CME Group Inc. (NASDAQ:CME) Q4 2014 Earnings Conference Call - Final Transcript

Feb 05, 2015 • 04:30 pm ET


CME Group Inc. (NASDAQ:CME) Q4 2014 Earnings Conference Call - Final Transcript


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Welcome to the CME Group Fourth Quarter and Year-End 2014 Earnings Call. Your lines have been placed on listen only mode and for the question-and-answer session. (Operator Instructions)

I will now turn the call over to Mr. John Peschier. Thank you. You may begin.

John C. Peschier

Gill and John will spend a few minutes outlining the highlights of the fourth quarter and then we will open it up for your questions. Terry, Bryan and Kim are on the call as well, and will participate in Q&A. Before they begin, I'll read the Safe Harbor language.

(Forward-Looking Cautionary Statements) More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available on our website.

Now I would like to turn the call over to Gill.

Phupinder S. Gill

I'm very pleased with our team's efforts and our performance during 2014. Further, the Q4 results we are going to talk about today were outstanding, and I'm proud of our staff for their hard work during some pretty difficult times.

During the fourth quarter, our ADV reached almost 15 million contracts, up more than 30%, and it is our second highest volume quarter in our history, during a normally slow time of the year. We saw significant growth in every product area, ranging from 14% growth in metals to 41% growth in interest rates.

Record options ADV increased 38% and futures rose 29%. Q4 revenue of 841 million was the second highest we have ever had. Most importantly, our earnings per share on an adjusted basis in the fourth quarter was up more than 50%.

Over the last three to four years, we have been investing organically in a very targeted way to broaden our global reach and to drive more core volume growth as trading conditions improve. I've spoken about this on every earnings call since I became CEO, and we are making progress.

During the quarter,we traded

John C. Peschier

During the quarter, we traded 3 million contracts per day from outside the United States, by far, the highest level we've ever seen. Revenue from outside the U.S. accounted for approximately 30% of our Globex revenue and 24% of the volume.

Our liquidity is building around the clock. You certainly saw that on our record day in October, when a much higher proportion traded from outside the U.S. than an average day. Fourth quarter electronic ADV from European clients was 2.4 million contracts, up 45% on a year-over-year basis, outperforming North America, which rose 31%.

In Europe, we saw growth of 61% year-over-year in our interest rate business and 32% growth in equities during the quarter. About three years ago, we made a concerted effort to reach out to educate European clients about the product suite client-by-client.

In 2014, we spent considerable time talking to these clients about our OTC rates offering and marketing how our Eurodollars, treasuries and other products can be utilized. We also pointed that the interest rate curve was more dynamic in the U.S. and