CME Group Inc. (NASDAQ:CME) Q4 2017 Earnings Conference Call - Preliminary Transcript

Feb 01, 2018 • 08:30 am ET


CME Group Inc. (NASDAQ:CME) Q4 2017 Earnings Conference Call - Preliminary Transcript


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Good day, and welcome to the CME Group Fourth Quarter and Full Year 2017 Earnings Call. At this time, I would like to turn the conference over to Mr. John Peschier. Please go ahead, sir.

John Peschier

Good morning, everyone. Thanks for joining us. I'm going to start with the safe harbor language, and then I'll turn it over to Terry for brief remarks followed by questions. Other members of our management team will also participate in the Q&A. Statements made on this call and in the slides on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance, they involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. For detailed information about factors that may affect our performance can be found in our filings with the SEC, which are on our website. Also, on the last page of the earnings release, you will find a reconciliation between GAAP and non-GAAP measures.

With that, I would like to turn the call over to Terry.

Terrence Duffy

Thanks, John, and thank you all for joining us this morning. We appreciate your interest in CME Group. 2017 was certainly an unusual year. Virtually every asset class experienced reduced volatility. So throughout the year, we focused on areas that we could control. That included adding new products, operating all of our markets in the most efficient manner and expanding our global customer base. We were aggressive in optimizing our operations. As you know, we sold investments we had in other exchanges, we wound down our European exchange and clearing house, we announced the exit of our credit default swaps clearing business and we focused on making investments in new product launches as well as our market data, audit and derived data functions.

Focusing on increasing the efficiency (Technical Difficulty) organization has resulted in another successful year of reducing our total controllable costs, while continuing to invest for the future. We also continue to evolve our sales strategy to help generate additional business and acquire new customers. Specific global sales campaigns were developed across every product area. We measured that success by tracking additional metrics. These efforts drove non-U.S. average daily volume up 10% for the year. This was achieved despite difficult comparables from the election year of 2016.

Also, we had 11% growth in our options franchise driven by increased trading on rollbacks. During 2017, we reached all-time highs in total open interest, along with records for the number of large open interest holders in several asset classes. This bodes well as market volatility normalizes.

As we begin 2018, we saw all sox product areas post solid growth in January as we continued to execute on our strategy. We also have seen open interest levels rise as our global clients are actively managing risk. These two measurements are extremely encouraging as we begin the year.

With that, we'd like to open your