CME GROUP INC. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in millions, except per share data; shares in thousands) December 31, 2024 2023 Assets Current Assets: Cash and cash equivalents $ 2,892.4 $ 2,912.0 Marketable securities 113.2 111.7 Accounts receivable, net of allowance of $9.0 and $7.1 573.1 535.6 Other current assets (includes $6.3 and $5.2 in restricted cash) 559.4 1,138.4 Performance bonds and guaranty fund contributions 98,895.4 90,192.5 Total current assets 103,033.5 94,890.2 Property, net 386.2 409.5 Intangible assets—trading products 17,175.3 17,175.3 Intangible assets—other, net 2,821.6 3,050.2 Goodwill 10,486.9 10,495.3 Other assets 3,543.5 3,685.6 Total Assets $ 137,447.0 $ 129,706.1 Liabilities and Equity Current Liabilities: Accounts payable $ 79.9 $ 90.6 Short-term debt 749.8 — Other current liabilities 2,588.8 3,133.8 Performance bonds and guaranty fund contributions 98,895.4 90,192.5 Total current liabilities 102,313.9 93,416.9 Long-term debt 2,678.2 3,425.4 Deferred income tax liabilities, net 5,246.8 5,327.7 Other liabilities 721.2 798.2 Total Liabilities 110,960.1 102,968.2 Shareholders’ Equity: Preferred stock, $0.01 par value, 10,000 shares authorized as of December 31, 2024 and 2023; 4,584 issued and outstanding as of December 31, 2024 and 2023 — — Class A common stock, $0.01 par value, 1,000,000 shares authorized as of December 31, 2024 and 2023, 359,602 and 359,231 shares issued and outstanding as of December 31, 2024 and 2023, respectively 3.6 3.6 Class B common stock, $0.01 par value, 3 shares authorized, issued and outstanding as of December 31, 2024 and 2023 — — Additional paid-in capital 22,403.0 22,334.7 Retained earnings 4,185.8 4,455.2 Accumulated other comprehensive income (loss) ( 105.5 ) ( 55.6 ) Total CME Group shareholders’ equity 26,486.9 26,737.9 Total Liabilities and Equity $ 137,447.0 $ 129,706.1 See accompanying notes to consolidated financial statements. 51 Table of Contents CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (dollars in millions, except per share data; shares in thousands) Year Ended December 31, 2024 2023 2022 Revenues Clearing and transaction fees $ 4,988.2 $ 4,588.5 $ 4,142.7 Market data and information services 710.2 663.7 610.9 Other 431.7 326.7 265.8 Total Revenues 6,130.1 5,578.9 5,019.4 Expenses Compensation and benefits 850.3 828.6 753.1 Technology 255.8 218.7 188.6 Professional fees and outside services 132.7 144.4 137.4 Amortization of purchased intangibles 221.7 226.6 227.7 Depreciation and amortization 115.1 126.0 134.9 Licensing and other fee agreements 355.4 322.8 320.0 Other 267.6 276.1 241.8 Total Expenses 2,198.6 2,143.2 2,003.5 Operating Income 3,931.5 3,435.7 3,015.9 Non-Operating Income (Expense) Investment income 4,079.1 5,275.3 2,198.4 Interest and other borrowing costs ( 160.9 ) ( 159.4 ) ( 162.7 ) Equity in net earnings (losses) of unconsolidated subsidiaries 350.9 296.9 301.1 Other non-operating income (expense) ( 3,659.2 ) ( 4,694.9 ) ( 1,862.4 ) Total Non-Operating Income (Expense) 609.9 717.9 474.4 Income before Income Taxes 4,541.4 4,153.6 3,490.3 Income tax provision 1,015.6 927.4 799.3 Net Income $ 3,525.8 $ 3,226.2 $ 2,691.0 Net Income Attributable to Common Shareholders of CME Group $ 3,481.5 $ 3,185.6 $ 2,657.2 Earnings per Share Attributable to Common Shareholders of CME Group: Basic $ 9.69 $ 8.87 $ 7.41 Diluted 9.67 8.86 7.40 Weighted Average Number of Common Shares: Basic 359,389 359,023 358,713 Diluted 359,944 359,500 359,181 See accompanying notes to consolidated financial statements. 52 Table of Contents CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2024 2023 2022 Net income $ 3,525.8 $ 3,226.2 $ 2,691.0 Other comprehensive income, net of tax: Investment securities: Net unrealized holding gains (losses) arising during the period 0.2 0.6 ( 2.7 ) Income tax benefit (expense) ( 0.1 ) ( 0.1 ) 0.7 Investment securities, net 0.1 0.5 ( 2.0 ) Defined benefit plans: Net change in defined benefit plans arising during the period 12.2 ( 0.9 ) 14.9 Amortization of net actuarial (gains) losses and prior service costs included in compensation and benefits expense 0.1 0.1 1.2 Income tax benefit (expense) ( 3.0 ) 0.2 ( 4.1 ) Defined benefit plans, net 9.3 ( 0.6 ) 12.0 Derivative investments: Amortization of effective portion of net (gains) losses on cash flow hedges included in interest expense ( 3.6 ) ( 3.6 ) ( 1.9 ) Income tax benefit (expense) 0.9 0.9 0.5 Derivative investments, net ( 2.7 ) ( 2.7 ) ( 1.4 ) Foreign currency translation: Foreign currency translation adjustments ( 61.0 ) 70.8 ( 195.4 ) Reclassification adjustment for (gain) loss included in other expense 2.2 9.7 — Income tax benefit (expense) 2.2 — — Foreign currency translation, net ( 56.6 ) 80.5 ( 195.4 ) Other comprehensive income (loss), net of tax ( 49.9 ) 77.7 ( 186.8 ) Comprehensive income $ 3,475.9 $ 3,303.9 $ 2,504.2 See accompanying notes to consolidated financial statements. 53 CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (dollars in millions, except per share data; shares in thousands) Preferred Stock (Shares) 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 Balance at December 31, 2021 4,584 358,599 3 $ 22,193.9 $ 5,151.9 $ 53.5 $ 27,399.3 Net income 2,691.0 2,691.0 Other comprehensive income (loss) ( 186.8 ) ( 186.8 ) Dividends of $8.50 per common share and per preferred share ( 3,096.1 ) ( 3,096.1 ) Exercise of stock options 1 0.1 0.1 Vesting of issued restricted Class A common stock 269 ( 24.8 ) ( 24.8 ) Shares issued to Board of Directors 19 4.0 4.0 Shares issued under Employee Stock Purchase Plan 41 7.7 7.7 Stock-based compensation 84.3 84.3 Balance at December 31, 2022 4,584 358,929 3 $ 22,265.2 $ 4,746.8 $ ( 133.3 ) $ 26,878.7 See accompanying notes to consolidated financial statements. 54 CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (continued) (dollars in millions, except per share data; shares in thousands) Preferred Stock (Shares) Class A Common Stock (Shares) Class B Common Stock (Shares) Preferred Stock, Common Stock and Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total CME Group Shareholders' Equity Balance at December 31, 2022 4,584 358,929 3 $ 22,265.2 $ 4,746.8 $ ( 133.3 ) $ 26,878.7 Net income 3,226.2 3,226.2 Other comprehensive income (loss) 77.7 77.7 Dividends of $9.65 per common share and preferred share ( 3,517.8 ) ( 3,517.8 ) Vesting of issued restricted Class A common stock 241 ( 21.4 ) ( 21.4 ) Shares issued to Board of Directors 20 3.6 3.6 Shares issued under Employee Stock Purchase Plan 41 8.0 8.0 Stock-based compensation 82.9 82.9 Balance at December 31, 2023 4,584 359,231 3 $ 22,338.3 $ 4,455.2 $ ( 55.6 ) $ 26,737.9 See accompanying notes to consolidated financial statements. 55 CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (continued) (dollars in millions, except per share data; shares in thousands) Preferred Stock (Shares) Class A Common Stock (Shares) Class B Common Stock (Shares) Preferred Stock, Common Stock and Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total CME Group Shareholders' Equity Balance at December 31, 2023 4,584 359,231 3 $ 22,338.3 $ 4,455.2 $ ( 55.6 ) $ 26,737.9 Net income 3,525.8 3,525.8 Other comprehensive income (loss) ( 49.9 ) ( 49.9 ) Dividends of $10.40 per common share and preferred share ( 3,795.2 ) ( 3,795.2 ) Vesting of issued restricted Class A common stock 315 ( 33.0 ) ( 33.0 ) Shares issued to Board of Directors 19 3.7 3.7 Shares issued under Employee Stock Purchase Plan 37 8.1 8.1 Stock-based compensation 89.5 89.5 Balance at December 31, 2024 4,584 359,602 3 $ 22,406.6 $ 4,185.8 $ ( 105.5 ) $ 26,486.9 See accompanying notes to consolidated financial statements. 56 Table of Contents CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2024 2023 2022 Cash Flows from Operating Activities Net income $ 3,525.8 $ 3,226.2 $ 2,691.0 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 89.5 82.9 84.3 Amortization of purchased intangibles 221.7 226.6 227.7 Depreciation and amortization 115.1 126.0 134.9 Net realized and unrealized (gains)/losses on investments ( 3.6 ) ( 72.1 ) ( 4.8 ) Deferred income taxes ( 66.4 ) ( 75.0 ) ( 23.2 ) Change in: Accounts receivable ( 39.4 ) ( 51.5 ) ( 51.1 ) Other current assets 664.8 ( 637.8 ) ( 76.5 ) Other assets 75.4 92.0 87.0 Accounts payable ( 10.7 ) ( 30.8 ) 72.5 Income taxes payable ( 117.4 ) ( 77.1 ) ( 147.8 ) Other current liabilities ( 705.9 ) 642.7 88.1 Other liabilities ( 55.4 ) ( 32.7 ) ( 67.4 ) Other ( 3.0 ) 34.4 41.3 Net Cash Provided by Operating Activities 3,690.5 3,453.8 3,056.0 Cash Flows from Investing Activities Proceeds from maturities and sales of available-for-sale marketable securities 6.0 5.9 6.3 Purchases of available-for-sale marketable securities ( 4.5 ) ( 4.1 ) ( 4.4 ) Purchases of property, net ( 94.0 ) ( 76.4 ) ( 89.7 ) Investments in business ventures ( 3.6 ) ( 2.4 ) ( 3.1 ) Proceeds from sale of business ventures 13.5 97.9 11.1 Investment in S&P Dow Jones Indices LLC — — ( 410.0 ) Net Cash Provided by (Used in) Investing Activities ( 82.6 ) 20.9 ( 489.8 ) See accompanying notes to consolidated financial statements. 57 Table of Contents CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in millions) Year Ended December 31, 2024 2023 2022 Cash Flows from Financing Activities Proceeds from debt, net of issuance costs $ — $ — $ 741.0 Repayment of other borrowings, including call premiums — ( 16.4 ) ( 756.2 ) Cash dividends ( 3,584.2 ) ( 3,235.5 ) ( 2,633.5 ) Change in performance bond and guaranty fund contributions 8,702.9 ( 45,056.7 ) ( 22,700.3 ) Employee taxes paid on restricted stock vesting ( 33.0 ) ( 21.4 ) ( 24.8 ) Other ( 9.2 ) ( 9.3 ) ( 7.9 ) Net Cash Provided by (Used in) Financing Activities 5,076.5 ( 48,339.3 ) ( 25,381.7 ) Net change in cash, cash equivalents, restricted cash and restricted cash equivalents 8,684.4 ( 44,864.6 ) ( 22,815.5 ) Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period 93,109.7 137,974.3 160,789.8 Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, End of Period $ 101,794.1 $ 93,109.7 $ 137,974.3 Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents: Cash and cash equivalents $ 2,892.4 $ 2,912.0 $ 2,720.1 Short-term restricted cash (within other current assets) 6.3 5.2 4.9 Long-term restricted cash (within other assets) — — 0.1 Restricted cash and restricted cash equivalents (performance bonds and guaranty fund contributions) 98,895.4 90,192.5 135,249.2 Total $ 101,794.1 $ 93,109.7 $ 137,974.3 Supplemental Disclosure of Cash Flow Information Income taxes paid $ 1,197.6 $ 1,109.4 $ 973.4 Interest paid 129.9 129.9 133.2 Non-cash financing activities: Declaration of annual variable dividend, payable in January 2025, January 2024 and January 2023 2,112.2 1,910.0 1,635.7 See accompanying notes to consolidated financial statements. 58 Table of Contents CME GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND BUSINESS CME Group Inc. (CME Group) exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange (FX), agricultural, energy and metal commodities. We offer futures and options across asset classes as well as cash, repo fixed income and OTC FX trading through the CME Globex platform. In addition, it operates one of the world’s leading central counterparty clearing houses. CME Group offers clearing, settlement and guarantees for all products cleared through the clearing house, which is operated by CME. 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), wholly-owned subsidiaries of CME Group, are designated contract markets for the trading of futures and options contracts. CME Group and its subsidiaries are referred to collectively as "the company" in the notes to the consolidated financial statements. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation. The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. and include the accounts of the company and its subsidiaries. All intercompany transactions and balances have been eliminated. Use of Estimates. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts on the consolidated financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and assumptions management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. Cash and Cash Equivalents. Cash and cash equivalents consist of cash and highly liquid investments with a maturity of three months or less at the time of purchase. Financial Investments. The company maintains short-term and long-term investments, classified as equity method investments, available-for-sale debt securities, equity investments in privately-held entities and trading securities. Available-for-sale debt securities are carried at fair value, with unrealized gains and losses, net of deferred income taxes, reported as a component of accumulated other comprehensive income. Trading securities held in connection with non-qualified deferred compensation plans are recorded at fair value, with net realized and unrealized gains and losses and dividend income reported as investment income. For equity investments in privately-held entities that do not have a readily determinable fair value, our accounting policy is to utilize the measurement alternative for valuation of these investments, which permits the company to estimate fair value at cost minus impairment, plus or minus changes resulting from observable price movements. Additionally, the company maintains long-term investments accounted for under the equity method, which requires that the company recognize its share of net income (loss) and other comprehensive income (loss) in the investee as an adjustment to the carrying amount of the investment each reporting period. The company reviews its investment portfolio at least quarterly, as well as whenever facts or circumstances exist which indicate that the carrying value of an investment is greater than its fair value. For investments not carried at fair value, the carrying value of the investment is reduced to its fair value and a corresponding impairment expense is charged to earnings, if events and circumstances indicate that a markdown to fair value is warranted. Declines in the fair value of available-for-sale debt securities that are deemed to represent indicators of impairment are charged to earnings as a realized loss. Fair Value of Financial Instruments. The company uses a three-level classification hierarchy of fair value measurements that establishes the quality of inputs used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial instruments is determined using various techniques that involve some level of estimation and judgment, the degree of which is dependent on the price transparency and the complexity of the instruments. Derivative Investments. The company occasionally uses derivative instruments to limit exposure to changes in interest rates and foreign currency exchange rates. Derivatives are recorded at fair value on the consolidated balance sheets. For those derivatives that meet the criteria for hedge accounting and are classified as effective cash flow hedges, changes in the fair value of derivative financial instruments are initially recorded in other comprehensive income and subsequently reclassified into earnings when the hedged item affects income. The company assesses, both at the inception of each hedge and on an ongoing basis, whether the derivative financial instruments that are designated as cash flow hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. For any hedges no longer deemed effective or for which hedge accounting 59 Table of Contents is not applied, changes in fair value of the derivative instruments are recognized in earnings within other non-operating income (expense). There were no outstanding derivative instruments at December 31, 2024. Accounts Receivable. Accounts receivable are comprised of trade receivables and unbilled revenue. All accounts receivable are stated at net realizable value. Exposure to losses on receivables for clearing and transaction fees and other amounts owed by clearing and trading firms is dependent on each firm's financial condition. With respect to clearing firms, our credit loss exposure is mitigated by the memberships that collateralize fees owed to the company. The company retains the right to liquidate exchange memberships to satisfy an outstanding receivable. The allowance for doubtful accounts is calculated based on management's assessment of future expected losses over the life of the receivable, historical trends and the current economic environment within which we operate. Performance Bonds and Guaranty Fund Contributions. Performance bonds and guaranty fund contributions held for clearing firms may be in the form of cash, securities or other non-cash deposits. Performance bonds and guaranty fund contributions received in the form of cash held by CME may be invested in U.S. government securities, U.S. government agency securities and certain foreign government securities acquired through and held by a bank or broker-dealer subsidiary of a bank, a cash account at the Federal Reserve Bank of Chicago, investments in highly rated government securities, money market funds or through CME's Interest Earning Facility (IEF) program. Any interest earned on these investments accrues to CME and is included in investment income on the consolidated statements of income. CME may distribute any interest earned on its investments to the clearing firms at its discretion. Because CME has control of the cash collateral and the benefits and market risks of ownership accrue to CME, cash performance bonds and guaranty fund contributions are reflected on the consolidated balance sheets. The cash performance bonds and guaranty fund contributions are considered restricted cash as the cash deposits cannot be used for the company's operations or to satisfy any operational liabilities. Cash performance bonds and guaranty fund contributions are included as restricted cash and restricted cash equivalents on the consolidated statements of cash flows. Securities and other non-cash deposits may include U.S. Treasury securities, U.S. government agency securities, Eurobonds, corporate bonds, other foreign government securities and gold bullion. Securities and other non-cash deposits are held in safekeeping by a custodian bank. Interest and gains or losses on securities deposited to satisfy performance bond and guaranty fund requirements accrue to the clearing firm. Non-cash performance bonds can also include letters of credit. Because the benefits and risks of ownership accrue to the clearing firm, non-cash performance bonds and guaranty fund contributions are not reflected on the consolidated balance sheets. Property. Property is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method, generally over one to twenty years. Property and equipment are depreciated over their estimated useful lives. Leasehold improvements are amortized over the shorter of the remaining term of the respective lease to which they relate or the remaining useful life of the leasehold improvement. Land is reported at cost. Internal and external costs incurred in developing, obtaining, or implementing computer software for internal use which meet the requirements for capitalization are amortized on a straight-line basis over the estimated useful life of the software, generally two to four years, but up to eight years for certain trading and clearing applications, depending upon expected useful lives. Leases. The company accounts for our leases of office space as operating leases. Landlord allowances are recorded as a direct reduction to the capitalized lease asset, which is reported in other assets and amortized to rent expense over the term of the lease. Both lease and direct non-lease costs are accounted for as a single lease component for purposes of capitalization on the consolidated balance sheets.The associated lease liability represents the present value of lease payments remaining in the lease term and is recorded within current and other liabilities depending upon the balance sheet classification of the payment obligations as short-term or long-term. For sale leaseback transactions, the company evaluates the sale and the lease arrangement based on the company's conclusion as to whether control of the underlying asset has been transferred and recognizes the sale leaseback as either a sale transaction or under the financing method, which requires the asset to remain on the consolidated balance sheets throughout the term of the lease and the proceeds to be recognized as a financing obligation. A portion of the lease payments is recognized as a reduction of the financing obligation and a portion is recognized as interest expense based on an imputed interest rate. Goodwill and Other Intangible Assets. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. The company reviews goodwill for impairment at least quarterly and whenever events or circumstances indicate that the carrying value may not be recoverable. The company may test goodwill quantitatively for impairment by comparing the carrying value of a reporting unit to its estimated fair value. Estimating the fair value of a reporting unit involves significant judgments inherent in the analysis, including estimating the amount and timing of future cash flows and the selection of appropriate discount rates and long-term growth rate assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for the reporting unit. If the carrying amount exceeds fair value, an impairment loss is recorded. In certain circumstances, goodwill may be reviewed qualitatively for indications of impairment without utilizing valuation techniques to estimate fair value. 60 Table of Contents The company performs an impairment assessment of indefinite-lived intangible assets at least quarterly or whenever events or circumstances indicate that their carrying values may not be recoverable. If the indefinite-lived intangible asset carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Estimating the fair value of indefinite-lived intangible assets involves the use of valuation techniques that rely on significant estimates and assumptions, including forecasted revenue growth rates, forecasted allocations of expense and risk-adjusted discount rates. Changes in these estimates and assumptions could materially affect the determination of fair value for indefinite-lived intangible assets. In certain circumstances, indefinite-lived intangible assets may be reviewed qualitatively for indications of impairment without utilizing valuation techniques to estimate fair value. Intangible assets subject to amortization are also assessed for impairment at least quarterly or when indicated by a change in economic or operational circumstances. The impairment assessment of these assets requires management to first compare the carrying value of the amortizing asset to undiscounted net cash flows. If the carrying value exceeds the undiscounted 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 value. In connection with this impairment assessment, management also challenges the useful lives of our amortizing intangible assets. Business Combinations. The company accounts for business combinations using the acquisition method. The method requires the acquirer to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. The company may use independent valuation services to assist in determining the estimated fair values. Employee Benefit Plans. The company recognizes the funded status of defined benefit postretirement plans on its consolidated balance sheets. Changes in that funded status are recognized in the year of change in other comprehensive income (loss). Plan assets and obligations are measured at year end. The company recognizes future changes in actuarial gains and losses and prior service costs in the year in which the changes occur through accumulated other comprehensive income (loss). Foreign Currency Translation and Re-measurement . Foreign currency denominated monetary assets and liabilities are re-measured into the functional currency using period-end exchange rates. Gains and losses from foreign currency transactions and re-measurement of monetary assets and liabilities into the functional currency are included in other expense on the accompanying consolidated statements of income. When the functional currency differs from the reporting currency, revenues and expenses of foreign subsidiaries are translated from their functional currencies into U.S. dollars using weighted-average exchange rates while their assets and liabilities are translated into U.S. dollars using period-end exchange rates. Gains and losses resulting from foreign currency translations are included in accumulated other comprehensive income (loss) within shareholders' equity. Revenue Recognition. Revenue recognition policies for specific sources of revenue are discussed below. Clearing and Transaction Fees. Clearing and transaction fees include per-contract charges for trade matching, clearing, trading on the company's electronic trading platforms, portfolio reconciliation and compression services, risk mitigation, and other fees. Fees are charged at various rates based on the product traded, the method of trade, the exchange trading privileges of the customer making the trade and the type of contract. The majority of our clearing and transaction fees are recognized as revenue upon successful execution of the trade, which represents completion of our trade matching, novation and clearing activities. Therefore, unfilled or canceled buy and sell orders have no impact on revenue. On occasion, the customer's exchange trading privileges may not be properly entered by the clearing firm and incorrect fees are charged for the transactions. When this information is corrected within the time period allowed by the company, a fee adjustment is provided to the clearing firm. A reserve is established for estimated fee adjustments to reflect corrections to customer exchange trading privileges. The reserve is based on the historical pattern of adjustments processed as well as management's estimate of future adjustment activity. This reserve has historically been immaterial. The company believes the reserve is adequate to cover estimated adjustments as of December 31, 2024 and 2023. Market Data and Information Services. Market data and information services represent revenue earned for the dissemination of market information. Revenues are accrued each month based on the number of devices reported by vendors or over a straight line basis in accordance with the market data subscription contract term. The company conducts periodic examinations of the number of devices reported and assesses additional fees as necessary. On occasion, customers will pay for services in a lump sum payment; however, revenue is recognized as services are provided. Other Revenues. Other revenues include access and communication fees, fees for collateral management, equity membership subscription fees and fees for trade order routing through agreements from various strategic relationships as well as other services to customers. Revenue is recognized as services are provided. Concentration of Revenue. One clearing firm represented at least approximately 10 % of the company's clearing and transaction fee revenue in 2024 and 2022, but no clearing firms represented at least approximately 10 % of the company's clearing and transaction fee revenue in 2023. Should a clearing firm withdraw from the company, management believes 61 Table of Contents that the customer portion of that firm's trading activity would likely transfer to another clearing firm. Therefore, management does not believe that the company is exposed to significant risk from the ongoing loss of revenue received from a particular clearing firm. The two largest resellers of market data represented approximately 30 % of market data and information services revenue in 2024, 32 % in 2023, and 33 % in 2022. Should one of these vendors no longer subscribe to the company's market data, management believes that the majority of that firm's customers would likely subscribe to the market data through another reseller. Therefore, management does not believe that the company is exposed to significant risk from a loss of revenue received from any particular market data reseller. Share-Based Payments. The company accounts for share-based payments at fair value, which is based on the grant date price of the equity awards issued. The company recognizes expense relating to stock-based compensation on an accelerated basis. As a result, the expense associated with each vesting date within a stock grant is recognized over the period of time that each portion of that grant vests. Forfeitures are recognized in the period in which they occur. Marketing Costs. Marketing costs are incurred for the production and communication of advertising as well as other marketing activities. These costs are expensed when incurred, except for costs related to the production of broadcast advertising, which are expensed when the first broadcast occurs. Income Taxes. Deferred income taxes arise from temporary differences between the tax basis and book basis of assets and liabilities. A valuation allowance is recognized if it is anticipated that some or all of a deferred tax asset may not be realized. The company accounts for uncertainty in income taxes recognized in its consolidated financial statements by using a more-likely-than-not recognition threshold based on the technical merits of the tax position taken or expected to be taken. The company recognizes interest and penalties related to uncertain tax positions in income tax expense. Segment Reporting. The company reports the results of its operations as one operating segment primarily comprised of the businesses of CME, CBOT, NYMEX, COMEX and our cash markets business. The individual operations of the company do not meet the criteria for classification as separate reporting segments. Recent Accounting Pronouncements. The following accounting pronouncements were issued during 2024: In November 2024, the FASB issued final guidance requiring public business entities to provide disclosures, in tabular format, of each relevant expense line item on the face of the income statement in continuing operations as disaggregated into the following: purchases of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, depletion and amortization of capitalized acquisition, exploration and development costs recognized as part of oil- and gas-producing activities, or other amounts of depletion expense. Specified expenses, gains, or losses that are already disclosed under existing U.S. GAAP are required to be included in the disaggregated income statement expense line item disclosures, and any remaining amounts need to be described qualitatively. The disclosures are effective beginning in 2027, and required on an annual and interim basis. Entities may apply the guidance prospectively or retrospectively. Early adoption is permitted. Adoption of this guidance is not expected to have a material impact on our consolidated financial statements. 3. REVENUE RECOGNITION The company generates revenue from customers from the following sources: Clearing and transaction fees. Clearing and transaction fees include per-contract charges for trade matching, clearing, trading on the company's electronic trading platforms, portfolio reconciliation and compression services, risk mitigation, and other fees. Clearing and transaction fees are assessed upfront at the time of trade execution. As such, the company recognizes the majority of the fee revenue upon successful execution of the trade. The minimal remaining portion of the fee revenue related to settlement activities performed after trade execution is recognized over the short-term period that the contract is outstanding, based on management’s estimates of the average contract lifecycle. These estimates are based on various assumptions to approximate the amount of fee revenue to be attributed to services performed through contract settlement, expiration, or termination. For cleared trades, these assumptions include the average number of days that a contract remains in open interest, contract turnover, average revenue per day, and revenue remaining in open interest at the end of each period. The nature of contracts gives rise to several types of variable consideration, including volume-based pricing tiers, customer incentives associated with market maker programs and other fee discounts. The company includes fee discounts and incentives in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee reduction. These estimates are based on historical experience, anticipated performance, and best judgment at the time. Because of the company's certainty in estimating these amounts, they are included in the transaction price of contracts. Market data and information services. Market data and information services represent revenue from the dissemination of market data to subscribers, distributors, and other third-party licensees of market data. Pricing for market data is primarily based on the number of reportable devices used as well as the number of subscribers enrolled under the arrangement. Fees for these services are generally billed monthly. Market data services are satisfied over time and revenue is recognized on a monthly basis 62 Table of Contents as the customers receive and consume the benefit of the market data services. However, the company also maintains certain annual license arrangements with one-time upfront fees. The fees for annual licenses are initially recorded as a contract liability and recognized as revenue monthly over the term of the annual period. Other. Other revenues include certain access and communication fees, fees for collateral management, equity membership subscription fees, and fees for trade order routing through agreements from various strategic relationships. Access and communication fees are charged to customers that utilize various telecommunications networks and communications services. Fees for these services are generally billed monthly and the associated fee revenue is recognized as billed. Collateral management fees are charged to clearing firms that have collateral on deposit with the clearing house to meet their minimum performance bond and guaranty fund obligations on the exchange. These fees are calculated based on daily collateral balances and are billed monthly. This fee revenue is recognized monthly as billed as the customers receive and consume the benefits of the services. The company also has an equity membership program which provides equity members the option to pay a monthly subscription fee in satisfaction of their existing requirement to hold CME Group Class A common stock. Choosing to pay this fee in lieu of holding Class A shares is entirely voluntary and the client's choice. Fee revenue under this program is earned monthly as billed over the contractual term. Pricing for strategic relationships may be driven by customer levels and activity. There are fee arrangements which provide for monthly as well as quarterly payments in arrears. Revenue is recognized monthly for strategic relationship arrangements as the customers receive and consume the benefits of the services. The following table represents a disaggregation of revenue from contracts with customers for the years ended December 31, 2024, 2023 and 2022: (in millions) 2024 2023 2022 Interest rates $ 1,659.6 $ 1,558.4 $ 1,326.8 Equity indexes 1,095.3 1,036.4 1,016.3 Foreign exchange 198.5 190.0 188.3 Agricultural commodities 585.1 508.5 444.7 Energy 800.5 702.8 585.5 Metals 284.3 224.7 196.9 BrokerTec fixed income 145.1 152.1 164.7 EBS foreign exchange 131.6 132.6 154.1 Interest Rate Swap 88.2 83.0 65.4 Total clearing and transaction fees 4,988.2 4,588.5 4,142.7 Market data 710.2 663.7 610.9 Other 431.7 326.7 265.8 Total revenues $ 6,130.1 $ 5,578.9 $ 5,019.4 Timing of Revenue Recognition Services transferred at a point in time $ 4,887.4 $ 4,491.1 $ 4,044.3 Services transferred over time 1,223.0 1,069.7 955.3 One-time charges and miscellaneous revenues 19.7 18.1 19.8 Total revenues $ 6,130.1 $ 5,578.9 $ 5,019.4 The timing of revenue recognition, billings and cash collections results in billed accounts receivable, and customer advances and deposits (contract liabilities) on the consolidated balance sheets. Certain fees for transactions, annual licenses, and other revenue arrangements are billed upfront before revenue is recognized, which results in the recognition of contract liabilities. These liabilities are recognized on the consolidated balance sheets on a contract-by-contract basis upon commencement of services under the customer contract. These upfront customer payments are recognized as revenue over time as the obligations under the contracts are satisfied. Changes in the contract liability balances during 2024 were not materially impacted by any other factors. The balance of contract liabilities wa s $15.6 million and $13.2 million as of December 31, 2024 and 2023, respectively. 4. PERFORMANCE BONDS AND GUARANTY FUND CONTRIBUTIONS The clearing house clears and guarantees the settlement of contracts traded in the futures and options and interest rate swap markets. In its guarantor role, the clearing house has precisely equal and offsetting claims to and from clearing firms on opposite sides of each contract, standing as an intermediary on every contract cleared. In the U.S., clearing firm funds are held 63 Table of Contents according to Commodity and Futures Trading Commission (CFTC) regulatory account segregation standards. To the extent that funds are not otherwise available to satisfy an obligation under the applicable contract, the clearing house bears counterparty credit risk in the event that future market movements create conditions that could lead to clearing firms failing to meet their obligations to the clearing house. The clearing house reduces the exposure through risk management programs that include initial and ongoing financial standards for designation as a clearing firm, performance bond requirements, daily mark-to-market, mandatory guaranty fund contributions and intra-day monitoring. Each clearing firm is required to deposit and maintain balances in the form of cash, U.S. government securities, certain foreign government securities, bank letters of credit or other approved collateral to satisfy performance bond and guaranty fund requirements. All non-cash deposits and certain cash deposits with foreign currency exposure are marked-to-market and haircut on a daily basis. Securities deposited by the clearing firms are not reflected on the consolidated financial statements and the clearing house does not earn any interest on these deposits. These balances may fluctuate significantly over time due to investment choices available to clearing firms and changes in the amount of contributions required. Cash performance bonds and guaranty fund contributions are included as restricted cash and restricted cash equivalents on the consolidated statements of cash flows. The clearing house marks-to-market open positions at least once a day (twice a day for futures and options contracts), and requires payment from clearing firms whose positions have lost value and makes payments to clearing firms whose positions have gained value. The clearing house has the capability to mark-to-market more frequently as market conditions warrant. Under the extremely unlikely scenario of simultaneous default by every clearing firm who has open positions with unrealized losses, the maximum exposure at the time of default related to positions other than interest rate swap contracts would be one half day of changes in fair value of all open positions, before considering the clearing house's ability to access defaulting clearing firms' collateral deposits. For cleared interest rate swap contracts, the maximum exposure at the time of default related to the clearing house's guarantee would be one full day of changes in fair value of all open positions, before considering the clearing house's ability to access defaulting clearing firms' collateral. During 2024, the clearing house transferred an average of approximately $ 5.7 billion a day through the clearing system for settlement from clearing firms whose positions had lost value to clearing firms whose positions had gained value. The clearing house reduces its exposure through maintenance performance bond requirements and guaranty fund contributions. For futures and options products, the clearing firms' collateral requirements are sized to cover at least one day of anticipated price movements. For cleared swap products, the clearing firms' collateral requirements are sized to cover at least five days of anticipated price movements. Management has assessed the fair value of the company's settlement guarantee liability by taking the following factors into consideration: the design and operations of the clearing risk management process, the financial safeguard packages in place, historical evidence of default by a clearing member and the estimated probability of potential payouts by the clearing house. Based on the assessment performed, management estimates the guarantee liability to be nominal and therefore has not recorded any liability at December 31, 2024. CME has been designated as a systemically important financial market utility by the Financial Stability Oversight Council and is authorized to maintain cash accounts at the Federal Reserve Bank of Chicago. At December 31, 2024 and 2023, the clearing house maintained $ 87.4 billion and $ 79.3 billion, respectively, within the cash accounts at the Federal Reserve Bank of Chicago. The cash deposited at the Federal Reserve Bank of Chicago is included within performance bonds and guaranty fund contributions on the consolidated balance sheets. In 2024 and 2023, earnings from cash performance bond and guaranty fund contributions were $3,943.8 million and $5,073.9 million, respectively. In 2024 and 2023, expense related to the distribution of interest earned on collateral reinvestments were $ 3,669.4 million a nd $4,717.5 million, respectively. The earnings from cash performance bonds and guaranty fund contributions are included in investment income and the expense related to the distribution of interest earned is included in other non-operating income (expense) on the consolidated statements of income. CME and The Options Clearing Corporation (OCC) have a perpetual cross-margin arrangement, whereby a clearing firm may maintain a cross-margin account in which a clearing firm's positions in certain equity index futures and options are combined with certain positions cleared by OCC for purposes of calculating performance bond requirements. The performance bond deposits are held jointly by CME and OCC. Cross-margin cash, securities and letters of credit jointly held with OCC under the cross-margin agreement are reflected at 50 % of the total, or CME's proportionate share per that agreement. If a participating firm defaults, the gain or loss on the liquidation of the firm's open position and the proceeds from the liquidation of the cross- margin account would be allocated equally between CME and OCC. In the event of a remaining loss, CME would first apply assets of the defaulting clearing firm to satisfy its payment obligation. These assets include the defaulting firm's guaranty fund contributions, performance bonds and any other available assets, such as assets required for clearing membership and any associated trading rights. Thereafter, if the payment default remains unsatisfied, the clearing house would use its corporate contributions designated for the respective financial safeguard package. The clearing house would then use guaranty fund contributions of other clearing firms within the respective financial safeguard package and funds collected through an assessment against solvent clearing firms within the respective financial safeguard package to satisfy the deficit. 64 Table of Contents In addition, CME has a cross-margin arrangement with Fixed Income Clearing Corporation (FICC) whereby certain of the clearing firms' offsetting positions with CME and FICC are subject to reduced performance bond requirements. Clearing firms maintain separate performance bond deposits with each clearing house, but based on the net offsetting positions between CME and FICC, each clearing house may reduce that firm's performance bond requirements. If a participating firm defaults, the gain or loss on the liquidation of the firm’s open positions and the proceeds from the liquidation of the cross margin account would be allocated between CME and FICC pursuant to a publicly-available cross-margining agreement. In the event of a remaining loss, CME would first apply assets of the defaulting clearing firm to satisfy its payment obligation. These assets include the defaulting firm's guaranty fund contributions, performance bonds and any other available assets, such as assets required for clearing membership and any associated trading rights. Thereafter, if the payment default remains unsatisfied, the clearing house would use its corporate contributions designated for the respective financial safeguard package. The clearing house would then use guaranty fund contributions of other clearing firms within the respective financial safeguard package and funds collected through an assessment against solvent clearing firms within the respective financial safeguard package to satisfy the deficit. Each clearing firm for futures and options is required to deposit and maintain specified guaranty fund contributions in the form of cash or U.S. Treasury securities (base guaranty fund). In the event that performance bonds, guaranty fund contributions and other assets required to support clearing membership of a defaulting clearing firm are inadequate to fulfill that clearing firm's outstanding financial obligation, the base guaranty fund for contracts other than interest rate swaps is available to cover potential losses after first utilizing $ 100.0 million of corporate contributions designated by CME to be used in the event of a default of a clearing firm for the base guaranty fund. The clearing house maintains a separate guaranty fund to support the clearing firms that clear interest rate swap products (cleared interest rate swaps contract guaranty fund). The funds for interest rate swaps are independent of the base guaranty fund and are isolated to clearing firms for products in the respective asset class. Each clearing firm for cleared interest rate swaps is required to deposit and maintain specified guaranty fund contributions in the form of cash or U.S. Treasury securities. In the event that performance bonds, guaranty fund contributions and other assets required to support clearing membership of a defaulting clearing firm for cleared interest rate swap contracts are inadequate to fulfill that clearing firm's outstanding financial obligation, the interest rate swaps contracts guaranty fund is available to cover potential losses after first utilizing $ 150.0 million of corporate contributions designated by CME to be used in the event of a default of a cleared interest rate swap clearing firm. CME maintains a 364 -day multi-currency line of credit with a consortium of domestic and international banks to be used in certain situations by the clearing house. CME may use the proceeds to provide temporary liquidity in the unlikely event of a clearing firm default, in the event of a liquidity constraint or default by a depositary (custodian of the collateral), or in the event of a temporary disruption with the domestic payments system that would delay payment of settlement variation between CME and its clearing firms. Clearing firm guaranty fund contributions received in the form of cash or U.S. Treasury securities as well as the performance bond assets of a defaulting firm can be used to collateralize the facility. The line of credit provides for borrowings of up to $ 7.0 billion. At December 31, 2024, guaranty fund contributions available to collateralize the facility were $ 10.1 billion. CME has the option to request an increase in the line from $ 7.0 billion to $ 10.0 billion, subject to the approval of participating banks. In addition to the 364 -day fully secured, committed multi-currency line of credit, the company also has the option to use the $ 2.3 billion multi-currency revolving senior credit facility to provide liquidity for the clearing house in the unlikely event of default. The company maintains committed repurchase facility agreements amounting to a total of $1.0 billion. The committed repurchase facilities provide access to cash, secured by non-cash collateral, in the event that one or more of our clearing firms fails to promptly discharge an obligation to the clearing house. The facilities are subject to annual renewal. The company currently does not have any borrowings outstanding under these facilities. CME also maintains a committed facility of up to $750.0 million for foreign currency conversions. The committed foreign currency facility allows the clearing house to convert cash to another currency within generally accepted local market timeframes in the event that one or more of our clearing firms fails to promptly discharge an obligation to the clearing house. The facility is subject to annual renewal. The company currently does not have any foreign currency trades outstanding under this facility. The clearing house is required under the U.S. Commodity Exchange Act to segregate cash and securities deposited by clearing firms from its clearing member customers. In addition, the clearing house requires segregation of all funds deposited by its clearing firms from operating funds. 65 Table of Contents Cash and non-cash deposits held as performance bonds and guaranty fund contributions at fair value at December 31, 2024 and 2023 were as follows: 2024 2023 (in millions) Cash Non-Cash Deposits and IEF Funds (1) Cash Non-Cash Deposits and IEF Funds (1) Performance bonds $ 96,036.4 $ 191,241.1 $ 87,285.5 $ 180,866.3 Guaranty fund contributions 2,343.5 7,977.2 2,379.6 6,849.6 Cross-margin arrangements 233.1 678.5 183.1 1,374.5 Other (2) 282.4 2.1 344.3 2.1 Total $ 98,895.4 $ 199,898.9 $ 90,192.5 $ 189,092.5 _______________ (1) IEF funds include customer-directed investments in IEF funds that are not included on the consolidated balance sheets. (2) Other includes collateral for delivery and accrued interest earned on collateral reinvestment due to the clearing firms. Cross-margin arrangements include collateral for the cross-margin accounts with OCC and FICC. Cash performance bonds may include intraday settlement, if any, that is owed to the clearing firms and paid the following business day. The balance of intraday settlements was $ 198.4 million and $ 237.5 million at December 31, 2024 and 2023, respectively. Intraday settlements may be invested on an overnight basis and are offset by an equal liability owed to clearing firms. In addition to cash, securities and other non-cash deposits, irrevocable letters of credit may be used as performance bond deposits for clearing firms. At December 31, 2024 and 2023, these letters of credit, which are not included in the accompanying consolidated balance sheets, were as follows: (in millions) 2024 2023 Performance bonds $ 4,254.8 $ 3,916.7 Performance bond collateral for delivery 3,505.9 4,631.4 Total Letters of Credit $ 7,760.7 $ 8,548.1 _______________ All cash, securities and letters of credit posted as performance bonds are only available to meet the financial obligations of that clearing firm to the clearing house. 5. PROPERTY A summary of the property accounts at December 31, 2024 and 2023 is presented below: (in millions) 2024 2023 Estimated Useful Life Building and building improvements $ 130.7 $ 130.7 1 - 10 years Leasehold improvements 147.1 143.7 2 - 20 years Furniture, fixtures and equipment 432.6 413.3 1 - 7 years Software and software development costs 700.1 654.9 2 - 8 years Total property 1,410.5 1,342.6 Less accumulated depreciation and amortization ( 1,024.3 ) ( 933.1 ) Property, net $ 386.2 $ 409.5 66 Table of Contents 6. INTANGIBLE ASSETS AND GOODWILL Intangible assets consisted of the following at December 31, 2024 and 2023: 2024 2023 (in millions) Assigned Value Accumulated Amortization Net Book Value Assigned Value Accumulated Amortization Net Book Value Amortizable Intangible Assets: Clearing firm, market data and other customer relationships $ 4,683.5 $ ( 2,334.4 ) $ 2,349.1 $ 4,694.4 $ ( 2,124.9 ) $ 2,569.5 Technology-related intellectual property 62.5 ( 62.5 ) — 62.5 ( 62.2 ) 0.3 Other 71.1 ( 48.6 ) 22.5 71.6 ( 41.2 ) 30.4 Total Amortizable Intangible Assets $ 4,817.1 $ ( 2,445.5 ) $ 2,371.6 $ 4,828.5 $ ( 2,228.3 ) $ 2,600.2 Indefinite-Lived Intangible Assets: Trade names 450.0 450.0 Total Intangible Assets—Other, Net $ 2,821.6 $ 3,050.2 Trading products (1) $ 17,175.3 $ 17,175.3 _______________ (1) Trading products represent futures and options products acquired in our business combinations with CBOT Holdings, Inc., NYMEX Holdings, Inc. and The Board of Trade of Kansas City, Missouri, Inc. Clearing and transaction fees are generated through the trading of these products. These trading products, most of which have traded for decades, require authorization from the CFTC. Product authorizations from the CFTC have no term limits. The originally assigned useful lives for the amortizable intangible assets as of December 31, 2024 are as follows: Clearing firm, market data and other customer relationships 5 - 30 years Technology-related intellectual property 5 - 9 years Other 3 - 24.5 years Total amortization expense for intangible assets was $ 221.7 million, $ 226.6 million and $ 227.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, the future estimated amortization expense related to amortizable intangible assets is expected to be as follows: (in millions) 2025 $ 221.5 2026 221.5 2027 220.2 2028 213.8 2029 213.8 Thereafter 1,280.8 Goodwill activity consisted of the following for the years ended December 31, 2024 and 2023 : (in millions) Goodwill Balance at December 31, 2022 $ 10,482.5 Foreign currency translation 12.8 Balance at December 31, 2023 10,495.3 Foreign currency translation ( 8.4 ) Balance at December 31, 2024 $ 10,486.9 67 Table of Contents 7. LONG-TERM INVESTMENTS The company maintains various long-term investments as described below. The investments are recorded in other assets on the consolidated balance sheets. GME Holdings Limited. The company owns a 33 % interest in GME Holdings Limited (GME Holdings), and accounts for its investment in GME Holdings using the equity method of accounting. Dubai Mercantile Exchange (DME) was rebranded as the Gulf Mercantile Exchange (GME) in 2024 to reflect its position as the key regional commodities exchange in the Middle East. In June 2024, the company invested $ 3.5 million in GME Holdings in exchange for 3.5 million additional shares of GME. This transaction was immediately followed by a secondary share sale to a third party of 15.5 million shares for $ 15.5 million , which ultimately reduced our stake in GME Holdings from 50 % to 33 %. The company recognized a net gain of $ 9.2 million on the transaction as recorded in other non-operating income on the consolidated statements of income during 2024. The carrying amount of the company's investment in GME Holdings was $ 11.6 million at December 31, 2024. The company and GME Holdings maintain an agreement for Gulf Mercantile Exchange futures contracts to be exclusively traded on the CME Globex platform. OSTTRA. The company owns a 50 % equity interest in OSTTRA, which is a joint venture withe IHS Markit. OSTTRA performs trade processing and risk mitigation services. The company accounts for its investment using the equity method of accounting. The carrying amount of the company's investment in OSTTRA was $ 1.2 billion at December 31, 2024. S&P Dow Jones Indices LLC. In June 2022, the company invested $ 410.0 million in S&P Dow Jones Indices LLC, which S&P Dow Jones Indices LLC used as part of the consideration for its acquisition of the IHS Markit index business. The company continues to own a 27 % interest in S&P Dow Jones Indices LLC and accounts for its investment in S&P Dow Jones Indices LLC using the equity method of accounting. The carrying amount of the company's investment in S&P Dow Jones Indices LLC was $ 1.3 billion at December 31, 2024. The company has long-term exclusive licensing agreements with S&P Dow Jones Indices LLC to list products based on the Standard & Poor's Indices and Dow Jones Indices. Shanghai CFETS-NEX International Money Broking Co., Ltd. The company owns a 33 % interest in Shanghai CFETS-NEX International Money Broking Co., Ltd. (CFETS) and accounts for its investment in CFETS using the equity method of accounting. The carrying amount of the company's investment in CFETS was $ 58.4 million at December 31, 2024. 68 Table of Contents 8. DEBT Short-term debt consisted of the following at December 31, 2024 and 2023: (in millions) 2024 2023 $750.0 million fixed rate notes due March 2025, stated rate of 3.00% (1) $ 749.8 $ — Total short-term debt $ 749.8 $ — _______________ (1) The company 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 %. Long-term debt outstanding consisted of the following at December 31, 2024 and 2023: (in millions) 2024 2023 $750.0 million fixed rate notes due March 2025, stated rate of 3.00% (1) $ — $ 749.1 $500.0 million fixed rate notes due June 2028, stated rate of 3.75% 498.5 498.1 $750.0 million fixed rate notes due March 2032, stated rate of 2.65% 743.7 742.9 $750.0 million fixed rate notes due September 2043, stated rate of 5.30% (2) 744.3 744.0 $700.0 million fixed rate notes due June 2048, stated rate of 4.15% 691.7 691.3 Total long-term debt $ 2,678.2 $ 3,425.4 _______________ (1) The company 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) The company 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 4.73 % . Short term and long-term debt maturities, at par value were as follows as of December 31, 2024: (in millions) Par Value 2025 $ 750.0 2026 — 2027 — 2028 500.0 2029 — Thereafter 2,200.0 69 Table of Contents 9. INCOME TAXES The company is subject to regulation under a wide variety of U.S., federal, state and foreign tax laws and regulations. Income before income taxes and the income tax provision consisted of the following for the years ended December 31, 2024, 2023 and 2022: (in millions) 2024 2023 2022 Income before income taxes: Domestic $ 4,305.9 $ 3,900.5 $ 3,291.7 Foreign 235.5 253.1 198.6 Total $ 4,541.4 $ 4,153.6 $ 3,490.3 Income tax provision: Current: Federal $ 776.9 $ 751.7 $ 620.5 State 252.8 205.8 177.1 Foreign 52.3 44.9 24.9 Total 1,082.0 1,002.4 822.5 Deferred: Federal ( 49.6 ) 21.9 ( 16.3 ) State ( 17.0 ) ( 33.8 ) ( 7.3 ) Foreign 0.2 ( 63.1 ) 0.4 Total ( 66.4 ) ( 75.0 ) ( 23.2 ) Total Income Tax Provision $ 1,015.6 $ 927.4 $ 799.3 Reconciliation of the U.S. federal income tax rate (statutory tax rate) to the effective tax rate is as follows: 2024 2023 2022 Statutory tax rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit 4.1 3.3 3.9 Foreign-derived intangible income deduction ( 1.7 ) ( 1.5 ) ( 1.5 ) Other, net ( 1.0 ) ( 0.5 ) ( 0.5 ) Effective Tax Expense Benefit Rate 22.4 % 22.3 % 22.9 % In 2024, 2023 and 2022, the effective tax rates were higher than the statutory tax rate. The increases to the effective tax rate for the state taxes were partially offset by the foreign-derived intangible income (FDII) deduction. 70 Table of Contents At December 31, 2024 and 2023, deferred income tax assets (liabilities) consisted of the following: (in millions) 2024 2023 Deferred Income Tax Assets: Net operating losses $ 5.3 $ 3.4 Property 12.8 — Accrued expenses, compensation, leases and other 123.9 131.4 Subtotal 142.0 134.8 Valuation allowance — ( 0.4 ) Total deferred income tax assets 142.0 134.4 Deferred Income Tax Liabilities: Purchased intangible assets ( 5,240.6 ) ( 5,298.2 ) Other ( 114.1 ) ( 115.4 ) Property — ( 1.3 ) Total deferred income tax liabilities ( 5,354.7 ) ( 5,414.9 ) Net Deferred Income Tax Liabilities $ ( 5,212.7 ) $ ( 5,280.5 ) Reported as: Net non-current deferred tax assets $ 34.1 $ 47.2 Net non-current deferred tax liabilities ( 5,246.8 ) ( 5,327.7 ) Net Deferred Income Tax Liabilities $ ( 5,212.7 ) $ ( 5,280.5 ) A valuation allowance is recorded when it is more-likely-than-not that some portion or all of the deferred income tax assets may not be realized. The ultimate realization of the deferred income tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions. At December 31, 2024, the company had domestic income tax loss carryforwards of $ 25.1 million of which $ 22.1 million will expire between 2030 and 2036 and $ 3.0 million can be carried forward indefinitely. These amounts primarily relate to losses from the acquisition of NEX Group plc and the acquisition of Pivot, Inc. No valuation allowance was recorded at December 31, 2024 and a valuation allowance of $ 0.4 million was recorded at December 31, 2023. The following is a summary of the company’s unrecognized tax benefits at December 31, 2024, 2023 and 2022: (in millions) 2024 2023 2022 Gross unrecognized tax benefits $ 251.6 $ 264.1 $ 280.3 Unrecognized tax benefits, net of tax impacts in other jurisdictions 238.1 251.9 264.4 Interest and penalties related to uncertain tax positions 18.8 16.6 28.0 Interest and penalties recognized on the consolidated statements of income 2.1 ( 4.0 ) ( 3.8 ) The company does not believe it is reasonably possible that within the next twelve months, unrecognized tax benefits will change by a significant amount. A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows: (in millions) 2024 2023 2022 Balance at January 1 $ 264.1 $ 280.3 $ 316.4 Additions based on tax positions related to the current year 12.0 10.0 8.5 Additions for tax positions of prior years 3.9 4.3 2.7 Reductions for tax positions of prior years ( 17.7 ) ( 8.0 ) ( 9.5 ) Reductions resulting from the lapse of statutes of limitations ( 5.6 ) ( 5.2 ) ( 5.5 ) Settlements with taxing authorities ( 5.1 ) ( 17.3 ) ( 32.3 ) Balance at December 31 $ 251.6 $ 264.1 $ 280.3 The company is subject to U.S. federal income tax as well as income taxes in Illinois and multiple other state, local and foreign jurisdictions. As of December 31, 2024, substantially all federal income tax matters have been concluded through 2016 other than the Section 199 deduction. On April 15, 2024, the company filed a court case with the U.S. court of Federal Claims 71 Table of Contents related to the Section 199 deduction. All United Kingdom income tax matters have been concluded through 2017, and substantially all state income tax matters have been concluded through 2019. 10. EMPLOYEE BENEFIT PLANS Pension Plans. CME maintains a non-contributory defined benefit cash balance pension plan for eligible employees. CME's plan provides for a pay-based credit added to the cash balance account based on age and earnings and includes salary and cash bonuses in the definition of earnings. Employees who have completed a continuous 12-month period of employment and have reached the age of 21 are eligible to participate. Participant cash balance accounts receive an interest credit equal to the greater of the one-year constant maturity yield for U.S. Treasury notes or 4.0 %. Participants become vested in their accounts after three years of service. The measurement date used for the plan is December 31. The following is a summary of the change in projected benefit obligation: (in millions) 2024 2023 Balance at January 1 $ 351.5 $ 316.4 Service cost 21.9 21.1 Interest cost 18.8 18.5 Actuarial (gain) loss ( 9.8 ) 18.3 Benefits paid ( 18.4 ) ( 22.8 ) Balance at December 31 $ 364.0 $ 351.5 The aggregate accumulated benefit obligation was $ 335.6 million an d $ 323.2 million at December 31, 2024 and 2023, respectively. The following is a summary of the change in fair value of plan assets: (in millions) 2024 2023 2022 Balance at January 1 $ 350.8 $ 331.7 $ 402.3 Actual return on plan assets 26.1 38.9 ( 50.0 ) Employer contributions 9.0 3.0 — Benefits paid ( 18.4 ) ( 22.8 ) ( 20.6 ) Balance at December 31 $ 367.5 $ 350.8 $ 331.7 The plan assets are classified into a fair value hierarchy in their entirety based on the lowest level of input that is significant to each asset or liability’s fair value measurement. Valuation techniques for level 2 assets use significant observable inputs such as quoted prices for similar assets, quoted market prices in inactive markets and other inputs that are observable or can be supported by observable market data. The fair value of each major category of plan assets as of December 31, 2024 and 2023 is indicated below: (in millions) 2024 2023 Level 2: Money market funds $ 15.9 $ 6.2 Mutual funds: Fixed income 168.1 165.3 U.S. equity 137.3 131.6 Foreign equity 46.2 47.7 Total $ 367.5 $ 350.8 At December 31, 2024, the fair value of pension plan assets exceeded the pension benefit obligation by $ 3.5 million and the excess was recorded as a non-current pension asset in other assets. At December 31, 2023, the fair value of pension plan assets had a shortfall of the projected benefit obligation by $ 0.7 million and the shortfall was recorded as a non-current pension liability in other liabilities. CME's funding goal is to have its pension plan 100 % funded at each year-end on a projected benefit obligation basis, while also satisf ying any minimum required contribution and obtaining the maximum tax deduction. Year-end 2024 assumptions have been used to project the assets and liabilities from December 31, 2024 to December 31, 2025. The company anticipates based on this projection that an additional contribution of $ 12.2 million in 2025 will be necessary for it to meet its funding goal. 72 Table of Contents However, the amount of the actual contribution is contingent on various factors, including the actual rate of return on the plan assets during 2025 and the December 31, 2025 discount rate. The components of net pension expense and the assumptions used to determine the end-of-year projected benefit obligation and net pension expense in aggregate at December 31, 2024, 2023 and 2022 are indicated below: (in millions) 2024 2023 2022 Components of Net Pension Expense: Service cost $ 21.9 $ 21.1 $ 25.7 Interest cost 18.8 18.5 12.0 Expected return on plan assets ( 24.1 ) ( 21.6 ) ( 22.3 ) Recognized net actuarial loss 0.4 0.3 1.4 Net Pension Expense $ 17.0 $ 18.3 $ 16.8 Assumptions Used to Determine End-of-Year Benefit Obligation: Discount rate 5.70 % 5.20 % 5.60 % Rate of compensation increase 4.00 4.00 4.00 Cash balance interest crediting rate 4.20 5.14 4.75 Assumptions Used to Determine Net Pension Expense: Discount rate 5.20 % 5.60 % 3.00 % Rate of compensation increase 4.00 4.00 4.00 Expected return on plan assets 7.25 6.75 5.75 Interest crediting rate 5.14 4.75 4.00 The discount rate for the plan was determined based on the market value of a theoretical settlement bond portfolio. This portfolio consisted of U.S. dollar denominated Aa-rated corporate bonds across the full maturity spectrum. A single equivalent discount rate was determined to align the present value of the required cash flow with that settlement value. The resulting discount rate was reflective of both the current interest rate environment and the plan's distinct liability characteristics. The basis for determining the expected rate of return on plan assets for the plan is comprised of three components: historical returns, industry peers and forecasted return. The plan's total return is expected to equal the composite performance of the security markets over the long term. The security markets are represented by the returns on various domestic and international stock, bond and commodity indexes. These returns are weighted according to the allocation of plan assets to each market and measured individually. The overall objective of the plan is to achieve required long-term rates of return in order to meet future benefit payments. The component of the investment policy for the plan that has the most significant impact on returns is the asset mix. The asset mix has a minimum and maximum range depending on asset class. The plan assets are diversified to minimize the risk of large losses by any one or more individual assets. Such diversification is accomplished, in part, through the selection of asset mix and investment management. The asset allocation for the plan, by asset category, at December 31, 2024 and 2023 was as follows: 2024 2023 Fixed income 45.7 % 47.1 % Money market funds 4.3 1.8 U.S. equity 37.4 37.5 Foreign equity 12.6 13.6 For 2025, management expects the fixed income asset class to be approximately 50 % of the portfolio. The target allocation for the equity asset classes is expected to be approximately 50 % of the portfolio. At times, the company may determine that it is necessary to place some assets in cash equivalent investments in order to pay expected plan liabilities. Given this, the actual asset allocation for the plan may not fall within the target allocation ranges from time to time. According to the plan's investment policy, the plan is not allowed to invest in securities that compromise independence, short sales of securities directly owned by the plan, securities purchased on margin or other uses of borrowed funds, derivatives not used for hedging purposes, restricted stock or illiquid securities or any other transaction prohibited by employment laws. If the plan directly invests in short-term and long-term debt obligations, the investments are limited to obligations rated at the highest rating category by Standard & Poor's or Moody's. 73 Table of Contents The pre-tax balance and activity of actuarial losses for the pension plan, which are included in other comprehensive income (loss), for 2024 are as follows: (in millions) Actuarial Loss Balance at January 1 $ 33.0 Unrecognized net loss ( 0.4 ) Recognized as a component of net pension expense ( 11.8 ) Balance at December 31 $ 20.8 At December 31, 2024, anticipated benefit payments from the plan in future years are as follows: (in millions) 2025 $ 34.9 2026 35.7 2027 36.4 2028 37.4 2029 38.4 2030-2034 196.2 Savings Plans. CME maintains a defined contribution savings plan pursuant to Section 401(k) of the Internal Revenue Code, whereby all U.S. employees are participants and have the option to contribute to this plan. CME matches employee contributions up to 3 % of the employee's base salary and may make additional discretionary contributions. In addition to the plan for U.S. employees, the company maintains defined contribution savings plans for employees in international locations. Aggregate expense for all of the defined contribution savings plans amount ed to $ 20.8 million, $ 19.7 million and $ 18.3 million in 2024, 2023 and 2022, respectively. CME Non-Qualified Plans. CME maintains non-qualified plans, under which participants may make assumed investment choices with respect to amounts contributed on their behalf. Although not required to do so, CME invests such contributions in assets that mirror the assumed investment choices. The balances in these plans are subject to the claims of general creditors of the company and totaled $ 104.2 million and $ 101.3 million at December 31, 2024 and 2023, respectively. Although the value of the plans is recorded as an asset in marketable securities on the consolidated balance sheets, there is an equal and offsetting liability. The investment results of these plans have no impact on net income as the investment results are recorded in equal amounts to both investment income and compensation and benefits expense. The non-qualified plans include the following: Supplemental Savings Plan. CME maintains a supplemental plan to provide benefits for employees who have been impacted by statutory limits under the provisions of the qualified pension and savings plan. Employees in this plan are subject to the vesting requirements of the underlying qualified plans. Deferred Compensation Plan. A deferred compensation plan is maintained by CME, under which eligible employees and members of the board of directors may contribute a percentage of their compensation and defer income taxes thereon until the time of distribution. COMEX Members' Retirement Plan and Benefits. COMEX maintains a non-qualified retirement and benefit plan under the COMEX Members' Retirement Plan and Benefits plan (MRRP). This plan provides benefits to certain members of the COMEX division based on long-term membership, and participation is limited to individuals who were COMEX division members prior to NYMEX's acquisition of COMEX in 1994. No new participants were permitted into the plan after the date of this acquisition. All benefits to be paid under the MRRP are based on reasonable actuarial assumptions, which are based upon the amounts that are available and are expected to be available to pay benefits. There were no contributions to the plan in 2024, 2023 and 2022. At December 31, 2024 and 2023, the obligation for the MRRP totaled $ 7.3 million and $ 8.7 million, respectively. Assets with a fair value of $ 9.0 million and $ 10.8 million have been allocated to this plan at December 31, 2024 and 2023, respectively, and are included in marketable securities and cash and cash equivalents on the c onsolidated balance sheets. The balances in this plan are subject to the claims of general creditors of COMEX. 74 Table of Contents 11. LEASES Leases. The company has operating leases for datacenters and corporate offices. The operating leases have remaining lease terms of up to 13 years, some of which include options to extend or renew the leases for up to an additional five years, and some of which include options to early terminate the leases in less than 12 months. Management evaluates the exercisability of these options at least quarterly in order to determine whether the contract term must be reassessed. For a small number of the leases, primarily the international locations, management's approach is to enter into short-term leases for a lease term of 12 months or less in order to provide for greater flexibility in the local environment. For certain office spaces, the company has entered into arrangements to sublease excess space to third parties, while the original lease contract remains in effect with the landlord. The company also has one finance lease, which is related to the sale of our datacenter in March 2016. In connection with the sale, the company leased back a portion of the property. The sale leaseback transaction was recognized under the financing method and not as a sale leaseback arrangement. The right-of-use lease asset is recorded within other assets, and the present value of the lease liability is recorded within other liabilities (segregated between short-term and long-term) on the consolidated balance sheets. The discount rate applied to the lease payments represents the company's incremental borrowing rate. The company has elected to utilize the short-term lease exception as prescribed in the leasing standard, such that the company has not capitalized on the balance sheet a lease asset or lease liability for leasing arrangements with a contractual term of 12 months or less from the lease commencement date. The components of lease costs were as follows for the years ended December 31, 2024 and 2023: (in millions) 2024 2023 Operating lease expense: Operating lease cost $ 51.4 $ 55.1 Short-term lease cost 0.4 0.4 Total operating lease expense included in other expense $ 51.8 $ 55.5 Finance lease expense: Interest expense $ 2.2 $ 2.5 Depreciation expense 8.7 8.7 Total finance lease expense $ 10.9 $ 11.2 Sublease revenue included in other revenue $ 9.8 $ 9.8 Supplemental cash flow information related to leases was as follows for years ended December 31, 2024 and 2023: (in millions) 2024 2023 Cash outflows for operating leases $ 73.7 $ 66.2 Cash outflows for finance leases 17.4 17.2 Supplemental balance sheet information related to leases was as follows as of December 31, 2024 and 2023: Operating leases (in millions) 2024 2023 Operating lease right-of-use assets $ 231.1 $ 272.0 Operating lease liabilities: Other current liabilities $ 44.7 $ 46.7 Other liabilities 289.3 344.0 Total operating lease liabilities $ 334.0 $ 390.7 Weighted average remaining lease term (in months) 106 114 Weighted average discount rate 4.2 % 3.8 % 75 Table of Contents Finance leases (in millions) 2024 2023 Finance lease right-of-use assets $ 54.2 $ 62.8 Finance lease liabilities: Other current liabilities $ 8.7 $ 8.4 Other liabilities 50.7 59.4 Total finance lease liabilities $ 59.4 $ 67.8 Weighted average remaining lease term (in months) 75 87 Weighted average discount rate 3.5 % 3.5 % Future minimum lease payments were as follows as of December 31, 2024 for operating and finance leases: (in millions) Operating Leases 2025 $ 58.0 2026 52.6 2027 50.1 2028 49.1 2029 35.1 Thereafter 153.7 Total lease payments 398.6 Less: imputed interest ( 64.6 ) Present value of lease liability $ 334.0 (in millions) Finance Lease 2025 $ 17.5 2026 17.6 2027 17.8 2028 17.9 2029 18.1 Thereafter 22.9 Total lease payments 111.8 Less: imputed interest ( 52.4 ) Present value of lease liability $ 59.4 12. CONTINGENCIES Legal and Regulatory Matters. In the normal course of business, the company discusses matters with its regulators raised during regulatory examinations or otherwise subject to their inquiry and oversight. These matters could result in censures, fines, penalties or other sanctions. Management believes the outcome of any resulting actions will not have a material impact on the company's consolidated financial position or results of operations. However, the company is unable to predict the outcome or the timing of the ultimate resolution of these matters, or the potential fines, penalties or injunctive or other equitable relief, if any, that may result from these matters. A putative class action complaint was filed January 15, 2014 in the Circuit Court of Cook County, Chancery Division, against CME Group Inc. and the Board of Trade of the City of Chicago, Inc. The plaintiffs, certain Class B shareholders of CME Group and Class B members of CBOT, allege breach of contract and breach of the implied covenant of good faith and fair dealing for violations of their core rights granted in the defendants’ respective Certificates of Incorporation. On December 2, 2021, the court granted the plaintiffs’ motion for certification of a damages-only class. In early 2024, the defendants moved for summary judgment on all claims. The court heard oral argument on that motion on January 31, 2025. Should the case proceed past summary judgment in whole or in part, the Court has set the matter for a jury trial starting on July 7, 2025. Plaintiffs have 76 Table of Contents produced an expert report estimating damages through June 30, 2023, and claiming that additional damages in an unspecified amount continue to accrue on a daily basis through final judgment. The defendants believe that the damages report is invalid under Illinois law and on that basis have filed a motion to exclude the expert from offering an opinion at trial and a motion to decertify the class. Given the uncertainty of factors that may potentially affect the resolution of the matter, at this time the company is unable to estimate the reasonably possible loss or range of reasonably possible losses in the unlikely event it were found to be liable at trial. Based on its investigation to date, the company believes that it has strong factual and legal defenses to the claims. In addition, the company is a defendant in, and has potential for, various other legal proceedings arising from its regular business activities. While the ultimate results of such proceedings against the company cannot be predicted with certainty, the company believes that the resolution of any of these matters on an individual or aggregate basis will not have a material impact on its consolidated financial position or results of operations. No accrual was required for contingent legal and regulatory matters as none were probable and estimable as of December 31, 2024 and 2023. Intellect ual Property Indemnifications. Certain agreements with customers and other third parties related to accessing the CME Group platforms, utilizing market data services and licensing CME SPAN and SPAN 2 software may contain indemnifications from intellectual property claims that may be made against them as a result of their use of the applicable products and/or services. The potential future claims relating to these indemnifications cannot be estimated and therefore no liability has been recorded. 13. GUARANTEES Mutual Offset Agreement. CME and Singapore Exchange Limited (SGX) maintain a mutual offset agreement with a current term through May 2025. This agreement enables market participants to open a futures position on one exchange and liquidate it on the other. The term of the agreement will automatically renew for a one-year period after May 2025 unless either party provides advance notice of its intent to terminate. CME can maintain collateral in the form of irrevocable standby letters of credit. At December 31, 2024, CME was contingently liable to SGX on irrevocable letters of credit totaling $ 400.0 million . CME also maintains a $ 350.0 million line of credit to meet its obligations under this agreement. Regardless of the collateral, CME guarantees all cleared transactions submitted through SGX and would initiate procedures designed to satisfy these financial obligations in the event of a default, such as the use of performance bonds and guaranty fund contributions of the defaulting clearing firm. Management has assessed the fair value of the company's guarantee liability under this mutual offset agreement by taking the following factors into consideration: the design and operations of the clearing risk management process, the financial safeguard packages in place, historical evidence of default by a clearing member and the estimated probability of potential payouts by the clearing house. Based on the assessment performed, management estimates the guarantee liability to be nominal and therefore has not recorded any liability at December 31, 2024 . Family Farmer and Rancher Protection Fund. In 2012, the company established the Family Farmer and Rancher Protection Fund (the Fund). The Fund is designed to provide payments, up to certain maximum levels, to family farmers, ranchers and other agricultural industry participants who use the company's agricultural products and who suffer losses to their segregated account balances due to their CME clearing member becoming insolvent. Under the terms of the Fund, farmers and ranchers are eligible for up to $ 25,000 per participant. Farming and ranching cooperatives are eligible for up to $ 100,000 per cooperative. The Fund has an aggregate maximum payment amount of $ 100.0 million. Since its establishment, the Fund has made payments of approximately $ 2.0 million, which leaves $ 98.0 million available for future claims. If payments to participants were to exceed this amount, payments would be pro-rated. Clearing firms and customers must register in advance with the company and provide certain documentation in order to substantiate their eligibility . The company believes that its guarantee liability is nominal and therefore has not recorded any liability at December 31, 2024. 77 Table of Contents 14. CAPITAL STOCK Shares Outstanding. The following table presents information regarding capital stock: December 31, (in thousands) 2024 2023 Preferred stock authorized 10,000 10,000 Preferred stock issued and outstanding 4,584 4,584 Class A common stock authorized 1,000,000 1,000,000 Class A common stock issued and outstanding 359,602 359,231 Class B-1 common stock authorized, issued and outstanding 0.6 0.6 Class B-2 common stock authorized, issued and outstanding 0.8 0.8 Class B-3 common stock authorized, issued and outstanding 1.3 1.3 Class B-4 common stock authorized, issued and outstanding 0.4 0.4 Preferred Stock. CME Group has approximately 4.6 million shares of Series G Non-Voting Convertible Preferred Stock (Series G preferred stock) outstanding. The Series G preferred stock is non-voting and is convertible into Class A common stock at a specified conversion rate, which is initially 1:1. The Series G preferred stock ranks on a parity basis with the Class A common stock with respect to dividend and liquidation rights and therefore participates in the earnings and losses of CME Group on the same basis as Class A common stock. Associated Trading Rights. Members of CME, CBOT, NYMEX and COMEX own or lease trading rights which entitle them access to open outcry trading, discounts on trading fees and the right to vote on certain matters as provided for by the rules of the particular exchange and CME Group's or the subsidiary's organizational documents. Each class of CME Group Class B common stock is associated with a membership in a specific division for trading at CME. A CME trading right is a separate asset that is not part of or evidenced by the associated share of Class B common stock of CME Group. The Class B common stock of CME Group is intended only to ensure that the Class B shareholders of CME Group retain rights with respect to the election of six members to the board of directors and approval rights with respect to the core rights described below. Trading rights at CBOT are evidenced by Class B memberships in CBOT, at NYMEX by Class A memberships in NYMEX and at COMEX by COMEX Division Memberships. Members of CBOT, NYMEX and COMEX do not have any rights to elect members of the board of directors and are not entitled to receive dividends or other distributions on their memberships or trading permits. Core Rights. Holders of CME Group Class B common shares have the right to approve changes in specified rights relating to the trading privileges at CME associated with those shares. These core rights relate primarily to trading right protections, certain trading fee protections and certain membership benefit protections. Votes on changes to these core rights are weighted by class. Each class of Class B common stock has the following number of votes on matters relating to core rights: Class B-1, six votes per share; Class B-2, two votes per share; Class B-3, one vote per share; and Class B-4, 1/6th of one vote per share. The approval of a majority of the votes cast by the holders of shares of Class B common stock is required in order to approve any changes to core rights. Holders of shares of Class A common stock do not have the right to vote on changes to core rights. Voting Rights. With the exception of the matters reserved to holders of CME Group Class B common stock, holders of CME Group common stock vote together on all matters for which a vote of common shareholders is required. In these votes, each holder of shares of Class A or Class B common stock of CME Group has one vote per share. The holder of Series G preferred stock does not have any voting rights. Transfer Restrictions. Each class of CME Group Class B common stock is subject to transfer restrictions contained in the Certificate of Incorporation of CME Group. These transfer restrictions prohibit the sale or transfer of any shares of Class B common stock separate from the sale of the associated trading rights. Election of Directors. The CME Group board of directors is currently comprised of 22 members. Holders of Class B-1, Class B-2 and Class B-3 common stock have the right to elect six directors, of which three are elected by Class B-1 shareholders, two are elected by Class B-2 shareholders and one is elected by Class B-3 shareholders. The remaining directors are elected by the Class A and Class B shareholders voting as a single class. Dividends. Holders of Class A and Class B common stock and Series G preferred stock of CME Group are entitled to receive proportionately such dividends, if any, as may be declared by the CME Group board of directors. CME Group Omnibus Stock Plan. CME Group has adopted an Omnibus Stock Plan under which stock-based awards may be made to employees. A total of 40.2 million Class A common stock shares have been reserved for awards under the plan. 78 Table of Contents Awards totaling 25.9 million shares have been granted and are outstanding or have been exercised under this plan at December 31, 2024 (See note 15 for further discussion). Director Stock Plan. CME Group has adopted a Director Stock Plan under which awards are made to non-executive directors as part of their annual compensation. Effective May 4, 2022, the number of Class A available shares reserved under the plan was increased from 625,000 to 725,000 , and approximately 488,223 shares have been awarded through December 31, 2024. Employee Stock Purchase Plan. CME Group has adopted an Employee Stock Purchase Plan (ESPP) under which employees may purchase Class A shares at 90 % of the market value of the shares using after-tax payroll deductions. Effective May 4, 2022, the number of Class A shares reserved under the plan was increased from 500,000 to 800,000 , of which approximately 510,567 shares have been purchased through December 31, 2024 (See note 15 for further discussion). Share Repurchase Program. In December 2024, the Board of Directors approved a share repurchase program, which authorizes the company to repurchase up to $ 3.0 billion of CME Group Class A common stock at prevailing market prices. As of December 31, 2024, there have been no shares repurchased under this program. The timing of any repurchases and the number of shares repurchased under the share repurchase program are within the discretion of CME Group and may be affected by various factors, including general market and economic conditions; the market price of the Class A common stock; CME Group’s earnings, financial condition, capital requirements and levels of indebtedness; legal requirements; and other considerations. The share repurchase program has no expiration date, does not obligate CME Group to acquire any particular amount of Class A common stock and may be modified, suspended or terminated at any time. 15. STOCK-BASED PAYMENTS CME Group adopted an Omnibus Stock Plan under which stock-based awards may be made to employees. A total of 40.2 million Class A shares have been reserved for awards under the plan. Awards totaling 25.9 million shares have been granted and are outstanding or have been exercised under the plan as of December 31, 2024. Awards granted generally vest over a four-year period, with 25 % vesting one year after the grant date and on that same date in each of the following three years. Total compensation expense for all stock-related awards (including ESPP) and total income tax benefit recognized on the consolidated statements of income for these awards at December 31, 2024, 2023 and 2022 were as follows: (in millions) 2024 2023 2022 Compensation expense $ 90.4 $ 83.7 $ 84.8 Income tax benefit recognized 19.2 14.2 13.2 At December 31, 2024, there was $ 139.6 million of total unrecognized compensation expense related to employee stock-based compensation arrangements that had not yet vested. The total unrecognized expense is expected to be recognized over a weighted average period of 2.2 years. In 2024, the company granted 342,716 shares of restricted Class A common stock and restricted stock units with respect to 12,812 shares of Class A common stock. Restricted common stock and restricted stock units generally have a vesting period of two to four years. The fair value related to these grants was $ 77.7 million, which is recognized as compensation expense on an accelerated basis over the vesting period. Dividends are accrued on restricted Class A common stock and restricted stock units and are paid once the restricted stock vests. In 2024, the company also granted 129,381 performance shares. The fair value related to these grants was $ 33.4 million, which is recognized as compensation expense on a straight-lined basis over the vesting period. The vesting of these shares is contingent on meeting stated performance or market conditions, generally measured over a three-year period. The following table summarizes restricted stock, restricted stock units and performance shares activity for 2024: Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2023 1,099,880 $ 204 Granted 484,909 229 Vested ( 314,695 ) 204 Cancelled ( 182,736 ) 208 Outstanding at December 31, 2024 1,087,358 219 79 Table of Contents The total fair value of restricted stock, restricted stock units and performance shares that vested during 2024, 2023 and 2022 was $ 61.4 million, $ 49.6 million and $ 52.2 million, respectively. Under the ESPP, eligible employees may acquire shares of Class A common stock using after-tax payroll deductions made during consecutive offering periods of approximately six months in duration. Shares are purchased at the end of each offering period at a price of 90 % of the closing price of the Class A common stock as reported on the Nasdaq Global Select Market. Compensation expense is recognized on the dates of purchase for the discount from the closing price. In 2024, 2023 and 2022, a total of 37,466 , 40,960 and 41,722 shares, respectively, of Class A common stock were issued to participating employees. These shares are subject to a six-month holding period. Annual expense of $ 0.8 million for the purchase discount was recognized in 2024, 2023 and 2022. Non-executive directors receive an annual award of Class A common stock with a value equal to $ 145,000 . Non-executive directors could also elect to receive some or all of the cash portion of their annual stipend, up to $ 95,000 , in shares of stock based on the closing price at the date of distribution. As a result, 18,901 shares, 19,966 shares and 18,836 shares of Class A common stock were issued to non-executive directors during 2024, 2023 and 2022, respectively. These shares are not subject to any vesting restrictions. Expense of $ 3.6 million related to these stock-based payments was recognized for the years ended December 31, 2024, 2023 and 2022. 16. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables present changes in the accumulated balances for each component of other comprehensive income (loss), including current period other comprehensive income and reclassifications out of accumulated other comprehensive income (loss): (in millions) Investment Securities Defined Benefit Plans Derivative Investments Foreign Currency Translation Total Balance at December 31, 2023 $ ( 0.4 ) $ ( 23.4 ) $ 62.0 $ ( 93.8 ) $ ( 55.6 ) Other comprehensive income before reclassifications and income tax benefit (expense) 0.2 12.2 — ( 61.0 ) ( 48.6 ) Amounts reclassified from accumulated other comprehensive income — 0.1 ( 3.6 ) 2.2 ( 1.3 ) Income tax benefit (expense) ( 0.1 ) ( 3.0 ) 0.9 2.2 — Net current period other comprehensive income 0.1 9.3 ( 2.7 ) ( 56.6 ) ( 49.9 ) Balance at December 31, 2024 $ ( 0.3 ) $ ( 14.1 ) $ 59.3 $ ( 150.4 ) $ ( 105.5 ) (in millions) Investment Securities Defined Benefit Plans Derivative Investments Foreign Currency Translation Total Balance at December 31, 2022 $ ( 0.9 ) $ ( 22.8 ) $ 64.7 $ ( 174.3 ) $ ( 133.3 ) Other comprehensive income before reclassifications and income tax benefit (expense) 0.6 ( 0.9 ) — 70.8 70.5 Amounts reclassified from accumulated other comprehensive income — 0.1 ( 3.6 ) 9.7 6.2 Income tax benefit (expense) ( 0.1 ) 0.2 0.9 — 1.0 Net current period other comprehensive income 0.5 ( 0.6 ) ( 2.7 ) 80.5 77.7 Balance at December 31, 2023 $ ( 0.4 ) $ ( 23.4 ) $ 62.0 $ ( 93.8 ) $ ( 55.6 ) 80 Table of Contents (in millions) Investment Securities Defined Benefit Plans Derivative Investments Foreign Currency Translation Total Balance at December 31, 2021 $ 1.1 $ ( 34.8 ) $ 66.1 $ 21.1 $ 53.5 Other comprehensive income before reclassifications and income tax benefit (expense) ( 2.7 ) 14.9 — ( 195.4 ) ( 183.2 ) Amounts reclassified from accumulated other comprehensive income — 1.2 ( 1.9 ) — ( 0.7 ) Income tax benefit (expense) 0.7 ( 4.1 ) 0.5 — ( 2.9 ) Net current period other comprehensive income ( 2.0 ) 12.0 ( 1.4 ) ( 195.4 ) ( 186.8 ) Balance at December 31, 2022 $ ( 0.9 ) $ ( 22.8 ) $ 64.7 $ ( 174.3 ) $ ( 133.3 ) 17. FAIR VALUE MEASUREMENTS The company uses a three-level classification hierarchy of fair value measurements for disclosure purposes: • Level 1 inputs, which are considered the most reliable evidence of fair value, consist of quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 inputs consist of observable market data, such as quoted prices for similar assets and liabilities in active markets, or inputs other than quoted prices that are directly observable. • Level 3 inputs consist of unobservable inputs which are derived and cannot be corroborated by market data or other entity-specific inputs. The company’s level 1 assets generally include investments in publicly traded mutual funds, equity securities and corporate debt securities with quoted market prices. In general, the company uses quoted prices in active markets for identical assets to determine the fair value of marketable securities. The company’s level 2 assets and liabilities generally consist of long-term debt notes. The fair values of the long-term debt notes were based on quoted market prices in an inactive market. The company’s level 3 assets and liabilities include certain investments that were adjusted to fair value. Recurring Fair Value Measurements. Financial assets recorded at fair value on the consolidated balance sheets as of December 31, 2024 and 2023 were classified in their entirety based on the lowest level of input that was significant to each asset's fair value measurement. Financial Instruments Measured at Fair Value on a Recurring Basis: December 31, 2024 (in millions) Level 1 Level 2 Level 3 Total Assets at Fair Value: Marketable securities: Corporate debt securities $ 8.8 $ — $ — $ 8.8 Mutual funds 104.2 — — 104.2 Equity securities 0.2 — — 0.2 Total Marketable Securities 113.2 — — 113.2 Total Assets at Fair Value $ 113.2 $ — $ — $ 113.2 81 Table of Contents December 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets at Fair Value: Marketable securities: Corporate debt securities $ 10.2 $ — $ — $ 10.2 Mutual funds 101.3 — — 101.3 Equity securities 0.2 — — 0.2 Total Marketable Securities 111.7 — — 111.7 Total Assets at Fair Value $ 111.7 $ — $ — $ 111.7 Non-Recurring Fair Value Measurements. During 2024, the company recognized net unrealized losses of $ 6.6 million on equity investments without readily determinable fair value. The fair value of these investments were estimated to be $ 11.6 million at December 31, 2024. This fair value assessments were based on quantitative factors, including observable price changes. The fair value measurements of these investments are considered level 3 and non-recurring. This investment is included in other assets on the consolidated balance sheet. Fair Values of Debt Notes. The follo wing presents the estimated fair values of short-term and long-term debt notes, which are carried at amortized cost on the consolidated balance sheets. The fair values below are classified as level 2 under the fair value hierarchy and were estimated using quoted market prices in inactive markets. At December 31, 2024, the fair values were as follows: (in millions) Fair Value Level $750.0 million fixed rate notes due March 2025 $ 747.0 Level 2 $500.0 million fixed rate notes due June 2028 487.1 Level 2 $750.0 million fixed rate notes due March 2032 646.4 Level 2 $750.0 million fixed rate notes due September 2043 752.4 Level 2 $700.0 million fixed rate notes due June 2048 581.1 Level 2 18. SEGMENT REPORTING The company's business is conducted through one reportable business segment, CME Group consolidated. The company has one operating segment as this is the level at which resource allocation and operating decisions regarding company performance are evaluated and determined by the senior leadership team. The company’s chief operating decision maker (CODM) is the senior leadership team that includes the Chairman and Chief Executive Officer, Chief Information Officer, Senior Managing Director Global Head of Fixed Income, President and Chief Financial Officer, Senior Managing Director and General Counsel, Senior Managing Director Global Head Equities, FX, and Alternative Products, Chief Human Resources Officer, Senior Managing Director Global Head of Commodities Markets, Chief Operating Officer and Global Head of Clearing, Chief Transformation Officer, and Chief Commercial Officer. The members of the senior leadership team represent a cross-functional group of management, which evaluates the company’s operating results in order to evaluate performance and make decisions about the company’s operating matters. The CODM reviews the financial results of CME Group consolidated on an ongoing basis throughout the year. As a single segment, the segment profitability measure is consolidated net income. Consolidated net income informs key operating decisions as made by the CODM, which include bonus allocation, discretionary share-based awards, liquidity and cash needs, new product development, existing product expansion, and product discontinuation. Consolidated net income is deemed the best indicator of segment performance. Segment assets are not reported to, or used by, the CODM to allocate resources or to assess performance. The CODM evaluates current period consolidated net income performance as compared to prior periods, budgeted results, and forecasts. The CODM reviews consolidated revenues as disaggregated by the following: clearing and transaction fees as a combination of rate per contract and average daily volume for each major asset class, market data fee revenue, and other revenue. The significant expense categories are consistent with those presented on the face of the consolidated statements of income. The components of non-operating income are also reviewed by the CODM. It is noted that the level of financial information provided to the CODM is consistent with the financial statement line items as disclosed in our consolidated statements of income. 82 Table of Contents 19. EARNINGS PER SHARE The company uses the two-class method to calculate basic and diluted earnings per common share because its Series G preferred stock are participating securities. Under the two-class method, undistributed earnings are allocated to common stock and participating securities according to their respective rights in undistributed earnings, as if all of the earnings for the period had been distributed. Basic earnings per common share is computed by dividing the net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Net income attributable to common shareholders is reduced for preferred stock dividends earned during the period. Series G preferred stock also receives a proportionate allocation of undistributed or overdistributed earnings for the period because Series G preferred stock has a contractual obligation to share in profits and losses of the company. Diluted earnings per share is computed by dividing the net income attributable to common shareholders by the weighted average number of common shares outstanding plus potentially dilutive common shares. Anti-dilutive stock awards were as follows for the years presented: (in thousands) 2024 2023 2022 Stock awards 89 455 158 Total 89 455 158 The following table presents the earnings per share calculation for the years presented: 2024 2023 2022 Net Income Attributable to CME Group (in millions) $ 3,525.8 $ 3,226.2 $ 2,691.0 Less: Preferred stock dividends ( 47.7 ) ( 44.2 ) ( 38.9 ) Less: (Undistributed earnings) overdistributed earnings allocated to preferred stock 3.4 3.6 5.1 Net Income Attributable to Common Shareholders of CME Group $ 3,481.5 $ 3,185.6 $ 2,657.2 Weighted Average Common Shares Outstanding (in thousands): Basic 359,389 359,023 358,713 Effect of stock options and stock awards 555 477 468 Diluted 359,944 359,500 359,181 Earnings per Common Share Attributable to Common Shareholders of CME Group: Basic $ 9.69 $ 8.87 $ 7.41 Diluted 9.67 8.86 7.40 20. SUBSEQUENT EVENTS The company has evaluated subsequent events through the date the financial statements were issued. The company has determined that there were no subsequent events that require disclosure. 83 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.