8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)

July 29, 2010

CME GROUP INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-31553	36-4459170
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(IRS Employer Identification No.)

20 South Wacker Drive

Chicago, Illinois 60606

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (312) 930-1000

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The information set forth under “Item 2.02. Results Of Operations and Financial Condition,” including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Attached and incorporated herein by reference as Exhibit 99.1 is a copy of a press release of CME Group Inc. dated July 29, 2010, reporting CME Group Inc.’s financial results for the quarter ended June 30, 2010.

Item 9.01 Financial Statements and Exhibits.

A copy of the press release is attached hereto as Exhibit 99.1.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CME Group Inc.
	Registrant
Date: July 29, 2010	By:	/s/ Kathleen M. Cronin
	Name:	Kathleen M. Cronin
	Title:	Managing Director, General Counsel and Corporate Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated July 29, 2010.

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

CME Group Inc. Reports Solid Second-Quarter 2010 Financial Results

CHICAGO, July 29, 2010 – CME Group Inc. (NASDAQ: CME) today reported that second-quarter total revenues increased 26 percent to $814 million and operating income increased 29 percent to $515 million from the year-ago period. Second-quarter 2010 operating margin was 63 percent, up from 62 percent in second-quarter 2009. Operating margin is defined as operating income as a percentage of total revenues.

Second-quarter net income was $271 million and diluted earnings per share were $4.11, up 22 percent and 23 percent respectively from the same period last year. Second-quarter 2010 results included a $20.5 million write down of goodwill of the company’s subsidiary, Credit Market Analysis Limited (CMA). Excluding the write down, second-quarter diluted EPS would have been $4.43*, a 33 percent increase versus second-quarter 2009.

“During a volatile second quarter, CME Group’s markets performed well in their critical functions of providing liquidity, transparency, reliability and security to market participants,” said CME Group Executive Chairman Terry Duffy. “Our extensive track record of operating safe and secure markets is what our customers rely on, and what helped us achieve strong second quarter results. We are pleased that the newly signed Dodd-Frank Act reinforces the value of these attributes, and look forward to working with market participants to efficiently implement the tenets of the Act while preserving the integrity of U.S. financial markets.”

“CME Group’s performance during the second quarter underscored the value of our products to our customers during highly volatile conditions,” said CME Chief Executive Officer Craig Donohue. “Volume was up in every asset class, resulting in 31 percent average daily volume growth from the same quarter last year, and generating $814 million in total revenues. Our focus continues to be on leveraging our globally relevant products, our extensive customer network, and our world class technology and clearing platforms to deliver new risk management opportunities to our clients.”

* A reconciliation of the non-GAAP EPS and non-GAAP tax rate 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.

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CME Group Inc. Second-Quarter 2010 Financial Highlights

($s in millions, except per share)	Q2 FY10			Q2 FY09			Y/Y		1H FY10			1H FY09			Y/Y
Revenues	$	814		$	648		26	%	$	1,507		$	1,295		16	%
Expenses	$	299		$	249		20	%	$	577		$	510		13	%
Operating Income	$	515		$	399		29	%	$	930		$	785		18	%
Operating Margin %		63.3	%		61.6	%				61.7	%		60.6	%
Net Income Attributable to CME Group	$	271		$	222		22	%	$	511		$	421		21	%
Diluted EPS	$	4.11		$	3.33		23	%	$	7.73		$	6.33		22	%

Second-quarter 2010 average daily volume was 13.5 million contracts, up 31 percent compared with second-quarter 2009. Clearing and transaction fee revenue was $684 million, up 27 percent from $537 million in second-quarter 2009, and up 18 percent from first-quarter 2010. Market data and information services revenue was $102 million, up 24 percent from $82 million in the same quarter last year, and includes the first full quarter of revenue from CME Group’s index services business. The total average rate per contract for CME Group decreased 4 percent from second-quarter 2009 to 79 cents.

Second-quarter 2010 non-operating expense was $35 million, driven primarily by interest expense and borrowing costs of $38 million, which was offset by $4 million of investment income. Additionally, the second-quarter 2010 effective tax rate was 43.5 percent, up from 40.8 percent in second-quarter 2009. Excluding the CMA write down, the tax rate would have been 41.7 percent*.

As of June 30, the company had $409 million of cash and marketable securities and $2.8 billion of debt. During the quarter, the company paid down $300 million of debt.

CME Group will hold a conference call to discuss second-quarter 2010 results at 8:30 a.m. Eastern Time today. A live audio Webcast of the call will be available on the Investor Relations section of CME Group’s Web site at www.cmegroup.com. An archived recording will be available for up to two months after the call.

CME Group (www.cmegroup.com) is the world’s largest and most diverse derivatives marketplace. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York. By acting as the buyer to every seller and the seller to every buyer, CME Clearing virtually eliminates counterparty credit risk. CME Clearing also offers financial safeguards to help mitigate systemic risk, providing the security and confidence market participants need to operate, invest and grow. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, and alternative investment products such as weather and real estate. CME Group is listed on NASDAQ under the symbol “CME.”

The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex, E-mini and CME ClearPort are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade, Inc. are trademarks of the Board of Trade of the City of Chicago. NYMEX and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (NASDAQ: CME) and its products can be found at www.cmegroup.com.

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Statements in this press release that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and 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 forward-looking statements. Among the factors that might affect our performance are: increasing competition by foreign and domestic entities, including increased competition from new entrants into our markets and consolidation of existing entities; our ability to keep pace with rapid technological developments, including our ability to complete the development and implementation of the enhanced functionality required by our customers; our ability to continue introducing competitive new products and services on a timely, cost-effective basis, including through our electronic trading capabilities, and our ability to maintain the competitiveness of our existing products and services; our ability to adjust our fixed costs and expenses if our revenues decline; our ability to generate revenues from our processing services; our ability to maintain existing customers, develop strategic relationships and attract new customers; our ability to expand and offer our products in foreign jurisdictions; changes in government policy, including policies relating to common or directed clearing, and changes resulting from the adoption and implementation of the Dodd-Frank Act and any changes in the regulation of our industry with respect to speculative trading in commodity interests and derivative contracts; the costs associated with protecting our intellectual property rights and our ability to operate our business without violating the intellectual property rights of others; our ability to generate revenue from our market data that may be reduced or eliminated by the growth of electronic trading, the state of the overall economy or declines in subscriptions; changes in our rate per contract due to shifts in the mix of the products traded, the trading venue and the mix of customers (whether the customer receives member or non-member fees or participates in one of our various incentive programs) and the impact of our tiered pricing structure; the ability of our financial safeguards package to adequately protect us from the credit risks of clearing members; the ability of our compliance and risk management methods to effectively monitor and manage our risks; changes in price levels and volatility in the derivatives markets and in underlying fixed income, equity, foreign exchange and commodities markets; economic, political and market conditions, including the recent volatility of the capital and credit markets and the impact of current economic conditions on the trading activity of our current and potential customers; our ability to accommodate increases in trading volume and order transaction traffic without failure or degradation of performance of our systems; our ability to execute our growth strategy and maintain our growth effectively; our ability to manage the risks and control the costs associated with our acquisition, investment and alliance strategy; our ability to continue to generate funds and/or manage our indebtedness to allow us to continue to invest in our business; industry and customer consolidation; decreases in trading and clearing activity; the imposition of a transaction tax on futures and options on futures transactions and/or the repeal of the 60/40 tax treatment of such transactions; the unfavorable resolution of material legal proceedings and the seasonality of the futures business. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent periodic reports filed on Form 10-K and Form 10-Q, which are available in the Investor Relations section of the CME Group Web site. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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CME Group Inc. and Subsidiaries

Consolidated Balance Sheets

(in millions)

	June 30, 2010		December 31, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	363.6	$	260.6
Marketable securities		45.0		42.6
Accounts receivable, net of allowance		330.8		248.3
Other current assets		103.8		165.6
Cash performance bonds and security deposits		3,758.8		5,981.9
Total current assets		4,602.0		6,699.0
Property, net of accumulated depreciation and amortization		729.5		738.5
Intangible assets - trading products		17,038.0		16,982.0
Intangible assets - other, net of accumulated amortization		3,502.0		3,246.5
Goodwill		7,962.8		7,549.2
Other assets		424.6		435.8
Total Assets	$	34,258.9	$	35,651.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	37.6	$	46.7
Short-term debt		300.0		299.8
Other current liabilities		237.9		195.2
Cash performance bonds and security deposits		3,758.8		5,981.9
Total current liabilities		4,334.3		6,523.6
Long-term debt		2,524.4		2,014.7
Deferred tax liabilities		7,775.9		7,645.9
Other liabilities		172.9		165.8
Total Liabilities		14,807.5		16,350.0
Redeemable non-controlling interest		67.9		—
Shareholders’ equity		19,383.5		19,301.0
Total Liabilities and Shareholders’ Equity	$	34,258.9	$	35,651.0

CME Group Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in millions, except per share amounts; shares in thousands)

	Quarter Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Revenues
Clearing and transaction fees	$	684.2		$	536.8		$	1,262.2		$	1,064.6
Market data and information services		102.0			82.1			189.6			167.6
Access and communication fees		11.2			11.5			22.1			23.1
Other		16.5			17.4			33.2			39.6
Total Revenues		813.9			647.8			1,507.1			1,294.9
Expenses
Compensation and benefits		103.1			88.0			201.9			174.7
Communications		10.9			11.6			21.0			24.0
Technology support services		12.7			11.6			24.9			23.4
Professional fees and outside services		25.2			22.4			56.4			44.0
Amortization of purchased intangibles		32.3			30.5			63.1			63.8
Depreciation and amortization		32.8			30.1			65.0			61.1
Occupancy and building operations		20.2			18.1			40.7			38.2
Licensing and other fee agreements		21.2			21.7			42.3			46.3
Restructuring		(0.2	)		1.4			(0.5	)		4.6
Other		40.6			13.6			62.5			29.6
Total Expenses		298.8			249.0			577.3			509.7
Operating Income		515.1			398.8			929.8			785.2
Non-Operating Income (Expense)
Investment income		4.4			10.1			15.5			11.9
Gains (losses) on derivative investments		—			—			6.0			—
Securities lending interest income		—			0.4			—			2.8
Securities lending interest and other costs		—			0.3			—			(0.1	)
Interest and other borrowing costs		(37.9	)		(32.6	)		(69.3	)		(71.1	)
Equity in losses of unconsolidated subsidiaries		(1.5	)		(1.7	)		(3.0	)		(2.9	)
Other income (expense)		—			(0.4	)		—			(0.4	)
Total Non-Operating		(35.0	)		(23.9	)		(50.8	)		(59.8	)
Income Before Income Taxes		480.1			374.9			879.0			725.4
Income tax provision		(208.9	)		(153.1	)		(367.6	)		(304.5	)
Net Income	$	271.2		$	221.8		$	511.4		$	420.9
Less: Net income attributable to redeemable non-controlling interest		0.5			—			0.5			—
Net Income Attributable to CME Group	$	270.7		$	221.8		$	510.9		$	420.9
Earnings per Common Share Attributable to CME Group:
Basic	$	4.13		$	3.34		$	7.75		$	6.35
Diluted		4.11			3.33			7.73			6.33
Weighted Average Number of Common Shares:
Basic		65,582			66,329			65,906			66,316
Diluted		65,784			66,526			66,104			66,470

CME Group Inc.

Quarterly Operating Statistics

	2Q 2009		3Q 2009		4Q 2009		1Q 2010		2Q 2010
Trading Days		63		64		64		61		64
Quarterly Average Daily Volume (ADV)
CME Group ADV (in thousands)
Product Line	2Q 2009		3Q 2009		4Q 2009		1Q 2010		2Q 2010
Interest rates		4,389		4,422		4,368		5,120		6,074
Equities		2,988		2,656		2,514		2,815		3,455
Foreign exchange		568		660		754		887		1,035
Energy		1,396		1,484		1,564		1,609		1,798
Agricultural Commodities		818		708		750		786		855
Metals		190		201		292		327		308
Total		10,349		10,132		10,243		11,544		13,525
Venue
Open outcry		1,431		1,264		1,210		1,318		1,539
Electronic		8,266		8,267		8,399		9,562		11,340
Privately negotiated		173		147		170		190		198
Exchange-traded Total		9,871		9,679		9,779		11,070		13,077
CME ClearPort		478		453		464		474		448
Total		10,349		10,132		10,243		11,544		13,525
Average Rate Per Contract (RPC)
CME Group RPC
Product Line	2Q 2009		3Q 2009		4Q 2009		1Q 2010		2Q 2010
Interest rates	$	0.525	$	0.505	$	0.509	$	0.503	$	0.481
Equities		0.712		0.722		0.733		0.713		0.713
Foreign exchange		0.901		0.853		0.816		0.803		0.798
Energy		1.653		1.694		1.606		1.636		1.581
Agricultural Commodities		1.130		1.199		1.278		1.244		1.282
Metals		1.808		1.849		1.872		1.734		1.749
Average RPC	$	0.823	$	0.834	$	0.849	$	0.821	$	0.790
Venue
Exchange-traded	$	0.765	$	0.765	$	0.783	$	0.754	$	0.732
CME ClearPort		2.031		2.304		2.236		2.392		2.489

Note: Average daily volume and rate per contract figures for prior periods have been revised due to standardizing NYMEX reporting conventions to follow CME Group’s treatment of post-trade transactions such as exercises, assignments and deliveries.

CME Group Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

(in millions)

	Quarter Ended June 30,						Year to Date June 30,
	2010			2009			2010			2009
GAAP Results
Revenues	$	813.9		$	647.8		$	1,507.1		$	1,294.9
Expenses		298.8			249.0			577.3			509.7
Operating income		515.1			398.8			929.8			785.2
Operating margin		63.3	%		61.6	%		61.7	%		60.6	%
Non-Operating income (expense)		(35.0	)		(23.9	)		(50.8	)		(59.8	)
Income before income taxes		480.1			374.9			879.0			725.4
Income tax provision		(208.9	)		(153.1	)		(367.6	)		(304.5	)
Effective tax rate		43.5	%		40.8	%		41.8	%		42.0	%
Net income	$	271.2		$	221.8		$	511.4		$	420.9
Less: Net income attributable to redeemable non-controlling interest		0.5			—			0.5			—
Net Income Attributable to CME Group	$	270.7		$	221.8		$	510.9		$	420.9
Earnings per Common Share Attributable to CME Group:
Basic	$	4.13		$	3.34		$	7.75		$	6.35
Diluted		4.11			3.33			7.73			6.33
Adjustments for Impairment of CMA goodwill
Adjustment to expenses		(20.5	)		—			(20.5	)		—
Adjustment to operating income		20.5			—			20.5			—
Adjustment to income before income taxes		20.5			—			20.5			—
Adjustment to net income	$	20.5		$	—		$	20.5		$	—
Non-GAAP results, excluding impairment of CMA goodwill
Revenues	$	813.9		$	647.8		$	1,507.1		$	1,294.9
Expenses		278.3			249.0			556.8			509.7
Operating income		535.6			398.8			950.3			785.2
Operating margin		65.8	%		61.6	%		63.1	%		60.6	%
Non-Operating income (expense)		(35.0	)		(23.9	)		(50.8	)		(59.8	)
Income before income taxes		500.6			374.9			899.5			725.4
Income tax provision		(208.9	)		(153.1	)		(367.6	)		(304.5	)
Effective tax rate		41.7	%		40.8	%		40.9	%		42.0	%
Net income	$	291.7		$	221.8		$	531.9		$	420.9
Less: Net income attributable to redeemable non-controlling interest		0.5			—			0.5			—
Net Income Attributable to CME Group	$	291.2		$	221.8		$	531.4		$	420.9
Adjusted earnings per Common Share Attributable to CME Group:
Basic	$	4.44		$	3.34		$	8.06		$	6.35
Diluted		4.43			3.33			8.04			6.33