Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is provided as a supplement to, and should be read in conjunction with, the accompanying unaudited consolidated financial statements and notes in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 27, 2023.

References in this discussion and analysis to “we” and “our” are to CME Group Inc. (CME Group) and its consolidated subsidiaries, collectively. References to “exchange” are to Chicago Mercantile Exchange Inc. (CME), the Board of Trade of the City of Chicago, Inc. (CBOT), New York Mercantile Exchange, Inc. (NYMEX), and Commodity Exchange, Inc. (COMEX), collectively, unless otherwise noted.

RESULTS OF OPERATIONS

Financial Highlights

The following summarizes significant changes in our financial performance for the periods presented.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(dollars in millions, except per share data)						2023						2022						Change						2023						2022						Change
Total revenues						$	1,337.8					$	1,227.8					9		%				$	4,139.6					$	3,811.6					9		%
Total expenses						517.6						489.0						6						1,567.1						1,464.0						7
Operating margin						61.3		%				60.2		%										62.1		%				61.6		%
Non-operating income (expense)						$	154.1					$	141.2					9						$	575.1					$	315.4					83
Effective tax rate						23.0		%				22.8		%										23.4		%				22.9		%
Net income						$	750.2					$	679.6					10						$	2,411.6					$	2,053.1					17
Diluted earnings per common share						2.06						1.87						10						6.62						5.64						17
Cash flows from operating activities																								2,409.5						2,074.5						16

Revenues

						Quarter Ended September 30,																		Nine Months Ended September 30,
(dollars in millions)						2023						2022						Change						2023						2022						Change
Clearing and transaction fees						$	1,085.5					$	998.6					9		%				$	3,404.0					$	3,161.3					8		%
Market data and information services						167.6						154.3						9						496.5						457.7						8
Other						84.7						74.9						13						239.1						192.6						24
Total Revenues						$	1,337.8					$	1,227.8					9						$	4,139.6					$	3,811.6					9

Clearing and Transaction Fees

Futures and Options Contracts

The following table summarizes our total contract volume, revenue and average rate per contract for futures and options. Total contract volume includes contracts that are traded on our exchange and cleared through our clearing house and certain cleared-only contracts. Volume is measured in round turns, which is considered a completed transaction that involves a purchase and an offsetting sale of a contract. Average rate per contract is determined by dividing total clearing and transaction fees by total contract volume. Contract volume and average rate per contract disclosures exclude trading volume for the cash markets business and interest rate swaps volume.

						Quarter Ended September 30,																		Nine Months Ended September 30,
						2023						2022						Change						2023						2022						Change
Total contract volume (in millions)						1,408.2						1,435.9						(2)		%				4,492.0						4,472.4						—		%
Clearing and transaction fees (in millions)						$	994.8					$	905.1					10						$	3,125.6					$	2,864.9					9
Average rate per contract						$	0.707					$	0.631					12						$	0.696					$	0.641					9

We estimate the following net change in clearing and transaction fees based on the change in total contract volume and the change in average rate per contract for futures and options during the third quarter and first nine months of 2023 when compared with the same periods in 2022.

(in millions)						Quarter Ended						Nine Months Ended
Increase (decrease) due to a change in total contract volume						$	(19.7)					$	13.0
Increases due to a change in average rate per contract						109.4						247.7
Net increases in clearing and transaction fees						$	89.7					$	260.7

Average rate per contract is impacted by our rate structure, including volume-based incentives; product mix; trading venue; and the percentage of volume executed by customers who are members compared with non-member customers. Due to the relationship between average rate per contract and contract volume, the change in clearing and transaction fees attributable to changes in each is only an approximation.

Contract Volume

The following table summarizes average daily contract volume. Contract volume can be influenced by many factors, including political and economic conditions, the regulatory environment and market competition.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in thousands)						2023						2022						Change						2023						2022						Change
Average Daily Volume by Product Line:
Interest rates						10,967						10,357						6		%				12,236						11,149						10		%
Equity indexes						6,353						7,445						(15)						6,623						7,712						(14)
Foreign exchange						942						1,091						(14)						937						983						(5)
Agricultural commodities						1,433						1,208						19						1,521						1,328						15
Energy						2,126						1,837						16						2,104						2,092						1
Metals						528						499						6						596						525						14
Aggregate average daily volume						22,349						22,437						—						24,017						23,789						1
Average Daily Volume by Venue:
CME Globex						20,839						21,021						(1)						21,966						22,192						(1)
Open outcry						713						704						1						1,151						818						41
Privately negotiated						797						712						12						900						779						15
Aggregate average daily volume						22,349						22,437						—						24,017						23,789						1
Electronic Volume as a Percentage of Total Volume						93		%				94		%										91		%				93		%

Market volatility within certain financial markets remained high throughout the first nine months of 2023. Interest rate volatility was higher as a result of higher inflation levels and market uncertainty following the collapse of two U.S. regional banks as well as uncertainty surrounding the Federal Reserve’s interest rate policy decision. The Federal Open Markets Committee (FOMC) has raised the federal funds rate multiple times throughout 2023 and has signaled the potential for future additional hikes. Additionally, the energy markets were more volatile in 2023 due to a shift in global supply caused by production cuts by the Organization of the Petroleum Exporting Countries (OPEC). Finally, the agricultural commodities market saw an increase in volatility as a result of more weather uncertainty in 2023 compared to 2022 as well as continued global trade uncertainty resulting from the conflict between Russia and Ukraine. However, overall equity index volatility leveled off following higher volatility in early 2022 caused by tensions and geopolitical uncertainty between Russia and Ukraine. We believe these factors contributed to total volumes remaining relatively flat in the third quarter and first nine months of 2023 when compared with the same periods in 2022.

Interest Rate Products

The following table summarizes average daily contract volume for our key interest rate products. We no longer offer Eurodollar contract trading as of June 2023.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in thousands)						2023						2022						Change						2023						2022						Change
Eurodollar futures and options:
Futures expiring within two years						—						891						(100)		%				117						1,296						(91)		%
Options						—						512						(100)						54						946						(94)
Futures expiring beyond two years						—						339						(100)						28						537						(95)
SOFR futures and options:
Futures expiring within two years						2,217						1,780						25						2,539						1,408						80
Options						1,178						585						101						1,738						286						n.m.
Futures expiring beyond two years						819						333						146						804						244						n.m.
U.S. Treasury futures and options:
10-Year						2,505						2,354						6						2,595						2,556						2
5-Year						1,742						1,481						18						1,788						1,602						12
2-Year						770						663						16						793						707						12
Treasury Bond						594						470						26						538						520						3
Federal Funds futures and options						324						335						(3)						470						350						34

n.m. not meaningful

In the third quarter and first nine months of 2023, overall interest rate contract volumes increased when compared with the same periods in 2022. We believe these volume increases were due to higher interest rate volatility as a result of rising U.S. Treasury yields following recent interest rate hikes by the Federal Open Market Committee. In addition, market uncertainty following the collapse of two U.S. regional banks also led to higher interest rate volatility. The increase in Secured Overnight Financing Rate contract (SOFR) volumes and the corresponding decrease in Eurodollar volumes were due to market participants transitioning to the new reference rate and away from Eurodollar contracts, which are based on LIBOR. The publication of the LIBOR rate concluded in the second quarter of 2023.

Equity Index Products

The following table summarizes average daily contract volume for our key equity index products.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in thousands)						2023						2022						Change						2023						2022						Change
E-mini S&P 500 futures and options						3,865						4,538						(15)		%				4,099						4,503						(9)		%
E-mini Nasdaq 100 futures and options						1,862						2,120						(12)						1,811						2,273						(20)
E-mini Russell 2000 futures and options						270						328						(18)						304						391						(22)

In the third quarter and first nine months of 2023, equity index contract volumes decreased when compared with the same periods in 2022, which we believe was due to lower overall equity volatility. There was significant market volatility throughout much of 2022 as a result of higher than expected inflation, as well as rising tensions and geopolitical uncertainty with Russia and Ukraine. We believe these factors led to lower overall equity contract volumes.

Foreign Exchange Products

The following table summarizes average daily contract volume for our key foreign exchange products.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in thousands)						2023						2022						Change						2023						2022						Change
Euro						245						299						(18)		%				251						263						(4)		%
Japanese Yen						184						193						(4)						180						166						9
British Pound						114						149						(23)						112						129						(13)
Australian dollar						108						109						(2)						102						106						(4)

In the third quarter and first nine months of 2023, overall foreign exchange volumes decreased when compared with the same periods in 2022, which we believe were due to lower overall volatility relative to prior periods.

Agricultural Commodity Products

The following table summarizes average daily contract volume for our key agricultural commodity products.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in thousands)						2023						2022						Change						2023						2022						Change
Corn						427						387						9		%				468						446						4		%
Soybean						286						229						24						312						272						14
Wheat						203						162						25						211						184						14

Overall commodity contract volumes increased in the third quarter and first nine months of 2023 when compared with the same periods in 2022. We believe these increases are due to higher overall market volatility as a result of weather uncertainty due to a drier than average 2023 growing season. In addition, the first half of 2022 saw lower overall volatility within the commodities markets due to risk aversion by market participants following price increases and global trade uncertainty resulting from the conflict between Russia and Ukraine. We believe these factors contributed to higher overall commodity volumes in the third quarter and first nine months of 2023.

Energy Products

The following table summarizes average daily contract volume for our key energy products.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in thousands)						2023						2022						Change						2023						2022						Change
WTI crude oil						1,129						1,049						8		%				1,091						1,153						(5)		%
Natural gas						533						404						32						577						499						16
Refined products						368						298						23						345						341						1

Energy contract volumes generally increased in the third quarter and first nine months of 2023 when compared with the same periods in 2022, which we believe was due to higher overall market volatility. The high volatility is a result of OPEC production cuts, which impacted total overall oil supply despite increases in global demand. In addition, uncertain weather conditions as well as continued market uncertainty as a result of the Russia and Ukraine conflict has led to increases in overall natural gas volumes.

Metal Products

The following table summarizes average daily volume for our key metal products.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in thousands)						2023						2022						Change						2023						2022						Change
Gold						300						300						—		%				354						326						9		%
Copper						104						94						10						115						91						26
Silver						88						78						13						93						82						14

In the third quarter and first nine months of 2023, overall metal contract volumes increased when compared with the same periods in 2022. Market uncertainty following the collapse of two U.S. regional banks and the Federal Reserve's interest rate policy decisions led to an overall increase in demand for gold and other precious metals as safe-haven investments. In addition,

copper contract volumes increased largely due to an increase in demand for copper in China following the lifting of restrictions from the COVID pandemic. We believe these factors led to the overall increases in metal contract volumes.

Average Rate per Contract

The average rates per contract increased in the third quarter and first nine months of 2023, when compared with the same periods in 2022. The increases in the average rate per contract were primarily due to increases in our fee structure that went into effect on February 1, 2023.

Cash Markets Business

Total clearing and transaction fees revenues in the third quarter and first nine months of 2023 include $69.5 million and $214.3 million of transaction fees attributable to the cash markets business, compared with $77.1 million and $245.7 million in the third quarter and first nine months of 2022. This revenue primarily includes BrokerTec Americas LLC's fixed income volume and EBS's foreign exchange volume.

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in millions)						2023						2022						Change						2023						2022						Change
BrokerTec fixed income transaction fees						$	37.3					$	40.7					(8)		%				$	114.3					$	127.1					(10)		%
EBS foreign exchange transaction fees						32.2						36.4						(12)		%				100.0						118.6						(16)		%

The related average daily notional value for the third quarter and first nine months of 2023 and 2022 were as follows:

						Quarter Ended September 30,																		Nine Months Ended September 30,
(amounts in billions)						2023						2022						Change						2023						2022						Change
European Repo (in euros)						$	313.9					$	359.2					(13)		%				$	340.1					$	342.1					(1)		%
U.S. Treasury						98.3						119.9						(18)						106.9						133.6						(20)
Spot FX						54.4						66.4						(18)						57.9						66.6						(13)

Overall average daily notional values and transactions revenues for the cash markets business and spot FX business were lower in the third quarter and first nine months of 2023 when compared with the same periods in 2022. We believe the decreases in U.S. Treasury average daily notional values were due to a reduction in treasury issuances during the periods. The declines in the spot FX average daily notional values were due to overall lower volatility in the third quarter and first nine months of 2023 when compared with the same periods in 2022. Volatility within the European Repo and spot FX markets were higher in 2022 as a result of the conflict between Russia and Ukraine and uncertainty surrounding the Federal Reserve's interest rate policy.

Concentration of Revenue

We bill a substantial portion of our clearing and transaction fees directly to our clearing firms. The majority of clearing and transaction fees received from clearing firms represent charges for trades executed and cleared on behalf of their customers. No individual firm represented at least 10% of our clearing and transaction fees in the first nine months of 2023. Should a clearing firm withdraw, we believe that the customer portion of the firm’s trading activity would likely transfer to another clearing firm of the exchange. Therefore, we do not believe we are exposed to significant risk from the ongoing loss of revenue received from or through a particular clearing firm.

Other Sources of Revenue

Market data and information services. During the third quarter and first nine months of 2023, overall market data and information services revenues increased when compared with the same periods in 2022, largely due to price increases for certain products as well as increases in device counts.

The two largest resellers of our market data represented approximately 32% of our market data and information services revenue in the first nine months of 2023. Despite this concentration, we consider exposure to significant risk of revenue loss to be minimal. In the event that one of these vendors no longer subscribes to our market data, we believe the majority of that vendor’s customers would likely subscribe to our market data through another reseller. Additionally, several of our largest institutional customers that utilize services from our two largest resellers report usage and remit payment of their fees directly to us.

Other revenues. In the third quarter and first nine months of 2023, the increases in other revenues when compared with the same periods in 2022 were largely attributable to higher custody fees as well as increases in co-location and other connectivity fees.

Expenses

						Quarter Ended September 30,																		Nine Months Ended September 30,
(dollars in millions)						2023						2022						Change						2023						2022						Change
Compensation and benefits						$	205.5					$	189.6					8		%				$	615.7					$	560.1					10		%
Technology						55.6						46.8						19						160.2						138.6						16
Professional fees and outside services						32.2						35.1						(8)						108.3						98.9						9
Amortization of purchased intangibles						57.2						55.5						3						171.0						171.0						—
Depreciation and amortization						31.1						34.5						(10)						95.3						101.0						(6)
Licensing and other fee agreements						79.5						83.6						(5)						242.4						247.6						(2)
Other						56.5						43.9						29						174.2						146.8						19
Total Expenses						$	517.6					$	489.0					6		%				$	1,567.1					$	1,464.0					7		%

Operating expenses increased by $28.6 million and $103.1 million in the third quarter and first nine months of 2023 when compared with the same periods in 2022. The following table shows the estimated impacts of key factors resulting in the changes in operating expenses:

						Quarter Ended September 30, 2023												Nine Months Ended September 30, 2023
						Amount of Change						Change as a Percentage of Total Expenses						Amount of Change						Change as a Percentage of Total Expenses
(dollars in millions)
Non-qualified deferred compensation						$	1.2					1		%				$	29.4					2		%
Currency fluctuation						8.6						2						23.5						2
Salaries, benefits and employer taxes						5.2						1						21.9						1
Technology support services						8.5						2						21.6						1
Professional fees and outside services						(3.0)						(1)						9.4						1
Employee separation and restructuring						12.0						2						8.0						1
Building maintenance						0.2						—						(5.2)						(1)
Other expenses, net						(4.1)						(1)						(5.5)						—
Total increase						$	28.6					6		%				$	103.1					7		%

Increases in operating expenses in the third quarter and first nine months of 2023 when compared with the same periods in 2022 were as follows:

• An increase in our non-qualified deferred compensation liability during the third quarter and nine months ended September 30, 2023, the impact of which does not affect net income because of an equal and offsetting change in investment income, contributed to increases in compensation and benefits expenses.

• In the third quarter and first nine months of 2023, we recognized net gains of $1.9 million and $0.1 million, compared with a net gain of $10.5 million and $23.6 million during the same periods in 2022, due to currency exchange rate fluctuations. Gains and losses from exchange rate fluctuations are recognized in the consolidated statements of net income when subsidiaries with a U.S. dollar functional currency hold certain monetary assets and liabilities denominated in foreign currencies.

• Salaries, benefits and employer taxes expenses were higher during the third quarter and first nine months of 2023 when compared with the same periods in 2022 due to increases in headcount during the year, which were primarily attributable to additional headcount in the company's international locations.

• The increases in expenses related to technology support services were primarily driven by higher software license fees and third party services to support the ongoing Google Cloud transformation project.

• Professional fees and outside services expenses increased during the nine months ended September 30, 2023 due to a greater reliance on consultants as well as an increase in legal fees related to our business activities and product offerings compared to 2022. These increases in professional fees were partially offset by decreases in NEX integration fees, which have steadily declined since the second half of 2021.

• Employee separation and restructuring costs increased during the quarter and nine months ended September 30, 2023 largely due to a layoff of 3% of employees in the third quarter of 2023.

Decreases in operating expenses in the third quarter and first nine months of 2023 when compared with the same period in 2022 were as follows:

• The decrease in building maintenance expense in the first nine months of 2023 was driven by a decline in expenses related to the development of the SOFR options trading floor, which was completed in 2022.

• Professional fees and outside services decreased in the third quarter of 2023 when compared with the same period in 2022 largely due to a decrease in costs associated with the Google Cloud Migration, which began in late 2021.

Non-Operating Income (Expense)

						Quarter Ended September 30,																		Nine Months Ended September 30,
(dollars in millions)						2023						2022						Change						2023						2022						Change
Investment income						$	1,272.5					$	686.2					85		%				$	4,198.4					$	1,046.2					n.m.
Interest and other borrowing costs						(39.6)						(40.4)						(2)						(119.7)						(122.8)						(2)		%
Equity in net earnings of unconsolidated subsidiaries						76.8						76.5						—						230.1						237.1						(3)
Other non-operating income (expense)						(1,155.6)						(581.1)						99						(3,733.7)						(845.1)						n.m.
Total Non-Operating						$	154.1					$	141.2					9						$	575.1					$	315.4					83

n.m. not meaningful

Investment income. Earnings from cash performance bond and guaranty fund contributions that are reinvested increased in the third quarter and first nine months of 2023 when compared with the same periods in 2022, due to a higher rate of interest earned in the cash accounts at the Federal Reserve Bank of Chicago following multiple interest rate hikes in 2022 and 2023. In the third quarter and first nine months of 2023, earnings from cash performance bond and guaranty fund contributions were $1,246.5 million and $4,042.9 million, compared with $676.8 million and $1,045.9 million in the third quarter and first nine months of 2022. We also recognized higher net realized and unrealized gains on investments in the first nine months of 2023.

Other income (expense)**. We recognized higher expenses related to the distribution of interest earned on performance bond collateral reinvestments to the clearing firms in conjunction with higher interest income earned on our reinvestment during the third quarter and first nine months of 2023 when compared with the same periods in 2022. This was due to a higher Federal Funds rate in 2023 compared with the same periods in 2022. In the third quarter and first nine months of 2023, expenses related to the distribution of interest earned on collateral reinvestments were $1,160.5 million and $3,756.8 million, compared with $589.7 million and $861.6 million in the third quarter and first nine months of 2022.

Income Tax Provision

The following table summarizes the effective tax rates for the periods presented:

						2023						2022
Quarter ended September 30						23.0		%				22.8		%
Nine months ended September 30						23.4		%				22.9		%

The overall effective tax rate remained relatively consistent in the third quarter of 2023 when compared with the same period in 2022. In the first nine months of 2023 when compared with the same period in 2022, the effective tax rate increased slightly because we recognized a benefit related to the settlement for various tax audits in 2022.

Liquidity and Capital Resources

Sources and Uses of Cash*.* Net cash provided by operating activities increased in the first nine months of 2023 when compared with the same period in 2022, largely due to an increase in revenue resulting from fee increases. Net cash provided by investing activities increased during the first nine months of 2023 when compared with the same period in 2022. In the second quarter of 2022, we made an additional investment in S&P/DJI of $410.0 million. Cash used in financing activities was higher during the first nine months of 2023 when compared with the same period in 2022, due to a decrease in cash performance bonds and guaranty fund contributions.

Debt Instruments*.* The following table summarizes our debt outstanding at September 30, 2023:

(in millions)			Par Value
Fixed rate notes due March 2025, stated rate of 3.00% (1)			$	750.0
Fixed rate notes due June 2028, stated rate of 3.75%			$	500.0
Fixed rate notes due March 2032, stated rate of 2.65%			$	750.0
Fixed rate notes due September 2043, stated rate of 5.30% (2)			$	750.0
Fixed rate notes due June 2048, stated rate of 4.15%			$	700.0

---

(1)We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 3.11%.

(2)We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable effectively became fixed at a rate of 4.73%.

We maintain a $2.3 billion multi-currency revolving senior credit facility with various financial institutions, which matures in November 2026. The proceeds from this facility can be used for general corporate purposes, which includes providing liquidity for our clearing house in certain circumstances at CME Group's discretion and, if necessary, for maturities of commercial paper. As long as we are not in default under this facility, we have the option to increase it up to $3.3 billion with the consent of the agent and lenders providing the additional funds. This facility is voluntarily pre-payable from time to time without premium or penalty. Under this facility, we are required to remain in compliance with a consolidated net worth test, which is defined as our consolidated shareholders' equity at September 30, 2021, giving effect to share repurchases made and special dividends paid during the term of the agreements (and in no event greater than $2.0 billion in aggregate), multiplied by 0.65. We currently do not have any borrowings outstanding under this facility, but any commercial paper balance if or when outstanding can be backstopped against this facility.

We maintain a 364-day multi-currency revolving secured credit facility with a consortium of domestic and international banks to be used in certain situations by the clearing house. The facility provides for borrowings of up to $7.0 billion. We may use the proceeds to provide temporary liquidity in the unlikely event a clearing firm fails to promptly discharge an obligation to CME Clearing, in the event of a liquidity constraint or default by a depositary (custodian for our collateral), in the event of a temporary disruption with the domestic payments system that would delay payment of settlement variation between us and our clearing firms, or in other cases as provided by the CME rulebook. Clearing firm guaranty fund contributions received in the form of cash or U.S. Treasury securities as well as the performance bond assets (pursuant to the CME rulebook) can be used to collateralize the facility. At September 30, 2023, guaranty fund contributions available to collateralize the facility totaled $8.3 billion. We have the option to request an increase in the line from $7.0 billion to $10.0 billion. Our 364-day facility contains a requirement that CME remain in compliance with a consolidated tangible net worth test, defined as CME's consolidated shareholder's equity less intangible assets (as defined in the agreement), of not less than $800.0 million. We currently do not have any borrowings outstanding under this facility.

The indentures governing our fixed rate notes, our $2.3 billion multi-currency revolving senior credit facility and our 364-day multi-currency revolving secured credit facility for $7.0 billion do not contain specific covenants that restrict the ability to pay dividends. These documents, however, do contain other customary financial and operating covenants that place restrictions on the operations of the company that could indirectly affect the ability to pay dividends.

At September 30, 2023, we have excess borrowing capacity for general corporate purposes of approximately $2.3 billion under our multi-currency revolving senior credit facility.

At September 30, 2023, we were in compliance with the various covenant requirements of all our debt facilities.

CME Group, as a holding company, has no operations of its own. Instead, it relies on dividends declared and paid to it by its subsidiaries in order to provide the funds which it uses to pay dividends to its shareholders.

To satisfy our performance bond obligation with Singapore Exchange Limited, we may pledge irrevocable standby letters of credit. At September 30, 2023, the letters of credit totaled $285.0 million. We also maintain a $350.0 million line of credit to meet our obligations under this agreement.

The following table summarizes our credit ratings at September 30, 2023:

						Short-Term						Long-Term
Rating Agency						Debt Rating						Debt Rating						Outlook
Standard & Poor’s Global Ratings						A1+						AA-						Stable
Moody’s Investors Service, Inc.						P1						Aa3						Stable

Given our cash flow generation, our ability to pay down debt levels and our ability to refinance existing debt facilities if necessary, we expect to maintain an investment grade rating. If our ratings are downgraded below investment grade within certain specified time periods due to a change of control, we are required to make an offer to repurchase our fixed rate notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest. No report of any rating agency is incorporated by reference herein.

Liquidity and Cash Management. Cash and cash equivalents totaled $2.3 billion and $2.7 billion at September 30, 2023 and December 31, 2022, respectively. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our corporate investment policy and alternative investment choices. A majority of our cash and cash equivalents balance is invested in money market mutual funds that invest only in U.S. Treasury securities, U.S. government agency securities and U.S. Treasury security reverse repurchase agreements and short-term bank deposits. Our exposure to credit and liquidity risk is minimal given the nature of the investments. Cash that is not available for general corporate purposes because of regulatory requirements or other restrictions is classified as restricted cash and is included in other current assets or other assets in the consolidated balance sheets.

Regulatory Requirements*.* CME is regulated by the CFTC as a Derivatives Clearing Organization (DCO). DCOs are required to maintain capital, as defined by the CFTC, in an amount at least equal to one year of projected operating expenses as well as cash, liquid securities, or a line of credit at least equal to six months of projected operating expenses. CME was designated by the Financial Stability Oversight Council as a systemically important financial market utility under Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As a result, CME must comply with CFTC regulations applicable to a systemically important DCO for financial resources and liquidity resources. CME is in compliance with all DCO financial requirements.

CME, CBOT, NYMEX and COMEX are regulated by the CFTC as Designated Contract Markets (DCM). DCMs are required to maintain capital, as defined by the CFTC, in an amount at least equal to one year of projected operating expenses as well as cash, liquid securities or a line of credit at least equal to six months of projected operating expenses. Our DCMs are in compliance with all DCM financial requirements.

BrokerTec Americas LLC is required to maintain sufficient net capital under Securities Exchange Act of 1934, as amended (Exchange Act), Rule 15c3-1 (the Net Capital Rule). The Net Capital Rule focuses on liquidity and is designed to protect securities customers, counterparties, and creditors by requiring that broker-dealers have sufficient liquid resources on hand at all times to satisfy claims promptly. Rule 15c3-3, or the customer protection rule, which complements Rule 15c3-1, is designed to ensure that customer property (securities and funds) in the custody of broker-dealers is adequately safeguarded. By law, both of these rules apply to the activities of registered broker-dealers, but not to unregistered affiliates. The firm began operating as a (k)(2)(i) broker dealer in November 2017 following notification to the Financial Industry Regulatory Authority and the SEC. A company operating under the (k)(2)(i) exemption is not required to lock up customer funds as would otherwise be required under Exchange Act Rule 15c3-3.