|
ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
36-4459170
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
20 South Wacker Drive, Chicago, Illinois
|
|
60606
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title Of Each Class
|
|
Name Of Each Exchange On Which Registered
|
Class A Common Stock $0.01 par value
|
|
NASDAQ GLOBAL SELECT MARKET
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
Emerging growth company
o
|
Documents
|
|
Form 10-K Reference
|
Portions of the CME Group Inc.’s Proxy Statement for the 2019 Annual Meeting of Shareholders
|
|
Part III
|
|
|
Page
|
|
|
|
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 1B.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
Item 7.
|
||
|
|
|
Item 7A.
|
||
|
|
|
Item 8.
|
||
|
|
|
Item 9.
|
||
|
|
|
Item 9A.
|
||
|
|
|
Item 9B.
|
||
|
|
|
|
||
|
|
|
Item 10.
|
||
|
|
|
Item 11.
|
||
|
|
|
Item 12.
|
||
|
|
|
Item 13.
|
||
|
|
|
Item 14.
|
||
|
|
|
|
||
|
|
|
Item 15.
|
||
|
|
|
Item 16.
|
||
|
|
|
|
•
|
increasing competition by foreign and domestic entities, including increased competition from new entrants into our markets and consolidation of existing entities;
|
•
|
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;
|
•
|
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;
|
•
|
our ability to adjust our fixed costs and expenses if our revenues decline;
|
•
|
our ability to maintain existing customers, develop strategic relationships and attract new customers;
|
•
|
our ability to expand and globally offer our products and services;
|
•
|
changes in regulations, including the impact of any changes in laws or government policy with respect to our products or services or our industry, such as any changes to regulations and policies that require increased financial and operational resources from us or our customers;
|
•
|
the costs associated with protecting our intellectual property rights and our ability to operate our business without violating the intellectual property rights of others;
|
•
|
decreases in revenue from our market data as a result of decreased demand or changes to regulations in various jurisdictions;
|
•
|
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;
|
•
|
the ability of our credit and liquidity risk management practices to adequately protect us from the credit risks of clearing members and other counterparties, and to satisfy the margin and liquidity requirements associated with the BrokerTec matched principal business;
|
•
|
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;
|
•
|
volatility in commodity, equity and fixed income prices, and price volatility of financial benchmarks and instruments such as interest rates, credit spreads, equity indices, fixed income instruments and foreign exchange rates;
|
•
|
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;
|
•
|
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;
|
•
|
our ability to execute our growth strategy and maintain our growth effectively;
|
•
|
our ability to manage the risks, control the costs and achieve the synergies associated with our strategy for acquisitions, investments and alliances, including those associated with the acquisition of NEX;
|
•
|
our ability to continue to generate funds and/or manage our indebtedness to allow us to continue to invest in our business;
|
•
|
industry and customer consolidation;
|
•
|
decreases in trading and clearing activity;
|
•
|
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;
|
•
|
our ability to maintain our reputation; and
|
•
|
the unfavorable resolution of material legal proceedings.
|
ITEM 1.
|
BUSINESS
|
•
|
CME's
product slate includes agricultural, equities, FX and interest rate products, including contracts for Eurodollars and contracts based on the S&P, NASDAQ-100 and FTSE Russell Indexes.
|
•
|
CBOT's
product slate consists of agricultural, equities, energy and interest rate products, including contracts for U.S. Treasury futures, corn and other grains and contracts based on the Dow Jones Industrial Index.
|
•
|
NYMEX's
product slate consists of energy and metals products, including contracts for crude oil, natural gas, heating oil and gasoline.
|
•
|
COMEX's
product slate consists of metals products, including contracts for gold, silver and copper.
|
•
|
certainty of execution;
|
•
|
vast capabilities to facilitate complex and demanding trading;
|
•
|
direct market access;
|
•
|
fairness, price transparency and anonymity;
|
•
|
convenience and efficiency;
|
•
|
connectivity through highly secure, resilient and low-latency network options; and
|
•
|
global distribution, including connectivity through high-speed international telecommunications hubs in key financial centers or order routing to our global partner exchanges.
|
•
|
BrokerTec
is a global electronic platform for the trading of fixed income products, with a leading position in cash U.S. Treasuries, as well as activity in European government bonds and E.U. and U.S. repo fixed income instruments. It facilitates trading principally for banks and non-bank professional trading firms.
|
•
|
EBS
is a global electronic platform for the trading of FX products. It is a reliable and trusted source of executable firm liquidity across major and emerging market currencies. EBS offers anonymous and disclosed trading venues, which give clients multiple execution and distribution options and the benefit of an established and far-reaching distribution network of liquidity providers and consumers. It also offers execution of non-deliverable forwards through a CFTC-registered Swap Execution Facility.
|
•
|
Trade and portfolio management
comprises portfolio and margin reconciliation, monitoring pre-trade risk and automating post-trade processing of financial transactions.
|
•
|
Financial resource optimization
comprises portfolio compression, basis risk mitigation, portfolio balancing and derivative pricing and risk analytics.
|
•
|
Analytics
delivers data, analytics and workflow tools that enable hedge funds and asset managers to manage their relationships with prime brokers more effectively. These tools provide a complete view of an individual hedge fund's relationships across multiple counterparties, delivering insights on counterparty credit risk, collateral management, portfolio financing and treasury.
|
•
|
Regulatory reporting
comprises trade and position reporting (including licensed MiFID agent reporting to national regulators and the public), end-to-end multi-regime regulatory reporting, data normalization, enrichment, reconciliation, validation and cross-jurisdictional matching.
|
•
|
brand and reputation;
|
•
|
efficient and secure settlement, clearing and support services;
|
•
|
depth and liquidity of markets;
|
•
|
diversity of product offerings and frequency and quality of new product development and innovative services;
|
•
|
ability to position and expand upon existing products to address changing market needs;
|
•
|
efficient and seamless customer experience;
|
•
|
transparency, reliability, anonymity and security in transaction processing;
|
•
|
regulatory environment;
|
•
|
connectivity, accessibility, flexibility in execution methods, and distribution;
|
•
|
technological capability and innovation; and
|
•
|
overall transaction costs.
|
•
|
The potential impact of changes to the E.U. equivalence and recognition regime on non-European Union clearing houses and exchanges with customers based in Europe arising from the potential adoption of EMIR 2.2 legislation being considered by the European Commission, European Council, and European Parliament. This legislation, and the implementation of subsidiary regulations once the legislation is adopted, could require us to make changes to how our clearing house operates, subject us to greater regulatory oversight by ESMA and increase costs. A failure of our clearing house to retain its recognition may result in our clearing members and certain customers in Europe being subject to higher capital costs thus creating a disincentive to use our markets. The E.U. equivalence and recognition regime also has the potential to impact the cost and ease or difficulty for certain of NEX’s OTC execution platforms to provide access to customers on a global basis.
|
•
|
The adoption and implementation of position limit rules, which could have a significant impact on our commodities business if federal rules for position limit management differ significantly from current exchange-administered rules.
|
•
|
Rules respecting capital charges under Basel III with respect to clearing members of central counterparties may have negative implications for the cleared derivatives markets. Additional risks could arise through inconsistent adoption of the Basel III capital charges globally, potentially leading to disparate impacts on our customers.
|
•
|
The potential for further regulation stemming from industry performance disruptions and residual concerns around electronic trading activity and, in particular, "high frequency trading."
|
•
|
The potential elimination of the 60/40 tax treatment of certain of our futures and options contracts, which would impose a significant increase in tax rates applicable to certain market participants and could result in a decrease in their trading activity.
|
•
|
The implementation of a transaction tax or user fee in the United States or European Union, or in the State of Illinois, which could discourage institutions and individuals from using our markets or products or encourage them to trade in another less costly jurisdiction. From time to time, the proposed Presidential budget, including the currently proposed budget, has included a proposal to impose a user fee to fund the CFTC. Legislation to impose a financial transaction tax has again been proposed in the Illinois General Assembly, as it has in previous sessions of the General Assembly.
|
•
|
The implementation of legislation in the European Union impacting how benchmark index prices are formed, including new requirements for price submitters, price aggregators and markets that list contracts that reference index prices.
|
•
|
Concerns that European legislators will prohibit or restrict exclusive licenses for benchmark indexes, which might impact the profitability of several of our most popular contracts.
|
•
|
The implementation of rules resulting in negative treatment of the liquidity profile of U.S. Treasury securities, including as qualifying liquidity resources, or any potential limitation on the use of U.S. Treasury securities as collateral could result in increased costs to us and our clearing firms.
|
•
|
The potential for further regulation and/or industry changes flowing from the continuing review by the official sector and industry participants of the U.S. Treasury “flash rally” of October 15, 2014 and its implications for clearing and settlement in the U.S. Treasury market.
|
•
|
economic, political and geopolitical market conditions;
|
•
|
legislative and regulatory changes, including any direct or indirect restrictions on or increased costs associated with trading in our markets;
|
•
|
broad trends in the industry and financial markets;
|
•
|
changes in price levels, trading volumes and volatility in the derivatives, cash and OTC markets and in underlying equity, foreign exchange, interest rate and commodity markets;
|
•
|
shifts in global or regional demand or supply in commodities underlying our products;
|
•
|
competition;
|
•
|
changes in government monetary policies, especially central bank decisions related to quantitative easing;
|
•
|
availability of capital to our market participants and their appetite for risk-taking;
|
•
|
levels of assets under management;
|
•
|
volatile weather patterns, droughts, natural disasters and other catastrophes;
|
•
|
pandemics affecting our customer base or our ability to operate our markets; and
|
•
|
consolidation or expansion in our customer base and within our industry.
|
•
|
respond more quickly to competitive pressures, including responses based upon their corporate governance structures, which may be more flexible and efficient than our corporate governance structure;
|
•
|
develop products that are preferred by our customers;
|
•
|
develop risk transfer products that compete with our products;
|
•
|
price their products and services more competitively;
|
•
|
develop and expand their network infrastructure and service offerings more efficiently;
|
•
|
utilize better, more user-friendly and more reliable technology;
|
•
|
take greater advantage of acquisitions, alliances and other opportunities;
|
•
|
more effectively market, promote and sell their products and services;
|
•
|
better leverage existing relationships with customers and alliance partners or exploit better recognized brand names to market and sell their services; and
|
•
|
exploit regulatory disparities between traditional, regulated exchanges and alternative markets that benefit from a reduced regulatory burden and lower-cost business model.
|
•
|
provide reliable and cost-effective services to our customers;
|
•
|
develop, in a timely manner, the required functionality to support electronic trading in a manner that is competitive with the functionality supported by other electronic markets;
|
•
|
maintain the competitiveness of our fee structure;
|
•
|
attract independent software vendors to write front-end software that will effectively access our electronic trading systems and automated order routing system;
|
•
|
respond to technological developments or service offerings by competitors; and
|
•
|
generate sufficient revenue to justify the substantial capital investment we have made and will continue to make to enhance our electronic trading platforms and other technology offerings.
|
•
|
unanticipated disruptions in service to our customers;
|
•
|
slower response times and delays in our customers' trade execution and processing;
|
•
|
failed settlement of trades;
|
•
|
incomplete or inaccurate accounting, recording or processing of trades;
|
•
|
financial losses;
|
•
|
security breaches;
|
•
|
litigation or other customer claims;
|
•
|
loss of customers; and
|
•
|
regulatory sanctions.
|
•
|
becoming subject to extensive regulations and oversight;
|
•
|
difficulties in staffing and managing international operations;
|
•
|
general economic and political conditions in the countries from which our markets are accessed, which may have an adverse effect on our volume from those countries; and
|
•
|
potentially adverse tax consequences.
|
•
|
require us to dedicate a significant portion of our cash flow from operations to payments on our debt, thereby reducing the availability of cash flows to fund capital expenditures, to pursue acquisitions or investments, to pay dividends and for general corporate purposes;
|
•
|
increase our vulnerability to general adverse economic conditions;
|
•
|
limit our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry; and
|
•
|
place us at a competitive disadvantage against any less leveraged competitors.
|
Location
|
Primary Use
|
Owned/Leased
|
Lease Expiration
|
Approximate Size
(in square feet)
(1)
|
|
20 South Wacker Drive Chicago, Illinois
|
Global headquarters and office space
|
Leased
|
2032
(2)
|
512,000
|
|
141 West Jackson
Chicago, Illinois
|
Office space
|
Leased
|
2027
(3)
|
150,000
|
|
333 S. LaSalle
Chicago, Illinois
|
Chicago trading floor and office space
|
Owned
|
N/A
|
300,000
|
|
550 West Washington
Chicago, Illinois
|
Office space
|
Leased
|
2023
|
250,000
|
|
One North End
New York, New York
|
Office space
|
Leased
|
2028
(4)
|
222,000
|
|
4 Times Square New York, New York
|
Office space
|
Leased
|
2032
(5)
|
83,000
|
|
2 Broadgate
London
|
Office space
|
Leased
|
2019
|
174,000
|
|
London Fruit and Wool Exchange
London
|
Office space
|
Leased
|
2038
(6)
|
125,000
|
|
Data Center 3
Chicagoland area
|
Business continuity and co-location
|
Leased
|
2031
(7)
|
83,000
|
|
Bagmane Tech Park Bangalore, India
|
Office space
|
Leased
|
2020
(8)
|
72,000
|
|
(1)
|
Size represents the amount of space leased or owned by us unless otherwise noted.
|
(2)
|
The extended lease expires in 2032 with various termination, extension, expansion and contraction options.
|
(3)
|
The initial lease expires in 2027 and contains options to extend the term and expand the premises.
|
(4)
|
The initial lease expires in 2028 and contains options to extend the term and expand the premises.
|
(5)
|
The initial lease expires in 2032 and contains options to extend the term as well as options to expand.
|
(6)
|
The initial lease expires in 2038 and contains the option to renew the lease.
|
(7)
|
In March 2016, the company sold its datacenter in the Chicago area for $130.0 million. At the time of the sale, the company leased back a portion of the property.
|
(8)
|
The initial lease expires in 2020 and contains an option to extend the term as well as an option to terminate early.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||
CME Group Inc.
|
$
|
118.32
|
|
|
$
|
127.40
|
|
|
$
|
170.63
|
|
|
$
|
225.79
|
|
|
$
|
298.31
|
|
S&P 500
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
|||||
Peer Group
|
106.16
|
|
|
124.56
|
|
|
141.16
|
|
|
183.02
|
|
|
187.01
|
|
Period
|
|
Total Number
of Shares (or Units)
Purchased
(1)
|
|
Average Price
Paid Per Share (or Unit)
|
|
Total Number of
Shares (or Units) Purchased as
Part of Publicly
Announced
Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value)
of Shares (or Units) that May Yet Be Purchased Under
the Plans or Programs
(in millions)
|
||||||
October 1 to October 31
|
|
5
|
|
|
$
|
181.22
|
|
|
—
|
|
|
$
|
—
|
|
November 1 to November 30
|
|
16
|
|
|
183.75
|
|
|
—
|
|
|
—
|
|
||
December 1 to December 31
|
|
240
|
|
|
187.64
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
261
|
|
|
|
|
—
|
|
|
|
(1)
|
Shares purchased consist of an aggregate of
261
shares of Class A common stock surrendered to satisfy employee tax obligations upon the vesting of restricted stock.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended or At December 31
|
||||||||||||||||||
(in millions, except per share data)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
|
$
|
4,309.4
|
|
|
$
|
3,644.7
|
|
|
$
|
3,595.2
|
|
|
$
|
3,326.8
|
|
|
$
|
3,112.5
|
|
Operating income
|
|
2,607.6
|
|
|
2,310.6
|
|
|
2,200.5
|
|
|
1,984.9
|
|
|
1,764.6
|
|
|||||
Non-operating income (expense)
|
|
170.2
|
|
|
215.7
|
|
|
87.1
|
|
|
(28.1
|
)
|
|
6.8
|
|
|||||
Income before income taxes
|
|
2,777.8
|
|
|
2,526.3
|
|
|
2,287.6
|
|
|
1,956.8
|
|
|
1,771.4
|
|
|||||
Net income attributable to CME Group
|
|
1,962.2
|
|
|
4,063.4
|
|
|
1,534.1
|
|
|
1,247.0
|
|
|
1,127.1
|
|
|||||
Earnings per common share attributable to CME Group:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
5.73
|
|
|
$
|
12.00
|
|
|
$
|
4.55
|
|
|
$
|
3.71
|
|
|
$
|
3.37
|
|
Diluted
|
|
5.71
|
|
|
11.94
|
|
|
4.53
|
|
|
3.69
|
|
|
3.35
|
|
|||||
Cash dividends per share
|
|
4.55
|
|
|
6.14
|
|
|
5.65
|
|
|
4.90
|
|
|
3.88
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
77,475.7
|
|
|
$
|
75,791.2
|
|
|
$
|
69,369.4
|
|
|
$
|
67,359.4
|
|
|
$
|
72,228.6
|
|
Short-term debt
|
|
574.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
|
3,826.8
|
|
|
2,233.1
|
|
|
2,231.2
|
|
|
2,229.3
|
|
|
2,095.0
|
|
|||||
CME Group shareholders’ equity
|
|
25,918.5
|
|
|
22,411.8
|
|
|
20,340.7
|
|
|
20,551.8
|
|
|
20,923.5
|
|
|
|
Year Ended or At December 31
|
|||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||
Average Daily Volume:
|
|
|
|
|
|
|
|
|
|
|
|||||
Product Lines:
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rates
|
|
9,951
|
|
|
8,189
|
|
|
7,517
|
|
|
6,720
|
|
|
7,009
|
|
Equity indexes
|
|
3,589
|
|
|
2,682
|
|
|
3,061
|
|
|
2,792
|
|
|
2,764
|
|
Foreign exchange
|
|
1,004
|
|
|
922
|
|
|
858
|
|
|
872
|
|
|
803
|
|
Agricultural commodities
|
|
1,480
|
|
|
1,353
|
|
|
1,321
|
|
|
1,265
|
|
|
1,120
|
|
Energy
|
|
2,561
|
|
|
2,578
|
|
|
2,432
|
|
|
1,970
|
|
|
1,630
|
|
Metals
|
|
639
|
|
|
568
|
|
|
460
|
|
|
344
|
|
|
337
|
|
Total Average Daily Volume
|
|
19,224
|
|
|
16,292
|
|
|
15,649
|
|
|
13,963
|
|
|
13,663
|
|
Method of Trade:
|
|
|
|
|
|
|
|
|
|
|
|||||
CME Globex
|
|
17,371
|
|
|
14,513
|
|
|
13,766
|
|
|
12,185
|
|
|
11,805
|
|
Open outcry
|
|
1,168
|
|
|
1,107
|
|
|
1,149
|
|
|
1,139
|
|
|
1,176
|
|
Privately negotiated
|
|
685
|
|
|
672
|
|
|
734
|
|
|
639
|
|
|
682
|
|
Total Average Daily Volume
|
|
19,224
|
|
|
16,292
|
|
|
15,649
|
|
|
13,963
|
|
|
13,663
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Contract Volume (round turn trades)
|
|
4,844,406
|
|
|
4,089,175
|
|
|
3,943,670
|
|
|
3,532,521
|
|
|
3,443,051
|
|
Open Interest at Year End (contracts)
|
|
115,669
|
|
|
108,043
|
|
|
102,930
|
|
|
91,369
|
|
|
93,644
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Executive Summary
: Includes an overview of our business; current economic, competitive and regulatory trends relevant to our business; our current business strategy; and our primary sources of operating and non-operating revenues and expenses.
|
•
|
Critical Accounting Policies
: Provides an explanation of accounting policies which may have a significant impact on our financial results and the estimates, assumptions and risks associated with those policies.
|
•
|
Recent Accounting Pronouncements
: Includes an evaluation of recent accounting pronouncements and the potential impact of their future adoption on our financial results.
|
•
|
Results of Operations
: Includes an analysis of our
2018
,
2017
and
2016
financial results and a discussion of any known events or trends which are likely to impact future results.
|
•
|
Liquidity and Capital Resources
: Includes a discussion of our future cash requirements, capital resources, significant planned expenditures and financing arrangements.
|
•
|
rate structure;
|
•
|
product mix;
|
•
|
venue, and
|
•
|
the percentage of trades executed by customers who are members compared with non-member customers.
|
•
|
Technology expense consists of costs related to maintenance of the hardware and software required to support our technology. It also includes costs for network connections for our electronic platforms and some market data customers; telecommunications costs of our exchange, and fees paid for access to external market data. This expense may be driven by system capacity, functionality and redundancy requirements. It also may be impacted by growth in electronic contract volume and changes in the number of telecommunications hubs and connections which allow customers outside the United States to access our electronic platforms directly.
|
•
|
Licensing and other fee agreements expense includes license fees paid as a result of contract volume in equity index products. This expense also includes royalty fees and broker rebates on energy and metals products as well as revenue sharing on cleared swaps contracts and some new product launches. This expense fluctuates with changes in contract volumes as well as changes in fee structures.
|
•
|
Other expenses include occupancy and building operations expenses including rent, maintenance, real estate taxes, utilities and other related costs related to leased property in Chicago, New York, the United Kingdom, India as well as other smaller locations throughout the world. Other expenses also include marketing and travel-related expenses as well as general and administrative costs. Marketing, advertising and public relations expense includes media, print and other advertising costs, as well as costs associated with our product promotion. Other expenses also include litigation and customer settlements, impairment charges on operating assets, gains and losses on disposals of operating assets, and foreign currency transaction gains and losses resulting from changes in exchange rates on certain foreign monetary assets and liabilities.
|
•
|
Investment income includes income from short-term investment of clearing firms' cash performance bonds and guaranty fund contributions as well as excess operating cash; interest income and realized gains and losses from our marketable securities; realized gains and losses as well as dividend income from our strategic equity investments, and gains and losses on trading securities in our non-qualified deferred compensation plans. Investment income is influenced by market interest rates, changes in the levels of cash performance bonds deposited by clearing firms, the amount of dividends distributed by our strategic investments and the availability of funds generated by operations.
|
•
|
Interest and other borrowing costs expense includes charges associated with various short-term and long-term funding facilities, including commitment fees on lines of credit agreements.
|
•
|
Equity in net earnings (losses) of unconsolidated subsidiaries includes income and losses from our investments in S&P/Dow Jones Indices LLC (S&P/DJI), Dubai Mercantile Exchange and Bursa Malaysia Derivatives Berhad.
|
•
|
Other income (expense) includes expenses related to the distribution of interest earned on performance bond collateral reinvestment to the clearing firms, gains and losses on derivative contracts as well as other various income and expenses outside our core operations.
|
•
|
Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
|
•
|
Level 2— Inputs consist of observable market data, other than level 1 inputs, 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 are unobservable and reflect management’s best estimate of what market participants would use in pricing the asset or liability. Assets and liabilities carried at level 3 fair value generally include assets and liabilities with inputs that require management’s judgment.
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||||||||
(dollars in millions, except per share data)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||||||||
Total revenues
|
|
$
|
4,309.4
|
|
|
$
|
3,644.7
|
|
|
$
|
3,595.2
|
|
|
18
|
%
|
|
1
|
%
|
Total expenses
|
|
1,701.8
|
|
|
1,334.1
|
|
|
1,394.7
|
|
|
28
|
|
|
(4
|
)
|
|||
Operating margin
|
|
61
|
%
|
|
63
|
%
|
|
61
|
%
|
|
|
|
|
|||||
Non-operating income (expense)
|
|
$
|
170.2
|
|
|
$
|
215.7
|
|
|
$
|
87.1
|
|
|
(21
|
)
|
|
147
|
|
Effective tax expense (benefit) rate
|
|
29
|
%
|
|
(61
|
)%
|
|
33
|
%
|
|
|
|
|
|||||
Net income attributable to CME Group
|
|
$
|
1,962.2
|
|
|
$
|
4,063.4
|
|
|
$
|
1,534.1
|
|
|
(52
|
)
|
|
165
|
|
Diluted earnings per common share attributable to CME Group
|
|
5.71
|
|
|
11.94
|
|
|
4.53
|
|
|
(52
|
)
|
|
164
|
|
|||
Cash flows from operating activities
|
|
2,440.8
|
|
|
1,751.1
|
|
|
1,732.0
|
|
|
39
|
|
|
1
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||||||||
(dollars in millions)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||||||||
Clearing and transaction fees
|
|
$
|
3,667.0
|
|
|
$
|
3,098.6
|
|
|
$
|
3,036.4
|
|
|
18
|
%
|
|
2
|
%
|
Market data and information services
|
|
449.6
|
|
|
391.8
|
|
|
406.5
|
|
|
15
|
|
|
(4
|
)
|
|||
Other
|
|
192.8
|
|
|
154.3
|
|
|
152.3
|
|
|
25
|
|
|
1
|
|
|||
Total Revenues
|
|
$
|
4,309.4
|
|
|
$
|
3,644.7
|
|
|
$
|
3,595.2
|
|
|
18
|
|
|
1
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||||||||
Total contract volume (in millions)
|
4,844.4
|
|
|
4,089.2
|
|
|
3,943.7
|
|
|
18
|
%
|
|
4
|
%
|
|||
Clearing and transaction fees (in millions)
|
$
|
3,513.9
|
|
|
$
|
3,029.9
|
|
|
$
|
2,974.4
|
|
|
16
|
|
|
2
|
|
Average rate per contract
|
0.725
|
|
|
0.741
|
|
|
0.754
|
|
|
(2
|
)
|
|
(2
|
)
|
|
|
Year-over-Year Change
|
||||||
(in millions)
|
|
2018-2017
|
|
2017-2016
|
||||
Increases due to change in total contract volume
|
|
$
|
547.8
|
|
|
$
|
109.8
|
|
Decrease due to change in average rate per contract
|
|
(63.8
|
)
|
|
(54.3
|
)
|
||
Net increases in clearing and transaction fees
|
|
$
|
484.0
|
|
|
$
|
55.5
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
|||||||
(amounts in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
|||||
Average Daily Volume by Product Line:
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rates
|
|
9,951
|
|
|
8,189
|
|
|
7,517
|
|
|
22
|
%
|
|
9
|
%
|
Equity indexes
|
|
3,589
|
|
|
2,682
|
|
|
3,061
|
|
|
34
|
|
|
(12
|
)
|
Foreign exchange
|
|
1,004
|
|
|
922
|
|
|
858
|
|
|
9
|
|
|
7
|
|
Agricultural commodities
|
|
1,480
|
|
|
1,353
|
|
|
1,321
|
|
|
9
|
|
|
2
|
|
Energy
|
|
2,561
|
|
|
2,578
|
|
|
2,432
|
|
|
(1
|
)
|
|
6
|
|
Metals
|
|
639
|
|
|
568
|
|
|
460
|
|
|
12
|
|
|
23
|
|
Aggregate average daily volume
|
|
19,224
|
|
|
16,292
|
|
|
15,649
|
|
|
18
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average Daily Volume by Venue:
|
|
|
|
|
|
|
|
|
|
|
|||||
CME Globex
|
|
17,371
|
|
|
14,513
|
|
|
13,766
|
|
|
20
|
|
|
5
|
|
Open outcry
|
|
1,168
|
|
|
1,107
|
|
|
1,149
|
|
|
6
|
|
|
(4
|
)
|
Privately negotiated
|
|
685
|
|
|
672
|
|
|
734
|
|
|
2
|
|
|
(9
|
)
|
Aggregate average daily volume
|
|
19,224
|
|
|
16,292
|
|
|
15,649
|
|
|
18
|
|
|
4
|
|
Electronic Volume as a Percentage of Total Volume
|
|
90
|
%
|
|
89
|
%
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||
(amounts in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||
Eurodollar futures and options:
|
|
|
|
|
|
|
|
|
|
|
||
Front 8 futures
|
|
2,131
|
|
1,745
|
|
1,828
|
|
22
|
%
|
|
(5
|
)%
|
Back 32 futures
|
|
839
|
|
769
|
|
729
|
|
9
|
|
|
5
|
|
Options
|
|
1,416
|
|
1,368
|
|
1,225
|
|
3
|
|
|
12
|
|
U.S. Treasury futures and options:
|
|
|
|
|
|
|
|
|
|
|
||
10-Year
|
|
2,363
|
|
1,914
|
|
1,717
|
|
23
|
|
|
11
|
|
5-Year
|
|
1,285
|
|
1,003
|
|
886
|
|
28
|
|
|
13
|
|
2-Year
|
|
560
|
|
396
|
|
331
|
|
41
|
|
|
20
|
|
Treasury bond
|
|
484
|
|
380
|
|
347
|
|
28
|
|
|
9
|
|
Federal Funds futures and options
|
|
259
|
|
191
|
|
133
|
|
36
|
|
|
44
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||
(amounts in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||
E-mini S&P 500 futures and options
|
|
2,527
|
|
2,062
|
|
2,449
|
|
23
|
%
|
|
(16
|
)%
|
E-mini NASDAQ 100 futures and options
|
|
504
|
|
289
|
|
271
|
|
75
|
|
|
6
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||
(amounts in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||
Euro
|
|
308
|
|
261
|
|
226
|
|
18
|
%
|
|
15
|
%
|
Japanese yen
|
|
159
|
|
181
|
|
159
|
|
(12
|
)
|
|
14
|
|
British pound
|
|
142
|
|
137
|
|
125
|
|
3
|
|
|
10
|
|
Australian dollar
|
|
118
|
|
102
|
|
106
|
|
15
|
|
|
(4
|
)
|
Canadian dollar
|
|
91
|
|
84
|
|
80
|
|
8
|
|
|
5
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||
(amounts in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||
Corn
|
|
482
|
|
449
|
|
424
|
|
7
|
%
|
|
6
|
%
|
Soybean
|
|
305
|
|
283
|
|
323
|
|
8
|
|
|
(12
|
)
|
Wheat
|
|
248
|
|
217
|
|
191
|
|
14
|
|
|
14
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||
(amounts in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||
WTI crude oil
|
|
1,439
|
|
1,442
|
|
1,321
|
|
—
|
%
|
|
9
|
%
|
Natural gas
|
|
594
|
|
597
|
|
549
|
|
(1
|
)
|
|
9
|
|
Refined products
|
|
398
|
|
392
|
|
363
|
|
2
|
|
|
8
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||
(amounts in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||
Gold
|
|
375
|
|
335
|
|
273
|
|
12
|
%
|
|
23
|
%
|
Copper
|
|
131
|
|
108
|
|
86
|
|
21
|
|
|
26
|
|
Silver
|
|
103
|
|
98
|
|
78
|
|
5
|
|
|
25
|
|
(amounts in billions)
|
|
Average Daily Notional Value
|
||
U.S. Treasury
|
|
$
|
187.2
|
|
European Repo (in euros)
|
|
253.6
|
|
|
Spot FX
|
|
79.0
|
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||||||||
(dollars in millions)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||||||||
Compensation and benefits
|
|
$
|
672.2
|
|
|
$
|
563.9
|
|
|
$
|
543.2
|
|
|
19
|
%
|
|
4
|
%
|
Technology
|
|
117.2
|
|
|
101.6
|
|
|
97.6
|
|
|
15
|
|
|
4
|
|
|||
Professional fees and outside services
|
|
166.1
|
|
|
117.6
|
|
|
144.4
|
|
|
41
|
|
|
(19
|
)
|
|||
Amortization of purchased intangibles
|
|
130.0
|
|
|
95.5
|
|
|
96.1
|
|
|
36
|
|
|
(1
|
)
|
|||
Depreciation and amortization
|
|
118.7
|
|
|
113.0
|
|
|
129.2
|
|
|
5
|
|
|
(13
|
)
|
|||
Licensing and other fee agreements
|
|
170.6
|
|
|
146.3
|
|
|
135.8
|
|
|
17
|
|
|
8
|
|
|||
Other
|
|
327.0
|
|
|
196.2
|
|
|
248.4
|
|
|
67
|
|
|
(21
|
)
|
|||
Total Expenses
|
|
$
|
1,701.8
|
|
|
$
|
1,334.1
|
|
|
$
|
1,394.7
|
|
|
28
|
|
|
(4
|
)
|
(dollars in millions)
|
|
Year-
Over-Year Change |
|
Change as a
Percentage of 2017 Expenses |
|||
Expenses from NEX operations
|
|
$
|
153.5
|
|
|
12
|
%
|
Foreign currency exchange rate fluctuation
|
|
83.0
|
|
|
6
|
|
|
NEX transaction costs
|
|
75.5
|
|
|
6
|
|
|
Licensing and other fee agreements
|
|
23.0
|
|
|
2
|
|
|
Bonus
|
|
20.9
|
|
|
2
|
|
|
Salaries, benefits and employer taxes
|
|
17.9
|
|
|
1
|
|
|
Other expenses, net
|
|
(6.1
|
)
|
|
(1
|
)
|
|
Total
|
|
$
|
367.7
|
|
|
28
|
%
|
•
|
In 2018, we recognized operating expenses beginning on November 3, 2018, from our operations of NEX, which was acquired on November 2, 2018.
|
•
|
In 2018, we recognized a net loss of $73.6 million primarily due to the decline in the British pound versus U.S. dollar exchange rate on $1.6 billion of restricted cash held for the acquisition of NEX, which was denominated in British pounds, compared to a net gain of $9.4 million on favorable changes in exchange rates on foreign cash balances in 2017. Gains and losses from exchange rate fluctuations 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.
|
•
|
Transaction costs incurred by CME Group pertaining to the NEX acquisition primarily include professional fees and transfer taxes. These costs accounted for a $75.5 million increase in operating expenses in 2018 when compared with 2017.
|
•
|
Licensing and other fee agreements expense increased during 2018 due to higher fees related to an increase in volume and an increase in license rates for certain products.
|
•
|
Bonus expense increased in 2018 due to improved performance relative to our cash earnings target in 2018 when compared with 2017 performance relative to our 2017 cash earnings target.
|
•
|
Compensation and benefits expense increased as a result of higher average headcount primarily in our international locations as well as normal cost of living adjustments.
|
(dollars in millions)
|
|
Year-
Over-Year
Change
|
|
Change as a
Percentage of
2016 Expenses
|
|||
Foreign currency exchange rate fluctuation
|
|
$
|
(33.9
|
)
|
|
(2
|
)%
|
Loss on datacenter and related legal fees
|
|
(28.6
|
)
|
|
(2
|
)
|
|
Professional fees and outside services
|
|
(26.8
|
)
|
|
(2
|
)
|
|
Licensing and other fee agreements
|
|
10.5
|
|
|
1
|
|
|
Salaries, benefits and employer taxes
|
|
18.8
|
|
|
1
|
|
|
Other expenses, net
|
|
(0.6
|
)
|
|
—
|
|
|
Total
|
|
$
|
(60.6
|
)
|
|
(4
|
)%
|
•
|
In 2017, we recognized a net gain of $9.4 million due to a favorable change in exchange rates on foreign cash balances, compared with a net loss of $24.5 million in 2016. Gains and losses from exchange rate fluctuations 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.
|
•
|
In the first quarter of 2016, we sold and leased back our datacenter in the Chicago area. The transaction was recognized under the financing method under generally accepted accounting principles. We recognized total losses and expenses of $28.6 million, including a net loss on write-down to fair value of the assets and certain other transaction fees of $27.1 million within other expenses and $1.5 million of legal and other fees.
|
•
|
Professional fees and outside services expense decreased in 2017 compared to 2016, largely due to higher legal and regulatory fees in 2016 related to our business activities and product offerings as well as higher professional fees related to a greater reliance on consultants for security and systems enhancement work.
|
•
|
Licensing and other fee agreements expense increased due to higher expense resulting from incentive payments made to facilitate the transition of the Russell contract open interest, as well as increased costs of revenue sharing agreements for certain licensed products. The overall increase in 2017 was partially offset by lower expense related to revenue sharing agreements for certain equity and energy contracts due to lower volume for these products compared to 2016.
|
•
|
Compensation and benefits expense increased as a result of higher average headcount primarily in our international locations as well as normal cost of living adjustments.
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||||||||
(dollars in millions)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||||||||
Investment income
|
|
$
|
745.1
|
|
|
$
|
531.7
|
|
|
$
|
141.8
|
|
|
40
|
%
|
|
n.m.
|
|
Interest and other borrowing costs
|
|
(157.7
|
)
|
|
(117.0
|
)
|
|
(123.5
|
)
|
|
35
|
|
|
(5
|
)
|
|||
Equity in net earnings (losses) of unconsolidated subsidiaries
|
|
152.8
|
|
|
129.2
|
|
|
110.2
|
|
|
18
|
|
|
17
|
|
|||
Other income (expense)
|
|
(570.0
|
)
|
|
(328.2
|
)
|
|
(41.4
|
)
|
|
74
|
|
|
n.m.
|
|
|||
Total Non-Operating
|
|
$
|
170.2
|
|
|
$
|
215.7
|
|
|
$
|
87.1
|
|
|
(21
|
)
|
|
147
|
|
|
2018
|
|
2017
|
|
2016
|
|
Year-over-Year Change
|
|||||
2018-2017
|
|
2017-2016
|
||||||||||
Year ended December 31
|
29.3
|
%
|
|
(60.8
|
)%
|
|
32.9
|
%
|
|
n.m.
|
|
n.m.
|
(in millions)
|
|
Operating
Leases
|
|
Purchase
Obligations
|
|
Debt Obligations
|
|
Other
Long-Term
Liabilities
(1)
|
|
Total
|
||||||||||
Year
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
$
|
82.5
|
|
|
$
|
24.7
|
|
|
$
|
720.4
|
|
|
$
|
—
|
|
|
$
|
827.6
|
|
2020-2021
|
|
151.0
|
|
|
34.0
|
|
|
266.6
|
|
|
22.7
|
|
|
474.3
|
|
|||||
2022-2023
|
|
154.7
|
|
|
18.2
|
|
|
1,401.1
|
|
|
—
|
|
|
1,574.0
|
|
|||||
Thereafter
|
|
586.2
|
|
|
—
|
|
|
4,324.9
|
|
|
—
|
|
|
4,911.1
|
|
|||||
Total
|
|
$
|
974.4
|
|
|
$
|
76.9
|
|
|
$
|
6,713.0
|
|
|
$
|
22.7
|
|
|
$
|
7,787.0
|
|
(1)
|
The liability for gross unrecognized income tax benefits, including interest and penalties, of
$459.7 million
for uncertain tax positions is not included in the table due to uncertainty about the date of their settlement. It also excludes liabilities for lease arrangements as well as liabilities that have uncertainty associated with timing of payments, including liabilities for benefit plans. It also excludes liabilities that will not be settled in cash.
|
|
|
|
|
|
|
|
|
Year-over-Year Change
|
||||||||||
(dollars in millions)
|
|
2018
|
|
2017
|
|
2016
|
|
2018-2017
|
|
2017-2016
|
||||||||
Net cash provided by operating activities
|
|
$
|
2,440.8
|
|
|
$
|
1,751.1
|
|
|
$
|
1,732.0
|
|
|
39
|
%
|
|
1
|
%
|
Net cash (used by) provided by investing activities
|
|
(1,889.6
|
)
|
|
179.9
|
|
|
53.7
|
|
|
n.m.
|
|
|
n.m.
|
|
|||
Net cash used in financing activities
|
|
(1,080.0
|
)
|
|
(1,985.3
|
)
|
|
(1,620.5
|
)
|
|
(46
|
)
|
|
23
|
|
|
|
||
(in millions)
|
Par Value
|
||
Fixed rate notes due March 2019, stated rate of 3.13%
(1)
|
€
|
350.0
|
|
Term loan due March 2019, stated rate at 0.81%
(2)
|
¥
|
19,100.0
|
|
Fixed rate notes due September 2022, stated rate of 3.00%
(3)
|
$
|
750.0
|
|
Fixed rate notes due May 2023, stated rate of 4.30%
|
€
|
15.0
|
|
Fixed rate notes due March 2025, stated rate of 3.00%
(4)
|
$
|
750.0
|
|
Fixed rate notes due June 2028, stated rate of 3.75%
|
$
|
500.0
|
|
Fixed rate notes due September 2043, stated rate of 5.30%
(5)
|
$
|
750.0
|
|
Fixed rate notes due June 2048, stated rate of 4.15%
|
$
|
700.0
|
|
Commercial Paper
|
$
|
390.0
|
|
(1)
|
We maintain a cross-currency swap contract, which swaps a euro-based stated interest rate of 3.13% for a pound-based interest rate of 4.40% and a euro-based principal repayment for a pound-based principal repayment on €250.0 million fixed rate notes.
|
(2)
|
We maintain a hedge contract to fix the exchange rate for the maturing principal and interest at a fixed British pound to Japanese yen exchange rate.
|
(3)
|
We maintain 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%.
|
(4)
|
We maintain 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%.
|
(5)
|
We maintain 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%.
|
Rating Agency
|
|
Short-Term
Debt Rating
|
|
Long-Term
Debt Rating
|
|
Outlook
|
Standard & Poor’s
|
|
A1+
|
|
AA-
|
|
Stable
|
Moody’s Investors Service
|
|
P1
|
|
Aa3
|
|
Stable
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
a financial safeguard package for all futures and options contracts other than cleared interest rate swap contracts (base package); and
|
•
|
a financial safeguard package for cleared interest rate swap contracts.
|
(in millions)
|
|
CME Clearing
Available Assets
|
||
Designated corporate contributions for futures and options
(1)
|
|
$
|
100.0
|
|
Guaranty fund contributions
(2)
|
|
4,096.0
|
|
|
Assessment powers
(3)
|
|
11,264.0
|
|
(1)
|
CME Clearing designates $100.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit.
|
(2)
|
Guaranty fund contributions of clearing firms include guaranty fund contributions required of clearing firms, but do not include any excess deposits held by us at the direction of clearing firms.
|
(3)
|
In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting clearing firms' guaranty fund contributions, we would assess all non-defaulting clearing members as provided in the rules governing the guaranty fund. We could assess non-defaulting clearing members 275% of their existing guaranty fund requirements up to a maximum of 550% of their existing guaranty fund requirements as provided in the rules. Assessment powers are calculated to reflect the potential obligation that each clearing member could be called for in the event clearing member defaults exhaust the guaranty fund, however the total amount available would be reduced by the defaulted clearing members assessment obligations since they would no longer be able to satisfy their obligations.
|
(in millions)
|
|
CME Clearing
Available Assets
|
||
Designated corporate contributions for interest rate swap contracts
(1)
|
|
$
|
150.0
|
|
Guaranty fund contributions
(2)
|
|
3,319.5
|
|
|
Assessment powers
(3)
|
|
1,121.9
|
|
(1)
|
CME Clearing designates $150.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit.
|
(2)
|
Guaranty fund contributions of clearing firms for interest rate swap contracts include guaranty fund contributions required of those clearing firms.
|
(3)
|
In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting firms' guaranty fund contributions, we would assess non-defaulting clearing members as provided in the rules governing the interest rate swap guaranty fund.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,374.5
|
|
|
$
|
1,903.6
|
|
Marketable securities
|
72.9
|
|
|
90.1
|
|
||
Accounts receivable, net of allowance of $2.7 and $2.2
|
553.3
|
|
|
359.7
|
|
||
Other current assets (includes $1.5 and $0 in restricted cash)
|
430.5
|
|
|
367.8
|
|
||
Performance bonds and guaranty fund contributions
|
39,455.5
|
|
|
44,185.3
|
|
||
Total current assets
|
41,886.7
|
|
|
46,906.5
|
|
||
Property, net
|
448.7
|
|
|
399.7
|
|
||
Intangible assets—trading products
|
17,175.3
|
|
|
17,175.3
|
|
||
Intangible assets—other, net
|
5,500.1
|
|
|
2,346.3
|
|
||
Goodwill
|
10,805.3
|
|
|
7,569.0
|
|
||
Other assets (includes $1.2 and $2.4 in restricted cash)
|
1,659.6
|
|
|
1,394.4
|
|
||
Total Assets
|
$
|
77,475.7
|
|
|
$
|
75,791.2
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
116.0
|
|
|
$
|
31.3
|
|
Short-term debt
|
574.2
|
|
|
—
|
|
||
Other current liabilities
|
1,126.9
|
|
|
1,456.3
|
|
||
Performance bonds and guaranty fund contributions
|
39,455.5
|
|
|
44,185.3
|
|
||
Total current liabilities
|
41,272.6
|
|
|
45,672.9
|
|
||
Long-term debt
|
3,826.8
|
|
|
2,233.1
|
|
||
Deferred income tax liabilities, net
|
5,665.9
|
|
|
4,857.7
|
|
||
Other liabilities
|
745.1
|
|
|
615.7
|
|
||
Total Liabilities
|
51,510.4
|
|
|
53,379.4
|
|
||
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000 shares authorized as of December 31, 2018 and 2017; none issued
|
—
|
|
|
—
|
|
||
Class A common stock, $0.01 par value, 1,000,000 shares authorized as of December 31, 2018 and 2017, 356,824 and 339,235 shares issued and outstanding as of December 31, 2018 and 2017, respectively
|
3.6
|
|
|
3.4
|
|
||
Class B common stock, $0.01 par value, 3 shares authorized, issued and outstanding as of December 31, 2018 and 2017
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
21,054.3
|
|
|
17,896.9
|
|
||
Retained earnings
|
4,855.3
|
|
|
4,497.2
|
|
||
Accumulated other comprehensive income (loss)
|
5.3
|
|
|
14.3
|
|
||
Total CME Group shareholders’ equity
|
25,918.5
|
|
|
22,411.8
|
|
||
Non-controlling interests
|
46.8
|
|
|
—
|
|
||
Total Equity
|
25,965.3
|
|
|
22,411.8
|
|
||
Total Liabilities and Equity
|
$
|
77,475.7
|
|
|
$
|
75,791.2
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
|
|
|
|
|
||||||
Clearing and transaction fees
|
$
|
3,667.0
|
|
|
$
|
3,098.6
|
|
|
$
|
3,036.4
|
|
Market data and information services
|
449.6
|
|
|
391.8
|
|
|
406.5
|
|
|||
Other
|
192.8
|
|
|
154.3
|
|
|
152.3
|
|
|||
Total Revenues
|
4,309.4
|
|
|
3,644.7
|
|
|
3,595.2
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Compensation and benefits
|
672.2
|
|
|
563.9
|
|
|
543.2
|
|
|||
Technology
|
117.2
|
|
|
101.6
|
|
|
97.6
|
|
|||
Professional fees and outside services
|
166.1
|
|
|
117.6
|
|
|
144.4
|
|
|||
Amortization of purchased intangibles
|
130.0
|
|
|
95.5
|
|
|
96.1
|
|
|||
Depreciation and amortization
|
118.7
|
|
|
113.0
|
|
|
129.2
|
|
|||
Licensing and other fee agreements
|
170.6
|
|
|
146.3
|
|
|
135.8
|
|
|||
Other
|
327.0
|
|
|
196.2
|
|
|
248.4
|
|
|||
Total Expenses
|
1,701.8
|
|
|
1,334.1
|
|
|
1,394.7
|
|
|||
Operating Income
|
2,607.6
|
|
|
2,310.6
|
|
|
2,200.5
|
|
|||
|
|
|
|
|
|
||||||
Non-Operating Income (Expense)
|
|
|
|
|
|
||||||
Investment income
|
745.1
|
|
|
531.7
|
|
|
141.8
|
|
|||
Interest and other borrowing costs
|
(157.7
|
)
|
|
(117.0
|
)
|
|
(123.5
|
)
|
|||
Equity in net earnings (losses) of unconsolidated subsidiaries
|
152.8
|
|
|
129.2
|
|
|
110.2
|
|
|||
Other non-operating income (expense)
|
(570.0
|
)
|
|
(328.2
|
)
|
|
(41.4
|
)
|
|||
Total Non-Operating Income (Expense)
|
170.2
|
|
|
215.7
|
|
|
87.1
|
|
|||
Income before Income Taxes
|
2,777.8
|
|
|
2,526.3
|
|
|
2,287.6
|
|
|||
Income tax provision (benefit)
|
814.1
|
|
|
(1,537.1
|
)
|
|
753.5
|
|
|||
Net Income
|
1,963.7
|
|
|
4,063.4
|
|
|
1,534.1
|
|
|||
Less: net (income) loss attributable to non-controlling interests
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|||
Net Income Attributable to CME Group
|
$
|
1,962.2
|
|
|
$
|
4,063.4
|
|
|
$
|
1,534.1
|
|
|
|
|
|
|
|
||||||
Earnings per Common Share Attributable to CME Group:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.73
|
|
|
$
|
12.00
|
|
|
$
|
4.55
|
|
Diluted
|
5.71
|
|
|
11.94
|
|
|
4.53
|
|
|||
Weighted Average Number of Common Shares:
|
|
|
|
|
|
||||||
Basic
|
342,344
|
|
|
338,707
|
|
|
337,496
|
|
|||
Diluted
|
343,737
|
|
|
340,226
|
|
|
338,966
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
|
|
$
|
1,963.7
|
|
|
$
|
4,063.4
|
|
|
$
|
1,534.1
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||
Investment securities:
|
|
|
|
|
|
|
|
||||||
Net unrealized holding gains (losses) arising during the period
|
|
|
(0.8
|
)
|
|
30.2
|
|
|
170.0
|
|
|||
Reclassification of gains (losses) on sale included in investment income
|
|
|
—
|
|
|
(89.5
|
)
|
|
(48.7
|
)
|
|||
Income tax benefit (expense)
|
|
|
0.2
|
|
|
79.4
|
|
|
(45.8
|
)
|
|||
Investment securities, net
|
|
|
(0.6
|
)
|
|
20.1
|
|
|
75.5
|
|
|||
Defined benefit plans:
|
|
|
|
|
|
|
|
||||||
Net change in defined benefit plans arising during the period
|
|
|
(15.3
|
)
|
|
0.3
|
|
|
(5.1
|
)
|
|||
Amortization of net actuarial (gains) losses and prior service costs included in compensation and benefits expense
|
|
|
2.6
|
|
|
2.9
|
|
|
3.2
|
|
|||
Income tax benefit (expense)
|
|
|
3.2
|
|
|
(1.5
|
)
|
|
0.7
|
|
|||
Defined benefit plans, net
|
|
|
(9.5
|
)
|
|
1.7
|
|
|
(1.2
|
)
|
|||
Derivative investments:
|
|
|
|
|
|
|
|
||||||
Net unrealized holding gains (losses) arising during the period
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|||
Amortization of effective portion of net (gains) losses on cash flow hedges included in interest expense
|
|
|
(1.2
|
)
|
|
(1.2
|
)
|
|
(1.2
|
)
|
|||
Income tax benefit (expense)
|
|
|
0.1
|
|
|
0.3
|
|
|
0.5
|
|
|||
Derivative investments, net
|
|
|
(0.2
|
)
|
|
(0.9
|
)
|
|
(0.7
|
)
|
|||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
|
(2.5
|
)
|
|
10.4
|
|
|
(8.2
|
)
|
|||
Income tax benefit (expense)
|
|
|
—
|
|
|
(2.9
|
)
|
|
1.3
|
|
|||
Foreign currency translation, net
|
|
|
(2.5
|
)
|
|
7.5
|
|
|
(6.9
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
|
(12.8
|
)
|
|
28.4
|
|
|
66.7
|
|
|||
Comprehensive income
|
|
|
1,950.9
|
|
|
4,091.8
|
|
|
1,600.8
|
|
|||
Less: comprehensive (income) loss attributable to non-controlling interest
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive income attributable to CME Group
|
|
|
$
|
1,949.4
|
|
|
$
|
4,091.8
|
|
|
$
|
1,600.8
|
|
|
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 Shareholders' Equity
|
||||||||
Balance at December 31, 2015
|
336,938
|
|
3
|
|
$
|
17,725.0
|
|
|
$
|
2,907.6
|
|
|
$
|
(80.8
|
)
|
|
$
|
20,551.8
|
|
Net income
|
|
|
|
|
|
|
1,534.1
|
|
|
|
|
1,534.1
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
66.7
|
|
|
66.7
|
|
||||||
Dividends on common stock of $5.65 per share
|
|
|
|
|
|
|
(1,917.2
|
)
|
|
|
|
(1,917.2
|
)
|
||||||
Exercise of stock options
|
686
|
|
|
|
51.8
|
|
|
|
|
|
|
51.8
|
|
||||||
Excess tax benefits from option exercises and restricted stock vesting
|
|
|
|
|
9.5
|
|
|
|
|
|
|
9.5
|
|
||||||
Vesting of issued restricted Class A common stock
|
570
|
|
|
|
(26.8
|
)
|
|
|
|
|
|
(26.8
|
)
|
||||||
Shares issued to Board of Directors
|
26
|
|
|
|
2.5
|
|
|
|
|
|
|
2.5
|
|
||||||
Shares issued under Employee Stock Purchase Plan
|
20
|
|
|
|
2.1
|
|
|
|
|
|
|
2.1
|
|
||||||
Stock-based compensation
|
|
|
|
|
66.2
|
|
|
|
|
|
|
66.2
|
|
||||||
Balance at December 31, 2016
|
338,240
|
|
3
|
|
$
|
17,830.3
|
|
|
$
|
2,524.5
|
|
|
$
|
(14.1
|
)
|
|
$
|
20,340.7
|
|
|
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, 2016
|
338,240
|
|
3
|
|
$
|
17,830.3
|
|
|
$
|
2,524.5
|
|
|
$
|
(14.1
|
)
|
|
$
|
20,340.7
|
|
Net income
|
|
|
|
|
|
|
4,063.4
|
|
|
|
|
4,063.4
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
28.4
|
|
|
28.4
|
|
||||||
Dividends on common stock of $6.14 per share
|
|
|
|
|
|
|
(2,088.5
|
)
|
|
|
|
(2,088.5
|
)
|
||||||
Impact of adoption of standards update on employee share-based payments, net of tax
|
|
|
|
|
1.4
|
|
|
(2.2
|
)
|
|
|
|
(0.8
|
)
|
|||||
Exercise of stock options
|
444
|
|
|
|
36.7
|
|
|
|
|
|
|
36.7
|
|
||||||
Vesting of issued restricted Class A common stock
|
511
|
|
|
|
(31.3
|
)
|
|
|
|
|
|
(31.3
|
)
|
||||||
Shares issued to Board of Directors
|
20
|
|
|
|
2.4
|
|
|
|
|
|
|
2.4
|
|
||||||
Shares issued under Employee Stock Purchase Plan
|
20
|
|
|
|
2.8
|
|
|
|
|
|
|
2.8
|
|
||||||
Stock-based compensation
|
|
|
|
|
58.0
|
|
|
|
|
|
|
58.0
|
|
||||||
Balance at December 31, 2017
|
339,235
|
|
3
|
|
$
|
17,900.3
|
|
|
$
|
4,497.2
|
|
|
$
|
14.3
|
|
|
$
|
22,411.8
|
|
|
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, 2017
|
339,235
|
|
3
|
|
$
|
17,900.3
|
|
|
$
|
4,497.2
|
|
|
$
|
14.3
|
|
|
$
|
22,411.8
|
|
|
$
|
—
|
|
|
$
|
22,411.8
|
|
Net income
|
|
|
|
|
|
|
1,962.2
|
|
|
|
|
1,962.2
|
|
|
1.5
|
|
|
1,963.7
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
(12.8
|
)
|
|
(12.8
|
)
|
|
|
|
(12.8
|
)
|
|||||||||
Dividends on common stock of $4.55 per share
|
|
|
|
|
|
|
(1,591.6
|
)
|
|
|
|
(1,591.6
|
)
|
|
|
|
(1,591.6
|
)
|
|||||||||
Impact of adoption of standards update on tax effects related to accumulated other comprehensive income and revenue recognition
|
|
|
|
|
|
|
(12.5
|
)
|
|
3.8
|
|
|
(8.7
|
)
|
|
|
|
(8.7
|
)
|
||||||||
Common stock issued to complete the acquisition of NEX
|
16,927
|
|
|
|
3,105.8
|
|
|
|
|
|
|
3,105.8
|
|
|
|
|
3,105.8
|
|
|||||||||
Non-controlling interest resulting from the acquisition of NEX
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
45.3
|
|
|
45.3
|
|
|||||||||
Exercise of stock options
|
175
|
|
|
|
11.5
|
|
|
|
|
|
|
11.5
|
|
|
|
|
11.5
|
|
|||||||||
Vesting of issued restricted Class A common stock
|
449
|
|
|
|
(35.0
|
)
|
|
|
|
|
|
(35.0
|
)
|
|
|
|
(35.0
|
)
|
|||||||||
Shares issued to Board of Directors
|
16
|
|
|
|
2.8
|
|
|
|
|
|
|
2.8
|
|
|
|
|
2.8
|
|
|||||||||
Shares issued under Employee Stock Purchase Plan
|
22
|
|
|
|
4.0
|
|
|
|
|
|
|
4.0
|
|
|
|
|
4.0
|
|
|||||||||
Stock-based compensation
|
|
|
|
|
68.5
|
|
|
|
|
|
|
68.5
|
|
|
|
|
68.5
|
|
|||||||||
Balance at December 31, 2018
|
356,824
|
|
3
|
|
$
|
21,057.9
|
|
|
$
|
4,855.3
|
|
|
$
|
5.3
|
|
|
$
|
25,918.5
|
|
|
$
|
46.8
|
|
|
$
|
25,965.3
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
1,963.7
|
|
|
$
|
4,063.4
|
|
|
$
|
1,534.1
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Stock-based compensation
|
96.5
|
|
|
58.0
|
|
|
66.2
|
|
|||
Amortization of purchased intangibles
|
130.0
|
|
|
95.5
|
|
|
96.1
|
|
|||
Depreciation and amortization
|
118.7
|
|
|
113.0
|
|
|
129.2
|
|
|||
Loss on datacenter
|
—
|
|
|
—
|
|
|
27.1
|
|
|||
Gain on sale of BM&FBOVESPA shares
|
—
|
|
|
(86.5
|
)
|
|
(48.4
|
)
|
|||
Gain on sale of Bolsa Mexicana de Valores, S.A.B de C.V.
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|||
Income tax expense reclassified from accumulated other comprehensive income upon final sale of BM&FBOVESPA shares
|
—
|
|
|
87.8
|
|
|
—
|
|
|||
Loss on derivative contracts
|
62.3
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains on privately-held equity investments
|
(97.4
|
)
|
|
—
|
|
|
—
|
|
|||
Undistributed earnings, net of losses, of unconsolidated subsidiaries
|
(8.3
|
)
|
|
(26.8
|
)
|
|
(2.3
|
)
|
|||
Deferred income taxes
|
114.3
|
|
|
(2,445.6
|
)
|
|
(83.0
|
)
|
|||
Change in:
|
|
|
|
|
|
||||||
Accounts receivable
|
(65.5
|
)
|
|
6.0
|
|
|
(8.1
|
)
|
|||
Other current assets
|
(84.9
|
)
|
|
(26.1
|
)
|
|
1.2
|
|
|||
Other assets
|
29.7
|
|
|
(77.1
|
)
|
|
(3.4
|
)
|
|||
Accounts payable
|
32.3
|
|
|
5.1
|
|
|
(2.6
|
)
|
|||
Income taxes payable
|
195.4
|
|
|
3.5
|
|
|
60.5
|
|
|||
Other current liabilities
|
(36.8
|
)
|
|
(8.9
|
)
|
|
(12.4
|
)
|
|||
Other liabilities
|
(20.5
|
)
|
|
(8.5
|
)
|
|
(22.5
|
)
|
|||
Other
|
11.3
|
|
|
0.6
|
|
|
0.3
|
|
|||
Net Cash Provided by Operating Activities
|
2,440.8
|
|
|
1,751.1
|
|
|
1,732.0
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Proceeds from maturities and sales of available-for-sale marketable securities
|
11.8
|
|
|
2.5
|
|
|
41.7
|
|
|||
Purchases of available-for-sale marketable securities
|
(10.0
|
)
|
|
(3.0
|
)
|
|
(45.9
|
)
|
|||
Purchases of property, net
|
(116.7
|
)
|
|
(81.9
|
)
|
|
(91.8
|
)
|
|||
Investments in business ventures
|
—
|
|
|
(5.3
|
)
|
|
(9.1
|
)
|
|||
Proceeds from sale of business ventures
|
20.7
|
|
|
4.0
|
|
|
8.8
|
|
|||
Proceeds from sale of BM&FBOVESPA shares
|
—
|
|
|
244.0
|
|
|
150.0
|
|
|||
Proceeds from sale of Bolsa Mexicana de Valores, S.A.B de C.V.
|
—
|
|
|
19.6
|
|
|
—
|
|
|||
Cash paid to acquire NEX, net of cash received
|
(1,795.4
|
)
|
|
—
|
|
|
—
|
|
|||
Net Cash (Used in) Provided by Investing Activities
|
(1,889.6
|
)
|
|
179.9
|
|
|
53.7
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Issuance of commercial paper, net of maturities
|
$
|
386.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Proceeds from other borrowings, net of issuance costs
|
1,185.0
|
|
|
—
|
|
|
—
|
|
|||
Repayment of other borrowings
|
(452.5
|
)
|
|
—
|
|
|
—
|
|
|||
Cash dividends
|
(2,149.9
|
)
|
|
(1,993.5
|
)
|
|
(1,787.2
|
)
|
|||
Premium payment for derivative contract
|
(30.0
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
11.5
|
|
|
36.7
|
|
|
51.8
|
|
|||
Proceeds from lease financing obligation
|
—
|
|
|
—
|
|
|
130.0
|
|
|||
Excess tax benefits related to employee option exercises and restricted stock vesting
|
—
|
|
|
—
|
|
|
9.5
|
|
|||
Employee taxes paid on restricted stock vesting
|
(35.0
|
)
|
|
(31.3
|
)
|
|
(26.8
|
)
|
|||
Other
|
4.0
|
|
|
2.8
|
|
|
2.2
|
|
|||
Net Cash Used in Financing Activities
|
(1,080.0
|
)
|
|
(1,985.3
|
)
|
|
(1,620.5
|
)
|
|||
|
|
|
|
|
|
||||||
Net change in cash, cash equivalents and restricted cash
|
(528.8
|
)
|
|
(54.3
|
)
|
|
165.2
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
1,906.0
|
|
|
1,960.3
|
|
|
1,795.1
|
|
|||
Cash, Cash Equivalents and Restricted Cash, End of Period
|
$
|
1,377.2
|
|
|
$
|
1,906.0
|
|
|
$
|
1,960.3
|
|
|
|
|
|
|
|
||||||
Reconciliation of cash, cash equivalents and restricted cash:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
1,374.5
|
|
|
$
|
1,903.6
|
|
|
$
|
1,868.6
|
|
Short-term restricted cash
|
1.5
|
|
|
—
|
|
|
30.0
|
|
|||
Long-term restricted cash
|
1.2
|
|
|
2.4
|
|
|
61.7
|
|
|||
Total
|
$
|
1,377.2
|
|
|
$
|
1,906.0
|
|
|
$
|
1,960.3
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
577.4
|
|
|
$
|
762.8
|
|
|
$
|
706.7
|
|
Interest paid
|
108.3
|
|
|
84.8
|
|
|
84.8
|
|
|||
Non-cash financing activities:
|
|
|
|
|
|
||||||
Common stock issued for the acquisition of NEX
|
3,105.8
|
|
|
—
|
|
|
—
|
|
|||
Declaration of annual variable dividend, payable in January 2019, January 2018 and January 2017
|
624.4
|
|
|
1,187.3
|
|
|
1,099.3
|
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost recognized in compensation and benefits expense
|
|
$
|
19.1
|
|
|
$
|
18.7
|
|
|
$
|
16.7
|
|
Other components of pension expense recognized in other non-operating income (expense)
|
|
(8.9
|
)
|
|
(1.4
|
)
|
|
(2.2
|
)
|
|||
Total net pension expense
|
|
$
|
10.2
|
|
|
$
|
17.3
|
|
|
$
|
14.5
|
|
(in millions)
|
Fair Value in USD
|
|
Estimated Useful Life
|
||
Customer relationships
|
$
|
3,032.3
|
|
|
11 to 19 years
|
Technology-related intellectual property
|
156.3
|
|
|
5 to 9 years
|
|
Trade names
|
100.3
|
|
|
3 to 9 years
|
|
Total
|
$
|
3,288.9
|
|
|
|
|
|
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
Corporate debt securities
(1)
|
|
$
|
18.2
|
|
|
$
|
18.1
|
|
|
$
|
20.0
|
|
|
$
|
20.8
|
|
Municipal debt securities
|
|
1.5
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
||||
Asset-backed security
|
|
0.6
|
|
|
0.3
|
|
|
0.6
|
|
|
0.3
|
|
||||
Equity securities
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total
|
|
$
|
20.3
|
|
|
$
|
20.2
|
|
|
$
|
20.6
|
|
|
$
|
21.2
|
|
(in millions)
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
Maturity of one year or less
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
Maturity between one and five years
|
|
9.1
|
|
|
9.2
|
|
||
Maturity between five and ten years
|
|
4.0
|
|
|
3.9
|
|
||
Maturity greater than ten years
|
|
5.4
|
|
|
5.2
|
|
||
Total
|
|
$
|
20.3
|
|
|
$
|
20.1
|
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest rates
|
|
$
|
1,201.0
|
|
|
$
|
995.4
|
|
|
$
|
944.5
|
|
Equity indexes
|
|
687.0
|
|
|
497.1
|
|
|
541.3
|
|
|||
Foreign exchange
|
|
187.8
|
|
|
185.6
|
|
|
171.6
|
|
|||
Agricultural commodities
|
|
470.0
|
|
|
436.0
|
|
|
438.6
|
|
|||
Energy
|
|
744.2
|
|
|
716.2
|
|
|
699.5
|
|
|||
Metals
|
|
223.9
|
|
|
200.2
|
|
|
179.2
|
|
|||
Interest rate swap and credit default swap
|
|
61.9
|
|
|
68.1
|
|
|
61.7
|
|
|||
Cash markets business
|
|
91.2
|
|
|
—
|
|
|
—
|
|
|||
Total clearing and transaction fees
|
|
3,667.0
|
|
|
3,098.6
|
|
|
3,036.4
|
|
|||
Market data and information services
|
|
449.6
|
|
|
391.8
|
|
|
406.5
|
|
|||
Other
|
|
192.8
|
|
|
154.3
|
|
|
152.3
|
|
|||
Total revenues
|
|
$
|
4,309.4
|
|
|
$
|
3,644.7
|
|
|
$
|
3,595.2
|
|
|
|
|
|
|
|
|
||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
||||||
Services transferred at a point in time
|
|
3,561.5
|
|
|
3,052.1
|
|
|
2,991.6
|
|
|||
Services transferred over time
|
|
738.8
|
|
|
579.9
|
|
|
592.1
|
|
|||
One-time charges and miscellaneous revenues
|
|
9.1
|
|
|
12.7
|
|
|
11.5
|
|
|||
Total revenues
|
|
$
|
4,309.4
|
|
|
$
|
3,644.7
|
|
|
$
|
3,595.2
|
|
|
|
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
Cash
|
|
Non-Cash
Deposits
and
IEF Funds
|
|
Cash
|
|
Non-Cash
Deposits
and
IEF Funds
|
||||||||
Performance bonds
|
|
$
|
38,211.4
|
|
|
$
|
102,264.8
|
|
|
$
|
41,809.5
|
|
|
$
|
86,730.4
|
|
Guaranty fund contributions
|
|
1,185.9
|
|
|
6,935.9
|
|
|
2,281.2
|
|
|
6,102.4
|
|
||||
Cross-margin arrangements
|
|
22.3
|
|
|
202.3
|
|
|
93.4
|
|
|
21.5
|
|
||||
Performance bond collateral for delivery
|
|
35.9
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
||||
Total
|
|
$
|
39,455.5
|
|
|
$
|
109,403.0
|
|
|
$
|
44,185.3
|
|
|
$
|
92,854.3
|
|
(in millions)
|
|
2018
|
|
2017
|
||||
Performance bonds
|
|
$
|
2,699.2
|
|
|
$
|
2,348.4
|
|
Cross-margin arrangements
|
|
—
|
|
|
59.5
|
|
||
Performance bond collateral for delivery
|
|
3,273.0
|
|
|
3,438.5
|
|
||
Total Letters of Credit
|
|
$
|
5,972.2
|
|
|
$
|
5,846.4
|
|
(in millions)
|
|
2018
|
|
2017
|
|
Estimated Useful Life
|
||||
Land and land improvements
|
|
$
|
7.8
|
|
|
$
|
7.8
|
|
|
10 - 20 years
(1)
|
Building and building improvements
|
|
174.1
|
|
|
173.8
|
|
|
3 - 39 years
|
||
Leasehold improvements
|
|
215.6
|
|
|
180.5
|
|
|
3 - 24 years
|
||
Furniture, fixtures and equipment
|
|
371.6
|
|
|
309.9
|
|
|
2 - 7 years
|
||
Software and software development costs
|
|
440.7
|
|
|
404.3
|
|
|
2 - 4 years
|
||
Total property
|
|
1,209.8
|
|
|
1,076.3
|
|
|
|
||
Less accumulated depreciation and amortization
|
|
(761.1
|
)
|
|
(676.6
|
)
|
|
|
||
Property, net
|
|
$
|
448.7
|
|
|
$
|
399.7
|
|
|
|
|
|
2018
|
|
2017
|
||||||||||||||||||||
(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
|
|
$
|
5,862.5
|
|
|
$
|
(1,065.6
|
)
|
|
$
|
4,796.9
|
|
|
$
|
2,838.8
|
|
|
$
|
(943.7
|
)
|
|
$
|
1,895.1
|
|
Technology-related intellectual property
|
|
179.1
|
|
|
(25.6
|
)
|
|
153.5
|
|
|
29.4
|
|
|
(29.4
|
)
|
|
—
|
|
||||||
Other
|
|
102.8
|
|
|
(3.1
|
)
|
|
99.7
|
|
|
2.4
|
|
|
(1.2
|
)
|
|
1.2
|
|
||||||
Total Amortizable Intangible Assets
|
|
$
|
6,144.4
|
|
|
$
|
(1,094.3
|
)
|
|
5,050.1
|
|
|
$
|
2,870.6
|
|
|
$
|
(974.3
|
)
|
|
1,896.3
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-Lived Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
|
|
|
|
|
450.0
|
|
|
|
|
|
|
450.0
|
|
||||||||||
Total Intangible Assets—Other, Net
|
|
|
|
|
|
$
|
5,500.1
|
|
|
|
|
|
|
$
|
2,346.3
|
|
||||||||
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 CFTC. Product authorizations from the CFTC have no term limits.
|
|
|
Clearing firm, market data and other customer relationships
|
5 - 30 years
|
Technology-related intellectual property
|
5 - 9 years
|
Other
|
3 - 24.5 years
|
(in millions)
|
|
Balance at December 31, 2017
|
|
Business
Combinations
|
|
Balance at December 31, 2018
|
||||||
CBOT Holdings
|
|
$
|
5,066.4
|
|
|
$
|
—
|
|
|
$
|
5,066.4
|
|
NYMEX Holdings
|
|
2,462.2
|
|
|
—
|
|
|
2,462.2
|
|
|||
NEX
|
|
—
|
|
|
3,236.3
|
|
|
3,236.3
|
|
|||
Other
|
|
40.4
|
|
|
—
|
|
|
40.4
|
|
|||
Total Goodwill
|
|
$
|
7,569.0
|
|
|
$
|
3,236.3
|
|
|
$
|
10,805.3
|
|
(in millions)
|
|
Balance at December 31, 2016
|
|
Business
Combinations
|
|
Balance at December 31, 2017
|
||||||
CBOT Holdings
|
|
$
|
5,066.4
|
|
|
$
|
—
|
|
|
$
|
5,066.4
|
|
NYMEX Holdings
|
|
2,462.2
|
|
|
—
|
|
|
2,462.2
|
|
|||
Other
|
|
40.4
|
|
|
—
|
|
|
40.4
|
|
|||
Total Goodwill
|
|
$
|
7,569.0
|
|
|
$
|
—
|
|
|
$
|
7,569.0
|
|
(in millions)
|
|
2018
|
|
2017
|
||||
€350.0 million fixed rate notes due March 2019, stated rate of 3.13%
(1)
|
|
$
|
400.7
|
|
|
$
|
—
|
|
¥19.1 billion term loan due March 2019, stated rate of 0.81%
(2)
|
|
173.5
|
|
|
—
|
|
||
Total short-term debt
|
|
$
|
574.2
|
|
|
$
|
—
|
|
(1)
|
The company maintains a cross-currency swap contract, which swaps a euro-based stated interest rate of
3.13%
for a pound-based interest rate of
4.40%
and a euro-based principal repayment for a pound-based principal repayment on
€250.0 million
fixed rate notes.
|
(2)
|
The company maintains a hedge contract to fix the exchange rate for the maturing principal and interest at a fixed British pound to Japanese yen exchange rate.
|
(in millions)
|
|
2018
|
|
2017
|
||||
$750.0 million fixed rate notes due September 2022, stated rate of 3.00%
(1)
|
|
$
|
746.9
|
|
|
$
|
746.0
|
|
€15.0 million fixed rate notes due May 2023, stated rate of 4.30%
|
|
16.6
|
|
|
—
|
|
||
$750.0 million fixed rate notes due March 2025, stated rate of 3.00%
(2)
|
|
745.6
|
|
|
744.9
|
|
||
$500.0 million fixed rate notes due June 2028, stated rate of 3.75%
|
|
495.9
|
|
|
—
|
|
||
$750.0 million fixed rate notes due September 2043, stated rate of 5.30%
(3)
|
|
742.4
|
|
|
742.2
|
|
||
$700.0 million fixed rate notes due June 2048, stated rate of 4.15%
|
|
689.5
|
|
|
—
|
|
||
Commercial paper
(4)
|
|
389.9
|
|
|
—
|
|
||
Total long-term debt
|
|
$
|
3,826.8
|
|
|
$
|
2,233.1
|
|
(1)
|
The company maintains 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%
.
|
(2)
|
The company maintains 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%
.
|
(3)
|
The company maintains 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%
.
|
(4)
|
The commercial paper is backed by the five-year multi-currency revolving credit facility.
|
(in millions)
|
Par Value
|
||
2019
|
$
|
573.9
|
|
2020
|
—
|
|
|
2021
|
—
|
|
|
2022
|
1,140.0
|
|
|
2023
|
17.2
|
|
|
Thereafter
|
2,700.0
|
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income before income taxes:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
2,716.8
|
|
|
$
|
2,464.2
|
|
|
$
|
2,221.8
|
|
Foreign
|
|
61.0
|
|
|
62.1
|
|
|
65.8
|
|
|||
Total
|
|
$
|
2,777.8
|
|
|
$
|
2,526.3
|
|
|
$
|
2,287.6
|
|
Income tax provision:
|
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
524.8
|
|
|
$
|
783.7
|
|
|
$
|
684.4
|
|
State
|
|
154.2
|
|
|
85.7
|
|
|
118.6
|
|
|||
Foreign
|
|
20.8
|
|
|
39.1
|
|
|
33.5
|
|
|||
Total
|
|
699.8
|
|
|
908.5
|
|
|
836.5
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(9.3
|
)
|
|
(2,576.3
|
)
|
|
(95.4
|
)
|
|||
State
|
|
127.8
|
|
|
130.8
|
|
|
10.0
|
|
|||
Foreign
|
|
(4.2
|
)
|
|
(0.1
|
)
|
|
2.4
|
|
|||
Total
|
|
114.3
|
|
|
(2,445.6
|
)
|
|
(83.0
|
)
|
|||
Total Income Tax Provision (Benefit)
|
|
$
|
814.1
|
|
|
$
|
(1,537.1
|
)
|
|
$
|
753.5
|
|
(in millions)
|
|
2018
|
|
2017
|
||||
Deferred Income Tax Assets:
|
|
|
|
|
||||
Net operating losses
|
|
$
|
42.1
|
|
|
$
|
13.0
|
|
Property
|
|
0.3
|
|
|
5.5
|
|
||
Accrued expenses, compensation and other
|
|
32.6
|
|
|
37.2
|
|
||
Subtotal
|
|
75.0
|
|
|
55.7
|
|
||
Valuation allowance
|
|
(10.7
|
)
|
|
(11.2
|
)
|
||
Total deferred income tax assets
|
|
64.3
|
|
|
44.5
|
|
||
Deferred Income Tax Liabilities:
|
|
|
|
|
||||
Purchased intangible assets
|
|
(5,700.6
|
)
|
|
(4,902.2
|
)
|
||
Total deferred income tax liabilities
|
|
(5,700.6
|
)
|
|
(4,902.2
|
)
|
||
Net Deferred Income Tax Liabilities
|
|
(5,636.3
|
)
|
|
(4,857.7
|
)
|
||
Reported as:
|
|
|
|
|
||||
Net non-current deferred tax assets
|
|
29.6
|
|
|
—
|
|
||
Net non-current deferred tax liabilities
|
|
(5,665.9
|
)
|
|
(4,857.7
|
)
|
||
Net Deferred Income Tax Liabilities
|
|
$
|
(5,636.3
|
)
|
|
$
|
(4,857.7
|
)
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Gross unrecognized tax benefits
|
|
$
|
396.2
|
|
|
$
|
308.8
|
|
|
$
|
252.1
|
|
Unrecognized tax benefits, net of tax impacts in other jurisdictions
|
|
367.9
|
|
|
276.0
|
|
|
216.1
|
|
|||
Unrecognized interest and penalties related to uncertain tax positions
|
|
63.5
|
|
|
34.0
|
|
|
32.7
|
|
|||
Interest and penalties recognized on the consolidated statements of income
|
|
29.5
|
|
|
1.3
|
|
|
13.2
|
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at January 1
|
|
$
|
308.8
|
|
|
$
|
252.1
|
|
|
$
|
206.9
|
|
Additions based on tax positions related to the current year
|
|
27.2
|
|
|
41.8
|
|
|
29.6
|
|
|||
Unrecognized tax benefits acquired at date of acquisition
|
|
58.4
|
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions of prior years
|
|
7.7
|
|
|
47.7
|
|
|
18.5
|
|
|||
Reductions for tax positions of prior years
|
|
(0.3
|
)
|
|
(8.7
|
)
|
|
(2.8
|
)
|
|||
Reductions resulting from the lapse of statutes of limitations
|
|
(3.1
|
)
|
|
(2.1
|
)
|
|
(0.1
|
)
|
|||
Settlements with taxing authorities
|
|
(2.5
|
)
|
|
(22.0
|
)
|
|
—
|
|
|||
Balance at December 31
|
|
$
|
396.2
|
|
|
$
|
308.8
|
|
|
$
|
252.1
|
|
(in millions)
|
|
2018
|
|
2017
|
||||
Balance at January 1
|
|
$
|
273.9
|
|
|
$
|
239.9
|
|
Service cost
|
|
19.1
|
|
|
18.7
|
|
||
Interest cost
|
|
10.5
|
|
|
10.8
|
|
||
Actuarial (gain) loss
|
|
(23.5
|
)
|
|
15.1
|
|
||
Benefits paid
|
|
(14.9
|
)
|
|
(10.6
|
)
|
||
Balance at December 31
|
|
$
|
265.1
|
|
|
$
|
273.9
|
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at January 1
|
|
$
|
348.0
|
|
|
$
|
238.8
|
|
|
$
|
217.5
|
|
Actual return on plan assets
|
|
(17.3
|
)
|
|
29.8
|
|
|
16.0
|
|
|||
Employer contributions
|
|
—
|
|
|
90.0
|
|
|
15.0
|
|
|||
Benefits paid
|
|
(14.9
|
)
|
|
(10.6
|
)
|
|
(9.7
|
)
|
|||
Balance at December 31
|
|
$
|
315.8
|
|
|
$
|
348.0
|
|
|
$
|
238.8
|
|
(in millions)
|
|
2018
|
|
2017
|
||||
Level 2:
|
|
|
|
|
||||
Money market funds
|
|
$
|
8.1
|
|
|
$
|
95.8
|
|
Mutual funds:
|
|
|
|
|
||||
Fixed income
|
|
155.0
|
|
|
109.7
|
|
||
U.S. equity
|
|
94.4
|
|
|
83.6
|
|
||
Foreign equity
|
|
58.3
|
|
|
58.9
|
|
||
Total
|
|
$
|
315.8
|
|
|
$
|
348.0
|
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Components of Net Pension Expense:
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
19.1
|
|
|
$
|
18.7
|
|
|
$
|
16.7
|
|
Interest cost
|
|
10.5
|
|
|
10.8
|
|
|
10.3
|
|
|||
Expected return on plan assets
|
|
(22.1
|
)
|
|
(15.1
|
)
|
|
(15.7
|
)
|
|||
Recognized net actuarial loss
|
|
2.7
|
|
|
2.9
|
|
|
3.2
|
|
|||
Net Pension Expense
|
|
$
|
10.2
|
|
|
$
|
17.3
|
|
|
$
|
14.5
|
|
Assumptions Used to Determine End-of-Year Benefit Obligation:
|
|
|
|
|
|
|
||||||
Discount rate
|
|
4.40
|
%
|
|
3.70
|
%
|
|
4.30
|
%
|
|||
Rate of compensation increase
|
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
|||
Cash balance interest crediting rate
|
|
4.00
|
|
|
4.00
|
|
|
4.00
|
|
|||
Assumptions Used to Determine Net Pension Expense:
|
|
|
|
|
|
|
||||||
Discount rate
|
|
3.70
|
%
|
|
4.30
|
%
|
|
4.60
|
%
|
|||
Rate of compensation increase
|
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
|||
Expected return on plan assets
|
|
6.50
|
|
|
6.50
|
|
|
7.50
|
|
|||
Interest crediting rate
|
|
4.00
|
|
|
4.00
|
|
|
4.00
|
|
|
2018
|
|
2017
|
||
Fixed income
|
49.1
|
%
|
|
31.6
|
%
|
Money market funds
|
2.5
|
|
|
27.5
|
|
U.S. equity
|
29.9
|
|
|
24.0
|
|
Foreign equity
|
18.5
|
|
|
16.9
|
|
|
Minimum
|
|
Maximum
|
||
Fixed income
|
50.0
|
%
|
|
50.0
|
%
|
U.S. large-cap equity
|
10.0
|
%
|
|
40.0
|
%
|
U.S. mid-cap equity
|
5.0
|
|
|
13.0
|
|
U.S. small-cap equity
|
5.0
|
|
|
10.0
|
|
Foreign developed equity
|
—
|
|
|
20.0
|
|
Foreign small-cap equity
|
—
|
|
|
5.0
|
|
Emerging markets equity
|
—
|
|
|
5.0
|
|
(in millions)
|
|
Actuarial
Loss
|
||
Balance at January 1
|
|
$
|
60.2
|
|
Unrecognized net loss
|
|
16.0
|
|
|
Recognized as a component of net pension expense
|
|
(2.7
|
)
|
|
Balance at December 31
|
|
$
|
73.5
|
|
•
|
In connection with the NEX acquisition, we assumed the leasing arrangements associated with office space in New York and London. The New York office lease expires in October 2032, and includes options for lease term extension as well as space expansion to other floors within the building. For the two London offices, Broadgate expires in April 2019 whereas the London Fruit and Wool Exchange lease expires in April 2038, subject to a renewal option.
|
•
|
In March 2016, the company sold its datacenter and leased back a portion of the property. The sale leaseback transaction was recognized under the financing method and not as a sale leaseback arrangement. The operating lease, which has an initial lease term ending in March 2031, contains
two
consecutive renewal options for
five
years.
|
•
|
In November 2013, the company sold a building in New York and leased back a portion of the property. The operating lease, which has an initial lease term ending on December 31, 2028, contains
two
consecutive renewal options for
five
years.
|
•
|
In April 2012, the company sold two buildings in Chicago at 141 W. Jackson and leased back a portion of the property. The operating lease, which has an initial lease term ending on April 30, 2027, contains
four
consecutive renewal options for
five
years.
|
•
|
In January 2011, the company entered into an operating lease for office space in London. The initial lease term terminates on March 24, 2026, with an option to terminate without penalty in January 2021.
|
•
|
The company maintains an operating lease for its headquarters at 20 South Wacker Drive in Chicago. In January 2018, the company signed a lease extension. The new lease expires in 2032 and contains
two
consecutive renewal options for
five
years each.
|
•
|
In August 2006, the company entered into an operating lease for additional office space in Chicago. The initial lease term ends on November 30, 2023. The lease contains
two
5
-year renewal options beginning in 2023.
|
Year
|
|
||
2019
|
$
|
82.5
|
|
2020
|
76.6
|
|
|
2021
|
74.4
|
|
|
2022
|
78.7
|
|
|
2023
|
76.0
|
|
|
Thereafter
|
586.2
|
|
|
Total
|
$
|
974.4
|
|
Year
|
|
||
2019
|
$
|
24.7
|
|
2020
|
19.6
|
|
|
2021
|
14.4
|
|
|
2022
|
10.2
|
|
|
2023
|
8.0
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
76.9
|
|
|
|
December 31,
|
||
(in thousands)
|
|
2018
|
|
2017
|
Class A common stock authorized
|
|
1,000,000
|
|
1,000,000
|
Class A common stock issued and outstanding
|
|
356,824
|
|
339,235
|
Class B-1 common stock authorized, issued and outstanding
|
|
0.6
|
|
0.6
|
Class B-2 common stock authorized, issued and outstanding
|
|
0.8
|
|
0.8
|
Class B-3 common stock authorized, issued and outstanding
|
|
1.3
|
|
1.3
|
Class B-4 common stock authorized, issued and outstanding
|
|
0.4
|
|
0.4
|
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Compensation expense
|
|
$
|
96.8
|
|
|
$
|
58.3
|
|
|
$
|
66.4
|
|
Income tax benefit recognized
|
|
27.5
|
|
|
42.6
|
|
|
38.6
|
|
|
|
Number of Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted Average Remaining Contractual Life (in years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at December 31, 2017
|
|
572,976
|
|
|
$
|
58
|
|
|
2.7
|
|
$
|
50.3
|
|
Exercised
|
|
(175,224
|
)
|
|
66
|
|
|
|
|
|
|||
Cancelled
|
|
(525
|
)
|
|
84
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
|
397,227
|
|
|
55
|
|
|
2.0
|
|
53.0
|
|
||
Exercisable at December 31, 2018
|
|
397,227
|
|
|
55
|
|
|
2.0
|
|
53.0
|
|
|
Number of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2017
|
1,559,231
|
|
|
$
|
116
|
|
Granted
|
513,777
|
|
|
176
|
|
|
Vested
|
(449,012
|
)
|
|
103
|
|
|
Cancelled
|
(262,768
|
)
|
|
108
|
|
|
Outstanding at December 31, 2018
|
1,361,228
|
|
|
144
|
|
(in millions)
|
Investment Securities
|
|
Defined Benefit Plans
|
|
Derivative Investments
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
0.6
|
|
|
$
|
(36.1
|
)
|
|
$
|
58.0
|
|
|
$
|
(8.2
|
)
|
|
$
|
14.3
|
|
Other comprehensive income before reclassifications and income tax benefit (expense)
|
(0.8
|
)
|
|
(15.3
|
)
|
|
0.9
|
|
|
(2.5
|
)
|
|
(17.7
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
2.6
|
|
|
(1.2
|
)
|
|
—
|
|
|
1.4
|
|
|||||
Income tax benefit (expense)
|
0.2
|
|
|
3.2
|
|
|
0.1
|
|
|
—
|
|
|
3.5
|
|
|||||
Net current period other comprehensive income
|
(0.6
|
)
|
|
(9.5
|
)
|
|
(0.2
|
)
|
|
(2.5
|
)
|
|
(12.8
|
)
|
|||||
Impact of adoption of standards update on tax effects related to accumulated other comprehensive income
|
$
|
0.1
|
|
|
$
|
(8.2
|
)
|
|
$
|
11.9
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
Balance at December 31, 2018
|
$
|
0.1
|
|
|
$
|
(53.8
|
)
|
|
$
|
69.7
|
|
|
$
|
(10.7
|
)
|
|
$
|
5.3
|
|
(in millions)
|
Investment Securities
|
|
Defined Benefit Plans
|
|
Derivative Investments
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
(19.5
|
)
|
|
$
|
(37.8
|
)
|
|
$
|
58.9
|
|
|
$
|
(15.7
|
)
|
|
$
|
(14.1
|
)
|
Other comprehensive income before reclassifications and income tax benefit (expense)
|
30.2
|
|
|
0.3
|
|
|
—
|
|
|
10.4
|
|
|
40.9
|
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
(89.5
|
)
|
|
2.9
|
|
|
(1.2
|
)
|
|
—
|
|
|
(87.8
|
)
|
|||||
Income tax benefit (expense)
|
79.4
|
|
|
(1.5
|
)
|
|
0.3
|
|
|
(2.9
|
)
|
|
75.3
|
|
|||||
Net current period other comprehensive income
|
20.1
|
|
|
1.7
|
|
|
(0.9
|
)
|
|
7.5
|
|
|
28.4
|
|
|||||
Balance at December 31, 2017
|
$
|
0.6
|
|
|
$
|
(36.1
|
)
|
|
$
|
58.0
|
|
|
$
|
(8.2
|
)
|
|
$
|
14.3
|
|
(in millions)
|
Investment Securities
|
|
Defined Benefit Plans
|
|
Derivative Investments
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
(95.0
|
)
|
|
$
|
(36.6
|
)
|
|
$
|
59.6
|
|
|
$
|
(8.8
|
)
|
|
$
|
(80.8
|
)
|
Other comprehensive income before reclassifications and income tax benefit (expense)
|
170.0
|
|
|
(5.1
|
)
|
|
—
|
|
|
(8.2
|
)
|
|
156.7
|
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
(48.7
|
)
|
|
3.2
|
|
|
(1.2
|
)
|
|
—
|
|
|
(46.7
|
)
|
|||||
Income tax benefit (expense)
|
(45.8
|
)
|
|
0.7
|
|
|
0.5
|
|
|
1.3
|
|
|
(43.3
|
)
|
|||||
Net current period other comprehensive income
|
75.5
|
|
|
(1.2
|
)
|
|
(0.7
|
)
|
|
(6.9
|
)
|
|
66.7
|
|
|||||
Balance at December 31, 2016
|
$
|
(19.5
|
)
|
|
$
|
(37.8
|
)
|
|
$
|
58.9
|
|
|
$
|
(15.7
|
)
|
|
$
|
(14.1
|
)
|
•
|
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, other than level 1 inputs, 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.
|
|
|
December 31, 2018
|
||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets at Fair Value:
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
|
$
|
18.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18.1
|
|
Municipal bonds
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
||||
Mutual funds
|
|
52.7
|
|
|
—
|
|
|
—
|
|
|
52.7
|
|
||||
Equity securities
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Asset-backed securities
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Total Marketable Securities
|
|
72.6
|
|
|
0.3
|
|
|
—
|
|
|
72.9
|
|
||||
Derivative Contracts
|
|
—
|
|
|
37.7
|
|
|
—
|
|
|
37.7
|
|
||||
Total Assets at Fair Value
|
|
$
|
72.6
|
|
|
$
|
38.0
|
|
|
$
|
—
|
|
|
$
|
110.6
|
|
Liabilities at Fair Value:
|
|
|
|
|
|
|
|
|
||||||||
Derivative contracts
|
|
$
|
—
|
|
|
$
|
6.7
|
|
|
$
|
—
|
|
|
$
|
6.7
|
|
Contingent consideration
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|
6.7
|
|
||||
Total Liabilities at Fair Value
|
|
$
|
—
|
|
|
$
|
6.7
|
|
|
$
|
6.7
|
|
|
$
|
13.4
|
|
|
|
December 31, 2017
|
||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets at Fair Value:
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
|
$
|
20.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.8
|
|
Mutual funds
|
|
68.9
|
|
|
—
|
|
|
—
|
|
|
68.9
|
|
||||
Equity securities
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Asset-backed securities
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Total Marketable Securities
|
|
89.8
|
|
|
0.3
|
|
|
—
|
|
|
90.1
|
|
||||
Total Assets at Fair Value
|
|
$
|
89.8
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
90.1
|
|
(in millions)
|
|
Fair Value
|
|
Level
|
||
€350.0 million fixed rate notes due March 2019
|
|
$
|
402.6
|
|
|
Level 1
|
¥19.1 billion term loan due March 2019
|
|
173.5
|
|
|
Level 3
|
|
$750.0 million fixed rate notes due September 2022
|
|
746.6
|
|
|
Level 2
|
|
€15.0 million fixed rate notes due May 2023
|
|
19.0
|
|
|
Level 2
|
|
$750.0 million fixed rate notes due March 2025
|
|
726.0
|
|
|
Level 2
|
|
$500.0 million fixed rate notes due June 2028
|
|
504.7
|
|
|
Level 2
|
|
$750.0 million fixed rates notes due September 2043
|
|
881.3
|
|
|
Level 2
|
|
$700.0 million fixed rate notes due June 2048
|
|
711.0
|
|
|
Level 2
|
|
Commercial paper
|
|
389.9
|
|
|
Level 3
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income Attributable to CME Group (in millions)
|
$
|
1,962.2
|
|
|
$
|
4,063.4
|
|
|
$
|
1,534.1
|
|
Weighted Average Common Shares Outstanding (in thousands):
|
|
|
|
|
|
||||||
Basic
|
342,344
|
|
|
338,707
|
|
|
337,496
|
|
|||
Effect of stock options and stock awards
|
1,393
|
|
|
1,519
|
|
|
1,470
|
|
|||
Diluted
|
343,737
|
|
|
340,226
|
|
|
338,966
|
|
|||
Earnings per Common Share Attributable to CME Group:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.73
|
|
|
$
|
12.00
|
|
|
$
|
4.55
|
|
Diluted
|
5.71
|
|
|
11.94
|
|
|
4.53
|
|
(in millions, except per share data)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Year to Date
|
||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
|
$
|
1,109.0
|
|
|
$
|
1,059.6
|
|
|
$
|
904.2
|
|
|
$
|
1,236.6
|
|
|
$
|
4,309.4
|
|
Operating income
|
|
740.9
|
|
|
666.9
|
|
|
549.9
|
|
|
649.9
|
|
|
2,607.6
|
|
|||||
Non-operating income (expense)
|
|
47.8
|
|
|
89.9
|
|
|
11.9
|
|
|
20.6
|
|
|
170.2
|
|
|||||
Income before income taxes
|
|
788.7
|
|
|
756.8
|
|
|
561.8
|
|
|
670.5
|
|
|
2,777.8
|
|
|||||
Net income attributable to CME Group
|
|
598.8
|
|
|
566.1
|
|
|
411.8
|
|
|
385.5
|
|
|
1,962.2
|
|
|||||
Earnings per common share attributable to CME Group:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.76
|
|
|
$
|
1.67
|
|
|
$
|
1.21
|
|
|
$
|
1.10
|
|
|
$
|
5.73
|
|
Diluted
|
|
1.76
|
|
|
1.66
|
|
|
1.21
|
|
|
1.09
|
|
|
5.71
|
|
|||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
|
$
|
929.3
|
|
|
$
|
924.6
|
|
|
$
|
890.8
|
|
|
$
|
900.0
|
|
|
$
|
3,644.7
|
|
Operating income
|
|
600.9
|
|
|
605.2
|
|
|
567.6
|
|
|
536.9
|
|
|
2,310.6
|
|
|||||
Non-operating income (expense)
|
|
106.1
|
|
|
32.1
|
|
|
39.7
|
|
|
37.8
|
|
|
215.7
|
|
|||||
Income before income taxes
|
|
707.0
|
|
|
637.3
|
|
|
607.3
|
|
|
574.7
|
|
|
2,526.3
|
|
|||||
Net income attributable to CME Group
|
|
399.8
|
|
|
415.8
|
|
|
308.6
|
|
|
2,939.2
|
|
|
4,063.4
|
|
|||||
Earnings per common share attributable to CME Group:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.18
|
|
|
$
|
1.23
|
|
|
$
|
0.91
|
|
|
$
|
8.67
|
|
|
$
|
12.00
|
|
Diluted
|
|
1.18
|
|
|
1.22
|
|
|
0.91
|
|
|
8.63
|
|
|
11.94
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
|
Plan Category
|
Number of Securities
to be Issued Upon
Exercise of Outstanding Options (a)
|
Weighted-Average Exercise Price of Outstanding Options
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))
|
||||
Equity compensation plans approved by security holders
|
397,227
|
|
$
|
54.81
|
|
16,487,029
|
|
Equity compensation plans not approved by security holders
|
—
|
|
—
|
|
—
|
|
|
Total
|
397,227
|
|
|
16,487,029
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Balance at
beginning
of year
|
|
Charged
(credited) to
costs and
expenses
|
|
Other
(1)
|
|
Balance
at end
of year
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
2.2
|
|
|
$
|
0.6
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.7
|
|
Allowance for deferred tax assets
|
11.2
|
|
|
(0.5
|
)
|
|
—
|
|
|
10.7
|
|
||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
3.5
|
|
|
$
|
0.6
|
|
|
$
|
(1.9
|
)
|
|
$
|
2.2
|
|
Allowance for deferred tax assets
|
14.9
|
|
|
(3.7
|
)
|
|
—
|
|
|
11.2
|
|
||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
1.9
|
|
|
$
|
2.4
|
|
|
$
|
(0.8
|
)
|
|
$
|
3.5
|
|
Allowance for deferred tax assets
|
122.3
|
|
|
(107.4
|
)
|
|
—
|
|
|
14.9
|
|
(1)
|
Includes write-offs of doubtful accounts, foreign currency and additions to allowance for deferred tax assets through accumulated other comprehensive income (loss).
|
(3)
|
Exhibits
|
Exhibit
Number
|
|
Description of Exhibit
|
|
|
|
|
|
|
3.
|
|
Articles of Incorporation and Bylaws
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.
|
|
Instruments Defining the Rights of Security Holders
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
|
|
|
|
10.
|
|
Material Contracts
|
|
|
|
10.1(1)
|
|
|
|
|
|
10.2(1)
|
|
|
|
|
|
10.3(1)
|
|
|
|
|
|
10.4(1)
|
|
|
|
|
|
Exhibit
Number
|
|
Description of Exhibit
|
10.21(1)
|
|
|
|
|
|
10.22(2)
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
|
|
|
|
|
|
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
|
*
|
Filed herewith.
|
(1)
|
Management contract or compensatory plan or arrangement.
|
(2)
|
Confidential treatment pursuant to Rule 406 of the Securities Act has been previously granted by the SEC for portions of this exhibit.
|
|
CME Group Inc.
|
||
|
|
|
|
|
By:
|
|
/
S
/ J
OHN
W. P
IETROWICZ
|
|
|
|
John W. Pietrowicz
Senior Managing Director and Chief Financial Officer
|
Signature
|
|
Title
|
|
|
|
/
S
/ TERRENCE A. DUFFY
|
|
Chairman of the Board, Director and Chief Executive Officer
|
Terrence A. Duffy
|
|
|
|
|
|
/
S
/ JOHN W. PIETROWICZ
|
|
Senior Managing Director and Chief Financial Officer
|
John W. Pietrowicz
|
|
|
|
|
|
/
S
/ JACK TOBIN
|
|
Managing Director and Chief Accounting Officer
|
Jack Tobin
|
|
|
|
|
|
/
S
/ JEFFREY M. BERNACCHI
|
|
Director
|
Jeffrey M. Bernacchi
|
|
|
|
|
|
/
S
/ TIMOTHY S. BITSBERGER
|
|
Director
|
Timothy S. Bitsberger
|
|
|
|
|
|
/
S
/ CHARLES P. CAREY
|
|
Director
|
Charles P. Carey
|
|
|
|
|
|
/
S
/ DENNIS H. CHOOKASZIAN
|
|
Director
|
Dennis H. Chookaszian
|
|
|
|
|
|
/
S
/ ELIZABETH A. COOK
|
|
Director
|
Elizabeth A. Cook
|
|
|
|
|
|
/
S
/ ANA DUTRA
|
|
Director
|
Ana Dutra
|
|
|
|
|
|
/
S
/ MARTIN J. GEPSMAN
|
|
Director
|
Martin J. Gepsman
|
|
|
|
|
|
/
S
/ LARRY G. GERDES
|
|
Lead Director
|
Larry G. Gerdes
|
|
|
|
|
|
/
S
/ DANIEL R. GLICKMAN
|
|
Director
|
Daniel R. Glickman
|
|
|
|
|
|
/
S
/ GEDON HERTSHTEN
|
|
Director
|
Gedon Hertshten
|
|
|
|
|
|
/
S
/ WILLIAM H. HOBERT
|
|
Director
|
Wiliam H. Hobert
|
|
|
|
|
|
/
S
/ DEBORAH J. LUCAS
|
|
Director
|
Deborah J. Lucas
|
|
|
|
|
|
/
S
/ RONALD A. PANKAU
|
|
Director
|
Ronald A. Pankau
|
|
|
|
|
|
/
S
/ ALEX J. POLLOCK
|
|
Director
|
Alex J. Pollock
|
|
|
|
|
|
/S/ TERRY L. SAVAGE
|
|
Director
|
Terry L. Savage
|
|
|
|
|
|
/
S
/ WILLIAM R. SHEPARD
|
|
Director
|
William R. Shepard
|
|
|
|
|
|
/
S
/ HOWARD J. SIEGEL
|
|
Director
|
Howard J. Siegel
|
|
|
|
|
|
/
S
/ MICHAEL A. SPENCER
|
|
Director and Special Advisor
|
Michael A. Spencer
|
|
|
|
|
|
/
S
/ DENNIS A. SUSKIND
|
|
Director
|
Dennis A. Suskind
|
|
|
|
|
|
/
S
/ DAVID J. WESCOTT
|
|
Director
|
David J. Wescott
|
|
|
|
|
|
Name of Subsidiary*
|
Jurisdiction of Incorporation or Organization
|
Abide Financial DRSP Limited
|
United Kingdom
|
Abide Financial Ltd
|
United Kingdom
|
Abide Financial Repository Limited
|
United Kingdom
|
Astley & Pearce Limited
|
United Kingdom
|
Board of Trade of the City of Chicago, Inc.
|
Delaware
|
BrokerTec Americas LLC
|
Delaware
|
BrokerTec Europe Limited
|
United Kingdom
|
BrokerTec Holdings Inc.
|
Delaware
|
BrokerTec Investments
|
United Kingdom
|
Capital Shipbrokers LLP
|
United Kingdom
|
Capital Shipbroking Limited
|
United Kingdom
|
C-B-T Corporation
|
Delaware
|
CFETS-NEX Markets Limited
|
Hong Kong
|
Chicago Mercantile Exchange Inc.
|
Delaware
|
Chicago Mercantile Exchange Korea Inc.
|
Republic of Korea
|
Chicago Mercantile Exchange Luxembourg Holdings S.à.r.l.
|
Luxembourg
|
Chicago Mercantile Exchange Luxembourg S.à.r.l.
|
Luxembourg
|
CME Amsterdam B.V.
|
Netherlands
|
CME Benchmark Europe Limited
|
United Kingdom
|
CME Clearing Europe Limited*
|
United Kingdom
|
CME Consulting (Beijing) Co. Ltd.
|
China
|
CME Digital Limited
|
United Kingdom
|
CME Digital Vault Limited
|
United Kingdom
|
CME Europe Limited*
|
United Kingdom
|
CME Finance Holdings Limited
|
United Kingdom
|
CME Global Marketplace Inc.
|
Delaware
|
CME Group Asia Holdings Pte. Ltd.
|
Singapore
|
CME Group Australia
|
New South Wales
|
CME Group Hong Kong Limited
|
Hong Kong
|
CME Group Index Services LLC
|
Delaware
|
CME Group International Market Data Limited
|
United Kingdom
|
CME Group Japan Kabushiki Kaisha
|
Japan
|
CME Group Marketing Canada Inc.
|
British Columbia
|
CME Group Singapore Operations Pte. Ltd.
|
Singapore
|
CME Group Strategic Investments LLC
|
Delaware
|
CME India Holdings LLC
|
Delaware
|
CME India Technology and Support Services Private Limited
|
India
|
CME Interest Earning Facility for Customer-Segregated Funds, L.L.C.
|
Illinois
|
CME Interest Earning Facility for Proprietary Funds, L.L.C.
|
Illinois
|
CME Investment Firm B.V.
|
Netherlands
|
CME London Limited
|
United Kingdom
|
CME Marketing Europe Limited
|
United Kingdom
|
CME Operations Limited
|
United Kingdom
|
CME Platforms Inc.
|
Delaware
|
CME Shareholder Servicing LLC
|
Illinois
|
CME Swaps Marketplace Ltd.
|
United Kingdom
|
CME Technology and Support Services Limited
|
United Kingdom
|
CME Trade Repository Limited
|
United Kingdom
|
CME Ventures LLC
|
Delaware
|
CMEF Luxembourg S.à.r.l.
|
Luxembourg
|
CMEG Brazil 1 Participações Ltda.
|
Brazil
|
CMEG Brazil Investments 1 LLC
|
Delaware
|
CMEG Brazil Investments 2 LLC
|
Delaware
|
CMEG Finance Holdings LLC
|
Delaware
|
CMEG Foundation Services Inc.
|
Delaware
|
CMEG México, S. de R.L. de C.V.
|
Mexico
|
CMEG NYMEX Holdings Inc.
|
Delaware
|
CMEG Strategic Sdn. Bhd.
|
Malaysia
|
CMESCC Inc.
|
Delaware
|
COMEX Clearing Association, Inc.
|
New York
|
Commodity Exchange, Inc.
|
New York
|
ConfirmHub, LLC
|
Delaware
|
EBO Investments Limited
|
Malta
|
EBS (Shanghai) Information Technology Co., Ltd.
|
China
|
EBS Dealing Resources International Limited
|
United Kingdom
|
EBS Dealing Resources Japan Limited
|
Japan
|
EBS Dealing Resources, Inc.
|
Delaware
|
EBS Financial Technologies Limited
|
Israel
|
EBS Group Limited
|
United Kingdom
|
EBS Holdco Inc.
|
Delaware
|
EBS Investments
|
United Kingdom
|
EBS No. 2 Limited
|
United Kingdom
|
EBS No. 4, LLC
|
Delaware
|
EBS Service Company Limited
|
Switzerland
|
Elysian Systems Limited
|
United Kingdom
|
e-MID SIM S.p.A.
|
Italy
|
Enso (UK) Limited
|
United Kingdom
|
Enso Financial Management LLP
|
Delaware
|
Enso LP
|
Jersey
|
Euclid Investment Holdings Inc
|
Delaware
|
Euclid Opportunities SA
|
Luxembourg
|
Garban Broking Holdings (Europe) Limited
|
United Kingdom
|
Garban Broking Services Limited
|
United Kingdom
|
Garban Harlow Resources Limited
|
United Kingdom
|
Globex Markets Ltd.*
|
United Kingdom
|
Godsell Astley & Pearce (Foreign Exchange) Limited
|
United Kingdom
|
Godsell Astley & Pearce (Holdings) Ltd
|
United Kingdom
|
Harlow Ueda Savage Limited
|
United Kingdom
|
Intercapital (Germany) GmbH
|
Germany
|
Intercapital (Hong Kong) Limited
|
Hong Kong
|
Intercapital Argentina S.A.
|
Argentina
|
Intercapital Capital Markets LLC
|
Delaware
|
Intercapital Lat Am Services S.A.
|
Argentina
|
Intercapital Limited
|
United Kingdom
|
Intercapital No. 1 Limited
|
United Kingdom
|
Intercapital No. 1 Pte. Ltd.
|
Singapore
|
Intercapital No. 2 Limited
|
United Kingdom
|
Intercapital No. 2 Pte. Ltd.
|
Singapore
|
Intercapital No. 3 Limited
|
United Kingdom
|
Intercapital Securities Inc
|
New York
|
Midhurst Chartering Limited
|
United Kingdom
|
Molten Markets Inc.
|
Delaware
|
Municipal Brokers Limited
|
United Kingdom
|
New York Mercantile Exchange, Inc.
|
Delaware
|
NEX Abide Trade Repository AB
|
Sweden
|
NEX Data Services Limited
|
United Kingdom
|
NEX Exchange Limited
|
United Kingdom
|
NEX Finance Limited
|
United Kingdom
|
NEX Group Holdings Limited
|
United Kingdom
|
NEX Group Investments, Inc.
|
Delaware
|
NEX Group Limited
|
United Kingdom
|
NEX International Investments Limited
|
United Kingdom
|
NEX International Limited
|
United Kingdom
|
NEX Investments LLC
|
Delaware
|
NEX Markets Limited
|
United Kingdom
|
NEX Optimisation Limited
|
United Kingdom
|
NEX SEF Limited
|
United Kingdom
|
NEX Services Limited
|
United Kingdom
|
NEX Services North America LLC
|
Delaware
|
NEX Services Pte. Ltd
|
Singapore
|
Nexstep HK 2 Limited
|
Hong Kong
|
Nexstep HK 3 Limited
|
Hong Kong
|
Pivot, Inc.
|
Delaware
|
Reset Holdings Private Limited
|
Singapore
|
Reset Private Limited
|
Singapore
|
Swapstream Limited
|
United Kingdom
|
Traiana Limited
|
United Kingdom
|
Traiana Technologies Limited
|
Israel
|
Traiana, Inc.
|
Delaware
|
TriOptima AB
|
Sweden
|
TriOptima Asia Pacific Pte. Limited
|
Singapore
|
TriOptima Japan K.K.
|
Japan
|
TriOptima North America LLC
|
Delaware
|
TriOptima UK Limited
|
United Kingdom
|
*Inactive subsidiaries and subsidiaries in the process of liquidation have been excluded.
|
|
/s/ Terrence A. Duffy
|
|
|
Name:
|
Terrence A. Duffy
|
|
Title:
|
Chief Executive Officer
|
|
/s/ John W. Pietrowicz
|
|
|
Name:
|
John W. Pietrowicz
|
|
Title:
|
Chief Financial Officer
|
/s/ Terrence A. Duffy
|
|
Name:
|
Terrence A. Duffy
|
Title:
|
Chief Executive Officer
|
|
|
Date: February 28, 2019
|
|
|
|
/s/ John W. Pietrowicz
|
|
Name:
|
John W. Pietrowicz
|
Title:
|
Chief Financial Officer
|
|
|
Date: February 28, 2019
|