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CME Group reports USD913m revenue in Q4

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CME Group has reported revenue of USD913 million and operating income of USD540 million for the fourth quarter of 2016.

Net income was USD373 million and diluted earnings per share were USD1.10.
On an adjusted basis, net income was USD387 million and diluted earnings per share were USD1.14. Financial results presented on an adjusted basis for the fourth quarters of 2016 and 2015 exclude certain items, which are detailed in the reconciliation of non-GAAP results.
Total revenue for full-year 2016 was USD3.6 billion and operating income was USD2.2 billion. Net Income was USD1.53 billion and diluted earnings per share were USD4.53. Adjusted for non-recurring items, 8 per cent year-over-year growth in revenue, coupled with operating expenses up only 1 per cent, drove net income of USD1.5 billion, up 12 per cent compared with 2015, and diluted earnings per share of USD4.53, up 12 per cent.
"Our diverse risk management products and services continue to increase in demand, especially given the unpredictable nature of ongoing geopolitical changes, and our trading volume for the fourth quarter and full-year 2016 increased more than 12 per cent, driving double-digit earnings growth over both periods," says CME Group chairman and chief executive officer Terry Duffy (pictured).
"Looking ahead, the opportunity to provide solutions to our global clients has never been greater, and the fact our open interest exceeded 120 million contracts for the first time ever during the fourth quarter shows how engaged they are in our markets. Further, by driving volume growth and remaining very focused on expense discipline, we were able to declare USD1.9 billion of dividends for our shareholders during 2016."
Fourth-quarter 2016 average daily volume was 16.3 million contracts, up 24 per cent from fourth-quarter 2015. Clearing and transaction fee revenue was USD769 million, up 13 per cent compared with fourth-quarter 2015. Fourth-quarter 2016 total average rate per contract was USD0.731 cents, down from USD0.750 in third-quarter 2016, driven by larger proportion of interest rate volume as well as higher member trading. Market data revenue was USD100 million, up 1 per cent compared with the fourth quarter last year.
Full-year 2016 record average daily volume was 15.6 million contracts, up 12 per cent from 2015, and included annual records for interest rates, energy, agricultural commodities, metals, total options and electronic options. Clearing and transaction fee revenue was USD3 billion up 9 per cent compared to 2015. The average rate per contract in 2016 was USD0.754, down 2 per cent from USD0.769 in 2015. Market data revenue was USD407 million, up 2 per cent compared with the prior year.
As of 31 December, 2016, the company had USD2.0 billion of cash and marketable securities and USD2.2 billion of long-term debt. The company declared dividends during 2016 of USD1.9 billion, including the annual variable dividend for 2016 of USD1.1 billion, which was paid in January 2017. The company has returned more than USD7.5 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.

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