CME Group (CME) 10-K risk factor changes: FY2020 vs FY2019

[removed: | • |] [added: -] economic, political and geopolitical market conditions; [removed: |]

[removed: | • |] [added: -] legislative and regulatory changes, including any direct or indirect restrictions on or increased costs associated with trading in our markets or our clearing services; [removed: |]

[removed: | • |] [added: -] broad trends in the industry and financial markets; [removed: |]

[removed: | • |] [added: -] changes in price levels, trading volumes and volatility in the derivatives, cash and OTC markets and in their underlying markets; [removed: |]

[removed: | • |] [added: -] shifts in demand or supply in commodities underlying our products; [removed: |]

[removed: | • |] [added: -] competition; [removed: |]

[removed: | • |] [added: -] availability of capital to our market participants and their appetite for risk-taking; [removed: |]

[removed: | • |] [added: -] levels of assets under [added: our customers'] management; [removed: |]

[removed: | • |] [added: -] volatile weather patterns, droughts, natural disasters and other catastrophes; [removed: |]

[removed: | • |] [added: -] pandemics affecting our customer base or our ability to operate our markets; and [removed: |]

[removed: | • |] [added: -] consolidation or expansion in our customer base and within our industry. [removed: |]

The shifts in market trading patterns we experienced as a result of the financial crisis of 2008 may or may not recur in the future, and our business will be affected by future economic uncertainties, which may result in decreased trading volume and a more [removed: difficult] [added: challenging] business environment for us.

We are primarily subject to the jurisdiction of the regulatory agencies in the [removed: United States, United Kingdom] [added: U.S., U.K.] and Europe.

As a result of our global operations, we are also subject to the rules and regulations of [removed: the] [added: other] local jurisdictions in which we conduct business and offer our products and services, as appropriate.

Due to the global financial crisis that began in 2008, the [removed: United States] [added: U.S.] and numerous other [removed: governments] [added: jurisdictions] have undertaken reviews of the legal framework governing financial markets and have either enacted new laws, rules and regulations, or are in the process of enacting new laws, rules and regulations that [removed: will] [added: could] impact our business.

We have incurred and expect to continue to incur significant [removed: additional] costs to comply with the extensive regulations that apply to our business.

Additionally, [removed: regulation] [added: regulations] imposed on financial institutions or market participants [removed: generally, such as enhanced capital requirements,] [added: generally] may adversely impact their trading activity in our markets.

Our broker-dealer and multilateral trading facility businesses, BrokerTec and EBS, are [added: also] extensively [removed: regulated.][added: regulated in various jurisdictions.]

The risks from failing to [removed: meet] [added: comply with] these [removed: compliance and] regulatory obligations include potential liability, disciplinary action against the firm and individuals, monetary penalties, and restrictions on future activities.

As part of maintaining its [added: FICC] membership, BrokerTec Americas is required to timely and fully meet all margin calls and other obligations established by FICC, and as such must maintain ready access to sufficient liquidity to satisfy those obligations.

To the extent the [added: legislative and] regulatory environment is less beneficial for us or our customers, our business, financial condition and operating results could be negatively affected.

If we fail to comply with applicable laws, rules or regulations, we may be subject to censure, fines, cease-and-desist orders, suspension of our business, removal of personnel or other sanctions, including revocation of our designations as a contract market, derivatives clearing organization, swap execution [removed: facility] [added: facility, swap data repository] or [removed: broker-dealer,] [added: broker-dealer] or other regulatory penalties.

[removed: Legislative] [added: Additional new laws] or [removed: regulatory] [added: regulations or] changes [added: in enforcement practices applicable to our businesses or those of our clients] could be [removed: adopted that would change] [added: imposed in] the [added: U.S. or other jurisdictions, which could change, or require us to change, our business practices or the] structure of our business, [added: including] its current governance [removed: structure] [added: structure,] or impose significant costs on us by, for example, requiring more of our funds to be set aside for the guaranty fund.

Please see "Item 1 - Business - Regulatory Matters" beginning on page [removed: 10] [added: 11] for additional information on our areas of regulatory focus.

Our strategic business plan [added: for our futures and options business] is to operate an efficient and transparent vertically integrated transaction execution, clearing and settlement [removed: business for our futures and options] business.

Some of these firms, along with certain industry associations, have sought, and may seek in the future, legislative or regulatory changes to be adopted that would facilitate mechanisms or policies that allow market [added: participants to transfer positions of futures or options from an exchange-owned clearing house to a clearing house owned and controlled by clearing firms.]

[removed: | • |] [added: -] respond more quickly to competitive pressures, including responses based upon their corporate governance structures, which may be more flexible and efficient than our corporate governance structure; [removed: |]

[removed: | • |] [added: -] develop products that are preferred by our customers compared to those offered by CME Group; [removed: |]

[removed: | • |] [added: -] develop risk transfer products that compete with our products; [removed: |]

[removed: | • |] [added: -] price their products and services more competitively; [removed: |]

[removed: | • |] [added: -] develop and expand their network infrastructure and service offerings more efficiently; [removed: |]

[removed: | • |] [added: -] utilize better, more user-friendly or more reliable technology; [removed: |]

[removed: | • |] [added: -] take greater advantage of acquisitions, alliances and other opportunities that provide a competitive advantage; [removed: |]

[removed: | • |] [added: -] more effectively market, promote and sell their products and services; [removed: |]

[removed: | • |] [added: -] better leverage existing relationships with customers and alliance partners or exploit better recognized brand names to market and sell their services; or [removed: |]

[removed: | • |] [added: -] exploit regulatory disparities between traditional, regulated exchanges and alternative markets that benefit from a reduced regulatory burden and lower-cost business model. [removed: |]

Please see "Item 1 - Business - Competition" beginning on page [removed: 9] [added: 10] for additional information on the competitive environment and its potential impact on our business.

The success of our business depends, in part, on our ability to maintain and increase [removed: our] trading volume in our markets.

To do so, we must maintain and expand our product offerings, our customer base and our trade execution facilities, our pre-and post-trade [removed: services and clearing facilities.]

If we fail to maintain [removed: our] trading volume, as a result of a loss of customers or decrease in trading activity; expand our product offerings or execution facilities; or are unable to attract new customers, our business and revenues will be adversely affected.

- changes in government monetary policies, including central bank decisions related to quantitative easing and the U.S. Federal Reserve and other international banks' forecasted commitment to zero or near-zero interest rates;

We believe that our interest rate product line will continue to be negatively impacted by the current state of the economy and a zero-interest rate policy.

Please see "Item 1A - Risk Factors - Risks Relating To Our Business" beginning on page 19 for additional information.

services and clearing facilities.

We may become subject to these claims as a

The COVID-19 pandemic has negatively affected the global economy, including the U.S. economy and the global financial markets, and has disrupted our business and that of our clients’ businesses.

The ultimate impact from COVID-19, including duration, is unknown and could have an adverse effect on our business, financial condition and results of operations.

The ongoing COVID-19 health emergency has caused significant disruption in the international and U.S. economies and financial markets.

The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability in the U.S. Similar impacts also have been experienced throughout the world, including in every country in which we do business.

Given the unique and unpredictable nature of this event, future impacts to our business are unknown and could be material.

Those impacts may include, among others, the following:

- Continued disruption to our business and operations;

- Key members of senior management or a significant number of our employees unable to work as a result of contracting COVID-19 or related illnesses;

- Reduced productivity and operating effectiveness as a result of our employees working remotely and impacts on our clients encountering similar circumstances;

- Impacts on our third-party suppliers and their ability to fulfill their obligations to us;

- Decreased trading volume and unprecedented market stresses in global financial markets;

- Changes in demand for our products and services, based upon fiscal, monetary and trade policies adopted in response to the economic impact of the pandemic;

- Reduced economic activity generally could cause businesses to have less need to hedge in our markets;

- Delays in our expansion, investment and strategic initiatives and system integrations;

- Impacts to our ability to expand our client base, grow our business and generate new revenue due to the inability to hold in-person meetings, events and conferences and other impacts from social distancing;

- Impacts on our brand and reputation due to negative investor sentiment in the overall financial markets;

- Increased financial and operational stress experienced by our clearing firm members due to unprecedented volatility, including significant losses that may result in a reduction of business or a default;

- Market access or trading limitations imposed by governmental authorities; and

- Increased technology and cyber-security risks, social engineering and phishing campaigns.

These potential impacts may exist for a significant period of time and may adversely affect our business, financial condition and results of operations even after the COVID-19 pandemic has subsided.

In the past year, we have experienced an overall decrease in trading volume, which we believe is in part a result of effects of the COVID-19 pandemic.

Additionally, the spread of COVID-19 has caused us to modify our business practices, including restricting employee travel and continuing work-from-home protocols, and we may take further actions as may be required by government authorities or as we determine to be in the best interests of our employees and clients.

We also closed our open outcry trading floor and trading is now conducted almost entirely through our electronic trading system.

In August 2020, the Eurodollar options pit was reopened after being reconfigured to meet social distancing standards with additional safety standards in place.

There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or will otherwise be satisfactory to government authorities.

The extent to which the COVID-19 pandemic further impacts our business, results of operations or financial condition will depend on future developments, which are highly uncertain and difficult to predict, but may include, among others, the duration and spread of the pandemic, its severity, the actions taken by governments and other third parties to contain the virus or treat its impact, such as vaccination, and the effect of such actions on our business practices (including ending work-from-home protocols), the impact of existing and any future federal stimulus measures, and the pace at which, and the extent to which, normal economic and operating conditions resume, or even if they resume, whether such economic and operating conditions can be sustained.

In addition, many of the other risk factors described herein could be heightened by the effects of the COVID-19 pandemic and related economic conditions, which could result in a material impact on our results of operations, financial condition and liquidity.

Although we are focused on the technology and customer experience as part of the migration of the BrokerTec platform to CME Globex in the first quarter of 2021 and the expected migration of the EBS platform to CME Globex in the

If we cannot increase the capacity and capabilities of our systems to accommodate an increasing

In October 2020, central banking counterparties revised the discounting and price alignment interest (PAI) of U.S.-dollar cleared interest rate swaps to use SOFR.

This event affected interest rate swaps, including auctions of newly created SOFR basis swaps, and increased liquidity for SOFR and the resulting orderly auctions.

On November 30, 2020, ICE Benchmark Administration (IBA) announced a consultation on its intention to cease the publication of certain LIBOR rates, including its intention to cease the publication of the three-month U.S. Dollar LIBOR on June 30, 2023.

The U.K. FCA also announced its proposed approach to ensure an orderly wind-down of LIBOR and has supported publication of three-month U.S. Dollar LIBOR tenor in a representative manner through June 30, 2023.

The U.S. Federal Reserve, Office of Comptroller of the Currency and the Federal Deposit Insurance Company also issued a statement

encouraging banks to cease entering into new contracts that use U.S. Dollar LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021.

| | |

| --- | --- |

| • | changes in government monetary policies, especially central bank decisions related to quantitative easing; |

Also, on January 1, 2020, amendments to the European Market Infrastructure Regulation (EMIR 2.2) became effective.

The implementation of the regulations under this legislation may increase our regulatory costs, including substantial new authority to impose fines, and/or create a disincentive for certain clients to use our products.

The European Union equivalence and recognition regime also has the potential to impact the cost and ease or difficulty for certain of our OTC execution platforms to provide access to customers on a global basis.

There is also the risk that new laws or regulations or changes in enforcement practices applicable to our businesses or those of our clients could be imposed in other jurisdictions.

Further, other jurisdictions could assert significant changes to our governance, business practices and costs in order to continue to make our services available in those jurisdictions.

participants to transfer positions of futures or options from an exchange-owned clearing house to a clearing house owned and controlled by clearing firms.

the closure of our facilities or render our backup data and recovery systems inoperable.

We plan to migrate the BrokerTec and EBS platforms to CME Globex in 2020 and 2021, respectively.

adequately expand their services to meet our needs and the needs of our customers, we could experience decreased trading volume, lower revenues and higher costs.

In November 2019, we shared via a public webinar details of improved fallback plans to convert Eurodollar futures and options into 3-month SOFR futures and options.

We sell our market data to individuals, trading institutions and other organizations that use our information services to participate in our markets and/or monitor general economic conditions.

The level of trading activity by our customers may be affected by their profitability and capital constraints and may lead to a decreased demand for our market data.

For example, in recent years, we experienced a decrease in the average number of market data connections due to continued economic uncertainty, high unemployment levels in the financial services sector and aggressive cost cutting initiatives at customer firms and the continued impact of legacy incentive programs tied to trading terminals.

We could also become subject to regulatory actions, which could have the potential to restrict how we charge for our market data.

We also license our market data to be used in the creation of derivative financial products, and changes to regulation, including the impact of any changes in laws or government policy, may impact the demand of our market data for such derivative works.

Continued

The ultimate impact of Brexit is contingent upon the final terms of withdrawal and the ongoing relationship between the UK and the European Union, following a transition period which is scheduled to end in December 2020.

Brexit may result in legal uncertainty and potentially divergent national laws and regulations as the withdrawal process progresses.

Notwithstanding the precautions we take to protect our proprietary

Under EMIR 2.2, our clearing house could be subject to enhanced minimum capital standards as well.

[removed: | • | Executive] [added: - Executive] Summary: Includes an overview of our business; current economic, competitive and regulatory trends relevant to our business; our current business strategy; and our primary sources of operating and non-operating revenues and expenses. [removed: |]

[removed: | • | Critical] [added: - Critical] Accounting Policies: Provides an explanation of accounting policies which may have a significant impact on our financial results and the estimates, assumptions and risks associated with those policies. [removed: |]

[removed: | • | Recent] [added: - Recent] Accounting Pronouncements: Includes an evaluation of recent accounting pronouncements and the potential impact of their future adoption on our financial results. [removed: |]

[removed: | • | Results] [added: - Results] of Operations: Includes an analysis of our [removed: 2019 and 2018] [added: 2020] financial results and a discussion of any known events or trends which are likely to impact future results. [removed: |]

[removed: | • | Liquidity] [added: - Liquidity] and Capital Resources: Includes a discussion of our future cash requirements, capital resources, significant planned expenditures and financing arrangements. [removed: |]

Additionally, the substitution of our clearing house as the counterparty to every transaction allows our customers to establish a position with one party and offset the [added: position with another party.]

Trading activity in our centralized markets has fluctuated due to the ongoing uncertainty in the financial [removed: markets caused by the United States and European credit crises,] [added: markets,] fluctuations in the availability of credit, variations in the amount of assets under management as well as the Federal Reserve Bank’s interest rate policy and quantitative easing.

Business" on page [removed: 9.][added: 11.]

[removed: | • |] [added: -] rate structure; [removed: |]

[removed: | • |] [added: -] product mix; [removed: |]

[removed: | • | venue,] [added: - venue;] and [removed: |]

[removed: | • |] [added: -] the percentage of trades executed by customers who are members compared with non-member customers. [removed: |]

Any customer who is guaranteed by a clearing firm and who agrees to be bound by our exchange rules is able to obtain direct access to our [removed: CME] electronic platforms.

Subscribers can obtain access to our market data services either directly or through [removed: third party] [added: third-party] distributors.

[removed: | • | Technology expense consists of costs related to maintenance of the hardware and software required to support our technology.] It also [removed: includes costs for network connections for our electronic platforms and some market data customers; telecommunications costs of our exchange, and fees paid for access to external market data. This expense] may be [removed: driven by system capacity, functionality and redundancy requirements. It also may be] impacted by growth in electronic contract volume and changes in the number of telecommunications hubs and connections which allow customers outside the [removed: United States] [added: U.S.] to access our electronic platforms directly. [removed: |]

[removed: | • | Licensing and other fee agreements expense includes license fees paid as a result of contract volume in equity index products.] This expense also includes royalty fees and broker rebates on energy and metals products as well as revenue sharing on cleared swaps contracts and some new product launches. [removed: This expense fluctuates with changes in contract volumes as well as changes in fee structures. |]

[removed: | • |] [added: -] Other expenses include occupancy and building operations expenses including rent, maintenance, real estate taxes, utilities and other related costs related to leased property in Chicago, New York, the [removed: United Kingdom,] [added: U.K.,] India as well as other smaller locations throughout the world. [removed: Other expenses also include marketing and travel-related expenses as well as general and administrative costs. Marketing, advertising and public relations expense includes media, print and other advertising costs, as well as costs associated with our product promotion. Other expenses also include litigation and customer settlements, impairment charges on operating assets, gains and losses on disposals of certain operating assets, and foreign currency transaction gains and losses resulting from changes in exchange rates on certain foreign monetary assets and liabilities. |]

[removed: | • |] [added: -] Investment income includes income from short-term investment of clearing firms' cash performance bonds and guaranty fund contributions as well as excess operating cash; interest income and realized gains and losses from our marketable securities; realized gains and losses as well as dividend income from our strategic equity investments, and gains and losses on trading securities in our non-qualified deferred compensation plans. [removed: Investment income is influenced by market interest rates, changes in the levels of cash performance bonds deposited by clearing firms, the amount of dividends distributed by our strategic investments and the availability of funds generated by operations. |]

[removed: | • |] [added: -] Interest and other borrowing costs expense includes charges associated with various short-term and long-term funding facilities, including commitment fees on lines of credit agreements. [removed: |]

[removed: | • |] [added: -] Equity in net earnings (losses) of unconsolidated subsidiaries includes income and losses from our investments in S&P/Dow Jones Indices LLC (S&P/DJI), [added: Shanghai CFETS-NEX International Money Broking Co., Ltd. and] Dubai Mercantile [removed: Exchange and Bursa Malaysia Derivatives Berhad. |][added: Exchange.]

[removed: | • |] [added: -] Other income (expense) includes expenses related to the distribution of a portion of interest earned on performance bond collateral reinvestment to the clearing firms, gains and losses on derivative contracts as well as other various income and expenses outside our core operations. [removed: |]

In establishing these policies within the framework of accounting principles generally accepted in the [removed: United States,] [added: U.S.,] management must make certain assessments, estimates and choices that will result in the application of these principles in a manner that appropriately reflects our financial condition and results of operations.

[removed: | • |] [added: -] Level [removed: 1—Inputs] [added: 1 inputs, which] are [removed: unadjusted,] [added: considered the most reliable evidence of fair value, consist of] quoted prices [removed: in active markets] [added: (unadjusted)] for identical assets or liabilities [removed: at the measurement date. |][added: in active markets.]

[removed: | • |] [added: -] Level [removed: 2— Inputs] [added: 2 inputs] consist of observable market data, [removed: other than level 1 inputs,] such as quoted prices for similar assets and liabilities in active [removed: markets] [added: markets,] or inputs other than quoted prices that are directly observable. [removed: |]

For further discussion regarding the fair value of financial assets and liabilities, see note [removed: 19] [added: 2] of the notes to the consolidated financial statements.

Indefinite-lived intangible assets may be tested quantitatively for [added: impairment by comparing their carrying values to their estimated fair values.]

The impairment assessment of these assets requires management to first compare the [removed: book] [added: carrying] value of the amortizing asset to [added: its] undiscounted [added: net] cash flows.

If the [removed: book] [added: carrying] value exceeds the undiscounted [added: net] cash flows, management is then required to estimate the fair value of the assets and record an impairment loss for the excess of the carrying value over the fair [removed: value and annually challenge the useful lives.][added: value.]

On occasion, the customer's exchange trading privileges may not be properly entered by the [removed: clearinrg] [added: clearing] firm and incorrect fees are charged for the transactions in the affected accounts.

[removed: An accrual] [added: A reserve] is established for estimated fee adjustments to reflect corrections to customer exchange trading privileges.

The [removed: accrual] [added: reserve] is based on the historical pattern of adjustments processed as well as [removed: specific] [added: management's estimate of future] adjustment [removed: requests.][added: activity.]

Internal use software costs. Certain internal and external costs that are incurred in connection with developing or obtaining [removed: computer] software for internal use are capitalized.

Software development costs incurred during the planning or maintenance stages of a software project are expensed as incurred, while costs incurred during the application development stage are capitalized and are amortized over the estimated useful life of the software, [added: which is] generally two to four [removed: years.][added: years, but up to eight years for certain trading and clearing applications, depending upon expected useful lives.]

Refer to note 2 in our notes to the consolidated financial statements for information on newly adopted [removed: and recently issued] accounting pronouncements that are applicable to us.

For a comparison of our results of operations for the fiscal years ended December 31, [removed: 2018 and December 2017,] [added: 2019,] see "Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2018] [added: 2019] filed with the SEC on February 28, [removed: 2019.][added: 2020.]

| | | | | | | | | | | [added: | | | | | | | | | | | | | |] Year-over-Year Change | | [added: | | | | | | |]

| (dollars in millions, except per share data) | | [added: | | | | 2020 | | | | | |] 2019 | | | | [removed: 2018] | | | | [removed: 2019-2018] | | [added: | | 2020-2019 | | | | | | | | |]

| Total revenues | | [added: | | | |] $ | [removed: 4,868.0] [added: 4,883.6] | | | [added: | |] $ | [removed: 4,309.4] [added: 4,868.0] | | | [removed: 13] | [added: | | | | | | | — | |] % | [added: | | | | | |]

| Total expenses | | [added: | | | | 2,246.2 | | | | | |] 2,280.2 | | | | [removed: 1,701.8] | | | | [removed: 34] | | [added: | | (1) | | | | | | | | |]

- Technology expense consists of costs related to maintenance of the hardware and software required to support our technology.

It also includes costs for network connections for our electronic platforms and some market data customers; telecommunications costs of our exchange, and fees paid for access to external market data.

This expense may be driven by system capacity, functionality and redundancy requirements.

- Licensing and other fee agreements expense includes license fees paid as a result of contract volume in equity index products.

This expense fluctuates with changes in contract volumes as well as changes in fee structures.

Other expenses also include marketing and travel-related expenses as well as general and administrative costs.

Marketing, advertising and public relations expense includes media, print and other advertising costs, as well as costs associated with our product promotion.

Other expenses also include litigation and customer settlements, impairment charges on operating assets, gains and losses on disposals of certain operating assets, and foreign currency transaction gains and losses resulting from changes in exchange rates on certain foreign monetary assets and liabilities.

Investment income is influenced by market interest rates, changes in the levels of cash performance bonds deposited by clearing firms, the amount of dividends distributed by our strategic investments and the availability of funds generated by operations.

- Level 3 inputs consist of unobservable inputs, which are derived and cannot be corroborated by market data or other entity-specific inputs.

In addition, the carrying value of goodwill, as denominated in foreign currencies, is adjusted each reporting period as a result of movements in foreign currency exchange rates relative to the U.S. dollar.

Such foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss) within shareholders' equity.

In connection with this impairment assessment, management also challenges the useful lives of our definite-lived intangible assets on a periodic basis.

This reserve has historically been immaterial.

In addition, software assets are assessed for impairment when events or circumstances indicate that the carrying values may not be recoverable or that a reduction in the estimated useful lives is warranted.

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| Aggregate average daily volume | | | | | | 19,054 | | | | | | 19,167 | | | | | | | | | | | | (1) | | | | | | | | |

In 2020 when compared with 2019, overall market volatility declined following a period of very high volatility in the first quarter of 2020.

During the first quarter of 2020, the Federal Reserve made the unexpected decision to lower the federal funds rate due to economic concerns from the COVID-19 pandemic, which resulted in significant volatility within the financial and equity markets.

However, interest rate volatility subsided following indication by the Federal Reserve that it did not intend to raise interest rates in the foreseeable future.

Equity market volatility remained high throughout 2020 as a result of the governmental and business response to the COVID-19 pandemic, as well as political uncertainty surrounding the U.S. Presidential and Congressional elections in November.

In addition, heightened producer price competition within the oil markets combined with lower energy demands during the COVID-19 pandemic resulted in significant market volatility within the energy market during the first quarter of 2020.

However, this volatility subsided as oil prices stabilized and demand for crude oil remained low for the remainder of 2020.

We believe these factors led to the changes in volume in 2020 when compared with 2019.

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On November 2, 2018, we completed our acquisition of NEX Group plc (NEX).

The following Management's Discussion and Analysis of Financial Condition and Results of Operations includes the financial results of NEX beginning on November 3, 2018.

position with another party.

| • | Level 3—Inputs are unobservable and reflect management’s best estimate of what market participants would use in pricing the asset or liability. Assets and liabilities carried at level 3 fair value generally include assets and liabilities with inputs that require management’s judgment. |

impairment by comparing their carrying values to their estimated fair values.

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| | 2019 | | | | 2018 | | | | 2019-2018 | |

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During 2019, volatility spiked in mid-2019 following a shift in expectations surrounding the Federal Reserve's interest rate policies.

In mid-2019, the Federal Reserve began cutting interest rates following earlier indications that it intended to continue to slowly increase interest rates throughout 2019.

Uncertainty surrounding the United States' foreign trade policy also increased mid-2019 following the threat of additional tariffs.

By the fourth quarter, market volatility generally declined as uncertainty surrounding the Federal Reserve's interest rate policy subsided.

Uncertainty surrounding the foreign trade policy also diminished following a preliminary trade agreement between the United States and China at the end of 2019.

We believe the net result of these factors lead to overall volume remaining relatively flat in 2019 when compared with 2018.

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In 2019 compared with 2018, overall interest rate contract volume increased slightly, particularly for short term contracts, due to volatility caused by continued uncertainty surrounding the Federal Reserve's interest rate policy.

We believe volatility increased in the middle of 2019 due to a shift in market expectations at that time following the Federal Reserve's decision to initiate interest rate cuts as well as uncertainty surrounding the United State's future economic growth.

Volatility levels were higher in 2018 due to uncertainty surrounding the United States' foreign trade and other economic policies; however, the volatility leveled off at the end of 2019.

We believe foreign exchange volatility decreased in 2019 following the indication by the Federal Reserve and other central banks to limit the number of interest rate changes in 2019.

We also believe that the lack of a final resolution of a trade agreement between the United States and China and the delay in the United Kingdom European Union membership referendum contributed to lower volume.

We believe the decline in soybean contract volume was due to lower U.S. exports of soybeans to China due to uncertainty surrounding trade policies between the countries.

The decrease in wheat contract volume was due to lower volatility levels resulting from a surplus of global supplies in major growing regions around the world.

Corn contract volume increased due to significant uncertainty surrounding crop yields for the 2019 growing season due to higher than normal precipitation levels.

Overall energy contract volume decreased in 2019 when compared with 2018, which we believe was due to lower price volatility within the energy markets throughout 2019 caused by greater price stability within the crude oil markets.

In addition, expanded production of natural gas resulted in a reduction of price volatility in early 2019, which we believe contributed to a decrease in natural gas volume.

The average rate per contract decreased in 2019 when compared with 2018, which is largely due to a shift in product mix.

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*Market data and information services.* In 2019 when compared with 2018, the increase in market data and information services revenue was attributable to the additional market data revenue generated by market data subscribers and distributors associated with the cash markets business subsequent to the NEX acquisition in November 2018.

In addition, fees for legacy CME basic real-time market data services increased to $105 per month from $85 per month for each device beginning in the second quarter of 2018, which also contributed to the increase in revenue in 2019 compared with 2018.

The increase was partially offset by a reduction in revenue due to modest declines in screen counts due to cost-cutting initiatives at member firms.

We are subject to various market risks, including those caused by changes in interest rates, [removed: credit,] [added: credit and] foreign currency exchange [removed: rates and equity prices.][added: rates.]

Debt outstanding at December 31, [removed: 2019] [added: 2020] consisted of fixed-rate borrowings of [removed: $3.7] [added: $3.4] billion (in U.S. dollar equivalent).

We did not have any variable-rate borrowings at December 31, [removed: 2019.][added: 2020.]

Our clearing house acts as the counterparty to all trades consummated on our exchanges as well as through [removed: third party] [added: third-party] exchanges and swaps markets for which we provide clearing services.

Despite our safeguards, we cannot [removed: assure you] [added: guarantee] that these measures will be sufficient to protect us from a default or that we will not be materially and adversely affected in the event of a significant default.

[removed: | • |] [added: -] a financial safeguard package for all futures, options and over-the-counter swap contracts other than cleared interest rate swap contracts (base package); and [removed: |]

[removed: | • |] [added: -] a financial safeguard package for cleared interest rate swap contracts. [removed: |]

[added: In addition to the 364-day multi-currency] line of credit, we also have the option to use our $2.4 billion multi-currency revolving senior credit facility to provide liquidity for our clearing house in the unlikely event of default.

At December 31, [removed: 2019,] [added: 2020,] aggregate performance bond deposits for clearing firms for both financial safeguard packages was [removed: $154.5] [added: $211.9] billion including cash performance bond deposits, non-cash deposits, Interest Earnings Facility funds and letters of credit.

The following shows the available assets at December 31, [removed: 2019] [added: 2020] in the event of a payment default by a clearing firm for the base financial safeguard package after first utilizing the defaulting firm's available assets:

| (in millions) | | [added: | | | |] Clearing [removed: House Available] [added: House Available] Assets | | |

| Designated corporate contributions for futures and options(1) | | [added: | | | |] $ | 100.0 | |

| Guaranty fund contributions(2) | | [removed: 4,902.8] | | | [added: | 4,654.1 | | |]

| Assessment powers(3) | | [removed: 13,482.7] | | | [added: | 12,798.9 | | |]

[removed: | (1) | Our] [added: (1)Our] clearing house designates $100.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit. [removed: |]

[removed: | (2) | Guaranty] [added: (2)Guaranty] fund contributions of clearing firms include guaranty fund contributions required of clearing firms, but do not include any excess deposits held by us at the direction of clearing firms. [removed: |]

[removed: | (3) | In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting clearing firms' guaranty fund contributions, we would assess all non-defaulting clearing members as provided in the rules governing the guaranty fund. We could assess non-defaulting clearing members 275% of their existing guaranty fund requirements up to a maximum of 550% of their existing guaranty fund requirements as provided in the rules.] Assessment powers are calculated to reflect the potential obligation that each clearing member could be called for in the event clearing member defaults exhaust the guaranty [removed: fund, however] [added: fund; however,] the total amount available would be reduced by the defaulted clearing [removed: members] [added: members'] assessment obligations since they would no longer be able to satisfy their obligations. [removed: |]

The following shows the available assets for the interest rate swap financial safeguard package at December 31, [removed: 2019] [added: 2020] in the event of a payment default by a clearing firm that clears interest rate swap contracts, after first utilizing the defaulting firm's available assets:

| (in millions) | | [added: | | | |] Clearing House Available Assets | | |

| Designated corporate contributions for interest rate swap contracts(1) | | [added: | | | |] $ | 150.0 | |

| Guaranty fund contributions(2) | | [removed: 3,559.8] | | | [added: | 3,392.1 | | |]

| Assessment powers(3) | | [removed: 1,609.9] | | | [added: | 1,089.5 | | |]

[removed: | (1) | Our] [added: (1)Our] clearing house designates $150.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit. [removed: |]

[removed: | (2) | Guaranty] [added: (2)Guaranty] fund contributions of clearing firms for interest rate swap contracts include guaranty fund contributions required of those clearing firms. [removed: |]

[removed: | (3) | In] [added: (3)In] the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting firms' guaranty fund contributions, we would assess non-defaulting clearing members as provided in the rules governing the interest rate swap guaranty fund. [removed: Assessment powers are calculated to reflected the potential obligation that each clearing member could be called for based on potential failure of the third and fourth largest clearing. |]

At December 31, [removed: 2019,] [added: 2020,] the balance of the collateral at FICC was [removed: $100.0] [added: $100.1] million, which was included in other current assets on the consolidated balance sheet.

For transactions with counterparties that are not members of the third-party clearing house, settlement typically occurs on the day following execution and, prior to settlement, BrokerTec Americas is exposed to the risk of loss in the event a [added: counterparty fails to meet its obligations.]

Aggregate transaction [removed: gains (losses)] [added: losses] for [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] were [removed: $(7.2)] [added: $9.3] million, [removed: $(73.6)] [added: $7.2] million and [removed: $9.4] [added: $73.6] million, respectively.

Brexit continues to generate economic and political uncertainty throughout the world, particularly throughout the U.K. and the [removed: EU.][added: E.U. This uncertainty could potentially lead to significant volatility with foreign currency exchange rates, which could result in additional foreign currency gain/loss.]

Aggregate translation gains (losses), net of tax, for [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] were [removed: $(0.6)] [added: $134.3] million, [removed: $(2.5)] [added: $(0.6)] million and [removed: $7.5] [added: $(2.5)] million, respectively.

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(3)In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting clearing firms' guaranty fund contributions, we would assess all non-defaulting clearing members as provided in the rules governing the guaranty fund.

We could assess non-defaulting clearing members 275% of their existing guaranty fund requirements up to a maximum of 550% of their existing guaranty fund requirements as provided in the rules.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- |

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Assessment powers are calculated to reflected the potential obligation that each clearing member could be called for based on potential failure of the third and fourth largest clearing.

At December 31, 2019, we maintained $303.8 million of commercial paper.

Commercial paper is considered a fixed rate borrowing; however, because maturities for commercial paper are generally less than 90 days, commercial paper is considered subject to interest rate fluctuations.

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In addition to the 364-day multi-currency

| | | | | |

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counterparty fails to meet its obligations.

On January 31, 2020, the United Kingdom (U.K.) formally withdrew from the European Union (EU) after a majority of voters in the U.K. approved an exit from the EU, commonly referred to as Brexit.

This uncertainty could potentially lead to significant volatility with foreign currency exchange rates, which could result in additional foreign currency gain/loss.

CME Group [removed: enables clients to trade futures, options, cash and over-the-counter (OTC) markets, optimize portfolios, and analyze data \- empowering] [added: provides] market participants worldwide [added: the ability] to efficiently manage risk [added: across multiple asset classes, by trading futures, options, cash] and [removed: capture opportunities.][added: over-the-counter (OTC) products.]

CME demutualized in 2000, and in 2002 its parent [removed: company] [added: company, CME Group,] completed [removed: its] [added: an] initial public offering of its Class A common stock [removed: (NASDAQ:] [added: (Nasdaq:] CME).

[removed: We] [added: CME Group] subsequently acquired CBOT Holdings, Inc. in 2007, NYMEX [added: Holdings, Inc. (NYMEX] and [removed: COMEX] [added: COMEX)] in 2008, the Kansas City Board of Trade in 2012 and NEX Group plc (NEX) in [removed: November] 2018.

[removed: Our] [added: The] combination with NEX [removed: expands] [added: expanded] our global customer base and product offerings through the complementary combination of CME Group’s exchange-traded derivative products and NEX’s cash and OTC products.

It also [removed: creates] [added: created] a leading, client-centric, global markets company, generating capital efficiencies across futures, cash and OTC products for market participants seeking to lower their cost of trading and better manage risk.

Our principal executive offices are located at 20 South Wacker Drive, Chicago, Illinois 60606, [removed: and] our telephone number is [removed: 312-930-1000.][added: 312-930-1000 and our website is *cmegroup.com*.]

[removed: NARRATIVE DESCRIPTION] [added: DESCRIPTION] OF BUSINESS

CME Group exchanges offer the widest range of global benchmark products across [removed: all major asset classes based on] interest rates, equity indexes, foreign exchange (FX), [removed: agricultural,] [added: agricultural commodities,] energy and [removed: metal commodities.][added: metals.]

We [added: also] offer [removed: futures and options on futures trading across asset classes through the CME Globex platform,] cash and repo fixed income trading via BrokerTec, and cash and OTC FX trading via EBS.

In addition, we operate one of the world’s leading central counterparty clearing providers, CME Clearing, [removed: a division of] [added: operated by] CME.

With a range of pre- and post-trade products and services underpinning the entire lifecycle of a trade, CME Group offers optimization, reconciliation and processing services through [removed: TriOptima, Traiana] [added: Traiana, TriOptima] and Reset.

Derivatives Exchange Business: Through our derivatives exchanges and clearing house, we believe our customers [removed: choose to trade on our centralized market due to its liquidity,] [added: prefer CME Group's] diversity of products, [added: liquidity,] price transparency and technological capabilities.

Our [removed: CME Group] products provide a means for hedging, speculation and asset allocation related to the risks associated with, among other things, interest rate sensitive instruments, equity ownership, changes in the value of foreign currency and changes in the prices of agricultural, energy and metal commodities.

[removed: | • | CME's] [added: - CME's] product slate includes agricultural, equities, FX and interest rate products, including [removed: contracts for Eurodollars,] [added: Eurodollar futures and options,] Secured Overnight Financing Rate (SOFR) [added: futures] and [added: options, livestock and cash-settled] contracts based on the [removed: S&P, NASDAQ-100] [added: S&P 500, including the E-mini S&P 500 Environmental, Social] and [added: Governance (ESG) contract, Micro E-mini Equity Index contracts, Nasdaq-100,] FTSE Russell [removed: Indexes. |][added: and Bitcoin Reference Rate.]

[removed: | • | CBOT's] [added: - CBOT's] product slate consists of agricultural, [removed: equities, energy] [added: equities] and interest rate products, including contracts for United States (U.S.) Treasury futures, [removed: corn and other grains] [added: soybean, corn, wheat] and contracts based on the Dow Jones Industrial Index. [removed: |]

[removed: | • | NYMEX's] [added: - NYMEX's] product slate consists of energy and metals products, including contracts for crude oil, natural gas, heating oil and gasoline. [removed: |]

[removed: | • | COMEX's] [added: - COMEX's] product slate consists of metals products, including contracts for gold, [removed: silver] [added: silver, copper] and [removed: copper. |][added: other base metals.]

We believe the breadth and diversity of our [removed: product lines] [added: products] and [removed: the variety of their underlying contracts] [added: services lines] are beneficial to our customers and CME Group's overall performance.

Our asset classes contain products designed to address differing risk management needs, and customers are able to [added: manage risks and] achieve operational and capital efficiencies by accessing our diverse products through our platforms and our clearing house.

[removed: Our] CME Group products are traded primarily through CME [removed: Globex and other electronic trading platforms,] [added: Globex, as well as] by open outcry auction markets in [removed: Chicago,] [added: Chicago] and through privately negotiated transactions.

[removed: CME Direct] includes CME One for mobile access and CME Straight-Through Processing, which enables direct connectivity for trade information directly with customer order management and risk management systems and is designed to reduce errors and improve efficiency.

[removed: | • |] [added: -] certainty of execution; [removed: |]

[removed: | • |] [added: -] extensive capabilities to facilitate complex and demanding trading; [removed: |]

[removed: | • |] [added: -] direct market access; [removed: |]

[removed: | • |] [added: -] fairness, price transparency and anonymity; [removed: |]

[removed: | • |] [added: -] convenience and efficiency; [removed: |]

[removed: | • |] [added: -] connectivity through highly secure, resilient and low-latency network options; [removed: and |]

[removed: | • |] [added: -] global distribution, including connectivity through high-speed international telecommunications hubs in key financial centers or order routing to our global partner exchanges. [removed: |]

Membership on one of our derivatives exchanges also enables a customer to trade specific products at [removed: reduced rates and] lower fees.

In [removed: 2019, 85%] [added: 2020, 83%] of our contract volume was from trades by our members.

Our integrated clearing function is designed to ensure the safety and the soundness of our [removed: exchange] markets by serving as the counterparty to every [removed: futures and options] trade, becoming the buyer to each seller and the seller to each buyer, and limiting counterparty credit risk.

CME Clearing marks open positions to market at least twice a [added: trading] day, [removed: requires] [added: requiring] payments from clearing firms whose positions have lost value and [removed: makes] [added: making] payments to clearing firms whose positions have gained value.

The CME ClearPort front-end system provides access to our flexible clearing services for block [removed: transactions] [added: transactions, bi-lateral trades] and swaps.

[removed: No individual] [added: One] firm represented at least 10% of our clearing and transaction fees revenue for [removed: 2019.][added: 2020.]

[removed: | • | BrokerTec is a] [added: - BrokerTec operates] global electronic [removed: platform for the] trading [removed: of] [added: for] fixed income [removed: products,] [added: products on the CME Globex platform,] with a leading position in cash U.S. Treasuries, [removed: as well as activity in European government bonds and] E.U. and U.S. repo fixed income [removed: instruments. It facilitates trading principally for banks] [added: instruments] and [removed: non-bank professional trading firms. |][added: European Government Bonds.]

[removed: | • | EBS] [added: - EBS] is a global electronic platform for the trading of FX products across major and emerging market [removed: currencies. EBS offers anonymous and disclosed trading venues, which gives clients multiple execution and distribution options and the benefit of an established and far-reaching distribution network of liquidity providers and consumers. It] [added: currencies.EBS] also offers execution of non-deliverable forwards through a [removed: CFTC-registered] [added: Commodity Futures Trading Commission (CFTC) registered] Swap Execution Facility (SEF). [removed: |]

Optimization Business: Our optimization services, which [removed: includes] [added: include] Traiana, TriOptima and Reset, [removed: delivers] [added: deliver] transaction lifecycle management services to help our clients simplify their workflow, optimize their capital and resources, mitigate their risk, increase efficiency, reduce their operational costs and streamline complex processes.

[removed: | • | Trade] [added: - Trade] and portfolio management comprises portfolio and margin reconciliation, monitoring pre-trade risk and automating post-trade processing of financial transactions. [removed: |]

[removed: | • | Financial] [added: - Financial] resource optimization comprises portfolio compression, basis risk mitigation, portfolio balancing and derivative pricing and risk analytics. [removed: |]

[removed: | • | Regulatory] [added: - Regulatory] reporting comprises trade and position reporting (including licensed MiFID agent reporting to national regulators and the public), end-to-end multi-regime regulatory reporting, data normalization, enrichment, reconciliation, validation and cross-jurisdictional matching. [removed: |]

CME Group also offers a suite of products and services to optimize portfolios, achieve capital efficiencies and manage pre-trade and post-trade processes.

Our customers can receive and analyze market data through multiple service offerings in real-time, historical and derived data formats.

CME Group also offers industry-leading research and analytics tools to provide customers with market education resources.

It established CME Clearing in 1919, which is operated by CME.

Due to the COVID-19 pandemic, in March 2020 we closed our open outcry trading floor and reopened it in August 2020 for Eurodollar options.

Currently, the remainder of the trading floor is closed.

CME Direct

- access to market data; and

CME Clearing Business: Through our clearing house, CME Clearing, which is operated by CME, we provide clearing and settlement services for a broad range of exchange-traded futures and options on futures contracts and over-the-counter derivatives.

BrokerTec and EBS offer anonymous and disclosed trading venues, offering clients multiple execution and distribution options and the benefit of an established and far-reaching distribution network of liquidity providers and consumers.

Our BrokerTec markets were migrated from a third-party platform to our CME Globex electronic platform in the first quarter of 2021 and our EBS market is expected to migrate to the CME Globex platform in the fourth quarter of 2021.

It facilitates trading principally for banks and non-bank professional trading firms.

In 2020, we substantially completed the wind-down of our commercial regulatory reporting operations.

We have transitioned to self-reporting for our EMEA BrokerTec and EBS businesses and will also continue to serve customer reporting needs in the U.S. (CFTC reporting) and Canada.

In January 2021, we announced an agreement with IHS Markit to combine our post-trade services into a new joint venture.

The new company will be structured as a 50/50 joint venture and will include trade processing and risk mitigation operations through incorporation of our optimization businesses – Traiana, TriOptima and Reset – and IHS Markit’s MarkitSERV.

We expect the transaction to close in mid-2021, subject to customary antitrust and regulatory approvals and other customary closing conditions.

Market Data Business: We offer a variety of market data services through industry-leading market data platforms and third-party distribution partners, which are designed to meet the risk-management, trading, investment and business needs of our global client base.

We further offer derived cash markets pricing, third-party and alternative data sets, as well as a wide range of analytic tools.

As customers continue to leverage cloud technology to improve and evolve their businesses, CME Group has taken a leading role by becoming the first derivatives marketplace to provide live market data natively in the cloud with the launch of our Smart Stream on Google Cloud Platform capabilities.

CME Group is also the distributor of leading benchmark equity and commodity indices on behalf of third parties as well as our own proprietary indices, which include CME Group Volatility Indices (CVOL).

We have further focused on building upon cloud-based data distribution capabilities as a more flexible and potentially cost-effective means of providing data to our clients.

In 2020, CME Group futures and options had an average daily volume of 19.1 million contracts, with volume records in two of our asset classes - equities and metals for the fifth consecutive year.

It was also a year of volume records for multiple products, including: Ultra 10 Year futures, SOFR futures, E-mini Nasdaq-100 futures, Russell 2000 futures, Micro E-Mini Equity Index futures and a record number of contracts executed via Basis Trade at Index Close.

We set records in the volume traded for our Micro E-Mini Equity Index futures in total, as well as for each of the Micro E-Mini S&P 500, Nasdaq-100, Russell 2000 and Dow 30 contracts.

We also set an overall volume record for the Natural Gas franchise, as well as an individual product record in Silver futures.

We continue to expand and deepen our customer base worldwide and offer customers around the world the most broad and diversified portfolio of benchmark products.

Some of our products introduced over the past two years include:

- 3-Year Treasury Note Futures (2020)

- Adjusted Interest Rate (AIR) Total Return Futures (2020)

- Trade at Cash Open (TACO) (2019)

- Cash-settled Bitcoin Options (2020)

- SOFR Options (2020) and SOFR OTC Swaps (2019)

- Shanghai Gold Futures (2019)

- Physical Liquefied Natural Gas (LNG) Futures (2019)

- Micro E-mini Equity Index Futures (2019) and Options (2020)

- E-mini S&P 500 ESG Index Futures (2019)

- Brazilian Soybean Futures (2020)

- Pork Cutout Futures and Options (2020)

- European Renewable Fuel Futures (2020)

It established CME Clearing as a division of CME in 1919.

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CME Clearing Business: Through our clearing house, CME Clearing, which is a division of CME, provides clearing services for all of our exchange-traded contracts, for certain cleared-only products and for certain contracts traded on other exchanges.

The clearing house is responsible for settling trading accounts, clearing trades, collecting and maintaining performance bond funds, regulating delivery and reporting trading data.

Market Data Business: We offer a variety of market data services for the futures, equities, OTC, cash and cleared swaps markets.

We also deliver independent market intelligence and pricing information for cash and OTC data to financial market participants using intelligence from our businesses and third parties.

During this decade, our key product launches have included the Ultra U.S. Treasury Bond futures and options, short-dated options across asset classes, new base metal products, expanded crude oil grades, Basis Trade at Index Close (BTIC) transactions, S&P Dividend futures, E-mini Russell 1000 and 2000 futures, a cash-settled bitcoin futures contract, and SOFR futures contracts.

We continued to introduce new products in 2019, including Micro E-mini S&P 500 Equity Index futures, E-mini S&P 500 Environmental, Social and Governance (ESG) index futures, Shanghai Gold futures, physical Liquefied Natural Gas (LNG) futures and expanded our SOFR futures listings.

We also launched bitcoin options and options on SOFR in January 2020.

During 2019, we experienced overall average daily volume of 19.2 million contracts, along with volume records in both interest rates and metals.

We also had record volume in overall options, with electronic options representing 64% of total options volume in 2019.

We continued to deepen liquidity and add diverse participation as evidenced by the growth in large open interest holders with records achieved across several product lines in 2019.

We also achieved 20% growth in trading volume during Asian trading hours and 7% growth during European trading hours in 2019 compared to the 2018.

In May 2019, we announced the launch of our next generation Standard Portfolio Analysis of Risk (SPAN) margin framework – CME SPAN 2.

We plan to begin the roll-out in the first half of 2020, subject to receipt of final approvals.

For example:

of these licensing agreements.

In June 2016, the United Kingdom held a referendum in which the electorate voted in favor of withdrawal from the European Union (Brexit), which continues to create a number of uncertainties for the financial services sector.

The United Kingdom's Withdrawal Agreement Bill was signed into law on January 24, 2020 and the United Kingdom formally left the European Union on January 31, 2020.

Under the terms of the Withdrawal Agreement, there will be an 11-month transition period due to expire on December 31, 2020.

| • | The potential impact of the adoption of EMIR 2.2 allowing for the direct regulation by the European Union of non-European Union clearing houses, like us, and resulting changes to the European Union equivalence and recognition regime on non-European Union clearing houses and exchanges with customers based in Europe. EMIR 2.2 became effective on January 1, 2020, and we are awaiting implementing regulations to determine its impact on our business and whether we will need to make any significant changes to how our clearing house operates. These potential changes could have negative implications for the markets we clear and our market participants by subjecting our clearing business to regulations that would conflict with the regulation imposed by U.S. law and the CFTC, prevent us from deploying our capital efficiently and increasing our regulatory costs. Further, ESMA could impose significant fines for non-compliance with their local European regulations, and we may have to consider material changes to certain of our risk management policies in order to reduce the risk of fines imposed under EMIR 2.2. A failure of our clearing house to retain its recognition may result in our clearing members and certain customers in Europe being subject to higher capital costs for participating in our markets, thus creating a disincentive to use our markets. The |

European Union equivalence and recognition regime also has the potential to impact the cost and ease or difficulty for certain of our OTC execution platforms to provide access to customers on a global basis.

| • | The adoption and implementation of position limit rules, which could have a significant impact on our commodities business if federal rules for position limit management differ significantly from current exchange-administered rules. |

Employees

As of December 31, 2019, we had approximately 4,360 employees.

We consider relations with our employees to be good.

Bryan T.

Durkin, 59. Mr. Durkin has served as President since November 2016 and will step down in May of 2020.

At that time, Mr. Durkin will begin serving as a special advisor to the company.

Mr. Durkin previously served as Senior Managing Director, Chief Commercial Officer since 2014 and as our Chief Operating Officer since 2007, and also held the title of Managing Director, Products and Services from 2010 to July 2012.

Mr. Durkin joined us in connection with the CBOT merger and he previously held a variety of leadership roles with CBOT from 1982 to 2007, most recently as Executive Vice President and Chief Operating Officer.

We make available on our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form

See "Legal and Regulatory Matters" in note [removed: 14.][added: 13.]

Contingencies to the Consolidated Financial Statements beginning on page [removed: 77] [added: 78] for CME Group’s legal proceedings disclosure, which is incorporated herein by reference.

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[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the Fiscal Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission File [removed: Number 001-31553][added: Number 001-31553]

| Delaware | | | | [added: | | | | | | | |] 36-4459170 | [added: | |]

| (State or Other Jurisdiction [removed: of Incorporation] [added: of Incorporation] or Organization) | | | | [added: | | | | | | | |] (IRS [removed: Employer Identification] [added: Employer Identification] No.) | [added: | |]

| 20 South Wacker Drive | | [added: | | | |] Chicago | [added: | |] Illinois | [added: | |] 60606 | [added: | |]

| (Address of Principal Executive Offices) | | | | [added: | | | | | | | |] (Zip Code) | [added: | |]

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

| Title Of Each Class | [added: | |] Trading symbol | [added: | |] Name Of Each Exchange On Which Registered | [added: | |]

| Class A Common Stock $0.01 par value | [added: | |] CME | [removed: NASDAQ] | [added: | Nasdaq | | |]

Indicate by check mark whether the [removed: registrant:] [added: registrant] (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or [added: an] emerging growth company.

See [added: the] definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange

| Large Accelerated Filer | [added: | |] ☒ | | [added: | | | |] Accelerated filer | [added: | |] ☐ | [added: | |]

| Non-accelerated filer | [added: | |] ☐ | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | | [added: | | | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, [removed: 2019,] [added: 2020,] was approximately [removed: $68.5] [added: $57.9] billion (based on the closing price per share of CME Group Inc. Class A common stock on the [removed: NASDAQ] [added: Nasdaq] Global Select Market [removed: (NASDAQ)] [added: (Nasdaq)] on such date).

The number of shares outstanding of each of the registrant’s classes of common stock as of February [removed: 12, 2020] [added: 10, 2021] was as follows: [removed: 358,402,226] [added: 359,003,437] shares of Class A common stock, $0.01 par value; 625 shares of Class B common stock, Class B-1, $0.01 par value; 813 shares of Class B common stock, Class B-2, $0.01 par value; 1,287 shares of Class B common stock, Class B-3, $0.01 par value; and 413 shares of Class B common stock, Class B-4, $0.01 par value.

| Documents | | [added: | | | |] Form 10-K Reference | [added: | |]

| Portions of [removed: the] CME Group Inc.’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders | | [added: | | | |] Part III | [added: | |]

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| Item 1. | [removed: [Business](#s677B5660696C5E2CA9F8EC9ED3555519)] | [removed: [5](#s677B5660696C5E2CA9F8EC9ED3555519)] | [added: [Business](#i681b44472b6747d8bfaa12863048d284_13) | | | [5](#i681b44472b6747d8bfaa12863048d284_13) | | |]

| Item 1A. | [removed: [Risk Factors](#s89D0AE5A8CCB58F0839464E4010D5D05)] | [removed: [14](#s89D0AE5A8CCB58F0839464E4010D5D05)] | [added: [Risk Factors](#i681b44472b6747d8bfaa12863048d284_16) | | | [15](#i681b44472b6747d8bfaa12863048d284_16) | | |]

| Item 1B. | [removed: [Unresolved] [added: | | [Unresolved] Staff [removed: Comments](#s0A5D15D531685CD0B10D44ABBC54147E)] [added: Comments](#i681b44472b6747d8bfaa12863048d284_19)] | [removed: [24](#s0A5D15D531685CD0B10D44ABBC54147E)] | [added: | [27](#i681b44472b6747d8bfaa12863048d284_19) | | |]

| Item 2. | [removed: [Properties](#s7F8F43BBC8EF5A40A8F91F85A51A6783)] | [removed: [24](#s7F8F43BBC8EF5A40A8F91F85A51A6783)] | [added: [Properties](#i681b44472b6747d8bfaa12863048d284_22) | | | [27](#i681b44472b6747d8bfaa12863048d284_22) | | |]

| Item 3. | [removed: [Legal Proceedings](#sFBA2265CD3FE5BFA89DBA06CFAC481BF)] | [removed: [25](#sFBA2265CD3FE5BFA89DBA06CFAC481BF)] | [added: [Legal Proceedings](#i681b44472b6747d8bfaa12863048d284_25) | | | [27](#i681b44472b6747d8bfaa12863048d284_25) | | |]

| Item 4. | [removed: [Mine] [added: | | [Mine] Safety [removed: Disclosures](#sB9CA9CD555085B998335F6E30671A21B)] [added: Disclosures](#i681b44472b6747d8bfaa12863048d284_28)] | [removed: [25](#sB9CA9CD555085B998335F6E30671A21B)] | [added: | [27](#i681b44472b6747d8bfaa12863048d284_28) | | |]

| [removed: [PART II.](#sB7AA69A6682F5B789CC75B4B1AF8A181)] [added: [PART II.](#i681b44472b6747d8bfaa12863048d284_31)] | | [removed: [25](#sC25836AE88DB51AD9DCD6B002D005863)] | [added: | | | [27](#i681b44472b6747d8bfaa12863048d284_34) | | |]

| Item 5. | [removed: [Market] [added: | | [Market] for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity [removed: Securities](#sC25836AE88DB51AD9DCD6B002D005863)] [added: Securities](#i681b44472b6747d8bfaa12863048d284_34)] | [removed: [25](#sC25836AE88DB51AD9DCD6B002D005863)] | [added: | [27](#i681b44472b6747d8bfaa12863048d284_34) | | |]

| Item 6. | [removed: [Selected] [added: | | [Selected] Financial [removed: Data](#sB107D41530B15E5887B3FDC15FD56D69)] [added: Data](#i681b44472b6747d8bfaa12863048d284_37)] | [removed: [27](#sB107D41530B15E5887B3FDC15FD56D69)] | [added: | [29](#i681b44472b6747d8bfaa12863048d284_37) | | |]

| Item 7. | [removed: [Management’s] [added: | | [Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sAE6DD2525CB8597D91932017C072DD5C)] [added: Operations](#i681b44472b6747d8bfaa12863048d284_40)] | [removed: [29](#sAE6DD2525CB8597D91932017C072DD5C)] | [added: | [31](#i681b44472b6747d8bfaa12863048d284_40) | | |]

| Item 7A. | [removed: [Quantitative] [added: | | [Quantitative] and Qualitative Disclosures about Market [removed: Risk](#s2C06061669A757658E59E03645BBD3F6)] [added: Risk](#i681b44472b6747d8bfaa12863048d284_82)] | [removed: [44](#s2C06061669A757658E59E03645BBD3F6)] | [added: | [46](#i681b44472b6747d8bfaa12863048d284_82) | | |]

| Item 8. | [removed: [Financial] [added: | | [Financial] Statements and Supplementary [removed: Data](#sE6EB36FEB78C5191B25DE217D0169EEF)] [added: Data](#i681b44472b6747d8bfaa12863048d284_85)] | [removed: [48](#sE6EB36FEB78C5191B25DE217D0169EEF)] | [added: | [50](#i681b44472b6747d8bfaa12863048d284_85) | | |]

| Item 9. | [removed: [Changes] [added: | | [Changes] in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sC58F907089485718818A724F21B1F220)] [added: Disclosure](#i681b44472b6747d8bfaa12863048d284_202)] | [removed: [85](#sC58F907089485718818A724F21B1F220)] | [added: | [85](#i681b44472b6747d8bfaa12863048d284_202) | | |]

| Item 9A. | [removed: [Controls] [added: | | [Controls] and [removed: Procedures](#sF9FCF72F941D5DF088882351C7487901)] [added: Procedures](#i681b44472b6747d8bfaa12863048d284_205)] | [removed: [85](#sF9FCF72F941D5DF088882351C7487901)] | [added: | [85](#i681b44472b6747d8bfaa12863048d284_205) | | |]

| Item 9B. | [removed: [Other Information](#sD6D4D5DE508352ACA03AB76DFEE494CD)] | [removed: [89](#sD6D4D5DE508352ACA03AB76DFEE494CD)] | [added: [Other Information](#i681b44472b6747d8bfaa12863048d284_208) | | | [89](#i681b44472b6747d8bfaa12863048d284_208) | | |]

| [removed: [PART III.](#s98F9209B3F2D527690474CB0AD087E4B)] [added: [PART III.](#i681b44472b6747d8bfaa12863048d284_211)] | | [removed: [89](#s98F9209B3F2D527690474CB0AD087E4B)] | [added: | | | [89](#i681b44472b6747d8bfaa12863048d284_211) | | |]

| Item 10. | [removed: [Directors,] [added: | | [Directors,] Executive Officers and Corporate [removed: Governance](#sDE69DA0ED2A354BFB91BA11D600F3675)] [added: Governance](#i681b44472b6747d8bfaa12863048d284_214)] | [removed: [89](#sDE69DA0ED2A354BFB91BA11D600F3675)] | [added: | [89](#i681b44472b6747d8bfaa12863048d284_214) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☒ No ☐

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| [PART I.](#i681b44472b6747d8bfaa12863048d284_10) | | | | | | [3](#i681b44472b6747d8bfaa12863048d284_10) | | |

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| [PART I.](#sACDDF53100EF58F8A21C5E4B457ED1E0) | | [3](#sACDDF53100EF58F8A21C5E4B457ED1E0) |

| [Signatures](#s836D80E2B04F52EA90E22D36CBBC28BB) | | [95](#s836D80E2B04F52EA90E22D36CBBC28BB) |

In March 2018, we exited the credit default swaps business.

Our European headquarters are located at the London Fruit & Wool Exchange [removed: (LFWE)] at 1 Duval Square, London, where we lease approximately 125,000 square feet of general office space.

In addition to [added: the] above properties, we have other offices and data centers in various locations around the globe.

Please see note [removed: 7.][added: 6.]

Property and note [removed: 13.][added: 12.]

Our integration of NEX includes the consolidation of office space where we have shared locations, including the consolidation of our European headquarters to the LFWE.

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Our Class A common stock is currently listed on [removed: NASDAQ] [added: Nasdaq] under the ticker symbol "CME." As of February [removed: 12, 2020,] [added: 10, 2021,] there were approximately [removed: 6,310] [added: 6,170] holders of record of our Class A common stock.

As of February [removed: 12, 2020,] [added: 10, 2021,] there were approximately [removed: 1,560] [added: 1,565] holders of record of our Class B common stock.

[added: The graph below compares the cumulative five-year total return on CME Group Inc.'s Class A common stock relative to the cumulative total returns of the S&P 500 index and a customized peer group of five companies that include: Cboe Global Markets Inc, Deutsche Boerse Ag, Intercontinental Exchange Inc, London Stock Exchange Group Plc and Nasdaq Inc.] An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock, in [removed: each index and in each of] the peer [removed: groups] [added: group and the S&P 500 index] on December 31, [removed: 2014] [added: 2015] and its relative performance is tracked through December 31, [removed: 2019.][added: 2020.]

[removed: ][added: ]

| | [removed: 2015] | | [added: 2016] | | [removed: 2016] | | | | 2017 | | | | [added: | |] 2018 | | | | [added: | |] 2019 | | | [added: | | | 2020 | | |]

| Period in [removed: 2019] [added: 2020] | | [added: | | | |] Total Number of Shares (or Units) Purchased(1) | | | [added: | | |] Average [removed: Price Paid] [added: Price Paid] Per Share (or Unit) | | | | [added: | |] Total Number [removed: of Shares] [added: of Shares] (or Units) Purchased [removed: as Part] [added: as Part] of [removed: Publicly Announced Plans] [added: Publicly Announced Plans] or Programs | | | [added: | | |] Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (in millions) | | |

| November 1 to November 30 | | [added: | | | |] — | | | [added: | | |] — | | | | [added: | |] — | | | [added: | | |] — | | |

[removed: | (1) | Shares] [added: (1)Shares] purchased consist of an aggregate of [removed: 132] [added: 24,924] shares of Class A common stock surrendered to satisfy employee tax obligations upon the vesting of restricted stock. [removed: |]

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| CME Group Inc. | | | $ | 133.93 | | | | | $ | 177.23 | | | | | $ | 234.16 | | | | | $ | 256.81 | | | | | $ | 240.54 | |

| S&P 500 | | | 111.96 | | | | | | 136.40 | | | | | | 130.42 | | | | | | 171.49 | | | | | | 203.04 | | |

| Peer Group | | | 104.28 | | | | | | 141.75 | | | | | | 145.74 | | | | | | 204.15 | | | | | | 241.29 | | |

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| October 1 to October 31 | | | | | | 114 | | | | | | $ | 159.47 | | | | | — | | | | | | $ | — | |

| December 1 to December 31 | | | | | | 24,810 | | | | | | 182.02 | | | | | | — | | | | | | — | | |

| Total | | | | | | 24,924 | | | | | | | | | | | | — | | | | | | | | |

The graph below compares the cumulative five-year total return provided shareholders on CME Group Inc.'s Class A common stock relative to the cumulative total returns of the S&P 500 index and two customized peer groups of three companies and five companies respectively, whose individual companies are listed in footnotes 1 and 2 below.

(1) There are three companies included in the company's 2018 customized peer group which are: Cboe Global Markets Inc, Intercontinental Exchange Inc and Nasdaq Inc.

(2) The five companies included in the company's 2019 customized peer group are: Cboe Global Markets Inc, Deutsche Boerse Ag, Intercontinental Exchange Inc, London Stock Exchange Group Plc and Nasdaq Inc. We complied this revised peer group to more closely reflect our competitors in our industry.

We believe the new peer group provides a more meaningful basis for comparison to our stock performance.

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| CME Group Inc. | $ | 107.68 | | | $ | 144.21 | | | $ | 190.83 | | | $ | 252.13 | | | $ | 276.52 | |

| S&P 500 | 101.38 | | | | 113.51 | | | | 138.29 | | | | 132.23 | | | | 173.86 | | |

| 2018 Peer Group | 117.34 | | | | 132.98 | | | | 172.32 | | | | 176.08 | | | | 222.54 | | |

| 2019 Peer Group | 119.52 | | | | 124.64 | | | | 169.37 | | | | 174.13 | | | | 244.04 | | |

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| October 1 to October 31 | | 112 | | | $ | 210.07 | | | — | | | $ | — | |

| December 1 to December 31 | | 20 | | | 205.96 | | | | — | | | — | | |

| Total | | 132 | | | | | | | — | | | | | |

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On November 2, 2018, CME Group completed its acquisition of [removed: NEX Group plc (NEX).][added: NEX.]

| | | [added: | | | |] Year Ended or At December 31 | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| (in millions, except per share data) | | [added: | | | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [removed: 2017] | | [added: 2017] | | [removed: 2016] | | | | [removed: 2015] [added: 2016] | | |

| Income Statement Data: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Total revenues | | [added: | | | |] $ | [removed: 4,868.0] [added: 4,883.6] | | | [added: | |] $ | [removed: 4,309.4] [added: 4,868.0] | | | [added: | |] $ | [removed: 3,644.7] [added: 4,309.4] | | | [added: | |] $ | [removed: 3,595.2] [added: 3,644.7] | | | [added: | |] $ | [removed: 3,326.8] [added: 3,595.2] | |

| Operating income | | [added: | | | | 2,637.4 | | | | | |] 2,587.8 | | | | [added: | |] 2,607.6 | | | | [removed: 2,310.6] | | [added: 2,310.6] | | [removed: 2,200.5] | | | | [removed: 1,984.9] [added: 2,200.5] | | |

| Non-operating income (expense) | | [added: | | | | 84.7 | | | | | |] 101.8 | | | | [added: | |] 170.2 | | | | [removed: 215.7] | | [added: 215.7] | | [removed: 87.1] | | | | [removed: (28.1] [added: 87.1] | | [removed: )] |

| Income before income taxes | | [added: | | | | 2,722.1 | | | | | |] 2,689.6 | | | | [added: | |] 2,777.8 | | | | [removed: 2,526.3] | | [added: 2,526.3] | | [removed: 2,287.6] | | | | [removed: 1,956.8] [added: 2,287.6] | | |

| Net income attributable to CME Group | | [added: | | | | 2,105.2 | | | | | |] 2,116.5 | | | | [added: | |] 1,962.2 | | | | [removed: 4,063.4] | | [added: 4,063.4] | | [removed: 1,534.1] | | | | [removed: 1,247.0] [added: 1,534.1] | | |

| Earnings per common share attributable to CME Group: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Basic | | [added: | | | |] $ | [removed: 5.93] [added: 5.88] | | | [added: | |] $ | [removed: 5.73] [added: 5.93] | | | [added: | |] $ | [removed: 12.00] [added: 5.73] | | | [added: | |] $ | [removed: 4.55] [added: 12.00] | | | [added: | |] $ | [removed: 3.71] [added: 4.55] | |

| Diluted | | [added: | | | | 5.87 | | | | | |] 5.91 | | | | [added: | |] 5.71 | | | | [removed: 11.94] | | [added: 11.94] | | [removed: 4.53] | | | | [removed: 3.69] [added: 4.53] | | |

| Cash dividends per share | | [added: | | | | 5.90 | | | | | |] 5.50 | | | | [added: | |] 4.55 | | | | [removed: 6.14] | | [added: 6.14] | | [removed: 5.65] | | | | [removed: 4.90] [added: 5.65] | | |

| Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Total assets | | [added: | | | |] $ | [removed: 75,215.3] [added: 124,659.6] | | | [added: | |] $ | [removed: 77,475.7] [added: 75,215.3] | | | [added: | |] $ | [removed: 75,791.2] [added: 77,475.7] | | | [added: | |] $ | [removed: 69,369.4] [added: 75,791.2] | | | [added: | |] $ | [removed: 67,359.4] [added: 69,369.4] | |

| Short-term debt | | [removed: —] | | | | [removed: 574.2] [added: —] | | | | [added: | |] — | | | | [added: | | 574.2 | | | | | |] — | | | | [added: | |] — | | |

| Long-term debt | | [added: | | | | 3,443.8 | | | | | |] 3,743.2 | | | | [added: | |] 3,826.8 | | | | [removed: 2,233.1] | | [added: 2,233.1] | | [removed: 2,231.2] | | | | [removed: 2,229.3] [added: 2,231.2] | | |

| CME Group shareholders’ equity | | [added: | | | | 26,319.9 | | | | | |] 26,128.9 | | | | [added: | |] 25,918.5 | | | | [removed: 22,411.8] | | [added: 22,411.8] | | [removed: 20,340.7] | | | | [removed: 20,551.8] [added: 20,340.7] | | |

| | | [added: | | | |] Year Ended or At December 31 | | | | | | | | | | | | | | [added: | | | | | | | | | | | | |]

| (in thousands) | | [added: | | | | 2020 | | | | | |] 2019 | | | [added: | | |] 2018 | | | [added: | | |] 2017 | | | [removed: 2016] | | | [removed: 2015] [added: 2016] | | [added: |]

| Average Daily Volume: | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| Product Lines: | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| Interest rates | | [added: | | | | 8,032 | | | | | |] 10,349 | | | [added: | | |] 9,951 | | | [added: | | |] 8,189 | | | [removed: 7,517] | | | [removed: 6,720] [added: 7,517] | | [added: |]

| Equity indexes | | [added: | | | | 5,650 | | | | | |] 3,459 | | | [added: | | |] 3,589 | | | [added: | | |] 2,682 | | | [removed: 3,061] | | | [removed: 2,792] [added: 3,061] | | [added: |]

| Foreign exchange | | [added: | | | |] 862 | | | [added: | | | 862 | | | | | |] 1,004 | | | [added: | | |] 922 | | | [removed: 858] | | | [removed: 872] [added: 858] | | [added: |]

| Agricultural commodities | | [added: | | | | 1,417 | | | | | |] 1,454 | | | [added: | | |] 1,480 | | | [added: | | |] 1,353 | | | [removed: 1,321] | | | [removed: 1,265] [added: 1,321] | | [added: |]

| Energy | | [added: | | | | 2,394 | | | | | |] 2,375 | | | [added: | | |] 2,561 | | | [added: | | |] 2,578 | | | [removed: 2,432] | | | [removed: 1,970] [added: 2,432] | | [added: |]

| Metals | | [added: | | | | 699 | | | | | |] 668 | | | [added: | | |] 639 | | | [added: | | |] 568 | | | [removed: 460] | | | [removed: 344] [added: 460] | | [added: |]

| Total Average Daily Volume | | [added: | | | | 19,054 | | | | | |] 19,167 | | | [added: | | |] 19,224 | | | [added: | | |] 16,292 | | | [removed: 15,649] | | | [removed: 13,963] [added: 15,649] | | [added: |]

| Method of Trade: | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| CME Globex | | [added: | | | | 17,977 | | | | | |] 17,182 | | | [added: | | |] 17,371 | | | [added: | | |] 14,513 | | | [removed: 13,766] | | | [removed: 12,185] [added: 13,766] | | [added: |]

| Open outcry | | [added: | | | | 410 | | | | | |] 1,205 | | | [added: | | |] 1,168 | | | [added: | | |] 1,107 | | | [removed: 1,149] | | | [removed: 1,139] [added: 1,149] | | [added: |]

| Privately negotiated | | [added: | | | | 667 | | | | | |] 780 | | | [added: | | |] 685 | | | [added: | | |] 672 | | | [removed: 734] | | | [removed: 639] [added: 734] | | [added: |]

| Other Data: | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| Total Contract Volume (round turn trades) | | [added: | | | | 4,820,590 | | | | | |] 4,830,043 | | | [added: | | |] 4,844,406 | | | [added: | | |] 4,089,175 | | | [removed: 3,943,670] | | | [removed: 3,532,521] [added: 3,943,670] | | [added: |]

| Open Interest at Year End (contracts) | | [added: | | | | 81,922 | | | | | |] 113,330 | | | [added: | | |] 115,669 | | | [added: | | |] 108,043 | | | [removed: 102,930] | | | [removed: 91,369] [added: 102,930] | | [added: |]

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total Average Daily Volume | | | | | | 19,054 | | | | | | 19,167 | | | | | | 19,224 | | | | | | 16,292 | | | | | | 15,649 | | |

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| | [added: | |] December 31, | | | | | | | [added: | |]

| | [added: | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | |

| Assets | | | | | | | | [added: | | | |]

| Current Assets: | | | | | | | | [added: | | | |]

| Cash and cash equivalents | [added: | |] $ | [added: 1,633.2 | | | | | $ |] 1,551.4 | | | [added: | |] $ | 1,374.5 | |

| Marketable securities | [removed: 83.2] | | [added: 100.9] | | [removed: 72.9] | | | [added: | 83.2 | | |]

| Accounts receivable, net of allowance of [removed: $3.4] [added: $5.4] and [removed: $2.7] [added: $3.4] | [removed: 491.8] | | [added: 461.3] | | [removed: 553.3] | | | [added: | 491.8 | | |]

| Other current assets (includes [removed: $4.3] [added: $4.7] and [removed: $1.5] [added: $4.3] in restricted cash) | [removed: 364.4] | | [added: 306.7] | | [removed: 430.5] | | | [added: | 364.4 | | |]

| Performance bonds and guaranty fund contributions | [removed: 37,077.0] | | [added: 86,781.8] | | [removed: 39,455.5] | | | [added: | 37,077.0 | | |]

| Total current assets | [removed: 39,567.8] | | [added: 89,283.9] | | [removed: 41,886.7] | | | [added: | 39,567.8 | | |]

| Property, net | [removed: 544.0] | | [added: 579.2] | | [removed: 448.7] | | | [added: | 544.0 | | |]

| Intangible assets—trading products | [added: | |] 17,175.3 | | | | [added: | |] 17,175.3 | | |

| Intangible assets—other, net | [removed: 5,117.7] | | [added: 4,865.3] | | [removed: 5,500.1] | | | [added: | 5,117.7 | | |]

| [added: Total] Goodwill | [removed: 10,742.5] | | | | [added: | $ |] 10,805.3 | | | [added: | | | | | | | | | | | | | | $ | (62.8) | | | | | $ | 10,742.5 | |]

| Other assets (includes [removed: $0.9] [added: $0.6] and [removed: $1.2] [added: $0.9] in restricted cash) | [removed: 2,068.0] | | [added: 1,957.1] | | [removed: 1,659.6] | | | [added: | 2,068.0 | | |]

| Total Assets | [added: | |] $ | [removed: 75,215.3] [added: 124,659.6] | | | [added: | |] $ | [removed: 77,475.7] [added: 75,215.3] | |

| Liabilities and Equity | | | | | | | | [added: | | | |]

| Current Liabilities: | | | | | | | | [added: | | | |]

| Accounts payable | [added: | |] $ | [removed: 61.9] [added: 69.3] | | | [added: | |] $ | [removed: 116.0] [added: 61.9] | |

| Other current liabilities | [removed: 1,384.8] | | [added: 1,346.8] | | [removed: 1,126.9] | | | [added: | 1,384.8 | | |]

| Performance bonds and guaranty fund contributions | [removed: 37,075.8] | | [added: 86,781.8] | | [removed: 39,455.5] | | | [added: | 37,075.8 | | |]

| Total current liabilities | [removed: 38,522.5] | | [added: 88,197.9] | | [removed: 41,272.6] | | | [added: | 38,522.5 | | |]

| Long-term debt | [removed: 3,743.2] | | [added: 3,443.8] | | [removed: 3,826.8] | | | [added: | 3,743.2 | | |]

| Deferred income tax liabilities, net | [removed: 5,635.2] | | [added: 5,607.0] | | [removed: 5,665.9] | | | [added: | 5,635.2 | | |]

| Other liabilities | [removed: 1,155.1] | | [added: 1,059.4] | | [removed: 745.1] | | | [added: | 1,155.1 | | |]

| Total Liabilities | [removed: 49,056.0] | | [added: 98,308.1] | | [removed: 51,510.4] | | | [added: | 49,056.0 | | |]

| Shareholders’ Equity: | | | | | | | | [added: | | | |]

| Preferred stock, $0.01 par value, 10,000 shares authorized as of December 31, [removed: 2019] [added: 2020] and [removed: 2018;] [added: 2019;] none issued | [added: | |] — | | | | [added: | |] — | | |

| Class A common stock, $0.01 par value, 1,000,000 shares authorized as of December 31, [removed: 2019] [added: 2020] and [removed: 2018, 357,469] [added: 2019, 358,110] and [removed: 356,824] [added: 357,469] shares issued and outstanding as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively | [added: | |] 3.6 | | | | [added: | |] 3.6 | | |

| Class B common stock, $0.01 par value, 3 shares authorized, issued and outstanding as of December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] | [added: | |] — | | | | [added: | |] — | | |

| Additional paid-in capital | [removed: 21,113.2] | | [added: 21,185.5] | | [removed: 21,054.3] | | | [added: | 21,113.2 | | |]

| Retained earnings | [removed: 5,008.7] | | [added: 4,995.9] | | [removed: 4,855.3] | | | [added: | 5,008.7 | | |]

| Accumulated other comprehensive income (loss) | [removed: 3.4] | | [added: 134.9] | | [removed: 5.3] | | | [added: | 3.4 | | |]

| Total CME Group shareholders’ equity | [removed: 26,128.9] | | [added: 26,319.9] | | [removed: 25,918.5] | | | [added: | 26,128.9 | | |]

| Non-controlling interests | [removed: 30.4] | | [added: 31.6] | | [removed: 46.8] | | | [added: | 30.4 | | |]

| Total Equity | [removed: 26,159.3] | | [added: 26,351.5] | | [removed: 25,965.3] | | | [added: | 26,159.3 | | |]

| Total Liabilities and Equity | [added: | |] $ | [removed: 75,215.3] [added: 124,659.6] | | | [added: | |] $ | [removed: 77,475.7] [added: 75,215.3] | |

| | [added: | |] Year Ended December 31, | | | | | | | | | | | [added: | | | |]

| | [removed: 2019] | | | | [removed: 2018] | | | | [removed: 2017] [added: 2020] | | | [added: | | | 2019 | | | | | | 2018 | | |]

| Revenues | | | | | | | | | | | | [added: | | | | | |]

| Goodwill | | | 10,798.8 | | | | | | 10,742.5 | | |

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| Reclassification adjustment for loss included in other expense | | | | | | | | | 0.4 | | | | | | — | | | | | | — | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Class A Common Stock (Shares) | | | | | | Class B Common Stock (Shares) | | | | | | Common Stock and Additional Paid-in Capital | | | | | | Retained Earnings | | | | | | Accumulated Other Comprehensive Income (Loss) | | | | | | Total CME Group Shareholders' Equity | | | | | | Non-controlling Interest | | | | | | Total Equity | | |

| Balance at December 31, 2019 | | | 357,469 | | | | | | 3 | | | | | | $ | 21,116.8 | | | | | $ | 5,008.7 | | | | | $ | 3.4 | | | | | $ | 26,128.9 | | | | | $ | 30.4 | | | | | $ | 26,159.3 | |

| Net income | | | | | | | | | | | | | | | | | | | | | 2,105.2 | | | | | | | | | | | | 2,105.2 | | | | | | 1.2 | | | | | | 2,106.4 | | |

| Impact of adoption of accounting standards updates on credit losses | | | | | | | | | | | | | | | | | | | | | (0.3) | | | | | | | | | | | | (0.3) | | | | | | | | | | | | (0.3) | | |

| Balance at December 31, 2020 | | | 358,110 | | | | | | 3 | | | | | | $ | 21,189.1 | | | | | $ | 4,995.9 | | | | | $ | 134.9 | | | | | $ | 26,319.9 | | | | | $ | 31.6 | | | | | $ | 26,351.5 | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Amortization of purchased intangibles | | | 311.2 | | | | | | 314.7 | | | | | | 130.0 | | |

| Depreciation and amortization | | | 153.2 | | | | | | 158.6 | | | | | | 118.7 | | |

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| --- | --- | --- | --- | --- | --- | --- | --- |

| Short-term debt | — | | | | 574.2 | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Reclassification of gains (losses) on sale included in investment income | | | — | | | | — | | | | (89.5 | | ) |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at December 31, 2016 | 338,240 | | 3 | | $ | 17,830.3 | | | $ | 2,524.5 | | | $ | (14.1 | ) | | $ | 20,340.7 | |

| Net income | | | | | | | | | 4,063.4 | | | | | | | | 4,063.4 | | |

| Impact of adoption of standards update on employee share-based payments, net of tax | | | | | 1.4 | | | | (2.2 | | ) | | | | | | (0.8 | | ) |

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| Balance at December 31, 2017 | 339,235 | | 3 | | $ | 17,900.3 | | | $ | 4,497.2 | | | $ | 14.3 | | | $ | 22,411.8 | | | $ | — | | | $ | 22,411.8 | |

| Income tax expense reclassified from accumulated other comprehensive income upon final sale of BM&FBOVESPA shares | — | | | | — | | | | 87.8 | | |

The company reviews its investment portfolio to determine whether a decline in fair value below the carrying value is other-than-temporary.

deferred in accumulated other comprehensive income.

The company evaluates the recoverability of indefinite-lived intangible assets at least quarterly by comparing the estimated fair value of the intangible asset to its carrying value.

In certain circumstances, indefinite-lived

One clearing firm represented 13% and another clearing firm represented 12% of clearing and transaction fees revenue in 2017.

Newly Adopted Accounting Policies. In February 2016, the FASB issued a standards update that requires lessees to recognize on the balance sheet the assets and liabilities associated with the rights and obligations created by those leases.

The guidance for lessors is largely unchanged from current accounting rules.

Under the new guidance, a lessee is required to recognize assets and liabilities for leases with terms of more than 12 months.

Consistent with current accounting standards, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease.

The company implemented this standard on January 1, 2019 using the modified retrospective approach with a cumulative effect of initially applying the guidance recognized on the date of initial adoption.

Upon adoption of the new standard on January 1, 2019, the company recognized a lease liability of $568.0 million and right-of-use asset of $448.2 million.

The standard’s provisions must be applied as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

This guidance is effective for reporting periods beginning in 2021.

Early adoption is permitted.

The company plans to update the disclosures for these changes upon adoption of the guidance in 2021.

Early adoption is permitted in any period for which the entity's financial statements have not yet been issued.

The company does not believe that the adoption of this guidance will have a material impact on the consolidated financial statements.

BUSINESS COMBINATIONS

On November 2, 2018, the company completed its acquisition of NEX and its subsidiaries in a transaction valued at £11.28 per share ($14.63 per share based on the CME Group share price of $183.75 and the exchange rate of US$1.30:£1 on November 2, 2018), consisting of £5.00 per share in cash and 0.0444 CME Group shares.

The total equity value of the transaction was approximately £4.3 billion ($5.6 billion), including the issuance of 16.9 million CME Group class A shares and $2.5 billion of cash consideration.

As part of the acquisition, the company also assumed $1.0 billion of existing debt of NEX.

The cash consideration was funded with $1.2 billion of net proceeds received from a debt offering of fixed rate notes in June 2018, borrowings from commercial paper and cash on hand.

The company entered into this acquisition primarily as a means to expand its product base, further leverage its existing operating model, extend its presence in the over-the-counter market and better position itself to compete on a global scale.

*Purchase Price Allocation.* The purchase price has been allocated to NEX's net tangible and identifiable intangible assets based on their estimated fair values as of November 2, 2018.

The identifiable intangible assets include customer relationships, technology-related intellectual property and trade names.

| | |

| --- | --- |

As required by Rule 13a-15(d) under the Exchange Act, the company's management, including the company's Chief Executive Officer and Chief Financial Officer, have evaluated the company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to determine whether any changes occurred during the [removed: fourth quarter of 2019] [added: period covered by this report] that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting.

There were no [removed: other] changes in the company’s internal control over financial reporting which occurred during [removed: 2019,] [added: 2020,] that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

Management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

Based on this assessment, management believes that, as of December 31, [removed: 2019,] [added: 2020,] our internal control over financial reporting is effective.

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in the report on page 88.

We have audited the accompanying consolidated balance sheets of CME Group Inc. and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 28, 2020] [added: 26, 2021] expressed an unqualified opinion thereon.

Our [removed: audit] [added: audits] included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Critical Audit [removed: Matters][added: Matter]

| | [added: | |] Uncertain Tax Positions | [added: | |]

| *Description of the Matter* | [added: | |] As discussed in Note [removed: 11] [added: 10] to the consolidated financial statements, the Company had unrecognized income tax benefits of [removed: $388.5] [added: $328.2] million related to uncertain tax positions as of December 31, [removed: 2019.] [added: 2020.] Uncertainty in a tax position may arise due to the application of complex tax regulations. The Company uses significant judgment to (1) determine whether, based on the technical merits, the tax position is more likely than not to be sustained upon examination and (2) measure the amount of the tax benefit that qualifies for recognition. Auditing management’s estimate of the Company’s uncertain tax positions that qualified for recognition and the related unrecognized income tax benefits was especially challenging because management’s estimate involved significant judgment in evaluating the technical merits of the positions, including interpretations of applicable tax laws and regulations. | [added: | |]

| *How we Addressed the Matter in Our Audit* | [added: | |] We tested the Company’s controls that address the risk of material misstatement relating to the recognition and measurement of uncertain tax positions. For example, we tested controls over the Company’s assessment of the technical merits of tax positions and management’s process to measure the benefit of those tax positions that qualified for recognition, including management’s review of the inputs used in the calculations. We involved our tax professionals to evaluate the technical merits of the Company's tax positions. Our audit procedures included, among others, evaluating the assumptions the Company used to develop its uncertain tax positions and related unrecognized income tax benefit amount by jurisdiction. We also tested the completeness and accuracy of the underlying data used by the Company to calculate its uncertain tax positions, inspected correspondence with relevant tax authorities, and evaluated third-party advice obtained and used by the Company in assessing the technical merits of its tax positions. | [added: | |]

We have audited CME Group Inc. and subsidiaries’ internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal [removed: Control-Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission [removed: (2013 framework)] [added: (2013 framework)] (the COSO criteria).