CME Group Inc. - Reports Fourth-Quarter and Full-Year 2018 Results

The company reported revenue of $1.2 billion and operating income of $650
million for the fourth quarter of 2018.  Net income was $385.5 million and
diluted earnings per share were $1.09.  On an adjusted basis, net income was
$625 million and diluted earnings per share were $1.77.  Financial results
presented on an adjusted basis for the fourth quarters of 2018 and 2017
exclude certain items, which are detailed in the reconciliation of non-GAAP
results.^1

Total revenue for full-year 2018 was $4.3 billion and operating income was
$2.6 billion.  Net Income was $2.0 billion and diluted earnings per share were
$5.71. On an adjusted basis, net income was $2.3 billion, and diluted earnings
per share were $6.82.

"During the fourth quarter, elevated volatility and increased customer demand
for our diverse risk management products resulted in strong trading volumes,
exceeding 20 million contracts per day," said CME Group Chairman and Chief
Executive Officer Terry Duffy. "We set annual average daily volume records in
four of our six asset classes as well as in total options and demonstrated
solid expense control during 2018. In November, we completed the NEX
acquisition, which positions us to launch innovative new products to an
expanding global customer base across futures, options, cash and OTC markets.
Looking ahead to 2019, we're extremely focused on the continued integration of
these two great companies, and expect to unlock additional value for our
customers and shareholders."


1. A reconciliation of the non-GAAP financial results mentioned to the
respective GAAP figures can be found within the Reconciliation of GAAP to
non-GAAP Measures chart at the end of the financial statements and earnings
presentation materials.

Fourth-quarter 2018 average daily volume (ADV) was 20.8 million contracts, up
31 percent compared with fourth-quarter 2017, and representing the
second-highest quarterly ADV on record.  Non-U.S. ADV grew 22 percent to 4.8
million contracts during the quarter, driven by strong performance in Equity
and Interest Rates products.  Clearing and transaction fees revenue for the
fourth-quarter 2018 totaled just over $1.0 billion and the total average rate
per contract was $0.697, down 7 percent compared with $0.753 in third-quarter
2018. This decline was driven primarily by product mix.  Market data revenue
totaled $130 million for the fourth-quarter 2018.

As of December 31, 2018, the company had $1.5 billion in cash (including $100
million deposited with Fixed Income Clearing Corporation (FICC) and included
in other current assets) and $4.4 billion in debt.  The company declared
dividends during 2018 of $1.6 billion, including the annual variable dividend
for 2018 of $624 million, which was paid in January 2019.  The company has
returned more than $11.2 billion to shareholders in the form of dividends
since the implementation of the variable dividend policy in early 2012.

CME Group Inc. and Subsidiaries
Consolidated Balance Sheets
(in millions)
December 31, 2018 December 31, 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 553.3 359.7
Other current assets (includes $1.5 and 430.5 367.8
$0 in restricted cash)
Performance bonds and guaranty fund 39,455.5 44,185.3
contributions
Total current assets 41,886.7 46,906.5
Property, net of accumulated 448.7 399.7
depreciation and amortization
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 1,659.6 1,394.4
restricted cash)
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 39,455.5 44,185.3
contributions
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
CME Group Shareholders' Equity 25,918.5 22,411.8
Non-controlling interest 46.8 —
Total Equity 25,965.3 22,411.8
Total Liabilities and Equity $ 77,475.7 $ 75,791.2