CME (CME) 29 Apr 202020 Q1 Earnings call transcript

Company Profile

Participants

John Peschier	IR
Terrence A. Duffy	Chairman and CEO
Derek Sammann	SMD, Global Head of Commodities & Options Products
John W. Pietrowicz	CFO
Kendal Vroman	SMD, International and Optimization Services
Julie Winkler	Chief Commercial Officer
Sean Tully	SMD, Global Head, Financial and OTC Products
Dan Fannon	Jefferies & Company
Benjamin Herbert	Citi
Alex Kramm	UBS Research
Brian Bedell	Deutsche Bank
Christopher Allen	Compass Point Research
Michael Carrier	Bank of America Merrill Lynch
Rich Repetto	Piper Sandler
Jeremy Campbell	Barclays
Christian Bolu	Autonomous Research
Owen Lau	Oppenheimer
Alexander Blostein	Goldman Sachs
Christopher Harris	Wells Fargo
Kyle Voigt	Keefe, Bruyette & Woods
Kenneth Hill	Rosenblatt Securities
Kenneth Worthington	J.P. Morgan

Call transcript

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Operator

Ladies and gentlemen good day and welcome to the CME Group First Quarter 2020 Earnings Call. At this time, I would like to turn the conference over to our first presenter Mr. John Peschier. Please go ahead, sir.

John Peschier

Good morning and thank you all for joining us today. with to Harbor for Terry, followed your start turn then brief to by over it Derek, questions. going the language Safe I’ll remarks I’m and John the team also management our of members participate Other in Q&A. will

Statements to made may the documents These differ implied facts our uncertainties, on They statements historical assumptions with and results predict. are be from what More Therefore, information our that or and are not actual our that of forward-looking the and can materially is other involve expressed are future on our website. are performance. in detailed filings reference website outcomes are this which found in performance on statement. call any in SEC statements. may about difficult not that factors guarantees affect risks,

final Lastly, of With turn find to release a non-GAAP you I Terry. between earnings the would will our measures. GAAP like to and over that, in reconciliation the call page

Terrence A. Duffy

John optimization end going am a markets at as has you we have hope healthy along Today, data areas, global for safe. transitions I energy to he Derek remarks. business. now of Julie as and several responsibilities Durkin’s advisor. comments my and have area Also, few international our sales and heads this families our staying Julie Ken the Winkler Sammann on his running Bryan Ken our she and the and are us Thank joining regarding of taking to an make Vroman. and role all your with and you us, Julie morning. taken our are We over thank you Ken business. research joining is

COVID-XX this are the that a of taken and for It heroes all ways in pandemic ago. around has devastating few and changed clear. uncertainty on created seemed crisis obviously challenging toll world. lives unimaginable extraordinarily daily in weeks us. difficult These The life human has also our are unprecedented a times The only

Our this towards the front entire medical sincere fighting aggressively to working vaccine. thanks a community the on and disease go out lines

We risk keep thank safe. many also responders first to lives continue to want us the to who their

Group, the daily action the the close to remain in community. basis. safety industry and early were that our and a and We access entire focused protect we At took first trading market CME to health employees of facility our participants who on on floor our

We mandates implemented and protect restrictions across home’ ‘work from travel to employees global our also offices.

the they of proud are resilience to and challenge. risen this We team have new our how of

help and quarter through customers Our its this number employees that highlight that look increased a our and to reflect navigate metrics as I’d important in are performance and we this like to our consider continue and hard to forward. partners to of challenge think incredibly uncertainty work volatility. we With mind,

the processes with performed and systems during Our traffic peak and extremely we order consistent quarter, saw very well times. response

volume XX took record highest we place first on in on the when day XXth. million Our contracts February quarter, traded

million, as up managed XXXX. peaks, QX global daily volume XX the quarter risk. records volumes many for Average Aside XX% our areas from product different the clients was across set from

clients United In up addition, strong, the million quarter States our X.X first particularly or XX%. per volume from averaging in day contracts the outside was

and continued all all their be across to clients risk to result, able a As zones. manage products time

our raised We These asset response margins In to our with risk also most management house, clearing increased and were reviewed classes. many every function to maintained committees, regulators. our trade. across industry-leading both for risk safeguards prudent products provide clearing policies on we volatility,

our with of ensure contact daily the markets our health in regulators are to volatility. during peaks these of We unprecedented

leveraging screen, options many closed roughly interest in the over interest rates period. products, relied that clients floor, floor number held users futures, we to well a have short on and our especially register moment, who to the remained key of We platform volumes of percentage Let trade And, on up the have assisted a same time at successfully the have since me significant quickly for turn as equities trading the front-end and floor a options rate traditionally in new then, to weeks a rate since onboard interest order in our own the five levels. it.

far, So were on few these they the where actually last that pits ahead volumes are were of open. the days

As to our made to years has served and the United regionally-focused our with sales global sales coverage Today, well is have staff client investment a several us effort increase you significant began sales presence. know, ago more to make And the many extremely we deepen our of our based States. model. that an around half globe. We than outside

in professionals around located the sales world. countries XX cities XX have We in

We Our Client these management, retail. client and broad-based have product together continue engagement handle will to groups closely out saw that and with banks, at clearing consistently record believe pay across customer industry. We off. compared hedge high. feedback all asset to including worked managers, trading operations during strength a to pandemic, stands our our proactive commercials, client sales, firms, efforts others outreach funds, teams interactions this mentions in prop

business than up Europe more in was U.S., XX% retail and Asia. growth strength Our considerable with the

Exchange, futures during of NEX Last, than optimization We offices traditional London business. businesses made the we those to the We least, divested acquired. our XXX XXX we meetings cash from completed our business, but integrate work. QX certainly and progress and employees not and both of to we clients over more integrated cross-selling our where considerable NEX

largest these clients and optimization, EBS, FX new compares reference, these to on interest XXXX. seeing are continue of full with data success XXX focused and the be we our rates also For services. businesses and during and in to that cross-selling options of BrokerTec, meetings The meetings of year percentage

challenge. summarize the to market employee us was of on dedication a To the I all level. the personal am base the of stepped professional of first environment challenging a quarter, they and for proud as our up

that the participants ability trust appreciate also our our deliver in have results. market We to

and term tragedy. know But long be. from the our of ultimately recovering not markets we impact what are yet part will COVID-XX important do of this ahead, economy an we that financial know maintaining Looking do

we As the clock, benchmark all classes I the remains any XXXX, strong to offerings management robust and before broad asset common Sammann. continue distribution to going participation, capital channel to strong continue you around to but deliver same, offer our efficiencies, through turn forward Derek of with promote partnerships. the move these global platforms, our build over class offer on our have, to questions look call that, to deep commitment strategy developing to liquidity We to am and Derek. risk answering world forward

Derek Sammann

Terry. you Thank

in to last the we increased global WTI week provide were a and classes, perspective take saw the uncertainty across crude what volatility caused happened all futures as pandemic to designed events. crude oil I’d that of our our As illustrate COVID-XX the further Overall, performed market market. context elevated has these a to most asset oil to Terry like mentioned, challenging environment of markets including on in share and they on -- market in I’ll market the further. our a these what comments few moment

there and months. reduction also have barrels global day a pressure about concerns with Along oil Continued pressure the oil, well. global a has drastic have created U.S. steepening few over barrels a been to oversupply day. for challenges of contango last the with market storage XX demand, Heightened significantly in million a daily downward a intensified oil prices global in XXX significant from the the and oil unique capacity as on million abroad consumption decreasing downward price

increasingly clearing may market the these early that capable create prices eventuality, saw XXth, handling proactively market April, and for driven of fundamentals WTI trade risk such firms, should moment it. Group systems U.S. full our ago: storage. CME pricing, the I dynamics an oversupply, and contract mentioned WTI regulator, by anticipating our we April negative that require the our demand, trading negative in In reduced management for marketplace a negative same Prepared dynamics the potential were informed on and

dynamics markets Tuesday’s going reflected the our futures as were of WTI and settlement WTI physically on cash Our challenging contract underlying contracts. delivered converging Monday into final these

are they in negative and that, are while entirely note also not markets. should power prices I energy rare, new

on energy also need in that WTI the Germany, represents it contracts We is these have the strength delivery cash for and physical risks. global negative certainty trade WTI end-user in comment the with settled the a in is on convergence Physical gold Commercial underlying and choice assessments. market’s markets because is other settle standard the global are more their than of physically-delivered seen convergence disconnected crude April. provides oil markets managing examples ensures the XX% pricing XX% products. I’d transactions oil as as exposure, the briefly optimal underlying customers to benchmarks crude based who result participate and which the market. futures, in oil Today, products physical in they believe so actual benchmark. via optimally to manage that U.S., power for can WTI including delivery the multiple from that UK. like futures with are commodity and physical of of WTI in opposed we that because and

every around We all XX%. world, in hours are volume has and Asian refined client and time and Europe reflect zone. trading our to increased is continue from segments XXX% Year-to-date products up pleased that crude the during overall broad WTI participation markets by

the oil first heightened options the tools, to of quarter this clients continue are of also important year with in volatility. which we have particularly Importantly, provide to crude XX% times in our our and grown clients leading

dynamics, crude transfer continues markets. over of and In I’ll to this turn call John. summary, extremely the backdrop that, against to perform WTI risk in benchmark to oil clients physically-delivered challenging global contract oil help hedge our With their our market

John W. Pietrowicz

Derek. Thanks

well mentioned, of served the time. our Terry and technology unprecedented during employees dedication investment this our our in the clients As

During CME more an very basis year. on were up and than quarter effective adjusted billion an the from adjusted XX.X%, revenue, tax in the of resulted in $X.XX. of XX% expenditures million. generated approximately were for an quarter the carefully $X.X had diluted first Capital CME Expenses EPS $XXX last approximately rate adjusted for which and million $XX managed quarter, were

in paid a to variable shareholders cash our out our of dividend ago. our dividend the year During $X.XX quarter, the billion. of share, regular at approximately CME’s per is end XX% CME of was $X.XX billion annual up of and form the from quarter which the $X share per $X.X

debt. down pay to continued our We

commercial down million pay year. we $XXX the of will outstanding approximately We by the paper end have of which

achieved we to EBITDA one quarter our debt target. times This

of systems. on We trading our continue and legacy to BrokerTec EBS progress the integration

towards and technology work to migration in EBS XXXX. the in fourth with teams following operations platform of Our the BrokerTec continue a Globex quarter to

environment are testing is up testing Our BrokerTec system. the and clients

we months environments, but working the billion remote time, continue complexity target to be to closely while will license this continue of $X.XX year we navigate fees with $X.XX operating customers point, the our at to working At billion We to excluding during the expense expect be next our range. fourth the quarter. this this added several we in

remains our refer our for highlights of tax guidance the and to Please page addition, In last additional CAPEX unchanged. details. Executive financial and Commentary

are we the very of summary, In with company. the pleased performance

relentlessly the worked market Our and of employees on environment adapted behalf challenges of to this participants.

difficult questions. investments In Peschier open and you closing, for I technology yourself after employees, today I along global now in well might and Our call have to healthy this during the markets John the question. available time. and was We you. follow-ups to are limit ensured for operated be up Please the hope we systems you our like families have would will managed. any call. the and one Thank processes, your your risk and made safe with effectively

Operator

Instructions]. [Operator you. Thank

Dan Our comes question Fannon first with Jefferies. from

Dan Fannon

both kind Thanks, the your can the obviously good, your that. I been and of acting about about relevance the have And really of pricing. you are ETS guess going seen how comments just of to WTI view product could what's just users I guess talk as still Derek of think some products why obviously that of within forward behaviorally regards and couple commercial a headlines the contracts, haven’t customers we the the customers last on talk of here rolling in your weeks good we happened to asset ultimately of the guess and change in you non-commercial the as I forward of utility kind you as then the again class? with morning. that if most relevant for health about utility walk could follow-up through and benchmark you the negative WTI

Terrence A. Duffy

Terry its Dan, Duffy.

day want one. The headlines I said. referenced, goes that in one on what The good that Derek think on because Before to you've question, I thing answering were not good it's headlines little been is to a bit touch haven't think I you incorrect.

I has was you've lot dramatically, lot I'm understand that narrative seen. think exactly a happened. changed because people of sure didn't what a there's That

what in narrative week negative I different and ago headline that completely pricing went with the Monday. associated a is it So think the was than on

just that that. I So we're want sure to on clear make

Derek Sammann

Hey the certainly It's Dan, for Derek. Thanks a question. it's topic.

started of believe contracts. firmly kind the it So utility optimal what delivered of by the based that talking of kind we are was about is. I physically mean, We WTI. the on WTI benchmarks

I at to firmly cash gold deliveries convergence be widely As contract that believed the with it mentioned my in a physical since commodity believe standard comments, the ensures for changed market. least

at price that and what represents $XX physically represents, over at WTI contracts April which it So barrels That's settled one actually when you XXst under at expirations think of million it about price. WTI X.X set. delivered in the on were the

physically the actual standard. physical contracts convert that value asset, to when looking cash represents that for underlying So are of is that product that different a customers

it's futures, the right talking morning, what delivers hour that are this in difference the right asset seeing the Brent being that now. of think WTI the noting or about about physical are disconnect it's ran versus futures worth Times cargoes with example. Financial that came is an physically are the now from actually article the with itself conversions Brent, the underlying that an ago underlying settled worth that I Sea out for futures And actual the North just traded So the references assessed underlying that the with product price you between says

are futures Brent, is settled now. right It financially between contract. Brent is barrels $X which $X on delivery. the below settle So a between Ice physical not physical does the priced that is What Ice and difference Brent dated trading

on end asset contract, customers growing on to focus for, use what the the you come your client actual corporates the the to we our to is participants. price for unarranged are side contract our at deliver year-to-date Dan, looking back side, and buyside that our look our fastest at on and our connect that when when revenue and our user business market physical So participants physical contracts question utility that bank

or those broad you contract. guys customers, our buy and participation it's hold based from whether user the participants customers in the been this whether So fastest see have it's year-to-date end growing commercial

market story. is some the basis, forward question look relative And story of like to this global oil say I right a has would that is kind is seen piece unprecedented of now. of market what on the last your going this a not impacts listen, U.S. global the This just a

storage for the is If global you all North of freights in of at floating being now estimated actually coming used look floating the oil is being it's out XX% about for storage right utilized, Sea. that at

need of simply curve story. the The fundamentals demand supply end not to price. can products what So is length the underlying of the at is globally, for. oversupply U.S. the they They the the that's front story know of WTI storage contract our steepness deliver underlying physical customers and risk of is just in of and the that not that the U.S. use just reflective And their

a $X data it, we our and how stop. about Bright are our just physical futures or about context actually underlying at put I now customers represents priced actual believe that's how relative WTI that's why using Brent the premium, to to contract, So products, contract to is barrel how physical and doesn't the That's the why the right converge WTI Brent think some cargoes. $X which want that's

Dan Fannon

color. Derek. Thanks Thanks, the for

Operator

you. Thank

question next Citi. comes from with Herbert Our Ben

Benjamin Herbert

good question. for Thanks morning. Hi, taking the

color some in the to APAC of you the detail provide you. any then strength volume and hope Thank rolling you also shutdowns the And give -- re-openings? then us April given date? just to the wanted progression economic on quarter, can similar some can Just on

Terrence A. Duffy

Julie and out so Thanks, can Ben. I'll go either Ken make ask start. or Vroman comments to Julie Ken and Winkler

Kendal Vroman

countries We Asia see this year-over-year, in saw Sure. volumes we places, of do we good. and through Thanks, economic as leading terms in the in in coming noted, is probably XX% back Asia, other which have despite QX. And across was China shutdowns point, they're Terry. To seen that we strong very, various very world really that up your now.

when able that growth the volume. So first as time come Taiwan, think was year you And saw it example while on But China, that will dampened for to of growth QX as they with a X% story. continue. back the China an Hong Last trade there story given stronger been online, an take -- ADV China and in up we've were year-over-year. XXXX. tough year see that Greater including do even combination the becomes we growth Kong we of just wars that some since going we

So on pandemic to and that's in through our a education the based technology, there dislocations area digital of we think sales done and the we've had terms the think marketing, been temporarily and seamlessly into and testament work we infrastructure the these a they've team and made more investments outreach. transitioned importantly worked in of

about think And we a second move XXXX part so back range more normal seen rate of April, answer us positions in to of question, we've a consistent growth. with run your platform range good while for the the or that feel into a we volumes, more

Benjamin Herbert

Thanks Ken.

Kendal Vroman

Ben. you, Thank

Operator

you. Thank

question Our with Alex Kramm UBS. comes from next

Alex Kramm

for morning means good that and to Obviously, I a lot everyone. interest second. hoping Hey, a zero switch debate you what was environment of rate to for rates a gears interest guys. about

was a think you growth things just that is of the seeing in already and peak, for I obviously the in down highlight color open provide from very happening volumes from XX% April a you the often large depth if open result seeing and on Eurodollar the as interest any guess could in guess have been cite also client would indicator you've soft, the any underneath just that surface? that perspective more futures the that So what -- interest I curious open I we not a down particular of as may things be color holders think I so been

Terrence A. Duffy

as comment am marketplaces, with Alex. rate down April a question, ask to I things global lot there's complex interesting. been that been but you that much Did and our Great Sean. But Tully him. interest little you I including the of pretty Sean volumes color going to across we've in fundamentally Eurodollars. the on know, watching a give lose bit Did Sean about very Sean that there? discussing can off. and Sean of talking we find drop have Tully think we you are Sean.

Operator

his sir, still connected. is line No

Terrence A. Duffy

Alright, one. so next second don't Sean back we can't -- go your come that a I question what and through. why to Alex know don't the to in why get

Alex Kramm

you. Oh good, thank

Terrence A. Duffy

We Alex Alex's you you question in Pietrowicz, back question. line John have correct. I will to be right heard that on

John W. Pietrowicz

Yeah, Sean back we it, is on heard we will to working line. the get --

Terrence A. Duffy

-- I discussing you Okay, been so, mean, I that to you John Sean this. if -- can what give all is we've want you.

John W. Pietrowicz

him. Sean It line, on can't is -- apparently but hear is the we

So, we Sean come when on. can back Alex, gets I think

to Sean to once back And question able is this we'll one go then so circle next we'll the and to speak.

Terrence A. Duffy

a the that Yeah, debt. associated against bit referenced the complex. looking been $X.X additional of the coupon on just think with issuance what of we'll with but debt, just other issuance we've call lot at Sean, of of little is a going that about point, we our see which Alex on day, trillion we're with us talking on treasury

that optimistic is very that So business. believe we do for that

and So, we point Eurodollars, end back your a in of activity even seeing more treasury the options zero debt. we coupons, on to of the needing in Eurodollars, of feel the are lot again, be assuming a that that across the And term will rate still are with debt along short environment are though to on we're people we manage do with the the Euros extreme complex.

he'll second. I'm So there. not but more is elaborate there's a give a lot Sean to going of positives sure back get in you on

back next Alex. and the we to we'll come So why don't question to go

Operator

next Bank. our question from you Thank Brian with Bedell comes Deutsche

Terrence A. Duffy

Brian. Hi,

Brian Bedell

he on. actually is the at maybe it's in is a rates Sean lot -- of as trades. lot hedge re-engage to line Or that defer those too can be of versus extent and the franchise it that's might you proprietary is you and to part take different will still and I -- really in a question want if has it, April, Well, well. shot substantially from it March is, a surmise dropped off in guys to funds in on when what again? of perspective. and by user question And firms And if a he just can the back okay confirm but base [ph] as maybe answer for bases -- It participation obviously April changed you the gets but this parity the it's part versus this that think trading April firms the it question with March, strategies risk decline begin to rates so take you trading what would seems the

Terrence A. Duffy

Brian. back sure if So not Sean I'm thank joined yet. you,

So if are he there. didn't, Sean you

Sean Tully

Yeah, am in, this hear back you Terry, time. I me can

John W. Pietrowicz

Sean. you hear can we Yes,

Terrence A. Duffy

you Did the Yes. question. hear

Sean Tully

I don't what apologize, happened know there. I

question, Now the repeat can apologize. you I

Terrence A. Duffy

-- ahead go sure sorry, I Yeah, Brian. am

Brian Bedell

Oh yeah, it. got Sean, yeah, joining Actually to for back. thanks I sure.

those of April what period, see the has and been in in it's books. lot to that in to the for and do a on March think you come user might proprietary volume March. again, we it to a rate the re-engage you the decline hedge franchise firms about that the we risk be? down Maybe their driver firms April funds versus you the long trading if through get will take major do So, typically after in volatility Obviously, strategies can of interest base how do extent what think pair

Sean Tully

that somehow I cut apologies earlier. you question. Yeah was the hi, thank for And off

upcoming do our during change become Federal of contracts, Fed the particular interest say zero for the of interesting not curve, to when rates volumes, less front policy. the in expect contracts, meeting. end the Reserve time very the of rate do at example, short funds we terms a yield And the let's In

extremely week, curve begin shape the and relative Budget end might deferred the the Fed trillion to become their estimated last active the you become Congressional again. at interesting our when seen of have timing of X.X X.X year. trillion issued obviously additional unprecedented that's in deficit managed. worth notes, this need year, be for is you its that This to And the to trillion deficit, size. completely futures federal to to that if importantly would of need treasury this did of about of government and announce think Office Most However, $X.X bonds will be the terms will choose risk bills, the Eurodollar

look net at example, XXXX XXX you billion. If for the issuance was

So this of obviously that. multiples is

expect treasury across So with we do issuance. see in to respect increased to hedging activity the increased curve the

You with also in their XXXX policy more manage additional the much that interest We've electronic invested Much we client that accurately acquisition. of allow added business and between time risk saw invested curve. across We've our invested also that zero We've products rate We've in seen entire huge innovation. of markets. people in grow XXXX. innovation. the dramatically to obviously

XXX,XXX XXX,XXX a doing day, doing day. is doing future silver contracts a day. is doing our Our a future XXX,XXX our ultra Invoice XX,XXX spread contacts contracts a is day, bond ultra is XX

our out Treasury issuance management expect there in that with think environment. innovative I be this will much products increased as risk serve expect well the So greater our for I curve, clients demand I also do go you further and create a do uncertainty. that will increased the

Brian Bedell

you like of looks part a you March in to guess it I think to those probably drop lot substantial off players confirm in a those are that, players it March, off seeing April, there's dropped if April? And mix just back between base, do of obviously, the from soon is strategies on engaged proprietary the you come March, that can user how or confirm that extent, the the change large or

Sean Tully

question large particular no when requirements. a you CPAs, see leverage and tend funds by in increase to you that There's reduction marginal very have some in

is clients We March, would in mentioned over I things time portfolio capital earlier have in great thing as out. The years addition I margins that we margining in helped increased. reached delivered all invested well efficiency the a efficiencies the margin to mention clients and new when to

So in X year a the savings of and It Treasury U.S. issuance bond back by do as will issue. be to in We years as first margin to portfolio may, margin. the March the increasing issuing have to Treasury time XX the in you expect month in the billion the know, manage year the come with for many progresses. customers

that will -- will be be into the it our on BrokerTec be bond and traded will We platform deliverable futures.

So we we've see seen with do Treasury the to activity increased always the expect issuance. same

Terrence A. Duffy

couple back April. and March of show of to in in they're trading. up they where Hey, that by we've me any all a bit years Brian, dissipate earlier down point, going heard the just We, for to other let little rates story a that measure the to with like your now then business, I add them We think where at, from. going come cannot weeks saw are the full participants year to

a is watching get every I That actively news good our few the can doesn't So too actually would is not single hung trading. on day. participate of markets. everybody weeks But they mean up

seen I period, like over in put saw we the over And we've business that have measure record think then the this to years. first that several just the saw longer the we last quarter. we we

[Multiple Speakers]

John W. Pietrowicz

our mean, think months To of in the that -- be you look point, I XX monthly I couple of last at to terms tends a in volume. bottom when April years, take in the

rates accounted of for last In about rates XX% April than we In year, activity. activity. fact, a are XX% for you contracts look the day in did accounted more about when of million that XX.X at

Easter tends no So, in the period like. fact this so decline and some a seen April, spring there's we've tends be the Good there's rule. Friday when to that be month In And there's time breaks also, of the and Easter of is not unusual. to April Monday.

not April So, is this a uncommon. year slower a bit different but, environment

Brian Bedell

Yeah.

Terrence A. Duffy

market time fundamentals to won't want weeks ago, Sean the pointed now I different ago a all from measure into see it side. today's managed. we risk there it have same start happen that at today's belabor out was contradicting do I people to There's want because of clearly But that year fundamentals in in the we different transitions And a don't everything know. but period. room, think we to needs and same true. and this that is be value to we're the and have we all definitely to was a March. And will not in and than And six we manage a I I over is Again, as to long how fundamental Brian is in everybody saw what than happening this, so don't want how said market there

Brian Bedell

the color. Appreciate it. for Thanks all great

Terrence A. Duffy

appreciate Thank comments, Appreciate for Brian. it, it. you your

Operator

Thank you.

next question comes with from Compass Chris Our Point. Allen

Christopher Allen

guys. morning, Good

Just understand want differences between on crude, dynamics. sediment Brent, back the the and to physical circle WTI

it would that to well, give makers. you color will to commercial breaks any moving a how the in, maybe us be storage through So the on some do hit roughly maybe base down size, from as between and start shut is if speculative it how customer forward think base, speculators, we it perspective, trying helpful? does What market commercial color down WTI can full capacity does base through well there how filtered impact I'm the to

Terrence A. Duffy

why to Derek deliver, don’t And ahead Okay, question. very we what go Chris. respond thank you Chris's and to you much, can

Derek Sammann

Good question. Chris. good thanks, so Yes, is question. it Yeah,

you you before is, can I at I that, part our I I growth give and proved us names, can't think can't you participation kind of spread it look the of is is reflection but a percent, that what give big that overall strong certainly a tell is franchise. you a the Chris asked our overall what when you'd of market energy of in

year corporates participants fastest and this is buyside the are the two energy Those As I franchise before, in mentioned our growing fastest participants. banks. growing

utilization, participating customers if we core for the extending you focus broadly, on it's our end more who's about asked So who's that connection those exactly that to product. user

We haven't don't change changing. of seen weeks anticipate last the and couple that that we in

utility converges barrels. is of it mentioned, As reason directly to a I contract the being WTI that underlying physically delivered those and

before, this you're is WTI now. market? question impact it continues, I I the an as what way think this the only impacting global the oil steep the contango that not mentioned that's this is, issue right Well, is, if on stays is posing

dated now to the the futures at reasons. same significant seeing discount Brent Ice Brent traded exactly right for You're a

now. it's between and a -- X $X think I disconnect right So $X about a

So oil impacting overall global issues lack oversupply is of a and demand globally the storage market. and the

call top crude saying, a comments to Ken WTI Terry became and the of market. no those physical underlying hey, of export the risk in Asia the the the were call reason the not reason were to our in top in use and exposed our actually it's the because importing the refined on globalization and from broadening end WTI is of alluded and of markets mentioned in products. function accelerated that and user to because energy of reflective we've growth use is energy, my up it people Asia if they significant The assets the they at explicitly it's participation XXXX, my Europe spoke participants seen longer in I is customers once was at lifted So physical ban is

a triple Asia, to in are growth the and people growth of become way benchmark the that facing. XX% that So digit is Europe global in XX% WTI is has which physical of risk indicative out

reflecting. To right is $X this I I Ice that. at is exactly control The about I our for for can't low oil trading morning Dated to said fact and it's storage, market priced physical what think control can't that that. Nobody as discount as reflecting Brent, it is to your point now. $X the loves market about Brent is

Ice reflect physical, to component Brent the and it. futures have the So Brent dated WTI physical don't

So oil Sea in right underlying It of now. the doesn't it's of the North the barrel reflect price pricing. actually

at barrel. because does So bit sell look can you Brent right it you not Ice reflect rate to a now where the little you a be when careful want

Christopher Allen

Thanks Derek.

Operator

Thank next you, our with Mike America. question comes of Carrier from Bank

Michael Carrier

Good thanks taking question. morning, for the

that Just are changes and given energy quarter during how the some moves seeing? Clearing FCMs given high held up, during significant and House the how we the big has volatility operated, of made level elsewhere, quarter, of in the the any

Terrence A. Duffy

Terry The weeks most the time, usual exceptional I Mike team be President are everything to continue that unprecedented that it's Cutinho, Clearing of Thanks, of to job the not these an team spend Sunil management to as his managing And and doing just it's done and House times. six this working as through House risk. Duffy. especially last this to over has Sunil tethered our Clearing my of as go many able we our to members make risk. we're me, sure to manage with eight others

think we're we my is margin that putting how products have you properly CME operate system sure remarks at component opening I of make risk. in very we a not heard so this about me reference to This margins. big

of unprecedented deposits with the volatility holding of live concerned on amounts we're in. with Today the we way margin record that and we're times the because

systems put none. nothing that entire for along operations Kevin I Julie The So my into done Holzrichter its and the They've with Kometer is has the but House, place and to a have Sunil remarkable staff. job. kudos COO second Clearing

working going excited So our we'll more will as keep about, But very we're a original system margin which we're forward. well. on spend methodology, still this. which proud be towards still margining to of We're advanced our

now know tell So House CEO and operated in business XX and the and don’t the you, that Chairman And the if now Sunil's been in Clearing our is -- on not will years years and at XX.X level. I've been I call all that CEO. Chairman the I've but highest that I

Michael Carrier

Okay, thanks a lot.

Terrence A. Duffy

you. Thank

Operator

Thank you.

comes question Our with Rich next Repetto Sandler. Piper from

Rich Repetto

got Derek you've quarter. the like first, and congrats healthy I And morning. And, me, WTI made phenomenal question turn good the back, safe. Hey, all into and CME hope the It again. a for on team I are families physical all their delivery. case excuse sounds to

cash that. to move So an contract there's go, option like the to to physical in like option deliver it sounds no

spread if really So negatively, it negative look was did $XX. the spread the been issue. I comes spreads then $XX to you you was but price last that or it around that back to And day the storage $X said the $X back And year, $X. know $X over to the around

to in you the issues wide going of also in that the storage are you again? well aware storage question storage what the doesn't improve that to So to improve can the the but your years, talk five storage past the participants improve do capacity if for it so they industry guess get is, I and question and on it's

Terrence A. Duffy

thanks. Derek. Hey, ahead, Go Richard,

Derek Sammann

have listen, change, of overall this. it's people so a think drivers Okay, question. written about three good guys understand you this, There's and I

down this consumption widely XXX you on reported I got Saudi was day, news this massive get You've and stat down oversupply Russia piloting, XX. air reference the demand reduced traffic barrels massive that million The to side. last with destruction And night, XX%. on was the a

driven miles that Europe are know, either shut XX%. is in or You in states or U.S. down

just there's there's is So storage -- there no issues. although some demand

So but to want of infrastructure this on of there I has and Europe storage tell what that in been expansion this, significant you and be I physical stores I Asia. use on far in floating both in a careful can how the opine U.S.

in and might out I ULCCs that, forms storage, now. of that have earlier in which carriers just Europe up U.S. various think in VLCCs docked storage or oil, this places filled I increasingly conversation alternative of the sort in right mentioned storage is are of floating plenty are our carry and being

run are stop refiners that There their reduced can't going as on their runs, as crude refiners quickly the as run. can other have is now pieces right

multiple find asking delivery can And how been to forms process? folks I have alternative speaking we So get they're questions, opportunity. in physical in those our of world us seeking the to involved

well Rich With is dated this a global the said true Brent WTI. steepness in of the as as This is curve right phenomenon. and I now,

underlined another the is function switching isn't demand supply overlaid a one and with this storage from issues. to product. This So fundamental product of

So excess. think some up we're of starting stores see that I to floating take

how utilities some to they address of storage. We are convert seeing folks those the where determining can and

use our control how we the of the particularly commercial underlying the expiration converge customers, of needed of customers which our can those engagement, day promise converge it for. fundamentals what for and our contract on who do, our recognize markets expiration. and again, But reflect can did day What was user that's not we the markets the end by what in control is effectively how on to the

said, million that basis little delivered on April of X.X settlement delivery As I the barrels of over of crude on in a XXst got $XX.XX. price

the COVID-XX of unprecedented of about is, are and physical have delivered about historically range of and because one differential And markets, market to will the our get are with user tell as high those in the levels I say globally. needs where We're and gold how concerns last cash impact a converged are it of EFP the participants. end converging. there market with cattle basis gold moving you, moving products seeing I'd it in delivery some operate of can prices across products We've they seen we thing markets the physical futures. those done out of serve how effectively between seeing every

Rich Repetto

you trade Thanks expect well? expect Seabourne as Brent, Derek. to Do delivered, that do you negatively that

Derek Sammann

steep can't that goes know, I somehow now. You tell how right if -- curve

explicitly out an disconnect. there's the on that steepest jumped FTE end before right we now call, the just came said, front piece the on I this very or dated As the of up Brent calling literally all

high as was I as think last it $X week.

contract telling month. out curve of little the probably flattens forward nine So below if curve but significantly curve beauty market, if is the of forward look look steepness you now, of at at return bit curve, of we the [ph]. That's if as that price the here's the second and with very all trading us not months right Rich it about month continue is, is you it's the out. the the contango, We're The below seeing six, to month see the the forward forward trading just front the low a roughly third as demand front steepness the end. market that

that points more Brent, where we've whereas So I think some and FTE good morning points made Brent the as been Ice future physical the at this not dated really looking has is.

a delivered is sold the molecules dated And the Brent products. You is is issue, it's WTI It fundamental is and a futures can't spend issue. of a it storage demand following pointing FTE sell a that and on what disconnect drivers The get that's growing issue right is based Ice issue, same and a price. is it supply is that now. molecule the physical that's on out,

X.X how opinions, customers return. volatility in of contracts where environment million navigate that's lots good is why news our there's different help going the we're still April demand that quickly market, this the And that's to is in to even So this. doing in

Terrence A. Duffy

FTE and we a that need Rich just the don't numerous marketplace the on everything Derek seeing working daily Thanks, that the to his fundamentals years for team to validate Derek. And are we've been and basis. reconfirm in

So, Derek question. for your for your thanks answer. thank you Rich,

Operator

you. Thank

Our question from comes next from Barclays. Campbell Jeremy

Jeremy Campbell

all great so color for Hey, the thanks the market thanks on and far.

a some bit ask Some natural of in that see well been pretty volume of your might to about just products. headwinds the blunt I want efforts little might some you traveled. help that's cross-selling

the maybe what traders two, year XXX help cross then charges like of like, either XXX you looking looking client waters lower and what quarter to engagement in the the us other to OTC full might looks Can just and clients cycle look of mentioned meetings cross-selling product first to the doing in versus capital the think you their last futures optimization structures? think toes year. for from one, I about use length futures or feedback typical cash dip this

Terrence A. Duffy

Ken respond to a something really towards I Thanks, that her think to wants little Julie. add Julie but optimization, and more to and Julie's turn is to question, going Winkler this to area. if Jeremy. let I'm

Julie Winkler

Thank for Sure. the you question.

drive and this that able the to definitely definitely a mentioned So, accurate. environment, has that client you been cross-sell are engagements challenging been but the we've statistics

end the XXX% April, So sales the activity of same up versus about in period our we've through year-to-date XXXX. seen

continued, we've virtual has environment. even So this the outreach though been in

we meetings. buyside driven number, expect. So an what we was month contacting of introductions, XXX with you videoconferences in would clients the within this did February segment U.S. the the our via And XXXX, the to where biggest calls, XXX. we client in we had introduction uptick e-mails, cross was More cross had all in that compared and saw And by an commercial specifically, XXX

continued in into introductions well as both across those interest seeing our and be and on as you've focused services. to But new The really percentage mentioned, introductions previously options, we optimization of successes, rate new franchises. cross we largest are as reported our futures FX clients

margin need well manage you data. like we're another the manage if looking do think things can exposure that resolve new as try to increased environment clients have at their in, about to So one where as are they to their risk,

data You but this events. haven't a about that know, models their need clients talked to data forecast of data to today, trading be volatility, trading period within put in unprecedented for able to future yet we

regionally have team years. leader to the based ground trust sales we that been having introductions, saw that so has cross our face what But that those engagement relationships. feedback's -- last I really build And client important been And it's few something more the the with is say, strong. last and those global to that face than and within need we in for over uptick sales quarter lot have would we customers even with means and the And We year. personnel continuing on when last monitor. meetings invested our we're a less

great. been has part that So

a we're of team introductions. from And to lot for of they're make sales advantage that environment taking and with those this continue cross our also do education sure to really work prepared home

anything to with that, I So from optimization add an perspective. to over will Ken it turn

Terrence A. Duffy

Ken, real optimization. briefly on

Kendal Vroman

that's and the The business. is were lifeblood I we say well importance observation Yeah, was work a we about performed the of Julie's in efforts well. are to so businesses, that optimization Because think, to learned very from able driving CME the one quarter quickly environment kind help they the and these team's briefly, to prepared move first home would of very I really we a lot were our that demand high QX better of performance based they're quarter. services their even are coming time during out from first positioned these sit coming we during I and our having here working of services say, can think and integration, out time, ago performed this months the through customers on in difficult the the our acquired XX very NEX this And customers well. and

Jeremy Campbell

Thanks again.

Terrence A. Duffy

thank you very much. Jeremy,

Operator

you. Thank

comes Kramm Our from next with UBS. question Alex

Terrence A. Duffy

Oh hey, hello again.

Alex Kramm

Yeah, you. thank

guess, follow so question Eurodollar on original since franchise, Terry's your comments a I -- more the to there's add, am on the don't rather. much just my think answered actually quick but I on, Sean here think comments back on I up I floor trading

guess between is closing say had almost like futures would the it You well, because impact doesn't and floor the remained shrunk, unchanged to seem because And I and degree some stable. has the an hasn't percentage the options hasn't right. I just challenge percentage made pie it mean

economics has else floor considering we trading to as the actually maybe cost hey, future lower don't you've what the what is and behaved, electronically. Wondering maybe or where flesh maybe reopen it somebody And could trading terms degree floor of anymore markets have seen -- can in etc? a people I that needed much a So says the like as on enough we you're how much again. little savings, trading it we need bit already really in to never the think if than strategies, related shifted substantial out be Sean then that, the exploring,

maybe color sort floor of So on be the any helpful as well? would the Thank of cost you.

Terrence A. Duffy

going the of are to doing there any is difference apples. Okay, apples associated there floor with I'm so let thanks, screen gave if to And first he's if percentages potential take you that Alex. Sean part any relates strategies it saying, versus as -- to different I

I'm objectives our about it's could be as far we're relates as will point the it as saying then not. not more floor. at I Your comment about And to trading where valid. the pie

that. to So let Sean me go first talk about to

Sean Tully

you, so prepared Terry Alex look for you his as very if question. you thank thank and Terry, much. remarks, referred in Alex mentioned to, you the at

floor our running of percentage futures since rate of a as closure at options are interest Our the XX%. the

the interest as of options XX% an relevant case, the base of XXXX at future. volume at our average rate traded daily look you If

to it's looks a perspective, the like from it floor. So very been that healthy transition

that, made particular in our investments know many have In of and spreads. electronification have user to we called well, markets we you'll instruments defined significant very for addition years now in

predefined from request makers that, spreads users can unlimited then market on that can that addition request lacs. And our an in users for, defined quote, XX they of user So prices. for many quotes to number are ask almost a there spreads up are on to

strategy -- different continue and growth on continuing said, example. seen give of have on floor you very ever that of in I'd the options I futures. of a versus since we I'll four the saw mention trade have closure the box. seen say We've actually an on the on the types had innovations the all to box and we've we So launched robust seen as we of to activity that gotten work I'd of greater traction. some also percentage we're the the

cross market, a put them. committed is the the both get a have a the called of to to where We better function they a they portion And if in sides broker able guaranteed trade. of trade

the both Why end the I'm to is important? so committed the brokers. or XX,XXX on trading January, customers, very floor as pleased And a electronically that experience We of the cross in we're makers, as a the that trying since was market day closure were well the XX,XXX trading just to replicate say while the for floor. day

options in and trade So they could helps. floor, the investments fact, easily markets today our I are in to the any have of our relative hope participants strategy the of to to our as electronic innovations closure since that closure last working, working, relative increased as floor. year are volumes can futures prior

Terrence A. Duffy

to the the We it options. Let as million can annually, you me or my just products, products around not several know the for XXXX The years. they costs John knowledge Peschier existence. thresholds. is for floor John actually Sean, thresholds floor, are with we right back Pietrowicz of did the except associated it thank correct roughly Subsequently relates those the was didn't options response. And, their futures, Eurodollar that you add with to it and trading we and of XX the do is years did a viability I them associated today after few them Alex things, futures that is. It what about in The number believe as many had the me, you threshold thresholds. one, meet away. closed the meet on none not meet But

anything as importantly, most and guidelines going But come thresholds sure as a the So, that we continue and we way location. the in trading many do exactly ago. officials many, years down we have multiple are -- irrational where together it we the we floor, will going government until agreed either making know to relates relates it Alex, our to are to officials our maintain people to health not single to getting

staff environments I to to and with are As that continue environments, this virus be and have very everybody trading you know, floors safe. to keep or XX closed difficult very employees trading to have and an hundreds have not and those that and there down obligation either then are down do there to right and overreact we thing the have traders of we way. clerks to

decisions and you? futures the those make on. not But that out with we'll officials goes not point and officials time as the for has amount been health extraordinary met Does subsequent Eurodollars. met but I still cost help So levels one is close to just that except in have government want threshold open futures, been not in the product threshold

Alex Kramm

Awesome, you very thank much.

Terrence A. Duffy

bye. Appreciate it. Thanks,

Operator

Thank you.

with Our Bolu comes next Christian Autonomous. question from

Christian Bolu

not just performance bonds CME volumes just did why will period issuance John, guess to a think for from balance XXX Maybe of on Treasury I a a more to see of this, any question, morning. Sean. missed curious different part at what's question zero question only billion. XXXX rate a but grow or question sorry debts you sheet a have I'm triple the clean-up then Good And really over that exactly the I but impact the XXXX -- this guys. you, follow-up QE second Thank time? tripled so volumes already for world, part on Treasury I basically if second do

that P&L here Just the think remind us that we item, on any what drove the about sustainable, is do more Thanks. and of spike, kind line impacts? how dynamics importantly,

Speaker] [Multiple

Terrence A. Duffy

go Yeah, ahead.

John W. Pietrowicz

Thanks.

say it marketplace completely today XXXX. is was than our So that I different would probably

XX has, cash said with complex year for done much today. their made example that years ultra attractive. added to innovation are I spent underlying added have These XXX,XXX this effort earlier, much we year futures product XXX,XXX bond doing ultra hedge just more on today. We amount an which tertiary our enormous XXXX contracts in futures our participants of treasuries We accurately money, the couple ago, more that products. As contracts our allowed futures of

that, also our significant we to to made adjustments addition have product. In

very today spread. around reducing bid that know, two our our are decline pricing. in to trade reducing you When you them pricing the believe we that reduce year a glad as by note futures the ago of offer year day pricing the to current, cost So, year notes, minimum that attributable two say reduce increments, minimum you we XXX,XXX half. a contracts I'm adjusted over by to futures, that

addition portfolio time Again, like efficiencies by trade through freight during execution significantly you minimum didn't In massively the improved to that swaps. exist the things margin reducing were the capital costs margining period about. to talking changing cost increments total and like things against that price we've

benefit and In in we all earlier time X had record an revenue all actually terms mentioned earlier, to in we March QX mention rate interest particular, saw our billion. in rate margining I in of swaps customers as of interest I swaps an did record time portfolio

products, of in differences offerings. our our significant in very terms see of we terms So

our a investment in for that, force. we long to time addition about could In talk sales

referring the -- Chicago. we States United of most have if Today, States penetrated back in much bulk our our global market. the sales sat the period to set you're bulk in look going So force more force of that you outside and of of the sales time to force of United is deeply and the so sales

me markets electronic of dramatically. up have much has and back is of another we these the sales, cash before calls our efficiencies, talk our Last, improvements bond because XXXX, market difference about because something key gone go you earnings in invested you've in on heard treasury of if to penetration so because

average Today, underlying we of trading XXX% cash so futures. treasury the So daily market. traded if are market, our more in that treasury of XX% of futures treasury than you bond XXXX, the volume back bond the look cash Treasury

So I were, of helps. different today in I think hope we're for place a we all than those reasons, completely that

Christian Bolu

John. Thanks,

Terrence A. Duffy

go I'm ahead. sorry, Christian,

Christian Bolu

I to John, on balance you, was sheet. going say Sean. the please thank And

John W. Pietrowicz

Christian. thanks So,

you positions on performance that did see in in XXXX sheet put support trading increase see fourth our balance in balance And increase the of in the bonds the to terms billion represents of what in performance XX we House, primarily up sheet, activity. year. cash that's customers of of terms $XXX put bonds, of up their in of an quarter the terms the So billion Clearing which the at about from first this quarter the

and activity pretty So that's volatility. the the at market increase really due to the Clearing and House

So an higher increase amount more volatility the activity, and bonds of see in out. put you'll performance the

that -- into our about and share we is generally a the up flows about reserves is, rebated IOER XX% what that money customers. through the put it's the statement back in how customers. of earn excess And House the keep income on managing the Clearing interest we support on by collateral. cash between Generally, speaking, to at the XX% have we Now with we spread customers the gets our

We also collateral through flows earn that revenue upon as based well and the our non-cash line.

first XX cash average But billion $XX average in billion increase idea, so on earn dollars $XX about XX to quarter. we points billion increase give quarter balance. we you a last to the fourth earned that the in from terms and quarter balances on points And in of the $XX.X basis basis in an

average the about month the the is through billion just in April April. of $XX point to Now, month of cash balances out,

we the than what first So quarter. on about more double for had average

did and about XX:XX, customers, IOER approximately a XX our come to to XX% us. again, points keep spread we the basis to down Now, of will XX%

the eight earning basis customers so basis points earning points. two and And we're

Christian Bolu

thank Great, much. very you

Terrence A. Duffy

Thanks John, thanks Christian.

Okay.

Operator

Our next question Lau comes from with Owen Oppenheimer.

Terrence A. Duffy

Owen. Hey

Owen Lau

variable you're leverage Thank the to cash But Thank $X debt? management, you more Yeah, think, debt good cash should had investors some balance more raise down about you you. so in the one the or order for capital end cash position your on taking quarter. more would the reached you And of your think about have year? confident and policy at question. target and morning. your uncertainty, times COVID in sheet I given can first and you Continuing dividend my how pay importantly, this billion

Terrence A. Duffy

as in John, Owen. can and ahead might chime that address go and Thanks well. you I

John W. Pietrowicz

Yes, Thanks sure, Owen. thanks.

We we've EBITDA our very the in with one our times our comfortable achieved to like target. prepared we're of structure, I remarks, capital mentioned structure. terms In debt capital

$XXX have million will be short paper We that commercial relatively order. we about in down paying in

So the of amount that's that's debt with pre-payable. that, remaining

investment comfortable this capital in you the quarter, high we leverage very feel we structure. our grade rating, We very in for and terms so important our have structure. with our of very capital we model we've firm, So as is think saw a comfortable business got strong which very had

debt In function million is variable of our terms debt, pay down of terms obviously in short our order. I in we the and pre-payable our I a Board annual pay in that's ability will think a of like down And $XXX dividend, to got which dividend Board mentioned, decision.

on been have got our dividend we've our policy appropriate back annual return variable We been that focused shareholders. regular our capital to we've and dividend a an very ensuring cash means as and utilizing to return

prudent really policy. what regular $X.XX we Our XX% dividend a we dividend increased good have think to a share. a and we And is

Terrence A. Duffy

Thanks, John.

Operator

you. Thank

Our next Sachs. Alex question Goldman from comes with Blostein

Terrence A. Duffy

Alex. Hey

Alexander Blostein

for Thanks morning. the taking good guys, Hey question.

one do How impacting talked decline oil terms Doc you see I WTI? revenues But total us can questions? growth not to in by the of buckets this terms kind of of terms you of a the different market about in you've about categories. in about decline back to bring dynamics. predict the fact more So of side production. not right hellmen another And delivery the equation is brand [ph]. of to much the any that's way exposure, WTI over markets kind of think is demand around give question of the production the likely exposures given described outlook you utilization energy curious in merits physical obviously or WTI run prior and just difficult And so of of oil the customer I'm the And one kind for balance, of total that by of the Derek rate now. really volumes into that or coming the sense versus of year U.S. Thanks. cash

Terrence A. Duffy

obviously, Derek, we why future volumes predict but question. Derek and you, go Alex's thank address don’t out can't you and Alex,

Derek Sammann

can frankly been more to concern can now accelerate is producers take there they and an There the the it to not they wells shut miles why as take as starting Yeah, markets you then start see I fly real the as they question that because and demand into that the demand is, open And increase terminal that now math returns that very this down quickly some Alex now to the less and which as so right amount again they than do go. is takes in ramp demand look be that a refiners and forward mentioned now work, oil where crude is just quicker if the reduce you, respond of issue the the we curve. while next start to slowly at concern curve is then because earlier, the look at real up are behind. to time look reluctant the to it's miles restart. if at the it excess you are chance me What to go close demand to see open market back year, a return, forward I out to air are point the and them down. start long should The this and all going risk states my to is look is as tough beginning to shifts is longer takes want driven to expecting by to where don't stocks and at, rather and well to a predicate shut is reduce have we market's -- doing does refining I how because is to The and won't is for think here, demand. be

oversupply risk you've producers be going people real if overly but then that the when effect a shutdown see are enough. some shut actually returns now, quickly uncertainty well, the demand got will can't folks rubberbanding their the There's now we too of to that back of, many curve right down demand production returns now and I return then behind

to rapid them demand see down takes can't we the a there's watching is do is return that. forward What So is watching and a the the opinions control going shut how long too be so demand they're of people going dynamic offline express return. as interesting reluctance for because are you curve behind. to quickly I it producers to different to we for for are if

market. on the the just we election to so And the keeping that's COVID at top in uncertainty need of people look uncertainty

it's to and We are not down seeing sit knows for the people because close return by see late. shutter positions everybody you too demand it and wait time

can't precise I in market. answer give look at So you look the the at but a continued curve, participation forward our

last open futures interest million us to contracts WTI continued that in the and X.X more million in be Our months, play. X.X of been between has six has

not We're before have as I We them seeing outsized from that step participation commercials. away. mentioned seen the

of out. three four think structural of there go a I everyone's in leave tank impression for I the and kind can't Cushing market's the the anywhere. it's meantime there's with So constraints so but demand, in telling that oil space storage much can't And the control return issue looking because the to herring I don't months people probably you at that only red want months out, is the

trucks million It a the rail a X as a cars, barrels on and to transition goes over elsewhere. There's distribution day it Cushing hub. through that moves goes

that folks smart doing and differences is finding to just and that ways hub an you're to market's physical can the that we seeing. move one so now responding that transit locations. oil, take and turning storage a it, be So folks quite I transport figuring there and That's that think going that opportunity not are a cost frankly to it's of take the is Cushing, in the and at to out to and where the contango for market the right that's

and So we're term it's to the business. about at still continuing coming $X.XX because We're the there near them don't a demand on uncertainty healthier back We see of see participate. $X.XX return. the about or and RPC commercials

Alexander Blostein

Derek. Thanks

Operator

you. Thank

Chris question Fargo. Harris next with Our Wells from comes

Terrence A. Duffy

Chris. Hey,

Christopher Harris

about as outlook a sure XXXX has thinking so be there we and of it impact far the about potential the not seem for any to and to market really but the like connectivity really should doesn't revenues How guys. been thinking risks recession, Hey data of the duration beyond? result be how

Terrence A. Duffy

from critically everything that order you side So I'm John you seen if Winkler you've is team historical. in times, everything times, revenue heard now and the derived let I the give Pietrowicz I'm And last this heard going sitting data where from opportunity well. is six observation on the Julie a will multiple and right comment to I for the going business over to whether I believe one believes no bit and important data little want comment about market you've be companies different in for before. uncharted management we're weeks waters, to it the it's difficult market risk or think as

So we more run it's I looking in their and to be seeing going be over and can't people more several last the more after predict think what but what's going weeks to going here data order to on more for help businesses. are

you Winkler are right and exceptional. Julie her doing is and pretty indication gives team that what if So any now

So comment Julie. John you then remark if and ahead. go else Julie to a I wants anybody will make let

Julie Winkler

Terry, our performed Sure, well certainly of thanks million. in Yeah, revenue XXX QX thanks with the business consolidated question. data the for

much up professional over were far. device quarter really slightly first subscriber in We not so have our of So we decline the seen count displays XXXX.

and home been So forward what key of say also transitioned with in. and prepared vendors that traders their COVID-XX they support our I'd as people from our much They and wanted work and very team's well clients we're and the DR doing to in from certainly those gather and kicks active home the minimal possible data environment. that the customers work close many as of data certainly their recreate to from experience with have scenario this in going teams the consultation were impact disruption our for is input.

So for in news really out some distribution. earlier customers the transition was was the of there more there market as no good right terms disruptive. disruption technology The or pointed Terry data

seen for we've data. while demand us vendors so our of some might tell data need some be forward others for are seeing And our an their going increased customers there from this screens in actually decreased

remain we them. close are definitely So to to going

XX% that the customers as talked increase think I the last months particular sales things two looking shopping I saw at in are for that the we're about we in where data two earlier are data. historical

the trading As Clients be and those that data to are manage their on web forward. strategies refine Terry traffic pointed to going to need to over have able continue XXX%. pages access up risk to out

algorithms And flexibility device to data increasingly seeking our customers machine and are business use in CME non display solutions. automated capabilities how other additionally and in of learning

to are as industry the across we've continue we're products, I and to client about as be that and seen and close development more understand to new also new think trend focused our going what a customers talked needs organization get client definitely bringing believe is will that's closely today channel certainly So continuing within deliver their clients, our with can to we our team continue very and so continue we work acquire that through that partners. possible distribution to research And this.

So John, anything to you want add

Speakers] [Multiple

John W. Pietrowicz

No, solid first saw quarter I mean, think quarter compared all get to alter to the and the Julie I points. we fourth

so [indiscernible] about thanks. have we believe I So

Terrence A. Duffy

guys. Thanks

out like or about I So believe through have to we I more don't four why don't of get anybody all questions cut and I'd we so to continue. so them three want

Operator

with next KBW. you, Thank Voigt question our comes from Kyle

Kyle Voigt

Hi, [Question good John Inaudible]. morning.

Terrence A. Duffy

question John get Kyle the your -- I you hear didn't but did question.

John W. Pietrowicz

am I not No, no. sure.

Operator

do I apologize.

question next Rosenblatt. with Ken comes Our from Hill

Terrence A. Duffy

Hey Ken.

Kenneth Hill

expenses, maybe first just -- extended some I the for you just wonder Thanks for to to to morning. quarter good the had and near base would or kind as of here progresses are impacts here be any XQ, here. you term will that on year control over about wanted Hi, think nice wanted be into XQ, so questions potential in through travel helpful? there flow ask lockdowns, COVID-XX how about that expense I Thanks. the the thinking might whether the then

Terrence A. Duffy

address it will John John. Thanks he that. to hand Ken. can over I and

John W. Pietrowicz

Terry. thanks Yeah,

a managing our activity time think expenses at the of entire unprecedented organization really and this amount done fantastic I has job in the of exchange. terms really unprecedented in

during And the related travel pandemic certainly expense terms you less less at on as impacts of you down when time. of to and it's level expect. would period this substantially In of look going hiring the attrition seeing we're employee

quarter the zero. out of first quarter Also near would half in I will what we and imagine quarter fact the spent was and marketing to year and event. and into really in in into and it also moved as had more video we XXXX webinars our be on pushed this we advertising In had conferencing it later previously, really spend Ken is versus of the -- fourth out moved Julie pointed to

the So it through how very they've am I of able we and proud related to expenses. the impacts to some manage been also manage seen have and organization crisis. entire

guidance range too stay are out. are our we times. a exceed come of In to previously going taken It how terms guidance to at not how predict unprecedented very and the really certainly away, it's as mentioned we're little relates going of to to Terry has businesses that comfortable really and orders how we're a lot respond our really get home these to early

several are have we've the our our a -- guidance. too we make entire But years to that felt to adjustments we been managing early little organization as -- has So well. expenses we it's any as obliged

Terrence A. Duffy

whenever back been valve said at a we've function going safe go a think very our it's not all for to doing the because that be may limit get this And just last the and will everybody that their I say into people world they to weeks able some high and and back clearly what what highlighted very were doing the of or very to before then to routines proud call been to from home. throughout I'm several to you as John my bet on pretty over we have that team we to be this as with just turn Ken, add not conservative may I'm normal degree. level

So to be cautious are business and travel would incur with continue that as we a perspective usual cost. if things on from very there will

Kenneth Hill

detail. much for Great, thanks the very

Terrence A. Duffy

appreciate it. Thanks Ken,

Operator

you. Thank

next Morgan. from Our question comes Worthington Ken J.P. with

Terrence A. Duffy

Ken. Hi

Kenneth Worthington

in. thank you me for Hi, squeezing

earlier on end those that we of now margin your In the of are you're what of and record in on are response where levels rates, earned on the the side the the yield And customer that levels, are have the or versus interest terms to sort diminished? decline yields is net Christian's April question the record cash near year? in might earning you volatility given in closing earlier

Terrence A. Duffy

it your answered Pietrowicz again. latter think answered John think question that maybe I can ago one I'm I already but John moment you you say mistaken. a but

the because models As on John if will that or are yield I amounts up to give deposit, minute depending down. a it exact far you as we margin fluctuate to Pietrowicz the for on on that number it what want does calling

prudent to margins asset As classes I most management. said raised be earlier risk we on on Board the have across

it me that. is obviously John a big that turn over part it. And comment let any So for to other on of

John W. Pietrowicz

Terry. thanks Sure,

our previously cash in of XX.X that's month I billion investments terms As through what's available clients, was up put of we the are in for behalf it April. mentioned Clearing House of the of averaging on terms

of collateral we managed noncash first this are and about put to at non-cash terms billion. collateral -- on the subject or behalf average behalf on In is up substantially that's that's that's -- Both amount that managed on is up House, the can Clearing $XXX that from quarter. of the

total through cash collateral XXX.X average billion approximately XXX.X our billion put fees that's of being billion and stable to was -- billion is At that management that's quarter was $XXX April XX for. end and end about to the up -- about relatively $XXX that of First collateral the some billion March we related earned range.

earn this -- risk our In in do management. both the we because terms with turns mentioned we and as on already about get get XX% -- the and XX sharing keep So about we Terry of XX% of what IOER right customers they customers at basis we behalf, now the about amount invest earn is prudent really points. related that indicated is their XX% of to what of we I've

Kenneth Worthington

you. thank Okay,

Terrence A. Duffy

John, thanks Thanks Ken.

Operator

comes Thank from you, our next question Voigt KBW. with Kyle

Terrence A. Duffy

Kyle. back Welcome

Kyle Voigt

about run to first the there's that I last just -- X.XX annual on think but there's a expenses. sorry I'm and I X.XX, just guidance a am X.XX that expense was -- get was billion you quarter of couple and wondering I annualized it in the sorry know kind you drive lacks and the CRO roll remain other guidance expenses low spend if bridge COVID-XX? expenses what's due gap and if for terms Demian if in the of year-over-year range help us John, incremental to your expense the and out if there the could options to going rate

Terrence A. Duffy

Kyle, Thanks John?

John W. Pietrowicz

and manage really certainly like organization from we Yeah, that's the really incredible amount of of outreach managed. of the mentioned has differentiates And they the amount been peers that and up engagement how of us entire -- in it's incredible I across have customer Kyle. expenses our volume think proud Yeah, crisis terms the to terms stepped be of light the in been our has to tremendous, especially our customers. of very the managing organization I with activity thanks entire in

you've efficiently us the seen is the as to our money at looks a our and something employee definitely employees. we very as spending to So we years. sure the really -- as trend We've a manage that our across several last carefully. really continue result intend can. managing carefully. This are board that do every from expenses been over very make We've expenses We

Going tell too to terms forward plays early of how it's in the crisis out.

could up our for spending. on our timing related there of tell. half quarter to to guidance. we guidance. are the our crisis above that terms in our in tends it's under yet aware, in back so based And, for change and us little heavier different I you us think not to some wasn't early fourth it's as appropriate a -- terms in felt fact of And little depending too there's We're spend on But be comfortable we're the to very opportunity how come plays in scenarios And of be some early be our it out going that to year, a the of our too seasonality to expenses. guidance

Terrence A. Duffy

thanks Kyle, John. Thanks

Kyle Voigt

Okay, thank you.

Operator

Thank no have the for to so Duffy Mr. it turn back comments. you. At we time, this questions I'll further in closing queue,

Terrence A. Duffy

questions opportunity once much. nothing all address you this best to say the bless, Dave, and during but health. forward again thank I to all friends God and and will importantly, very and We safety you you. we'll Bye-bye. quarter. look to And your families it safe, Thank you soon. the of we all your most be very, wish talking appreciate

Operator

earnings Ladies and concludes first CME the call. gentlemen, XXXX quarter that Group

today. and you lines your disconnect joining thank may us for You phone

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