CME Group(US:CME)2023-02-26 16:00Financial Performance - Total revenues for 2022 were $5,019.4 million, representing a 7% increase from $4,689.7 million in 2021[150] - Total expenses decreased to $2,003.5 million in 2022 from $2,044.5 million in 2021, a reduction of 2%[150] - Operating margin improved to 60.1% in 2022, up from 56.4% in 2021[150] - Net income attributable to CME Group increased by 2% to $2,691.0 million in 2022 compared to $2,636.4 million in 2021[150] - Diluted earnings per share rose by 2% to $7.40 in 2022 from $7.29 in 2021[150] - Cash flows from operating activities increased by 27% to $3,056.0 million in 2022 from $2,402.4 million in 2021[150] Revenue Breakdown - Clearing and transaction fees revenue increased by 10% to $4,142.7 million in 2022 from $3,765.1 million in 2021[171] - Market data and information services revenue grew by 6% to $610.9 million in 2022 from $576.9 million in 2021[171] - Other revenue decreased by 24% to $265.8 million in 2022 from $347.7 million in 2021[171] Business Strategy - CME Group's business strategy includes expanding electronic trading platforms and optimizing capital management services[156] - The company aims to maximize futures and options growth globally and diversify its business and revenues through partnerships, including with Google Cloud[158] - The strategy includes delivering unparalleled customer efficiencies and operational excellence across a wide range of products and asset classes[158] Regulatory and Competitive Environment - The competitive environment is expected to intensify due to ongoing regulatory reforms in the financial services industry[157] - The regulatory environment may require significant financial and operational resources for compliance, potentially affecting profitability[157] Risk Management - The company is exposed to significant credit risk from third parties, including clearing firms, and has established performance bond requirements to mitigate this risk[326] - The company continues to adapt its trading technology and clearing services to meet evolving market needs[157] Capital and Liquidity - The company maintains a $7.0 billion multi-currency line of credit, with the option to increase it to $10.0 billion, to provide temporary liquidity in case of a clearing firm default[327] - As of December 31, 2022, aggregate performance bond deposits for clearing firms totaled $231.5 billion, which includes cash and non-cash deposits[327] - The company has a $2.3 billion multi-currency revolving senior credit facility, which can be increased to $3.3 billion with lender consent[344] - The company has a 364-day multi-currency revolving secured credit facility with a borrowing capacity of up to $7.0 billion, with no outstanding borrowings as of December 31, 2022[346] - The company maintains fixed-rate borrowings of $3.4 billion as of December 31, 2022, with no variable-rate borrowings[349] - The company has excess borrowing capacity of approximately $2.3 billion under its multi-currency revolving senior credit facility as of December 31, 2022[346] - The company is in compliance with all covenant requirements of its debt facilities as of December 31, 2022[346] - The company expects to maintain an investment grade rating based on its cash flow generation and ability to manage debt levels[346] - The company has a $350 million line of credit to meet obligations under its agreement with Singapore Exchange Limited[346] Dividend and Capital Expenditures - A regular quarterly dividend of $1.10 per share was declared, totaling approximately $400.0 million for the first quarter of 2023[344] - The company plans to incur approximately $100.0 million in capital expenditures in 2023 to support growth and improve system capacity[344] Currency and Foreign Transactions - The company recognized a net gain of $13.2 million in 2022 due to currency exchange rate fluctuations, compared to a net gain of $0.4 million in 2021[339] - Aggregate foreign currency transaction gains for 2022 were $13.2 million, compared to $0.4 million in 2021 and a loss of $(9.3) million in 2020[356] Pension Plan - The company aims to have its pension plan 100% funded at each year-end, with no additional contributions expected for 2023 based on actuarial projections[347]