
. This Amendment may be executed in any number of counterparts.
All of such counterparts together shall constitute one document at such time as the counterparts are executed.
|
By:
/s/ Hilda Harris Piell
|
|
|
|
|
|
|
|
Dated: November 6, 2015
|
|
/s/ Phupinder S. Gill
|
|
|
Name: Phupinder S. Gill
|
|
|
Title: Chief Executive Officer
|
|
|
|
|
Dated: November 6, 2015
|
|
|
/s/ John W. Pietrowicz
|
|
|
|
Name: John W. Pietrowicz
|
|
|
|
Title: Chief Financial Officer
|
|
|
/s/ Phupinder S. Gill
|
|
Name: Phupinder S. Gill
|
|
Title: Chief Executive Officer
|
|
|
|
/s/ John W. Pietrowicz
|
|
Name: John W. Pietrowicz
|
|
Title: Chief Financial Officer
|
|