# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# (Mark	One)

ý ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	Fiscal	Year	Ended	December	31,	2017

¨ TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# CME	GROUP	INC.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	Other	Jurisdiction	of

Incorporation	or	Organization)

20	South	Wacker	Drive,	Chicago,	Illinois

(Address	of	Principal	Executive	Offices)

(Zip	Code)

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

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Title	Of	Each	Class

Name	Of	Each	Exchange	On	Which	Registered

Class	A	Common	Stock	$0.01	par	value NASDAQ	GLOBAL	SELECT	MARKET

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	Class	B	common	stock,	Class	B-1,	$0.01	par	value;	Class	B	common	stock,	Class	B-2,	$0.01	par	value;	Class	B	common	stock,	Class	B-3,

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				Yes		 ý				No		¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.				Yes ¨				No		ý

Indicate	by	check	mark	whether	the	registrant:	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months	(or	for	such shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.				Yes		ý				No		¨

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	website,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted	pursuant	to	Rule 405	of	Regulation	S-T	(§232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such	files).				Yes		ý				No		¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§229.405	of	this	chapter)	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.		¨

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	a	smaller	reporting	company,	or	emerging	growth	company.	See	definitions	of "large	accelerated	filer,"	"accelerated	filer,"	"smaller	reporting	company,"	and	"emerging	growth	company"	in	Rule	12b-2	of	the	Exchange	Act.

Large	accelerated	filer		x

Non-accelerated	filer				o (Do	not	check	if	a	smaller	reporting	company)

Accelerated	filer					o

Smaller	reporting	company	o

Emerging	growth	company	o

If	an	emerging	growth	company,	indicate	by	check	mark	if	the	registrant	has	elected	not	to	use	the	extended	transition	period	for	complying	with	any	new	or	revised	financial	accounting	standards provided	pursuant	to	Section	13(a)	of	the	Exchange	Act.	¨

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				Yes		 ¨				No		ý

The	aggregate	market	value	of	the	voting	stock	held	by	non-affiliates	of	the	registrant	as	of	June	30,	2017,	was	approximately	 $42.2	billion	(based	on	the	closing	price	per	share	of	CME	Group	Inc. Class	A	common	stock	on	the	NASDAQ	Global	Select	Market	(NASDAQ)	on	such	date).	The	number	of	shares	outstanding	of	each	of	the	registrant's	classes	of	common	stock	as	of	February	7,	2018 was	as	follows:	340,382,147	shares	of	Class	A	common	stock,	$0.01	par	value;	625	shares	of	Class	B	common	stock,	Class	B-1,	$0.01	par	value;	813	shares	of	Class	B	common	stock,	Class	B-2, $0.01	par	value;	1,287	shares	of	Class	B	common	stock,	Class	B-3,	$0.01	par	value;	and	413	shares	of	Class	B	common	stock,	Class	B-4,	$0.01	par	value.

# DOCUMENTS	INCORPORATED	BY	REFERENCE:

Documents

Portions	of	the	CME	Group	Inc.'s	Proxy	Statement	for	the	2018	Annual	Meeting of	Shareholders

Form	10-K	Reference

Part	III

Table	of	Contents

# ANNUAL	REPORT	ON	FORM	10-K

# INDEX

| PART	I. |  | 3 |
| :--- | :--- | :--- |
| Item\t1. | Business | 5 |
| Item\t1A. | Risk\tFactors | 14 |
| Item\t1B. | Unresolved\tStaff\tComments | 23 |
| Item\t2. | Properties | 23 |
| Item\t3. | Legal\tProceedings | 24 |
| Item\t4. | Mine\tSafety\tDisclosures | 24 |
| PART\tII. |  | 24 |
| Item\t5. | Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tShareholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 24 |
| Item\t6. | Selected\tFinancial\tData | 27 |
| Item\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 29 |
| Item\t7A. | Quantitative\tand\tQualitative\tDisclosures\tabout\tMarket\tRisk | 46 |
| Item\t8. | Financial\tStatements\tand\tSupplementary\tData | 50 |
| Item\t9. | Changes\tin\tand\tDisagreements\twith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 83 |
| Item\t9A. | Controls\tand\tProcedures | 83 |
| Item\t9B. | Other\tInformation | 86 |
| PART\tIII. |  | 86 |
| Item\t10. | Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 86 |
| Item\t11. | Executive\tCompensation | 86 |
| Item\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tShareholder\tMatters | 86 |
| Item\t13. | Certain\tRelationships,\tRelated\tTransactions\tand\tDirector\tIndependence | 86 |
| Item\t14. | Principal\tAccountant\tFees\tand\tServices | 86 |
| PART\tIV. |  | 87 |
| Item\t15. | Exhibits\tand\tFinancial\tStatement\tSchedules | 87 |
| Item\t16. | Form\t10-K\tSummary | 91 |
| Signatures |  | 92 |

# PART	I

# Certain	Terms

All	references	to	"options"	or	"options	contracts"	in	the	text	of	this	document	refer	to	options	on	futures	contracts.

Unless	otherwise	indicated,	references	to	CME	Group	Inc.	(CME	Group	or	the	company)	products	include	references	to	products	listed	on	one	of	its	regulated exchanges:	Chicago	Mercantile	Exchange	Inc.	(CME),	Board	of	Trade	of	the	City	of	Chicago,	Inc.	(CBOT),	New	York	Mercantile	Exchange,	Inc.	(NYMEX)	and Commodity	Exchange,	Inc.	(COMEX).	Products	listed	on	these	exchanges	are	subject	to	the	rules	and	regulations	of	the	particular	exchange	and	the	applicable	rulebook should	be	consulted.	Unless	otherwise	indicated,	references	to	NYMEX	include	its	subsidiary,	COMEX.

Further	information	about	CME	Group	and	its	products	can	be	found	at	http://www.cmegroup.com.	Information	made	available	on	our	website	does	not	constitute	a	part of	this	Annual	Report	on	Form	10-K.

# Information	about	Contract	Volume	and	Average	Rate	per	Contract

All	amounts	regarding	contract	volume	and	average	rate	per	contract	exclude	our	interest	rate	swaps	and	credit	default	swaps	unless	otherwise	noted.	In	September 2017,	we	announced	we	will	exit	the	credit	default	swaps	business	by	mid-2018.

# Trademark	Information

CME	Group,	the	Globe	logo,	CME,	Chicago	Mercantile	Exchange,	Globex	and	E-mini	are	trademarks	of	Chicago	Mercantile	Exchange	Inc.		CBOT,	Chicago	Board	of Trade,	KCBT	and	Kansas	City	Board	of	Trade	are	trademarks	of	Board	of	Trade	of	the	City	of	Chicago,	Inc.		NYMEX,	New	York	Mercantile	Exchange	and	ClearPort are	trademarks	of	New	York	Mercantile	Exchange,	Inc.		COMEX	is	a	trademark	of	Commodity	Exchange,	Inc.		Dow	Jones,	Dow	Jones	Industrial	Average,	S&P	500 and	S&P	are	service	and/or	trademarks	of	Dow	Jones	Trademark	Holdings	LLC,	Standard	&	Poor's	Financial	Services	LLC	and	S&P/Dow	Jones	Indices	LLC,	as	the case	may	be,	and	have	been	licensed	for	use	by	Chicago	Mercantile	Exchange	Inc.		All	other	trademarks	are	the	property	of	their	respective	owners.

# FORWARD-LOOKING	STATEMENTS

From	time	to	time,	in	this	Annual	Report	on	Form	10-K	as	well	as	in	other	written	reports	and	verbal	statements,	we	discuss	our	expectations	regarding	future performance.	These	forward-looking	statements	are	identified	by	their	use	of	terms	and	phrases	such	as	"believe,"	"anticipate,"	"could,"	"estimate,"	"intend,"	"may," "plan,"	"expect"	and	similar	expressions,	including	references	to	assumptions.	These	forward-looking	statements	are	based	on	currently	available	competitive,	financial and	economic	data,	current	expectations,	estimates,	forecasts	and	projections	about	the	industries	in	which	we	operate	and	management's	beliefs	and	assumptions.	These statements	are	not	guarantees	of	future	performance	and	involve	risks,	uncertainties	and	assumptions	that	are	difficult	to	predict.	Therefore,	actual	outcomes	and	results may	differ	materially	from	what	is	expressed	or	implied	in	any	forward-looking	statements.	We	want	to	caution	you	not	to	place	undue	reliance	on	any	forward-looking statements.	We	undertake	no	obligation	to	publicly	update	any	forward-looking	statements,	whether	as	a	result	of	new	information,	future	events	or	otherwise.	Among the	factors	that	might	affect	our	performance	are:

•increasing	competition	by	foreign	and	domestic	entities,	including	increased	competition	from	new	entrants	into	our	markets	and	consolidation	of	existing entities;

•our	ability	to	keep	pace	with	rapid	technological	developments,	including	our	ability	to	complete	the	development,	implementation	and	maintenance	of	the enhanced	functionality	required	by	our	customers	while	maintaining	reliability	and	ensuring	that	such	technology	is	not	vulnerable	to	security	risks;

•our	ability	to	continue	introducing	competitive	new	products	and	services	on	a	timely,	cost-effective	basis,	including	through	our	electronic	trading	capabilities, and	our	ability	to	maintain	the	competitiveness	of	our	existing	products	and	services,	including	our	ability	to	provide	effective	services	to	the	swaps	market;

•our	ability	to	adjust	our	fixed	costs	and	expenses	if	our	revenues

decline;

•our	ability	to	maintain	existing	customers,	develop	strategic	relationships	and	attract	new customers;

•our	ability	to	expand	and	offer	our	products	outside	the	United States;

•changes	in	regulations,	including	the	impact	of	any	changes	in	laws	or	government	policy	with	respect	to	our	industry,	such	as	any	changes	to	regulations	and policies	that	require	increased	financial	and	operational	resources	from	us	or	our	customers;

•the	costs	associated	with	protecting	our	intellectual	property	rights	and	our	ability	to	operate	our	business	without	violating	the	intellectual	property	rights	of others;

•decreases	in	revenue	from	our	market	data	as	a	result	of	decreased

demand;

•changes	in	our	rate	per	contract	due	to	shifts	in	the	mix	of	the	products	traded,	the	trading	venue	and	the	mix	of	customers	(whether	the	customer	receives member	or	non-member	fees	or	participates	in	one	of	our	various	incentive	programs)	and	the	impact	of	our	tiered	pricing	structure;

•the	ability	of	our	financial	safeguards	package	to	adequately	protect	us	from	the	credit	risks	of	clearing

members;

•the	ability	of	our	compliance	and	risk	management	methods	to	effectively	monitor	and	manage	our	risks,	including	our	ability	to	prevent	errors	and	misconduct and	protect	our	infrastructure	against	security	breaches	and	misappropriation	of	our	intellectual	property	assets;

•changes	in	price	levels	and	volatility	in	the	derivatives	markets	and	in	underlying	equity,	foreign	exchange,	interest	rate	and	commodities markets;

•economic,	political	and	market	conditions,	including	the	volatility	of	the	capital	and	credit	markets	and	the	impact	of	economic	conditions	on	the	trading activity	of	our	current	and	potential	customers;

•our	ability	to	accommodate	increases	in	contract	volume	and	order	transaction	traffic	and	to	implement	enhancements	without	failure	or	degradation	of	the performance	of	our	trading	and	clearing	systems;

•our	ability	to	execute	our	growth	strategy	and	maintain	our	growth effectively;

•our	ability	to	manage	the	risks	and	control	the	costs	associated	with	our	strategy	for	acquisitions,	investments	and alliances;

•our	ability	to	continue	to	generate	funds	and/or	manage	our	indebtedness	to	allow	us	to	continue	to	invest	in	our business;

•industry	and	customer	consolidation;

•decreases	in	trading	and	clearing	activity;

•the	imposition	of	a	transaction	tax	or	user	fee	on	futures	and	options	on	futures	transactions	and/or	repeal	of	the	60/40	tax	treatment	of	such transactions;

•the	unfavorable	resolution	of	material	legal	proceedings;

•the	uncertainties	of	the	ultimate	impact	of	the	Tax	Cuts	and	Jobs	Act	(2017	Tax

For	a	detailed	discussion	of	these	and	other	factors	that	might	affect	our	performance,	see	Item	1A.	of	this	Report	beginning	on	page	14.

# ITEM	1. BUSINESS

# GENERAL	DEVELOPMENT	OF	BUSINESS

CME	Group	serves	the	risk	management	and	investment	needs	of	customers	around	the	globe.

CME	was	founded	in	1898	as	a	not-for-profit	corporation.	In	2000,	CME	demutualized	and	became	a	shareholder-owned	corporation.	As	a	consequence,	we	adopted	a for-profit	approach	to	our	business,	including	strategic	initiatives	aimed	at	optimizing	contract	volume,	efficiency	and	liquidity.	In	2002,	Chicago	Mercantile	Exchange Holdings	Inc.	(CME	Holdings)	completed	its	initial	public	offering	of	its	Class	A	common	stock,	which	is	listed	on	the	NASDAQ	Global	Select	Market	under	the symbol	"CME."	In	2007,	CME	Holdings	merged	with	CBOT	Holdings,	Inc.	and	was	renamed	CME	Group.	In	connection	with	the	merger,	we	acquired	the	CBOT exchange.	CBOT	is	a	leading	marketplace	for	trading	agricultural	and	U.S.	Treasury	futures	as	well	as	options	on	futures.	In	2008,	we	merged	with	NYMEX	Holdings, Inc.	and	acquired	NYMEX	and	COMEX.	On	NYMEX,	customers	primarily	trade	energy	futures	and	options	contracts,	including	contracts	for	crude	oil,	natural	gas, heating	oil	and	gasoline.	On	COMEX,	customers	trade	metal	futures	and	options	contracts,	including	contracts	for	gold,	silver	and	copper.	In	2012,	we	acquired	The Board	of	Trade	of	Kansas	City,	Missouri,	Inc.	(KCBT)	and	its	hard	red	winter	wheat	product	line	and	effective	December	2013,	KCBT	operations	were	transferred	to CBOT.	In	April	2013,	we	purchased	the	non-controlling	interest	in	CME	Group	Index	Services	from	Dow	Jones	&	Company	(Dow	Jones)	resulting	in	an	increase	in	our ownership	to	27%	of	the	S&P/Dow	Jones	Indices	LLC	(S&P/DJI)	joint	venture	with	S&P	Global,	Inc.	(formerly	known	as	McGraw-Hill),	originally	established	in 2012.	In	2013,	we	began	offering	repository	services	and	now	offer	global	trade	repository	services	in	the	United	States,	United	Kingdom,	Canada	and	Australia.	In April	2017,	we	announced	the	wind	down	of	CME	Clearing	Europe	Limited	and	CME	Europe	Limited,	which	has	been	completed.	In	September	2017,	we	also announced	we	will	exit	the	credit	default	swaps	business	by	mid-2018.

Our	business	has	historically	been	subject	to	the	extensive	regulation	of	the	U.S.	Commodity	Futures	Trading	Commission	(CFTC).	As	a	result	of	our	global	operations, we	are	also	subject	to	the	rules	and	regulations	of	the	local	jurisdictions	in	which	we	conduct	business,	including	the	European	Securities	and	Markets	Authority	(ESMA) and	the	Financial	Conduct	Authority	(FCA).	Additionally,	our	U.S.	clearing	house	has	been	designated	as	systemically	important,	which	carries	with	it	enhanced regulatory	oversight	of	certain	of	our	risk-management	standards,	clearing	and	settlement	activities,	including	additional	oversight	by	the	Federal	Reserve.

Our	principal	executive	offices	are	located	at	20	South	Wacker	Drive,	Chicago,	Illinois	60606,	and	our	telephone	number	is	312-930-1000.

# FINANCIAL	INFORMATION	ABOUT	INDUSTRY	SEGMENTS

The	company	reports	the	results	of	its	operations	as	one	reporting	segment	primarily	comprised	of	the	CME,	CBOT,	NYMEX	and	COMEX	exchanges.	The	remaining operations	do	not	meet	the	thresholds	for	reporting	separate	segment	information.	Financial	information	about	our	reporting	segment	is	hereby	incorporated	by reference	to	"Item	6.	Selected	Financial	Data"	on	page	27	and	"Item	8.	Financial	Statements	and	Supplementary	Data"	on	page	50.

# NARRATIVE	DESCRIPTION	OF	BUSINESS

CME	Group	is	where	the	world	comes	to	manage	risk.	Through	its	exchanges,	CME	Group	offers	the	widest	range	of	global	benchmark	products	across	all	major	asset classes,	including	futures	and	options	based	on	interest	rates,	equity	indexes,	foreign	exchange,	energy,	agricultural	products	and	metals.	CME	Group	provides	electronic trading	globally	on	its	CME	Globex	platform.	The	company	also	offers	clearing	and	settlement	services	across	asset	classes	for	exchange-traded	and	over-the-counter derivatives	through	its	clearing	house,	CME	Clearing.	CME	Group's	products	and	services	are	designed	to	provide	businesses	around	the	world	with	the	means	to effectively	manage	risk.	We	also	provide	hosting,	connectivity	and	customer	support	for	electronic	trading	through	our	co-location	services.	Our	CME	Direct	platform offers	side-by-side	trading	of	exchange-listed	and	privately	negotiated	markets.	We	provide	clearing	and	settlement	services	for	exchange-traded	contracts,	as	well	as	for cleared	swaps,	and	provide	regulatory	reporting	solutions	for	market	participants	through	our	global	repository	services	in	the	United	States,	United	Kingdom,	Canada and	Australia.	Finally,	we	offer	a	wide	range	of	market	data	services	—	including	live	quotes,	delayed	quotes,	market	reports	and	a	comprehensive	historical	data service.

# Our	Competitive	Strengths

We	provide	innovative	ways	to	manage	risk	and	offer	a	number	of	key	differentiating	elements	that	set	us	apart	from	others	in	our	industry,	including:

Highly	Liquid	Markets	—	Our	listed	futures	and	options	markets	provide	an	effective	forum	for	our	customers	to	manage	their	risk	and	meet	their	investment	needs relating	to	our	markets.	We	believe	our	customers	choose	to	trade	on	our	centralized	market	due	to	its	liquidity	and	price	transparency.	Market	liquidity	—	or	the	ability of	a	market	to	absorb	the	execution	of	large	purchases	or	sales	quickly	and	efficiently,	whereby	the	market	recovers	quickly	following	the	execution	of	large	orders	—	is key	to	attracting	customers	and	contributing	to	a	market's	success.

Most	Diverse	Product	Line	—	Our	products	provide	a	means	for	hedging,	speculation	and	asset	allocation	relating	to	the	risks	associated	with,	among	other	things, interest	rate	sensitive	instruments,	equity	ownership,	changes	in	the	value	of	foreign	currency	and	changes	in	the	prices	of	agricultural,	energy	and	metal	commodities.

The	estimated	percentage	of	clearing	and	transaction	fees	revenue	contributed	by	each	product	line	is	as	follows:

| Product	Line | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Interest\trate | 33% | 32% | 31% |
| Equity | 16 | 18 | 19 |
| Foreign\texchange | 6 | 6 | 7 |
| Agricultural\tcommodity | 14 | 15 | 15 |
| Energy | 24 | 23 | 23 |
| Metal | 7 | 6 | 5 |

We	believe	the	breadth	and	diversity	of	our	product	lines	and	the	variety	of	their	underlying	contracts	are	beneficial	to	our	overall	performance.	Our	asset	classes	contain products	designed	to	address	differing	risk	management	needs,	and	customers	are	able	to	achieve	operational	and	capital	efficiencies	by	accessing	our	diverse	products through	our	platforms	and	our	clearing	house.

In	2017,	we	reached	record	average	daily	volume	of	16.3	million	contracts,	up	4%	from	2016,	despite	a	lower	volatility	environment.	Year-end	open	interest	was	up	5% from	the	end	of	2016,	and	we	reached	an	all-time	high	record	open	interest	during	the	year	of	129.1	million	contracts	on	June	14,	2017.

Our	products	are	traded	primarily	through	CME	Globex	and	other	electronic	trading	platforms,	by	open	outcry	auction	market	in	Chicago,	and	through	privately negotiated	transactions	that	we	clear.	The	estimated	percentage	of	clearing	and	transaction	fees	revenue	contributed	by	each	trading	venue	is	as	follows:

| Trading	Venue | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Electronic | 83% | 82% | 81% |
| Open\toutcry(1) | 5 | 5 | 6 |
| Privately\tnegotiated(2) | 12 | 13 | 13 |

(1)	In	July	2015,	we	closed	most	of	the	futures	pits	in	Chicago	and	New	York.	On	December	31,	2016,	we	closed	the	remaining	open	outcry	pits	in	New	York.	Most	open	outcry options	markets	remain	open	in	Chicago.

(2)	Privately	negotiated	average	daily	volume	includes	both	traditional	block	trades,	off-exchange	trades,	which	were	historically	categorized	as	CME	ClearPort	(now	executed	as futures	block	trades),	and	Exchange	for	Related	Positions	(EFRP).

In	addition,	our	cleared-only	CME	interest	rate	swap	and	CME	credit	default	swap	contracts	contributed	approximately	2%	of	total	revenue	in	each	of	the	last	three years.	In	September	2017,	we	announced	we	will	exit	the	credit	default	swap	business	by	mid-2018.

Our	products	generate	valuable	information	regarding	prices	and	trading	activity.	Customers	pay	a	subscription	fee	for	real-time	market	data	and	have	the	choice	of receiving	their	market	data	either	directly	from	us	or	through	a	variety	of	third	party	quote	vendors	and	data	providers.	We	also	offer	customers	detailed	historical market	data	for	use	in	their	development	and	analysis	of	various	trading	strategies.	The	estimated	contributions	of	our	market	data	and	information	services	products, excluding	our	index	market	data	offerings,	based	on	percentage	of	total	revenue,	were	11%	in	both	2017	and	2016	and	12%	in	2015.

Safety	and	Soundness	of	our	Markets	—	We	understand	the	importance	of	ensuring	our	customers	are	able	to	manage	and	contain	their	trading	risks.	As	the	markets and	the	economy	have	evolved,	we	have	worked	to	adapt	our	clearing	services	to	meet	the	needs	of	our	customers.	We	apply	robust	risk	management	standards	and enforce	and	facilitate	applicable	regulatory	customer	protection	standards	for	exchange-traded	products	and	cleared	swaps.	Clearing	firms	are	continually	monitored	and examined	to	assess	their	outstanding	risk,	capital	adequacy	and	compliance	with	customer	protection	rules	and	regulations.	We	utilize	a	combination	of	risk	management capabilities	to	assess	our	clearing	firms	and	their	account	exposure	levels	for	all	asset	classes	24	hours	a	day	throughout	the	trading	week.	Our	clearing	house,	CME Clearing,	is	a	division	of	CME.	In	April	2017,	we	announced	the	wind	down	of	our	European	clearing	house,	which	was	completed	in	late	2017.

Our	integrated	clearing	function	is	designed	to	ensure	the	safety	and	soundness	of	our	markets	by	serving	as	the	counterparty	to	every	trade,	becoming	the	buyer	to	each seller	and	the	seller	to	each	buyer,	and	limiting	counterparty	credit	risk.	The	clearing	house	is	responsible	for	settling	trading	accounts,	clearing	trades,	collecting	and maintaining	performance	bond	funds,	regulating	delivery	and	reporting	trading	data.	CME	Clearing	marks	open	positions	to	market	at	least	twice	a	day,	and	requires

payment	from	clearing	firms	whose	positions	have	lost	value	and	makes	payments	to	clearing	firms	whose	positions	have	gained	value.	For	select	cleared-only	markets, positions	are	marked-to-market	daily,	with	the	capacity	to	mark-to-market	more	frequently	as	market	conditions	warrant.	The	CME	ClearPort	front-end	system	provides access	to	our	flexible	clearing	services	for	block	transactions	and	swaps.	See	"Item	7A.	Quantitative	and	Qualitative	Disclosures	About	Market	Risk,"	beginning	on	page 46	and	"Item	1A.	Risk	Factors,"	beginning	on	page	14,	for	more	information	on	our	financial	safeguards	package	and	the	associated	credit	risks	related	to	our	clearing services.

Superior	Trading	Technology	and	Distribution	—	We	strive	to	provide	the	most	flexible	and	scalable	platforms	to	support	the	operational	and	capacity	needs	of	the business	along	with	the	delivery	of	innovative	technology	solutions	to	the	marketplace.	Our	CME	Globex	electronic	platform	is	the	trading	engine	for	our	central	limit order	book	markets,	and	is	available	on	a	global	basis	nearly	24	hours	a	day	throughout	the	trading	week.	The	CME	Globex	platform	is	accessible	through	a	wide	variety of	vendor-provided	and	custom-built	trading	systems	that	benefit	from	our	open	application	programming	interface	approach.	For	privately	negotiated	markets,	we	offer brokers	and	customers	the	CME	Direct	platform	for	arranging,	executing,	recording	and	risk-managing	trades.	CME	Direct	includes	CME	One	for	mobile	access,	CME Messenger	for	instant-message	capabilities	and	CME	Straight-Through	Processing.	CME	Straight-Through	Processing	enables	direct	connectivity	for	trade	information directly	with	customer	order	management	and	risk	management	systems	and	is	designed	to	reduce	errors	and	improve	efficiency.	In	2017,	89%	of	our	contract	volume was	conducted	electronically.

# Together,	our	platforms	offer:

# •certainty	of	execution;

•vast	capabilities	to	facilitate	complex	and	demanding trading;

•direct	market	access;

•fairness,	price	transparency	and anonymity;

# •convenience	and	efficiency;	and

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

We	also	offer	co-location	services	at	a	data	center	facility,	which	houses	our	trading	match	engines	for	all	products	traded	on	the	CME	Globex	electronic	trading platform.	The	service	provides	low	latency	connection	for	our	customers.	The	offering	is	made	available	to	all	customers	on	equal	terms.

# Our	Strategic	Initiatives

The	following	is	a	description	of	our	strategic	initiatives:

Leading	Core	Business	Innovation	and	Expanded	Product	Offerings	—	We	continue	to	focus	on	cross-selling	our	products,	expanding	the	strength	of	our	existing benchmark	products,	launching	new	products	and	services	and	deepening	open	interest	in	our	core	futures	and	options	on	futures	offerings.	During	this	decade,	our	key product	launches	have	included	the	Ultra	U.S.	Treasury	Bond	futures	and	options	and	most	recently	the	Ultra	10	Year	Treasury	futures,	numerous	Eurodollar	mid-curve options,	end-of-month	equity	options,	weekly	options	for	various	financial	and	commodity	products,	short-dated	options	across	asset	classes,	new	base	metal	products, expanded	crude	oil	grades,	S&P	Dividend	futures,	E-mini	Russell	1000	and	2000	futures,	CME	Bloomberg	Spot	Dollar	Spot	Index	futures	and	a	cash-settled	bitcoin futures	contract.	In	June	2017,	we	announced	our	intention	to	launch	products	on	the	new	secured	overnight	financing	rate.	During	2017,	we	experienced	multiple volume	records	across	our	core	product	portfolio,	including	interest	rates,	energy,	agricultural	commodities	and	metals.	We	also	had	record	volume	in	overall	options, with	electronic	options	representing	62%	of	total	options	volume	in	2017.	We	continued	to	deepen	liquidity	and	add	diverse	participation	as	evidenced	by	the	growth	in large	open	interest	holders	with	records	achieved	across	several	product	lines	in	2017.

Globalizing	our	Company	and	our	Business	—	We	continue	to	expand	and	diversify	our	customer	base	worldwide	and	offer	customers	around	the	world	the	most broadly	diversified	portfolio	of	benchmark	products.	We	have	expanded	our	international	product	suite	with	the	launch	of	a	number	of	regionally	specific	products, including	European	wheat	and	aluminum	futures,	Mexican	peso	futures	and	Brazilian	real	futures,	which	help	us	appeal	to	risk	management	needs	unique	to	a	particular geography.	We	believe	we	have	significant	opportunity	to	expand	the	participation	of	our	non-U.S.	customer	base	in	our	markets.	We	are	focused	on	core	growth	in global	markets	because	we	believe	that	Australia,	Asia,	Latin	America,	and	other	emerging	markets	will	experience	significant	growth	and	development	of	their	financial markets.	In	addition,	we	continue	to	expand	our	presence	in	major	global	financial	centers,	grow	our	business	outside	the	United	States	and	penetrate	emerging	markets, such	as	China,	South	Korea,	Brazil	and	Mexico.	In	2017,	approximately	26%	of	our	electronic	volume	was	transactions	customers	reported	to	us	as	from	outside	the United	States	and	50%	of	our	market	data	revenue	was	derived	from

outside	the	United	States.	We	also	achieved	34%	growth	in	liquidity	during	European	trading	hours	and	18%	growth	during	Asian	trading	hours.

In	order	to	accelerate	our	long-term	integration	in	the	global	economy,	CME	Group	has	built	out	its	international	infrastructure	and	strategic	relationships.	In	recent years,	we	have	expanded	our	ability	to	support	physical	delivery	of	locally	relevant	products	in	both	Europe	and	Asia.

Expanding	our	Customer	Base	and	Enhancing	Customer	Participation	in	our	Markets	—	We	continue	to	grow	our	business	by	targeting	cross-asset	sales	across	client segments,	driving	international	sales	and	generating	new	client	participation	across	all	regions.	We	have	a	long	history	of	providing	customer	value	and	responsiveness and	believe	our	products	and	services	make	us	well	positioned	to	help	our	customers	adapt	and	comply	with	new	regulations,	while	enabling	them	to	efficiently	manage their	risks.	We	have	a	broad	distribution	network	comprised	of	a	combination	of	internal	and	external	channels	and	front-end	capabilities.	With	changing	regulatory capital	requirements	for	many	of	our	customers	and	the	need	for	greater	efficiencies,	we	have	added	tools	to	enable	customers	to	build	and	manage	trading	and	clearing positions	in	our	markets	in	an	efficient	manner.

Our	customer-centric	approach	to	sales	and	distribution	has	continued	to	deepen	our	liquidity	and	added	diverse	customer	participation	as	evidenced	by	reaching	record large	open	interest	holders	across	several	product	lines	during	2017.

With	the	ongoing	implementation	of	regulatory	reform	in	the	United	States	and	in	Europe,	we	expect	capital	efficiencies	and	centralized	clearing	to	continue	to	be important	for	our	global	client	base.

We	remain	focused	on	expanding	our	sales	and	marketing	capabilities	and	tools	to	broaden	customer	participation	and	to	simplify	and	enrich	the	customer	experience resulting	in	increased	trading	and	a	reduction	in	their	regulatory	burdens.	Over	the	past	decade,	we	have	also	expanded	our	education,	sales,	and	customer	support efforts,	opening	offices	in	Hong	Kong,	Seoul,	Beijing,	Bangalore	and	Sydney.

Extending	our	Risk	Management	and	Post-Trade	Offerings	and	Solutions	—	We	provide	a	comprehensive	multi-asset	class	clearing	solution	to	the	market	for maximum	operational	ease	and	the	capital	efficiency	that	comes	with	connecting	to	our	clearing	house.	Our	clearing	services	offer	the	ability	to	optimize	collateral	and capital	efficiencies	across	portfolios	within	the	clearing	house	while	meeting	the	heightened	regulatory	requirements	on	derivatives.	We	also	offer	clearing	services	for interest	rate,	foreign	exchange	and	commodity	swaps.	In	2017,	we	launched	clearing	services	for	OTC	FX	options.	We	also	added	OTC	interest	rate	clearing	services	for the	Korean	Won	and	Indian	Rupee	denominated	contracts.

CME	Group	continues	to	introduce	tools	and	services	to	assist	customers	with	portfolio	margining.	As	of	December	31,	2017,	42	unique	marketplace	participants utilized	CME	Group's	portfolio	margining	services.	In	the	past	few	years,	we	have	introduced	compression	via	coupon	blending	as	well	as	CME	CORE,	an	interactive margin	calculator	that	enables	clients	to	optimize	their	capital	by	providing	insights	on	margin	requirements	prior	to	trading.	We	also	introduced	multilateral compression	for	our	cleared	swap	customers	through	a	partnership	with	TriOptima,	a	NEX	Group	business,	and	we	have	added	trade	reporting	services	in	the	United States,	Europe,	Canada	and	Australia.

Establishing	Ourselves	as	the	Leading	Exchange	Provider	of	Information	Products	and	Index	Services	and	Enhancing	our	Intellectual	Property	Portfolio	—	We offer	a	variety	of	market	data	services	for	the	futures,	equities	and	the	cleared	swaps	markets.	Our	market	data	platform	includes	historical,	real-time	and	derived	data offerings.	Our	joint	venture	with	S&P	Global,	Inc.	combines	the	world	class	capabilities	of	S&P	Indices	and	Dow	Jones	Indices.	As	part	of	the	joint	venture,	we	acquired a	long-term,	ownership-linked,	exclusive	license	to	list	futures	and	options	on	futures	based	on	the	S&P	500	Index	and	certain	other	S&P	indices.	In	2015,	CME obtained	exclusive	licensing	rights	to	list	contracts	on	FTSE	Russell	indexes	beginning	in	mid-2017.	In	July	2017,	CME	launched	both	futures	and	options	based	on	the Russell	2000	Index.	In	2017,	we	also	secured	the	rights	to	the	TOPIX	futures	contract	and	renewed	our	existing	licensing	agreement	with	Platts.	We	also	continue	to expand	our	existing	intellectual	property	portfolio	for	our	technology,	products	and	services	offerings.

# Patents,	Trademarks	and	Licenses

We	own	the	rights	to	a	large	number	of	trademarks,	service	marks,	domain	names	and	trade	names	in	the	United	States,	Europe	and	other	parts	of	the	world.	We	have registered	many	of	our	most	important	trademarks	in	the	United	States	and	other	countries.	We	hold	the	rights	to	a	number	of	patents	and	have	made	a	number	of	patent applications.	Our	patents	cover	match	engine,	trader	user	interface,	trading	floor	support,	market	data,	general	technology	and	clearing	house	functionalities.	We	also own	the	copyright	to	a	variety	of	materials.	Those	copyrights,	some	of	which	are	registered,	include	printed	and	on-line	publications,	websites,	advertisements, educational	material,	graphic	presentations	and	other	literature,	both	textual	and	electronic.	We	attempt	to	protect	our	intellectual	property	rights	by	relying	on trademarks,	patents,	copyrights,	database	rights,	trade	secrets,	restrictions	on	disclosure	and	other	methods.

We	offer	equity	index	futures	and	options	on	key	benchmarks,	including	S&P,	NASDAQ,	Dow	Jones	and	the	FTSE	Russell	indexes.	These	products	are	listed	by	us subject	to	license	agreements	with	the	applicable	owners	of	the	indexes,	some	of	which

are	exclusive.	In	connection	with	our	joint	venture	with	S&P	Global,	Inc.,	we	entered	into	a	new	license	agreement	(S&P	License	Agreement),	which	superseded	our prior	licensing	arrangements	and	was	assigned	to	the	joint	venture.	CME's	license	for	the	S&P	500	Index	will	be	exclusive	for	futures	and	options	on	futures	until	one year	prior	to	the	termination	of	the	S&P	License	Agreement,	and	non-exclusive	for	the	last	year.	The	license	for	the	other	S&P	stock	indexes	is	generally	exclusive	for futures	and	options	on	futures.	The	term	of	the	S&P	License	Agreement	will	continue	until	the	date	that	is	one	year	after	the	date	that	CME	Group	ceases	to	own	at	least five	percent	(accounting	for	dilution)	of	the	outstanding	joint	venture	interests.	Upon	the	occurrence	of	certain	events,	including	certain	terminations	of	the	joint	venture, the	term	may	be	extended	up	to	an	additional	ten	years.	CBOT	has	an	exclusive	license	agreement	(Dow	Jones	License	Agreement)	with	CME	Group	Index	Services LLC	(CME	Indexes)	for	certain	Dow	Jones	indexes,	which	has	also	been	assigned	to	the	joint	venture.	The	initial	term	of	the	agreement	is	through	June	30,	2026. Following	the	initial	term,	the	Dow	Jones	License	Agreement	shall	automatically	renew	for	renewal	terms	of	five	years	thereafter	so	long	as	there	is	open	interest	in	any of	CBOT's	or	its	affiliates'	products	based	on	one	or	more	of	the	Dow	Jones	licensed	indexes.	In	the	event	there	is	no	open	interest	in	any	such	products,	then	CME Indexes	has	the	ability	to	terminate	the	agreement.	We	also	have	an	exclusive	license	agreement	for	certain	NASDAQ	indexes	through	2019.	In	2015,	we	entered	into	an exclusive	license	agreement	with	FTSE	Russell	and	launched	the	E-mini	Russell	2000	futures	in	2017.	Copies	of	our	S&P,	Dow	Jones	and	NASDAQ	license arrangements	have	been	filed	as	material	contracts.	We	pay	the	applicable	third	party	per	trade	fees	based	on	contract	volume	under	the	terms	of	these	licensing agreements.

We	also	have	a	long-term,	non-exclusive	licensing	arrangement	with	ICE	Benchmark	Administration	for	the	use	of	LIBOR	to	settle	several	of	our	interest	rate	products, including	our	Eurodollar	contract.

We	cannot	assure	you	that	we	will	be	able	to	maintain	the	exclusivity	of	our	licensing	agreements	with	S&P,	Dow	Jones,	NASDAQ	and	FTSE	Russell	or	be	able	to maintain	our	other	existing	licensing	arrangements	beyond	the	term	of	the	current	agreements.	In	addition,	we	cannot	assure	you	that	others	will	not	succeed	in	creating stock	index	futures	based	on	information	similar	to	that	which	we	have	obtained	by	license,	or	that	market	participants	will	not	increasingly	use	other	instruments, including	securities	and	options	based	on	the	S&P,	Dow	Jones,	NASDAQ	or	Russell	indexes,	to	manage	or	speculate	on	U.S.	stock	risks.	Parties	also	may	succeed	in offering	indexed	products	that	are	similar	to	our	licensed	products	without	being	required	to	obtain	a	license,	or	in	countries	that	are	beyond	our	jurisdictional	reach and/or	our	licensors.

# Working	Capital

We	generally	meet	our	funding	requirements	with	internally	generated	funds	supplemented	from	time	to	time	with	public	debt	and	commercial	paper	offerings.	For	more information	on	our	working	capital	needs,	see	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	—	Liquidity	and	Capital Resources,"	beginning	on	page	42,	which	section	is	incorporated	herein	by	reference.

# Customer	Base

Our	customer	base	includes	professional	traders,	financial	institutions,	institutional	and	individual	investors,	major	corporations,	manufacturers,	producers,	governments and	central	banks.	Our	customers	can	connect	to	our	electronic	trading	platforms	from	access	points	across	the	globe.	Customers	may	be	members	of	one	or	more	of	our CME,	CBOT,	NYMEX	or	COMEX	exchanges.	Rights	to	directly	access	our	markets	will	depend	upon	the	nature	of	the	customer,	such	as	whether	the	individual	is	a member	of	one	of	our	exchanges	or	has	executed	an	agreement	with	us	for	direct	access.

U.S.	trading	rights	and	privileges	are	exchange-specific.	Open	outcry	trading	is	conducted	exclusively	by	our	members.	Membership	on	one	of	our	futures	exchanges also	enables	a	customer	to	trade	specific	products	at	reduced	rates	and	lower	fees.	Under	the	terms	of	the	organizational	documents	of	our	exchanges,	our	members	have certain	rights	that	relate	primarily	to	trading	right	protections,	certain	trading	fee	protections	and	certain	membership	benefit	protections.	In	2017,	83%	of	our	contract volume	was	conducted	by	our	members.

The	majority	of	clearing	and	transaction	fees	received	from	clearing	firms	represents	charges	for	trades	executed	and	cleared	on	behalf	of	their	customers.	One	firm represented	13%	and	another	firm	represented	12%	of	our	clearing	and	transaction	fees	revenue	for	2017.	In	the	event	a	clearing	firm	were	to	withdraw,	our	experience indicates	that	the	customer	portion	of	the	firm's	trading	activity	would	likely	transfer	to	another	clearing	firm	of	the	exchange.

# Competition

The	industry	in	which	we	operate	is	highly	competitive	and	we	expect	competition	to	continue	to	intensify	and	become	more	global,	especially	in	light	of	changes	in	the financial	services	industry	driven	by	regulatory	reforms	such	as	the	Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act	(Dodd-Frank),	European	Market Infrastructure	Regulation	(EMIR),		Markets	in	Financial	Instruments	Directive	II	(MiFID	II),	Capital	Requirements	Directive	IV	(CRD	IV),	Market	Abuse	Regulation, Benchmarks	Regulation,	Basel	III,	and	various	other	laws	and	regulations.

Please	also	refer	to	the	discussion	below	and	in	the	"Risk	Factors"	section	beginning	on	page	14	for	a	description	of	competitive	risks	and	uncertainties.

# Competition	in	our	Derivatives	Business

We	believe	competition	in	the	derivatives	and	securities	business	is	based	on	a	number	of	factors,	including,	among	others:

# •brand	and

reputation;

•efficient	and	secure	settlement,	clearing	and	support services;

# •depth	and	liquidity	of	markets;

•diversity	of	product	offerings	and	rate	and	quality	of	new	product	development	and	innovative services;

•ability	to	position	and	expand	upon	existing	products	to	address	changing	market	needs;

# •efficient	and	seamless	customer	experience;

•transparency,	reliability,	anonymity	and	security	in	transaction	processing;

# •regulatory

environment;

•connectivity,	accessibility	and	distribution;

•technological	capability	and	innovation;	and

# •overall	transaction

costs.

We	believe	that	we	compete	favorably	with	respect	to	these	factors.	Our	deep,	liquid	markets;	diverse	product	offerings;	rate	and	quality	of	new	product	development; and	efficient,	secure	settlement,	clearing	and	support	services,	distinguish	us	from	others	in	the	industry.	We	believe	that	in	order	to	maintain	our	competitive	position, we	must	continue	to	expand	globally;	develop	new	and	innovative	products;	enhance	our	technology	infrastructure,	including	its	reliability	and	functionality;	maintain liquidity	and	low	transaction	costs,	and	implement	customer	protections	designed	to	ensure	the	integrity	of	our	market	and	the	confidence	of	our	customers.

We	compete	in	a	large	financial	services	trading,	clearing	and	settlement	marketplace	globally.	Our	competitors	include,	among	other	entities,	exchanges	such	as Intercontinental	Exchange,	Inc.	(ICE),	the	Hong	Kong	Exchanges	and	Clearing	Limited,	and	Deutsche	Börse	AG.	Competition	in	our	industry	continues	to	be	dynamic and	recent	developments	and	alliances	may	result	in	a	growing	number	of	well-capitalized	trading	service	providers	that	compete	with	all	or	a	portion	of	our	business.

# Competition	in	our	Transaction	Processing	Business

In	addition,	we	face	a	number	of	competitors	in	our	transaction	processing	and	other	business	services.	In	the	past	few	years,	there	has	been	increased	competition	in	the provision	of	clearing	services	and	we	expect	competition	to	continue	to	increase	in	connection	with	compliance	with	Dodd-Frank,	Basel	III,	MiFID	II	and	other	various laws	and	regulations.

Our	competitors	in	the	clearing	services	space	include,	among	others,	companies	such	as	ICE,	LCH.Clearnet	Ltd.,	the	Options	Clearing	Corporation,	Depository	Trust	& Clearing	Corporation	and	Deutsche	Börse	AG.	In	light	of	the	implementation	of	regulatory	requirements	and	other	reforms	of	the	financial	services	industry,	we	believe that	other	exchanges	and	infrastructure	providers	also	may	undertake	to	provide	clearing	and	other	related	post-trade	services.

We	believe	competition	in	transaction	processing	and	business	services	is	based	on,	among	other	things,	the	value	of	providing	customers	with	capital	and	margin efficiencies;	quality	and	reliability	of	the	services;	creditworthiness	of	the	clearing	house;	timely	delivery	of	the	services;	reputation;	diversity	of	the	service	offerings; confidentiality	of	positions	and	information	security	protective	measures,	and	the	fees	charged	for	the	services	provided.

# Competition	in	our	Market	Data	Business

Technology	companies,	market	data	and	information	vendors	and	front-end	software	vendors	also	represent	actual	and	potential	competitors	because	they	have	their own	substantial	market	data	distribution	capabilities	that	could	serve	as	alternative	means	for	receiving	open	market	data	feeds	instead	of	connecting	directly	to	our exchange.		Distributors	and	consumers	of	our	market	data	may	also	use	our	market	data	as	an	input	into	a	product	that	competes	against	one	of	our	traded	or	cleared products.	Although	we	may	receive	license	fees	for	such	products,	such	fees	may	not	offset	the	impact	of	any	loss	in	revenue	from	our	comparable	product.

# Regulatory	Matters

We	are	primarily	subject	to	the	jurisdiction	of	the	regulatory	agencies	in	the	United	States,	the	United	Kingdom	and	the	European	Union.	We	also	are	subject	to	varying levels	of	regulation	by	foreign	jurisdictions	that	permit	our	exchanges	and	other	businesses	to	offer	our	products	and	services	to	their	citizens.

Please	also	refer	to	the	discussion	below	and	in	the	"Risk	Factors"	section	beginning	on	page	14	for	a	description	of	regulatory	and	legislative	risks	and	uncertainties.

# Regulation	in	the	United	States

Our	operation	of	U.S.	futures	exchanges	and	our	clearing	house	is	subject	to	extensive	regulation	by	the	CFTC	that	requires	our	regulated	subsidiaries	to	satisfy	the requirements	of	certain	core	principles	relating	to	the	operation	and	oversight	of	our	markets	and	our	clearing	house.	The	CFTC	carries	out	the	regulation	of	the	futures and	swaps	markets	and	clearing	houses	in	accordance	with	the	provisions	of	the	Commodity	Exchange	Act	as	amended	by,	among	others,	the	Commodity	Futures Modernization	Act	and	Dodd-Frank.	The	CFTC	is	subject	to	reauthorization	every	five	years.	Following	the	enactment	of	Dodd-Frank,	the	CFTC	has	moved	from	a principles-based	to	a	more	prescriptive	regulatory	approach	over	most	aspects	of	our	trading	and	clearing	operations.

Regulations	implementing	Dodd-Frank	include	rules	relating	to	the	implementation	of	mandatory	clearing	of	certain	over-the-counter	derivatives,	swap	reporting, operation	of	a	clearing	house,	anti-manipulation,	large	trader	reporting,	product	definitions,	the	definition	of	an	agricultural	commodity	and	certain	provisions	of	the rules	applicable	to	designated	contract	markets,	swap	execution	facilities	and	swap	data	repositories.	We	continue	to	believe	these	regulations	provide	opportunities	for our	business,	which	we	continue	to	explore.

Our	clearing	house	has	been	designated	as	a	systemically	important	financial	market	utility	and	a	systemically	important	derivatives	clearing	organization.	These designations	carry	with	them	additional	regulatory	oversight	of	certain	of	our	risk-management	standards,	clearing	and	settlement	activities	by	the	Federal	Reserve	Bank and	the	CFTC.

Our	U.S.	swap	data	repository	service	and	swap	execution	facility	are	also	subject	to	the	requirements	of	the	Commodity	Exchange	Act	and	the	regulations	of	the	CFTC.

In	February	2017,	President	Trump	signed	an	executive	order	calling	for	the	current	U.S.	presidential	administration	to	review	U.S.	financial	laws	and	regulations	to determine	their	consistency	with	a	set	of	core	principles	identified	in	the	order.	Some	areas	identified	as	subject	to	potential	change,	amendment	or	repeal	include	the Dodd-Frank	Act	and	the	authorities	of	the	Federal	Reserve	and	the	Financial	Stability	Oversight	Council.	We	cannot	predict,	which,	if	any,	of	these	or	other	actions	will be	taken	or,	if	taken,	their	effect	on	our	business.

U.S.	income	tax	reform	efforts	could	have	a	material	impact	on	our	business.	On	December	22,	2017,	the	2017	Tax	Act,	was	signed	into	law.	The	2017	Tax	Act	enacts broad	changes	to	the	existing	U.S.	federal	income	tax	code,	including	reducing	the	federal	corporate	income	tax	rate	from	35%	to	21%,	amongst	many	other	complex provisions.	The	ultimate	impact	of	such	tax	reforms	may	differ	from	our	current	estimates	due	to	changes	in	interpretations	and	assumptions	made	by	us	as	well	as	the issuance	of	any	further	regulations	or	guidance	that	may	alter	the	operation	of	the	U.S.	federal	income	tax	code.	Various	uncertainties	also	exist	in	terms	of	how	U.S. states	and	any	foreign	countries	within	which	we	operate	will	react	to	these	U.S.	federal	income	tax	reforms,	which	could	have	additional	impacts	on	our	business.

# Regulation	in	the	United	Kingdom	and	the	European	Union

In	the	United	Kingdom,	parts	of	our	operations	are	subject	to	the	oversight	of	ESMA	and	the	FCA.	Our	clearing	house	is	subject	to	certain	conditions	and	reporting obligations	as	a	result	of	its	recognition	by	ESMA.	Multiple	directives	and	regulations,	such	as	MiFID	II	and	the	Markets	in	Financial	Instruments	Regulation	(MiFIR), the	CRD	IV,	and	the	Market	Abuse	Regulation,	have	been	implemented	either	in	full	or	on	a	phased	basis	with	provisions	similar	to	those	contained	in	Dodd-Frank. Further	regulation,	such	as	EMIR	and	the	Benchmarks	Regulation,	or	changes	to	such	legislation,	may	impact	our	business	and	operations.

In	June	2016,	the	United	Kingdom	held	a	referendum	in	which	U.K.	voters	voted	in	favor	of	withdrawal	from	the	European	Union	(Brexit).	The	ultimate	impact	of Brexit	on	the	relevant	law	and	scope	of	regulation	applicable	to	our	U.K.	operations,	including	the	recognition	of	our	clearing	house,	is	unclear	and	is	contingent	upon the	terms	of	withdrawal	and	the	ongoing	relationship	between	the	United	Kingdom	and	the	European	Union.

# Key	Areas	of	Focus

We	actively	monitor	and	participate	in	the	domestic	and	international	rulemaking	processes	for	our	industry,	including	providing	government	testimony,	commenting	on proposed	rulemakings	and	educating	our	regulators	on	potential	impacts	to	the	marketplace.

Our	key	areas	of	focus	in	the	regulatory	environment	are:

•The	adoption	and	implementation	of	position	limit	rules,	which	could	have	a	significant	impact	on	our	commodities	business	if	comparable	trading	venues	in foreign	jurisdictions	are	not	subject	to	equivalent	limitations.

•Rules	respecting	capital	charges	under	Basel	III	with	respect	to	clearing	members	of	central	counterparties.	There	is	a	risk	that	these	new	standards	may	impose overly	burdensome	capital	requirements	on	our	clearing	members	and	customers.	Additional	risks	could	arise	through	inconsistent	adoption	of	the	Basel	III capital	charges	globally,	potentially	leading	to	disparate	impacts	on	our	customers.

•The	potential	impact	of	the	E.U.	equivalence	and	recognition	regime	on	non-European	Union	clearing	houses	and	exchanges	with	customers	based	in	Europe, which	could	require	us	to	allocate	increased	amounts	of	contributed	capital	to	the	default	waterfall	and	make	changes	to	our	governance	structure.		A	failure	of our	clearing	house	to	retain	its	recognition	may	result	in	our	clearing	members	and	certain	customers	in	Europe	being	subject	to	higher	capital	costs	thus creating	a	disincentive	to	use	our	markets.

•The	potential	for	further	regulation	stemming	from	industry	performance	disruptions	and	residual	concerns	around	electronic	trading	activity	and,	in	particular, "high	frequency	trading."

•The	potential	elimination	of	the	60/40	tax	treatment	of	certain	of	our	futures	and	options	contracts,	which	would	impose	a	significant	increase	in	tax	rates applicable	to	certain	market	participants	and	could	result	in	a	decrease	in	their	trading	activity.

•The	implementation	of	a	transaction	tax	or	user	fee	in	the	United	States	or	European	Union,	which	could	discourage	institutions	and	individuals	from	using	our markets	or	products	or	encourage	them	to	trade	in	another	less	costly	jurisdiction.	From	time	to	time,	the	proposed	Presidential	budget	has,	including	the currently	proposed	budget,	included	a	proposal	to	impose	a	user	fee	to	fund	the	CFTC.

•Regulations	implementing	the	core	principles	for	designated	contract	markets,	including	any	changes	to	the	rules	implementing	the	competitive	execution requirements	of	Core	Principle	9.	Rules	promulgated	under	this	provision	may	require	us	to	make	modifications	to	the	manner	in	which	certain	of	our	contracts trade	and/or	require	that	such	products	be	de-listed	as	futures	and	re-listed	as	swaps	after	a	specified	compliance	period.

•The	implementation	of	legislation	in	the	European	Union	impacting	how	benchmark	index	prices	are	formed,	including	new	requirements	for	price	submitters, price	aggregators	and	markets	that	list	contracts	that	reference	index	prices.

•Concerns	that	legislators	will	prohibit	or	restrict	exclusive	licenses	for	benchmark	indexes,	which	might	impact	the	profitability	of	several	of	our	most	popular contracts.

•The	implementation	of	rules	resulting	in	negative	treatment	of	the	liquidity	profile	of	U.S.	Treasury	securities,	including	as	qualifying	liquidity	resources,	or any	potential	limitation	on	the	use	of	U.S.	Treasury	securities	as	collateral	could	result	in	increased	costs	to	us	and	our	clearing	firms.

# Employees

As	of	December	31,	2017,	we	had	approximately	2,830	employees.	We	consider	relations	with	our	employees	to	be	good.

# Executive	Officers

The	following	are	CME	Group's	executive	officers.	Ages	are	as	of	February	10,	2018.

Terrence	A.	Duffy,	59.	Mr.	Duffy	has	served	as	our	Chairman	and	Chief	Executive	Officer	since	November	2016.	Mr.	Duffy	previously	served	as	our	Executive Chairman	and	President	since	2012	and	as	Executive	Chairman	from	2006.	Mr.	Duffy	has	been	a	member	of	our	board	of	directors	since	1995.	He	also	served	as President	of	TDA	Trading,	Inc.	from	1981	to	2002	and	has	been	a	member	of	our	CME	exchange	since	1981.

Kathleen	M.	Cronin,	54.	Ms.	Cronin	has	served	as	our	Senior	Managing	Director,	General	Counsel	and	Corporate	Secretary	since	2003.	Prior	to	joining	us,	Ms.	Cronin was	a	corporate	attorney	at	Skadden,	Arps,	Slate,	Meagher	&	Flom	LLP	from	1989	through	1995	and	from	1997	through	2002.	Ms.	Cronin	also	serves	as	a	director	of Kemper	Corporation.

Sunil	Cutinho,	46.	Mr.	Cutinho	has	served	as	President	of	CME	Clearing	since	September	2014.	He	joined	CME	Group	in	2002	and	since	then	has	held	various positions	of	increasing	responsibility	within	the	organization	and,	most	recently	served	as	Managing	Director,	Deputy	Head	of	CME	Clearing	from	April	2014	through September	2014.

Bryan	T.	Durkin,	57.	Mr.	Durkin	has	served	as	President	since	November	2016.	Mr.	Durkin	previously	served	as	Senior	Managing	Director,	Chief	Commercial	Officer since	2014	and	as	our	Chief	Operating	Officer	since	2007,	and	also	held	the	title	of	Managing	Director,	Products	and	Services	from	2010	to	July	2012.	Mr.	Durkin joined	us	in	connection	with	the	CBOT	merger	and	he	previously	held	a	variety	of	leadership	roles	with	CBOT	from	1982	to	2007,	most	recently	as	Executive	Vice President	and	Chief	Operating	Officer.

Julie	Holzrichter,	49.	Ms.	Holzrichter	has	served	as	our	Senior	Managing	Director,	Chief	Operating	Officer	since	September	2014.	She	previously	served	as	our	Senior Managing	Director,	Global	Operations	from	2007.	Ms.	Holzrichter	rejoined	us	in	2006	as	our	Managing	Director,	CME	Globex	Services	and	Technology	Integration. Ms.	Holzrichter	previously	held	positions	of	increasing	responsibility	in	our	organization	from	1986	to	2003	in	trading	operations.

Kevin	Kometer,	53.	Mr.	Kometer	has	served	as	Senior	Managing	Director	and	Chief	Information	Officer	since	2008.	He	previously	served	as	Managing	Director	and Deputy	Chief	Information	Officer	from	2007	to	2008.	Since	joining	the	company	most	recently	in	1998,	he	has	held	senior	leadership	positions	in	the	Technology Division,	including	Managing	Director,	Trading	Execution	Systems	and	Director,	Advanced	Technology.	Mr.	Kometer	was	also	with	the	company	from	1994	to	1996.

Hilda	Harris	Piell,	50.	Ms.	Piell	has	served	as	Senior	Managing	Director	and	Chief	Human	Resources	Officer	since	2007.	Previously	she	served	as	Managing	Director and	Senior	Associate	General	Counsel,	as	Director	and	Associate	General	Counsel	and	as	Associate	Director	and	Assistant	General	Counsel	since	joining	us	in	2000.

John	W.	Pietrowicz,	53.	Mr.	Pietrowicz	has	served	as	our	Chief	Financial	Officer	since	December	2014.	Previously,	Mr.	Pietrowicz	served	as	our	Senior	Managing Director,	Business	Development	and	Corporate	Finance	since	2010.	Mr.	Pietrowicz	joined	us	in	2003	and	since	then	has	held	various	positions	of	increasing responsibility,	including	Managing	Director	and	Deputy	Chief	Financial	Officer	from	2009	to	2010	and	Managing	Director,	Corporate	Finance	and	Treasury	from	2006 to	2009.	Mr.	Pietrowicz	also	serves	as	a	director	of	S&P/Dow	Jones	Indices	LLC.

Derek	Sammann,	49.	Mr.	Sammann	has	served	as	our	Senior	Managing	Director,	Commodities	and	Options	Products	since	September	2014.	He	previously	served	as our	Senior	Managing	Director,	Financial	Products	and	Services	since	2009	and	Global	Head	of	Foreign	Exchange	Products	since	joining	us	in	2006.	Prior	to	joining	us, Mr.	Sammann	served	as	Managing	Director,	Global	Head	of	FX	Options	and	Structured	Products	at	Calyon	Corporate	and	Investment	Bank	in	London	from	1997	to 2006.

Jack	Tobin,	54.	Mr.	Tobin	has	served	as	our	Chief	Accounting	Officer	since	February	2015.	Mr.	Tobin	most	recently	served	as	our	Managing	Director,	Corporate Finance	since	2007.	Prior	to	our	merger	with	CBOT	Holdings,	Mr.	Tobin	served	as	the	Director,	Corporate	Finance	for	CBOT	Holdings,	Inc.	and	CBOT	from	2002	to 2007.	Prior	to	joining	CBOT,	Mr.	Tobin	served	as	a	principal	consultant	with	PricewaterhouseCoopers	from	1997	to	2002.	Mr.	Tobin	is	a	registered	certified	public accountant.

Sean	Tully,	54.	Mr.	Tully	has	served	as	Senior	Managing	Director,	Financial	and	OTC	Products	of	CME	Group	since	September	2014.	He	previously	served	as	Senior Managing	Director,	Interest	Rates	and	OTC	Products	since	February	2014.	Previously,	he	served	as	Managing	Director,	Interest	Rate	and	OTC	Products	since	October 2013	and	as	our	Managing	Director,	Interest	Products	since	joining	us	in	2011.	Before	joining	the	company,	Mr.	Tully	most	recently	served	as	Managing	Director, Global	Head	of	Fixed	Income	Trading	at	WestLB	in	London.

Julie	Winkler,	43.	Ms.	Winkler	has	served	as	our	Senior	Managing	Director,	Chief	Commercial	Officer	since	December	2016.	She	previously	served	as	Senior Managing	Director,	Research	and	Product	Development	and	Index	Services	of	CME	Group	since	2014	and	as	Managing	Director,	Research	and	Product	Development since	2007.	Prior	to	our	merger	with	CBOT	Holdings,	Ms.	Winkler	held	positions	of	increasing	responsibility	for	CBOT	Holdings	since	1996.	Ms.	Winkler	also	serves as	a	director	of	S&P/Dow	Jones	Indices	LLC.

# FINANCIAL	INFORMATION	ABOUT	GEOGRAPHIC	AREAS

We	track	trading	volume	based	on	the	country	of	origin	of	the	transaction	as	disclosed	to	us	by	the	customer.	During	2017,	we	estimate	that	approximately	26%	of	our electronic	trading	volume	was	reported	to	us	as	originating	from	outside	the	United	States.	This	was	an	increase	from	2016	and	2015,	when	we	estimated	approximately 24%	of	our	electronic	trading	volume	was	reported	to	us	as	originating	from	outside	the	United	States.

# AVAILABLE	INFORMATION

Our	website	is	www.cmegroup.com.	Information	made	available	on	our	website	does	not	constitute	part	of	this	document.	We	make	available	on	our	website	our	Annual Reports	on	Form	10-K,	Quarterly	Reports	on	Form	10-Q,	Current	Reports	on	Form	8-K	and	amendments	to	those	reports	as	soon	as	reasonably	practicable	after	we electronically	file	or	furnish	such	materials	to

the	U.S.	Securities	and	Exchange	Commission	(SEC).	Our	corporate	governance	materials,	including	our	Corporate	Governance	Principles,	Director	Conflict	of	Interest Policy,	Board	of	Directors	Code	of	Ethics,	Categorical	Independence	Standards,	Employee	Code	of	Conduct	and	the	charters	for	all	the	standing	committees	of	our board,	also	may	be	found	on	our	website.	Copies	of	these	materials	also	are	available	to	shareholders	free	of	charge	upon	written	request	to	Shareholder	Relations, Attention	Ms.	Beth	Hausoul,	CME	Group	Inc.,	20	South	Wacker	Drive,	Chicago,	Illinois	60606.

# ITEM	1A.				RISK	FACTORS

In	addition	to	the	other	information	contained	in	this	Annual	Report	on	Form	10-K,	you	should	carefully	consider	the	factors	discussed	below,	which	are	the	risks	we believe	are	material	at	this	time.	These	risks	could	materially	and	adversely	affect	our	business,	financial	condition	and	results	of	operations.	These	risks	and uncertainties	are	not	the	only	ones	facing	us.	Additional	risks	and	uncertainties	not	presently	known	to	us	or	that	we	currently	believe	to	be	immaterial	may	also adversely	affect	our	business.

# RISKS	RELATING	TO	OUR	INDUSTRY

# Our	business	is	subject	to	the	impact	of	domestic	and	international	market,	economic	and	political	conditions	that	are	beyond	our	control	and	that	could significantly	reduce	our	contract	volumes	and	make	our	financial	results	more	volatile.

Our	revenue	is	substantially	dependent	on	the	contract	volume	in	our	markets.	Our	contract	volume	is	directly	affected	by	domestic	and	international	factors	that	are beyond	our	control,	including:

•economic,	political	and	geopolitical	market

conditions;

•legislative	and	regulatory	changes,	including	any	direct	or	indirect	restrictions	on	or	increased	costs	associated	with	trading	in	our markets;

•broad	trends	in	the	industry	and	financial markets;

•changes	in	price	levels,	contract	volumes	and	volatility	in	the	derivatives	markets	and	in	underlying	equity,	foreign	exchange,	interest	rate	and	commodity markets;

•shifts	in	global	or	regional	demand	or	supply	in	commodities	underlying	our products;

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

•availability	of	capital	to	our	market	participants	and	their	appetite	for	risk- taking;

•levels	of	assets	under management;

•volatile	weather	patterns,	droughts,	natural	disasters	and	other catastrophes;

•pandemics	affecting	our	customer	base	or	our	ability	to	operate	our	markets; and

•consolidation	or	expansion	in	our	customer	base	and	within	our

industry.

Any	one	or	more	of	these	factors	may	contribute	to	reduced	activity	in	our	markets.	Historically,	periods	of	heightened	uncertainty	have	tended	to	increase	our	trading volume	due	to	increased	hedging	activity	and	the	increased	need	to	manage	the	risks	associated	with,	or	speculate	on,	volatility	in	the	U.S.	equity	markets,	fluctuations in	interest	rates	and	price	changes	in	the	foreign	exchange,	commodity	and	other	markets.	However,	as	evidenced	by	our	past	performance,	in	the	period	after	a	material market	disturbance,	there	may	persist	extreme	uncertainties,	which	may	lead	to	decreased	volume	due	to	factors	such	as	reduced	risk	exposure,	lower	interest	rates, central	bank	asset	purchase	programs	and	lack	of	available	capital.	The	shifts	in	market	trading	patterns	we	experienced	as	a	result	of	the	financial	disturbance	of	2008 may	or	may	not	recur	in	the	future,	and	our	business	will	be	affected	by	future	economic	uncertainties,	which	may	result	in	decreased	trading	volume	and	a	more difficult	business	environment	for	us.	Material	decreases	in	trading	volume	would	have	a	material	adverse	effect	on	our	financial	condition	and	operating	results.

# We	operate	in	a	heavily	regulated	environment	that	imposes	significant	costs	and	competitive	burdens	on	our	business.

We	are	primarily	subject	to	the	jurisdiction	of	the	regulatory	agencies	in	the	United	States.	As	a	result	of	our	global	operations,	we	are	also	subject	to	the	rules	and regulations	of	the	local	jurisdictions	in	which	we	conduct	business,	including	ESMA	and	the	FCA.	We	also	have	obtained	certain	licenses	from	foreign	jurisdictions	that permit	our	exchanges	and	clearing	house	to	offer	our	products	and	services	to	their	citizens.

Due	to	the	global	financial	crisis	that	began	in	2008,	the	United	States	and	numerous	other	governments	have	undertaken	reviews	of	the	legal	framework	governing financial	markets	and	have	either	passed	new	laws	and	regulations,	or	are	in	the	process	of	debating	or	enacting	new	laws	and	regulations	that	will	impact	our	business. Moreover,	in	February	2017,	President

Trump	signed	an	executive	order	calling	for	the	current	U.S.	presidential	administration	to	review	U.S.	financial	laws	and	regulations	to	determine	their	consistency	with a	set	of	core	principles	identified	in	the	order.	Some	areas	identified	as	subject	to	potential	change,	amendment	or	repeal	include	the	Dodd-Frank	Act	and	the	authorities of	the	Federal	Reserve	and	Financial	Stability	Oversight	Council.	In	December	2017,	the	2017	Tax	Act	was	signed	into	law	and	the	ultimate	impact	to	our	business remains	uncertain.	While	certain	of	these	changes	may	have	a	positive	impact	on	our	business,	some	of	these	changes	could	adversely	affect	our	business,	including areas	of	regulatory	focus	discussed	under	"Item	1	–	Business	–	Regulatory	Matters"	beginning	on	page	11.	Compliance	with	regulations	may	require	us	and	our customers	to	dedicate	significant	financial	and	operational	resources	that	could	result	in	some	participants	leaving	our	markets	or	decreasing	their	trading	activity,	which would	negatively	affect	our	profitability.	We	have	incurred	and	expect	to	continue	to	incur	significant	additional	costs	to	comply	with	the	extensive	regulations	that apply	to	our	business.	To	the	extent	the	regulatory	environment	is	less	beneficial	for	us	or	our	customers,	our	business,	financial	condition	and	operating	results	could	be negatively	affected.

If	we	fail	to	comply	with	applicable	laws,	rules	or	regulations,	we	may	be	subject	to	censure,	fines,	cease-and-desist	orders,	suspension	of	our	business,	removal	of personnel	or	other	sanctions,	including	revocation	of	our	designations	as	a	contract	market	and	derivatives	clearing	organization.

# We	face	intense	competition	from	other	companies,	including	some	of	our	members.	If	we	are	not	able	to	successfully	compete,	our	business,	financial	condition and	operating	results	will	be	materially	harmed.

The	industry	in	which	we	operate	is	highly	competitive	and	we	expect	competition	to	continue	to	intensify,	especially	in	light	of	the	implementation	of	Dodd-Frank	and other	reforms	of	the	financial	services	industry.	We	believe	portions	of	Dodd-Frank	and	the	corresponding	regulations	with	respect	to	mandatory	clearing	and	organized trading	provide	opportunities	for	our	business.	However,	other	reforms	could	negatively	impact	our	business	and	our	ability	to	compete	effectively.	We	encounter competition	in	all	aspects	of	our	business,	including	from	entities	having	substantially	greater	capital	and	resources,	offering	a	wide	range	of	products	and	services	and in	some	cases	operating	under	a	different	and	possibly	less	stringent	regulatory	regime.	We	face	competition	from	other	futures,	securities	and	securities	option exchanges;	over-the-counter	markets;	clearing	organizations;	consortia	formed	by	our	members	and	large	industry	participants;	swap	execution	facilities;	alternative trade	execution	facilities;	technology	firms,	including	market	data	distributors	and	electronic	trading	system	developers,	and	others.	Many	of	our	competitors	and potential	competitors	have	greater	financial,	marketing,	technological	and	personnel	resources	than	we	do.

# Our	competitors	may:

•respond	more	quickly	to	competitive	pressures,	including	responses	based	upon	their	corporate	governance	structures,	which	may	be	more	flexible	and	efficient than	our	corporate	governance	structure;

•develop	products	that	are	preferred	by	our customers;

•develop	risk	transfer	products	that	compete	with	our products;

•price	their	products	and	services	more	competitively;

•develop	and	expand	their	network	infrastructure	and	service	offerings	more	efficiently;

•utilize	better,	more	user-friendly	and	more	reliable technology;

•take	greater	advantage	of	acquisitions,	alliances	and	other opportunities;

•more	effectively	market,	promote	and	sell	their	products	and services;

•better	leverage	existing	relationships	with	customers	and	alliance	partners	or	exploit	better	recognized	brand	names	to	market	and	sell	their	services; and

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

If	our	products,	markets	and	services	are	not	competitive,	our	business,	financial	condition	and	operating	results	will	be	materially	harmed.	A	decline	in	our	fees	or	loss of	customers	could	lower	our	revenues,	which	would	adversely	affect	our	profitability.

Please	see	"Item	1	–	Business	–	Competition"	beginning	on	page	9	for	additional	information	on	the	competitive	environment	and	its	potential	impact	on	our	business.

# Our	contract	volume,	and	consequently	our	revenues	and	profits,	would	be	adversely	affected	if	we	are	unable	to	retain	our	current	customers	or	attract	new customers.

The	success	of	our	business	depends,	in	part,	on	our	ability	to	maintain	and	increase	our	contract	volume.	To	do	so,	we	must	maintain	and	expand	our	product	offerings, our	customer	base	and	our	trade	execution	and	clearing	facilities.	Our	success	also

depends	on	our	ability	to	offer	competitive	prices	and	services	in	an	increasingly	price-sensitive	business.	For	example,	some	of	our	competitors	have	engaged	in aggressive	pricing	strategies	in	the	past,	such	as	lowering	the	fees	that	they	charge	for	taking	liquidity	and	increasing	liquidity	payments	or	rebates.	We	cannot	provide assurances	that	we	will	be	able	to	continue	to	expand	our	product	lines,	that	we	will	be	able	to	retain	our	current	customers	or	attract	new	customers	or	that	we	will	not be	required	to	modify	our	pricing	structure	to	compete	effectively.	Changes	in	our	pricing	structure	may	result	in	a	decrease	in	our	profit	margin.	We	bill	a	substantial portion	of	our	clearing	and	transaction	fees	to	our	clearing	firms.	The	majority	of	clearing	and	transaction	fees	received	from	clearing	firms	represent	charges	for	trades executed	and	cleared	on	behalf	of	their	customers.	One	firm	represented	13%	and	another	firm	represented	12%	of	our	clearing	and	transaction	fees	revenue	for	2017. Should	a	clearing	firm	withdraw,	our	experience	indicates	that	the	customer	portion	of	the	firm's	trading	activity	would	likely	transfer	to	another	clearing	firm	of	the exchange.	However,	there	is	the	possibility	we	would	lose	a	portion	of	the	customer	business.	Additionally,	from	time	to	time,	certain	customers	may	represent	a significant	portion	of	the	open	interest	in	our	individual	product	lines	or	contracts.	If	we	fail	to	maintain	our	contract	volume;	expand	our	product	offerings	or	execution facilities;	or	lose	a	substantial	number	of	our	current	customers,	or	a	subset	of	customers	representing	a	significant	percentage	of	contract	volume	in	a	particular	product line;	or	are	unable	to	attract	new	customers,	our	business	and	revenues	will	be	adversely	affected.	Furthermore,	declines	in	contract	volume	due	to	loss	of	customers	may negatively	impact	market	liquidity,	which	could	lead	to	further	loss	of	contract	volume.

Our	role	in	the	global	marketplace	places	us	at	greater	risk	than	other	public	companies	for	a	cyber	attack	and	other	cyber	security	risks.	Our	technology,	our	people and	those	of	our	third-party	service	providers	may	be	vulnerable	to	cyber	security	threats,	which	could	result	in	wrongful	use	of	our	information	or	cause interruptions	in	our	operations	that	cause	us	to	lose	customers	and	contract	volume,	and	result	in	substantial	liabilities.	We	also	could	be	required	to	incur significant	expense	to	protect	our	systems	and/or	investigate	any	alleged	attack.

We	regard	the	secure	transmission	of	confidential	information	and	the	ability	to	continuously	transact	and	clear	on	our	electronic	trading	platforms	as	critical	elements	of our	operations.	Our	technology,	our	people	and	those	of	our	third-party	service	providers	and	our	customers	may	be	vulnerable	to	targeted	attacks,	unauthorized	access, fraud,	computer	viruses,	denial	of	service	attacks,	terrorism,	"ransom"	attacks,	firewall	or	encryption	failures	and	other	security	problems.	Criminal	groups,	political activist	groups	and	nation-state	actors	have	targeted	the	financial	services	industry	and	our	role	in	the	global	marketplace	places	us	at	greater	risk	than	other	public companies	for	a	cyber	attack	and	other	information	security	threats.	While	the	company	has	not	experienced	cyber	incidents	that	are	individually,	or	in	the	aggregate, material,	the	company	has	experienced	cyber	attacks	of	varying	degrees	in	the	past.	The	company	has	designed	its	cyber	defense	program	to	mitigate	such	attacks	by preventative,	detective,	and	responsive	measures.	Our	usage	of	mobile	and	cloud	technologies	may	increase	our	risk	for	a	cyber	attack.	Our	security	measures	may	also be	breached	due	to	employee	error,	malfeasance,	system	errors	or	vulnerabilities.	Additionally,	outside	parties	may	attempt	to	fraudulently	induce	employees,	users,	or customers	to	disclose	sensitive	information	in	order	to	gain	access	to	our	technology	systems	and	data,	or	our	customers'	data.	Any	such	breach	or	unauthorized	access could	result	in	significant	legal	and	financial	exposure,	damage	to	our	reputation,	and	a	loss	of	confidence	in	the	services	we	provide	that	could	potentially	have	an adverse	effect	on	our	business,	while	resulting	in	regulatory	penalties	or	the	imposition	of	burdensome	obligations	by	regulators.	In	addition,	as	the	regulatory environment	related	to	information	security,	data	collection	and	use,	and	privacy	becomes	increasingly	rigorous,	with	new	and	constantly	changing	requirements applicable	to	our	business,	compliance	with	those	requirements	could	also	result	in	additional	costs	and	may	carry	significant	penalties	for	non-compliance.

Additionally,	our	role	as	a	leading	derivatives	marketplace	and	the	operation	of	our	technology	platforms	may	place	us	at	greater	risk	for	misappropriation	of	our intellectual	property,	and	persons	who	circumvent	security	measures	could	wrongfully	use	or	steal	our	information	or	cause	interruptions	or	malfunctions	in	our operations.	In	the	past,	we	have	been	the	victim	of	trade	secret	theft	by	an	employee.

As	part	of	our	global	information	security	program,	we	employ	resources	to	monitor	and	protect	our	technology	infrastructure	and	employees	against	such	cyber	attacks, including	the	rapid	response	to	zero-day	vulnerabilities,	and	the	potential	misappropriation	of	our	intellectual	property	assets.	However,	our	security	measures	or	those of	our	third-party	providers,	including	any	cloud-based	technologies,	may	prove	insufficient	depending	upon	the	attack	or	threat	posed.	Any	security	attack	or	breach could	result	in	system	failures	and	delays,	loss	of	customers	and	lower	contract	volume,	loss	of	competitive	position,	damage	to	our	reputation,	disruption	of	our business,	legal	liability	or	regulatory	fines,	significant	costs,	which	in	turn,	may	cause	our	revenues	and	earnings	to	decline.	Though	we	have	insurance	against some	cyber	risks	and	attacks,	we	may	be	subject	to	litigation	and	financial	losses	that	exceed	our	policy	limits	or	are	not	covered	under	any	of	our	current	insurance policies.

# As	a	financial	services	provider,	we	are	subject	to	significant	litigation	risk	and	potential	commodity	and	securities	law	liability.

Many	aspects	of	our	business	involve	substantial	litigation	risks.	While	we	generally	are	protected	by	our	rules	limiting	liability	for	system	failures	and	certain	forms	of negligence	and	by	statutory	limits	on	the	ability	to	bring	private	causes	of	actions	in	cases	where	we	have	not	acted	in	bad	faith,	we	could	be	exposed	to	substantial liability	under	federal	and	state	laws

and	court	decisions,	as	well	as	rules	and	regulations	promulgated	and/or	direct	actions	brought	by	the	SEC	and	the	CFTC.	These	risks	include,	among	others,	potential liability	from	disputes	over	terms	of	a	trade,	the	claim	that	a	system	failure	or	delay	caused	monetary	losses	to	a	customer,	that	we	entered	into	an	unauthorized transaction,	that	we	provided	materially	false	or	misleading	statements	in	connection	with	a	transaction	or	that	we	failed	to	effectively	fulfill	our	regulatory	oversight responsibilities.	We	may	be	subject	to	disputes	regarding	the	quality	of	trade	execution,	the	settlement	of	trades	or	other	matters	relating	to	our	services.	We	may	become subject	to	these	claims	as	a	result	of	failures	or	malfunctions	of	our	systems	and	services	we	provide.	We	could	incur	significant	legal	expenses	defending	claims,	even those	without	merit.	In	addition,	an	adverse	resolution	of	any	future	lawsuit	or	claim	against	us	could	have	a	material	adverse	effect	on	our	business	and	our	reputation. To	the	extent	we	are	found	to	have	failed	to	fulfill	our	regulatory	obligations,	we	could	lose	our	authorizations	or	licenses	or	become	subject	to	conditions	that	could make	future	operations	more	costly	and	impairing	our	profitability.

Some	of	our	largest	clearing	firms	have	indicated	their	belief	that	clearing	facilities	should	not	be	owned	or	controlled	by	exchanges	and	should	be	operated	as utilities	and	not	for	profit.	These	clearing	firms	have	sought,	and	may	seek	in	the	future,	legislative	or	regulatory	changes	that	would,	if	adopted,	enable	them	to	use alternative	clearing	services	for	positions	established	on	our	exchanges	or	to	freely	move	open	positions	among	clearing	houses	in	order	to	take	advantage	of	our liquidity.	Even	if	they	are	not	successful,	these	factors	may	cause	them	to	limit	the	use	of	our	markets.

Our	clearing	house	seeks	to	offer	customers,	intermediaries	and	clearing	firms	universal	access	in	order	to	maximize	the	efficient	use	of	capital,	exercise	appropriate oversight	of	value	at	risk	and	maintain	operating	leverage	from	clearing	activities.	Our	strategic	business	plan	is	to	operate	an	efficient	and	transparent	vertically integrated	transaction	execution,	clearing	and	settlement	business	for	our	futures	and	options	on	futures	business.	Some	of	our	clearing	firms	have	expressed	the	view that	clearing	firms	should	control	the	governance	of	clearing	houses	or	that	clearing	houses	should	be	operated	as	utilities	rather	than	as	part	of	for-profit	enterprises. Some	of	these	firms,	along	with	certain	industry	associations,	have	sought,	and	may	seek	in	the	future,	legislative	or	regulatory	changes	to	be	adopted	that	would facilitate	mechanisms	or	policies	that	allow	market	participants	to	transfer	positions	of	futures	or	options	on	futures	from	an	exchange-owned	clearing	house	to	a clearing	house	owned	and	controlled	by	clearing	firms.	If	these	legislative	or	regulatory	changes	are	adopted,	our	revenues	and	profits	could	be	adversely	affected.

# We	may	be	at	greater	risk	from	terrorism	than	other	companies.

We	may	be	more	likely	than	other	companies	to	be	a	direct	target	of,	or	an	indirect	casualty	of,	attacks	by	terrorists	or	terrorist	organizations.	It	is	impossible	to accurately	predict	the	likelihood	or	impact	of	any	terrorist	attack	on	the	derivatives	industry	generally	or	on	our	business.	While	we	have	implemented	significant physical	security	protection	measures,	business	continuity	plans	and	established	backup	sites,	in	the	event	of	an	attack	or	a	threat	of	an	attack,	these	security	measures and	contingency	plans	may	be	inadequate	to	prevent	significant	disruptions	in	our	business,	technology	or	access	to	the	infrastructure	necessary	to	maintain	our business.	Such	attack	may	result	in	the	closure	of	our	trading	and	clearing	facilities	or	render	our	backup	data	and	recovery	systems	inoperable.	Damage	to	our	facilities due	to	terrorist	attacks	may	be	significantly	in	excess	of	any	amount	of	insurance	received,	or	we	may	not	be	able	to	insure	against	such	damage	at	a	reasonable	price	or at	all.	The	threat	of	terrorist	attacks	may	also	negatively	affect	our	ability	to	attract	and	retain	employees.	Any	of	these	events	could	have	a	material	adverse	effect	on	our business,	financial	condition	and	operating	results.

# RISKS	RELATING	TO	OUR	BUSINESS

# Damage	to	our	reputation	could	damage	our	business.

Maintaining	our	reputation	and	brand	is	critical	to	attracting	and	retaining	customers	and	investors	and	for	maintaining	our	relationships	with	our	regulators.		Negative publicity	regarding	our	company	or	actual,	alleged	or	perceived	issues	regarding	our	products	or	services	could	give	rise	to	reputational	risk	which	could	significantly harm	our	business	prospects.		These	issues	may	include,	but	are	not	limited	to,	any	of	the	risks	discussed	in	this	Item	1A,	including	risks	from	trading	disputes,	system failures	or	intrusions,	failures	to	meet	our	regulatory	obligations,	failures	of	a	clearing	firm,	issues	relating	to	our	third	party	suppliers,	misconduct	and	ineffective	risk management.

# The	success	of	our	markets	depends	on	our	ability	to	complete	development	of,	successfully	implement	and	maintain	the	electronic	trading	systems	that	have	the functionality,	performance,	reliability	and	speed	required	by	our	customers.

The	success	of	our	business	depends	in	large	part	on	our	ability	to	create	interactive	electronic	marketplaces,	in	a	wide	range	of	derivatives	products,	that	have	the required	functionality,	performance,	capacity,	reliability	and	speed	to	attract	and	retain	customers.	In	2017,	89%	of	our	overall	volume	was	generated	through	electronic trading	on	our	CME	Globex	electronic	platform.

We	must	continue	to	enhance	our	electronic	trading	platform	and	other	technology	offerings	to	remain	competitive.	As	a	result,	we	will	continue	to	be	subject	to	risks, expenses	and	uncertainties	encountered	in	the	rapidly	evolving	market	for	electronic	transaction	services.	These	risks	include	our	failure	or	inability	to:

# •provide	reliable	and	cost-effective	services	to	our

customers;

•develop,	in	a	timely	manner,	the	required	functionality	to	support	electronic	trading	in	our	key	products	in	a	manner	that	is	competitive	with	the	functionality supported	by	other	electronic	markets;

•maintain	the	competitiveness	of	our	fee

structure;

•attract	independent	software	vendors	to	write	front-end	software	that	will	effectively	access	our	electronic	trading	system	and	automated	order	routing system;

•respond	to	technological	developments	or	service	offerings	by	competitors;	and

•generate	sufficient	revenue	to	justify	the	substantial	capital	investment	we	have	made	and	will	continue	to	make	to	enhance	our	electronic	trading	platform	and other	technology	offerings.

If	we	do	not	successfully	enhance	our	electronic	trading	systems	and	technology	offerings,	if	we	are	unable	to	develop	them	to	include	other	products	and	markets	or	if they	do	not	have	the	required	functionality,	performance,	capacity,	reliability	and	speed	desired	by	our	customers,	our	ability	to	successfully	compete	and	our	revenues and	profits	will	be	adversely	affected.

Additionally,	we	rely	on	our	customers'	ability	to	have	the	necessary	back	office	functionality	to	support	our	new	products	and	our	trading	and	clearing	functionality.	To the	extent	our	customers	are	not	prepared	and/or	lack	the	resources	or	infrastructure,	the	success	of	our	new	initiatives	may	be	compromised.

# If	we	experience	systems	failures	or	capacity	constraints,	our	ability	to	conduct	our	operations	and	execute	our	business	strategy	could	be	materially	harmed	and	we could	be	subjected	to	significant	costs	and	liabilities.

Our	business	is	highly	dependent	on	our	ability	to	process	and	monitor,	on	a	daily	basis,	a	large	number	of	transactions	which	occur	at	high	volume	and	frequencies across	multiple	systems.	We	are	heavily	reliant	on	the	capacity,	reliability	and	security	of	the	computer	and	communications	systems	and	software	supporting	our operations.	Our	systems,	or	those	of	our	third-party	providers,	including	cloud	providers,	may	fail	or	be	shut	down	or,	due	to	capacity	constraints,	may	operate	slowly, causing	one	or	more	of	the	following	to	occur:

•unanticipated	disruptions	in	service	to	our customers;

•slower	response	times	and	delays	in	our	customers'	trade	execution	and processing;

•failed	settlement	of trades;

•incomplete	or	inaccurate	accounting,	recording	or	processing	of trades;

•financial	losses;

•security	breaches;

•litigation	or	other	customer	claims;

•loss	of	customers;

# •regulatory	sanctions.

We	cannot	assure	you	that	we	will	not	experience	systems	failures	from	power	or	telecommunications	failure,	acts	of	God,	war	or	terrorism,	human	error	on	our	part	or on	the	part	of	our	vendors,	natural	disasters,	fire,	sabotage,	hardware	or	software	malfunctions	or	defects,	computer	viruses,	cyber	attacks,	acts	of	vandalism	or	similar occurrences.	If	any	of	our	systems	or	the	systems	of	our	third-party	providers	do	not	operate	properly,	are	compromised	or	are	disabled,	including	as	a	result	of	system failure,	employee	or	customer	error	or	misuse	of	our	systems,	we	could	suffer	financial	loss,	liability	to	customers,	regulatory	intervention	or	reputational	damage	that could	affect	demand	by	current	and	potential	users	of	our	market.

From	time	to	time,	we	have	experienced	system	errors	and	failures	that	have	resulted	in	some	customers	being	unable	to	connect	to	our	electronic	trading	platforms	and technology	offerings,	or	that	resulted	in	erroneous	reporting,	such	as	transactions	that	were	not	authorized	by	any	customer	or	reporting	of	filled	orders	as	canceled.	Such errors	may	result	in	CME	Group	being	liable	or	in	our	voluntary	assumption	of	financial	liability.	We	cannot	assure	you	that	if	we	experience	system	errors	or	failures	in the	future	that	they	will	not	have	a	material	adverse	impact	on	our	business.	Any	such	system	failures	that	cause	an	interruption	in	service	or	decrease	our responsiveness	could	impair	our	reputation,	damage	our	brand	or	have	a	material	adverse	effect	on	our	business,	financial	condition	and	operating	results.

Our	status	as	a	CFTC	registrant	generally	requires	that	our	trade	execution	and	communications	systems	be	able	to	handle	anticipated	present	and	future	peak	contract volume.	Heavy	use	of	our	computer	systems	during	peak	trading	times	or	at	times	of	unusual	market	volatility	could	cause	our	systems	to	operate	slowly	or	even	to	fail for	periods	of	time.	We	constantly	monitor	system	loads	and	performance,	and	regularly	implement	system	upgrades	to	handle	estimated	increases	in	contract	volume. However,	we	cannot	assure	you	that	our	estimates	of	future	contract	volume	and	order	messaging	traffic	will	be	accurate	or	that	our	systems	will	always	be	able	to accommodate	actual	contract	volume	and	order	messaging	traffic	without	failure	or	degradation	of	performance.	Increased	CME	Globex	contract	volume	and	order messaging	traffic	may	result	in	connectivity	problems	or	erroneous	reports	that	may	affect	users	of	the	platform.	System	failure	or	degradation	could	lead	our	customers to	file	formal	complaints	with	industry	regulatory	organizations,	to	file	lawsuits	against	us	or	to	cease	doing	business	with	us,	or	could	lead	the	CFTC	or	other	regulators to	initiate	inquiries	or	proceedings	for	failure	to	comply	with	applicable	laws	and	regulations.

We	will	need	to	continue	to	upgrade,	expand	and	increase	the	capacity	of	our	systems	as	our	business	grows	and	as	we	execute	our	business	strategy.	Although	many	of our	systems	are	designed	to	accommodate	additional	volume	and	products	and	services	without	redesign	or	replacement,	we	will	need	to	continue	to	make	significant investments	in	additional	hardware	and	software	to	accommodate	the	increases	in	volume	of	transactions	and	order	transaction	traffic	and	to	provide	processing	services to	third	parties.	If	we	cannot	increase	the	capacity	and	capabilities	of	our	systems	to	accommodate	an	increasing	volume	of	transactions	and	to	execute	our	business strategy,	our	ability	to	maintain	or	expand	our	businesses	would	be	adversely	affected.

# We,	as	well	as	many	of	our	customers,	depend	on	third-party	suppliers	and	service	providers	for	a	number	of	services	that	are	important.	An	interruption	or cessation	of	an	important	supply	or	service	by	any	third	party	could	have	a	material	adverse	effect	on	our	business,	including	revenues	derived	from	our	customers' trading	activity.

We	depend	on	a	number	of	suppliers,	such	as	banking,	clearing	and	settlement	organizations,	telephone	companies,	on-line	service	providers,	data	processors,	cloud hosting	providers,	data	center	providers,	and	software	and	hardware	vendors,	for	elements	of	our	trading,	clearing	and	other	systems,	as	well	as	communications	and networking	equipment,	computer	hardware	and	software	and	related	support	and	maintenance.

Many	of	our	customers	rely	on	third	parties,	such	as	independent	software	vendors,	to	provide	them	with	front-end	systems	to	access	our	CME	Globex	platform	and other	back	office	systems	for	their	trade	processing	and	risk	management	needs.	While	these	service	providers	have	undertaken	to	keep	current	with	our	enhancements and	changes	to	our	interfaces	and	functionality,	we	cannot	guarantee	that	they	will	continue	to	make	the	necessary	monetary	and	time	investments	to	keep	up	with	our changes.

To	the	extent	any	of	our	service	providers	or	the	organizations	that	provide	services	to	our	customers	in	connection	with	their	trading	activities	cease	to	provide	these services	in	an	efficient,	cost-effective	manner	or	fail	to	adequately	expand	their	services	to	meet	our	needs	and	the	needs	of	our	customers,	we	could	experience decreased	contract	volume,	lower	revenues	and	higher	costs.

# Our	clearing	house	operations	expose	us	to	substantial	credit	risk	of	our	clearing	firms	and,	consequently,	a	diminishment	in	their	financial	resources	could adversely	affect	us.

Our	clearing	house	operations	expose	us	to	counterparties	with	differing	risk	profiles.	We	routinely	guarantee	transactions	submitted	by	our	clearing	firms	with counterparties	in	the	financial	industry,	including	brokers	and	dealers,	commercial	banks,	investment	banks,	mutual	and	hedge	funds,	and	other	institutional	customers. We	could	be	adversely	impacted	by	the	financial	distress	or	failure	of	one	or	more	of	our	clearing	firms.

A	substantial	part	of	our	working	capital	may	be	at	risk	if	a	clearing	firm	defaults	on	its	obligations	to	the	clearing	house	and	its	margin	and	guaranty	fund	deposits	are insufficient	to	meet	its	obligations.	Although	we	have	policies	and	procedures	to	help	ensure	that	our	clearing	firms	can	satisfy	their	obligations,	these	policies	and procedures	may	not	succeed	in	detecting	problems	or	preventing	defaults.	We	also	have	in	place	various	measures	intended	to	enable	us	to	cure	any	default	and	maintain liquidity.	However,	we	cannot	assure	you	that	these	measures	will	be	sufficient	to	protect	market	participants	from	a	default	or	that	we	will	not	be	adversely	affected	in the	event	of	a	significant	default.	In	addition,	we	have	established	a	fund	(currently	$98	million)	to	provide	payments,	up	to	certain	maximum	levels,	to	qualified	family farmers,	ranchers	and	other	agricultural	industry	participants	who	use	our	products	and	who	suffer	losses	to	their	segregated	account	balances	if	their	clearing	firm member	becomes	insolvent.

# The	required	capital	and	posted	collateral	of	our	clearing	firms	may	lose	value	given	the	volatility	of	the	market.

To	become	a	clearing	member,	a	firm	must	meet	certain	minimum	capital	requirements	and	must	deposit	collateral	to	meet	performance	bond	and	guaranty	fund requirements.	We	accept	a	variety	of	collateral	to	satisfy	these	requirements,	including	cash,	regulated	money	market	mutual	funds,	U.S.	Treasury	securities,	U.S. Government	Agency	securities,	letters	of	credit,	gold,	equities	and	select	ETFs,	foreign	sovereign	debt,	Canadian	Provincials	and	corporate	bonds,	and	subject	them	to established	haircuts	based	on	the	type	of	collateral	and	maturity.	There	is	no	guarantee	the	collateral	will	maintain	its	value.	To

the	extent	a	clearing	firm	is	not	compliant	with	capital,	margin	or	guaranty	fund	requirements,	it	would	be	required	to	promptly	come	into	compliance	by	adding	capital or	collateral,	decreasing	its	proprietary	trading	activity	and/or	transferring	customer	accounts	to	another	clearing	firm.	These	actions	could	result	in	a	decrease	in	trading activity	in	our	products.

# Intellectual	property	rights	licensed	from	third-party	price	reporting	agencies	form	the	basis	for	many	of	our	products	from	which	we	derive	a	significant	portion	of our	volume	and	revenue.	Regulatory	scrutiny	into	such	benchmarks	could	have	a	negative	impact	on	our	ability	to	offer	such	products.

We	are	significantly	dependent	on	the	contract	volume	of	products	which	are	based	on	intellectual	property	rights	of	indexes	derived	from	third-party	price	reporting agencies.	To	comply	with	CFTC	core	principles,	we	must	be	able	to	demonstrate	that	our	products	may	not	be	readily	subject	to	manipulation.	Our	inability	to	offer products	based	on	these	indexes	could	have	a	negative	impact	on	our	contract	volume	and	revenues.

# Our	market	data	revenues	may	be	reduced	by	decreased	demand,	poor	overall	economic	conditions	or	a	significant	change	in	how	market	participants	trade	and	use market	data.

We	sell	our	market	data	to	individuals,	trading	institutions	and	other	organizations	that	use	our	information	services	to	participate	in	our	markets	and/or	monitor	general economic	conditions.	Revenues	from	our	market	data	and	information	services	represented	11%	of	our	total	revenues	during	both	years	ended	December	31,	2017	and 2016.	A	decrease	in	overall	contract	volume	may	lead	to	a	decreased	demand	for	our	market	data.	For	example,	in	both	2017	and	2016,	we	experienced	a	decrease	in	the average	number	of	market	data	devices	due	to	continued	economic	uncertainty,	high	unemployment	levels	in	the	financial	services	sector	and	aggressive	cost	cutting initiatives	at	customer	firms	and	the	continued	impact	of	legacy	incentive	programs	tied	to	trading	terminals.

# We	may	have	difficulty	executing	our	growth	strategy	and	maintaining	our	growth	effectively.

We	continue	to	focus	on	strategic	initiatives	to	grow	our	business,	including	our	efforts	to	serve	the	over-the-counter	markets	and	to	distribute	our	products	and	services on	a	global	basis.	There	is	no	guarantee	that	our	efforts	will	be	successful.	Continued	growth	will	require	additional	investment	in	personnel,	facilities,	information technology	infrastructure	and	financial	and	management	systems	and	controls	and	may	place	a	significant	strain	on	our	management	and	resources.	For	example,	if	we encounter	limited	resources,	we	may	be	required	to	increase	our	expenses	to	obtain	the	necessary	resources,	defer	existing	initiatives	or	not	pursue	certain	opportunities. We	may	not	be	successful	in	implementing	all	of	the	processes	that	are	necessary	to	support	our	growth	organically	or,	as	described	below,	through	acquisitions,	other investments	or	strategic	alliances.	Our	growth	strategy	also	may	subject	us	to	increased	legal,	compliance	and	regulatory	obligations.	Unless	our	growth	results	in	an increase	in	our	revenues	that	is	proportionate	to	the	increase	in	our	costs	associated	with	our	growth,	our	future	profitability	could	be	adversely	affected,	and	we	may have	to	incur	significant	expenditures	to	address	the	additional	operational	and	control	requirements	as	a	result	of	our	growth.

We	intend	to	continue	to	explore	acquisitions,	other	investments	and	strategic	alliances.	We	may	not	be	successful	in	identifying	opportunities	or	in	integrating	the acquired	businesses.	Any	such	transaction	may	not	produce	the	results	we	anticipate,	which	could	adversely	affect	our	business	and	our	stock	price.

We	intend	to	continue	to	explore	and	pursue	acquisitions	and	other	strategic	opportunities	to	strengthen	our	business	and	grow	our	company.	We	may	make	acquisitions or	investments	or	enter	into	strategic	partnerships,	joint	ventures	and	other	alliances.	The	market	for	such	transactions	is	highly	competitive,	especially	in	light	of historical	merger	and	acquisition	activity	in	our	industry.	As	a	result,	we	may	be	unable	to	identify	strategic	opportunities	or	we	may	be	unable	to	negotiate	or	finance future	transactions	on	terms	favorable	to	us,	which	could	impact	our	ability	to	identify	growth	opportunities.	We	may	finance	future	transactions	by	issuing	additional equity	and/or	debt.	The	issuance	of	additional	equity	in	connection	with	any	future	transaction	could	be	substantially	dilutive	to	our	existing	shareholders.	The	issuance of	additional	debt	could	increase	our	leverage	substantially.	The	process	of	integration	also	may	produce	unforeseen	regulatory	and	operating	difficulties	and expenditures	and	may	divert	the	attention	of	management	from	the	ongoing	operation	of	our	business.	To	the	extent	we	enter	into	joint	ventures	and	alliances,	we	may experience	difficulties	in	the	development	and	expansion	of	the	business	of	any	newly	formed	ventures,	in	the	exercise	of	influence	over	the	activities	of	any	ventures	in which	we	do	not	have	a	controlling	interest,	as	well	as	encounter	potential	conflicts	with	our	joint	venture	or	alliance	partners.	We	may	not	realize	the	anticipated	growth and	other	benefits	from	our	growth	initiatives	and	investments,	which	may	have	an	adverse	impact	on	our	financial	condition	and	operating	results.	We	also	may	be required	to	take	an	impairment	charge	in	our	financial	statements	relating	to	our	acquisitions	and/or	investments,	which	could	negatively	affect	our	stock	price.

# Expansion	of	our	global	operations	involves	special	challenges	that	we	may	not	be	able	to	meet,	which	could	adversely	affect	our	financial	results.

We	plan	to	continue	to	expand	our	global	operations.	We	face	certain	risks	inherent	in	doing	business	in	international	markets,	particularly	in	the	regulated	derivatives exchange	business.	These	risks	include:

•becoming	subject	to	extensive	regulations	and	oversight;

•difficulties	in	staffing	and	managing	foreign

operations;

•general	economic	and	political	conditions	in	the	countries	from	which	our	markets	are	accessed,	which	may	have	an	adverse	effect	on	our	volume	from	those countries;	and

# •potentially	adverse	tax	consequences.

We	cannot	assure	you	that	we	will	be	successful	in	marketing	our	products	and	services	in	international	markets.	We	also	may	experience	difficulty	in	managing	our international	operations	because	of,	among	other	things,	competitive	conditions	overseas,	management	of	foreign	exchange	risk,	established	domestic	markets,	language and	cultural	differences	and	economic	or	political	instability.	Any	of	these	factors	could	have	a	material	adverse	effect	on	the	success	of	our	international	operations	and, consequently,	on	our	business,	financial	condition	and	operating	results.

The	ultimate	impact	of	Brexit	on	the	relevant	law	and	scope	of	regulation	applicable	to	our	U.K.	operations	and	to	our	European	expansion	is	unclear	and	is	contingent upon	the	terms	of	withdrawal	and	the	ongoing	relationship	between	the	United	Kingdom	and	the	European	Union.	Brexit	may	result	in	legal	uncertainty	and	potentially divergent	national	laws	and	regulations	as	the	withdrawal	process	progresses.	This	could	increase	legal,	compliance	and	operational	costs.

# Our	compliance	and	risk	management	programs	might	not	be	effective	and	may	result	in	outcomes	that	could	adversely	affect	our	reputation,	financial	condition and	operating	results.

In	the	normal	course	of	our	business,	we	discuss	matters	with	our	regulators	raised	during	regulatory	examinations,	or	we	may	otherwise	become	subject	to	their	inquiry and	oversight.	The	CFTC	has	broad	enforcement	powers	to	censure,	fine,	issue	cease-and-desist	orders,	prohibit	us	from	engaging	in	some	of	our	businesses	or	suspend or	revoke	our	designation	as	a	contract	market	or	the	registration	of	any	of	our	officers	or	employees	who	violate	applicable	laws	or	regulations.	Our	ability	to	comply with	applicable	laws	and	rules	is	largely	dependent	on	our	establishment	and	maintenance	of	compliance,	review	and	reporting	systems,	as	well	as	our	ability	to	attract and	retain	qualified	compliance	and	other	risk	management	personnel.	We	face	the	risk	of	significant	intervention	by	regulatory	authorities,	including	extensive examination	and	surveillance	activity.	In	the	case	of	alleged	non-compliance	with	applicable	laws	or	regulations,	we	could	be	subject	to	investigations	and	judicial	or administrative	proceedings	that	may	result	in	substantial	penalties	or	civil	lawsuits,	including	by	customers,	for	damages,	which	could	be	significant.	Any	of	these outcomes	may	adversely	affect	our	reputation,	financial	condition	and	operating	results.	In	extreme	cases,	these	outcomes	could	adversely	affect	our	ability	to	conduct our	business.	In	2013,	the	CFTC	filed	suit	against	NYMEX	and	two	former	employees	alleging	disclosure	of	confidential	customer	information	in	violation	of	the Commodity	Exchange	Act.	Based	on	our	review	of	the	allegations,	we	believe	that	we	have	strong	factual	and	legal	defenses	to	the	claim.

Our	policies	and	procedures	to	identify,	monitor	and	manage	our	risks	may	not	be	fully	effective.	Some	of	our	risk	management	methods	depend	upon	evaluation	of information	regarding	markets,	customers	or	other	matters	that	are	publicly	available	or	otherwise	accessible	by	us.	That	information	may	not	in	all	cases	be	accurate, complete,	up-to-date	or	properly	evaluated.	Management	of	operational,	financial,	legal,	regulatory	and	strategic	risk	requires,	among	other	things,	policies	and procedures	to	record	properly	and	verify	a	large	number	of	transactions	and	events.	We	cannot	assure	you	that	our	policies	and	procedures	will	always	be	effective	or that	we	will	always	be	successful	in	monitoring	or	evaluating	the	risks	to	which	we	are	or	may	be	exposed.

# We	could	be	harmed	by	misconduct	or	errors	that	are	difficult	to	detect	and	deter.

There	have	been	a	number	of	highly	publicized	cases	involving	fraud	or	other	misconduct	by	employees	of	financial	services	firms	in	the	past.	Misconduct	by	our employees	and	agents	could	include	hiding	unauthorized	activities	from	us,	improper	or	unauthorized	activities	on	behalf	of	customers	or	improper	use	or	unauthorized disclosure	of	confidential	information.	Misconduct	could	subject	us	to	financial	losses	or	regulatory	sanctions	and	seriously	harm	our	reputation.	It	is	not	always	possible to	deter	misconduct,	and	the	precautions	we	take	to	prevent	and	detect	this	activity	may	not	be	effective	in	all	cases.	Our	employees	and	agents	also	may	commit	errors that	could	subject	us	to	financial	claims	for	negligence,	as	well	as	regulatory	actions,	or	result	in	our	voluntary	assumption	of	financial	liability.

# We	may	not	be	able	to	protect	our	intellectual	property	rights,	which	may	materially	harm	our	business.

We	own	the	rights	to	a	large	number	of	trademarks,	service	marks,	domain	names	and	trade	names	in	the	United	States,	Europe	and	other	parts	of	the	world.	We	have registered	many	of	our	most	important	trademarks	in	the	United	States	and	other

countries.	We	hold	the	rights	to	a	number	of	patents	and	have	made	a	number	of	patent	applications.	Our	patents	cover	match	engine,	trader	user	interface,	trading	floor support,	market	data,	general	technology	and	clearing	house	functionalities.	We	attempt	to	protect	our	intellectual	property	rights	by	relying	on	trademarks,	copyright, database	rights,	trade	secrets,	restrictions	on	disclosure	and	other	methods.	Notwithstanding	the	precautions	we	take	to	protect	our	intellectual	property	rights,	it	is possible	that	third	parties	may	copy	or	otherwise	obtain	and	use	our	proprietary	technology	without	authorization	or	otherwise	infringe	on	our	rights.	For	example,	one of	our	former	employees	pled	guilty	to	theft	of	our	trade	secrets.	In	addition,	in	the	future,	we	may	have	to	rely	on	litigation	to	enforce	our	intellectual	property	rights, protect	our	trade	secrets,	determine	the	validity	and	scope	of	the	proprietary	rights	of	others	or	defend	against	claims	of	infringement	or	invalidity.	Any	such	litigation, whether	successful	or	unsuccessful,	could	result	in	substantial	costs	to	us	and	diversions	of	our	resources,	either	of	which	could	adversely	affect	our	business.

# Any	infringement	by	us	on	patent	rights	of	others	could	result	in	litigation	and	adversely	affect	our	ability	to	continue	to	provide,	or	increase	the	cost	of	providing, our	products	and	services.

Patents	of	third	parties	may	have	an	important	bearing	on	our	ability	to	offer	certain	products	and	services.	Our	competitors	as	well	as	other	companies	and	individuals may	obtain,	and	may	be	expected	to	obtain	in	the	future,	patents	related	to	the	types	of	products	and	services	we	offer	or	plan	to	offer.	We	cannot	assure	you	that	we	are or	will	be	aware	of	all	patents	containing	claims	that	may	pose	a	risk	of	infringement	by	our	products	and	services.	In	addition,	some	patent	applications	in	the	United States	are	confidential	until	a	patent	is	issued	and,	therefore,	we	cannot	evaluate	the	extent	to	which	our	products	and	services	may	be	covered	or	asserted	to	be	covered by	claims	contained	in	pending	patent	applications.	These	claims	of	infringement	are	not	uncommon	in	our	industry.

In	general,	if	one	or	more	of	our	products	or	services	were	to	infringe	on	patents	held	by	others,	we	may	be	required	to	stop	developing	or	marketing	the	products	or services,	to	obtain	licenses	to	develop	and	market	the	services	from	the	holders	of	the	patents	or	to	redesign	the	products	or	services	in	such	a	way	as	to	avoid	infringing on	the	patent	claims.	We	cannot	assess	the	extent	to	which	we	may	be	required	in	the	future	to	obtain	licenses	with	respect	to	patents	held	by	others,	whether	such licenses	would	be	available	or,	if	available,	whether	we	would	be	able	to	obtain	such	licenses	on	commercially	reasonable	terms.	If	we	were	unable	to	obtain	such licenses,	we	may	not	be	able	to	redesign	our	products	or	services	to	avoid	infringement,	which	could	materially	adversely	affect	our	business,	financial	condition	and operating	results.

# RISKS	RELATING	TO	AN	INVESTMENT	IN	OUR	CLASS	A	COMMON	STOCK

# Our	indebtedness	could	adversely	affect	our	financial	condition	and	operations	and	prevent	us	from	fulfilling	our	debt	service	obligations.	We	might	still	be	able	to incur	more	debt,	intensifying	these	risks.

As	of	December	31,	2017,	we	had	approximately	$2.2	billion	of	total	indebtedness	and	we	had	excess	borrowing	capacity	for	general	corporate	purposes	under	our existing	facilities	of	approximately	$2.3	billion.

Our	indebtedness	could	have	important	consequences.	For	example,	our	indebtedness	may:

•require	us	to	dedicate	a	significant	portion	of	our	cash	flow	from	operations	to	payments	on	our	debt,	thereby	reducing	the	availability	of	cash	flows	to	fund capital	expenditures,	to	pursue	acquisitions	or	investments,	to	pay	dividends	and	for	general	corporate	purposes;

•increase	our	vulnerability	to	general	adverse	economic

•limit	our	flexibility	in	planning	for,	or	reacting	to,	changes	in	or	challenges	relating	to	our	business	and	industry;

•place	us	at	a	competitive	disadvantage	against	any	less	leveraged

competitors.

The	occurrence	of	any	one	of	these	events	could	have	a	material	adverse	effect	on	our	business,	financial	condition,	results	of	operations,	prospects	and	ability	to	satisfy our	debt	service	obligations.	In	addition,	the	agreements	governing	our	outstanding	indebtedness	do	not	significantly	limit	our	ability	to	incur	additional	indebtedness, which	could	increase	the	risks	described	above	to	the	extent	that	we	incur	additional	debt.	Our	U.S.	exchanges	and	clearing	house	also	are	required	to	maintain	capital	as defined	by	the	CFTC.

# Any	reduction	in	our	credit	rating	could	increase	the	cost	of	our	funding	from	the	capital	markets.

Our	long-term	debt	is	currently	rated	investment	grade	by	two	of	the	major	rating	agencies.	These	rating	agencies	regularly	evaluate	us.	Their	ratings	of	our	long-term debt	are	based	on	a	number	of	factors,	including	our	financial	strength	as	well	as	factors	not	entirely	within	our	control,	such	as	conditions	affecting	the	financial services	industry	generally.	In	light	of	the	difficulties	in	the	financial	services	industry	and	the	financial	markets	over	the	last	few	years,	there	can	be	no	assurance	that we	will	maintain	our	current	ratings.	In	the	past,	we	have	experienced	ratings	downgrades.	Our	failure	to	maintain	our	ratings	could	adversely	affect	the	cost	and	other terms	upon	which	we	are	able	to	obtain	funding,	and	increase	our	cost	of	capital.	Additionally,	if	our	ratings	are	downgraded	below	investment	grade	due	to	a	change	of control,	we	are	required	to	make	an	offer	to	repurchase	all	of	our	fixed-rate	notes	at	a	price	equal	to	101%	of	the	principal	amount,	plus	accrued	and	unpaid	interest.

# Our	operations	of,	and	investments	in,	businesses	outside	of	the	United	States	subject	us	to	currency	risk.

As	a	global	company	with	operations	outside	of	the	United	States,	portions	of	our	revenues	and	expenses	are	denominated	in	the	local	currency	of	the	particular subsidiary.		Because	our	consolidated	financial	statements	are	presented	in	U.S.	dollars,	we	must	translate	non-U.S.	dollar	denominated	revenues,	income	and	expenses, as	well	as	assets	and	liabilities,	into	U.S.	dollars	at	exchange	rates	in	effect	during	or	at	the	end	of	each	reporting	period.	Therefore,	increases	or	decreases	in	the	value	of the	U.S.	dollar	against	the	other	currencies	may	affect	our	operating	income	and	the	value	of	balance	sheet	items	denominated	in	foreign	currencies.

Our	average	rate	per	contract	is	subject	to	fluctuation	due	to	a	number	of	factors.	As	a	result,	you	may	not	be	able	to	rely	on	our	average	rate	per	contract	in	any particular	period	as	an	indication	of	our	future	average	rate	per	contract.

Our	average	rate	per	contract,	which	impacts	our	operating	results,	is	subject	to	fluctuation	due	to	shifts	in	the	mix	of	products	traded,	the	trading	venue	and	the	mix	of customers	(whether	the	customer	receives	member	or	non-member	fees	or	participates	in	one	of	our	various	incentive	programs)	and	the	impact	of	our	tiered	pricing structure.	In	addition,	our	members	and	participants	in	our	various	incentive	programs	generally	are	charged	lower	fees	than	our	non-member	customers.	Variation	in each	of	these	factors	is	difficult	to	predict	and	will	have	an	impact	on	our	average	rate	per	contract	in	the	particular	period.	Because	of	this	fluctuation,	you	may	not	be able	to	rely	on	our	average	rate	per	contract	in	any	particular	period	as	an	indication	of	our	future	average	rate	per	contract.	If	we	fail	to	meet	securities	analysts' expectations	regarding	our	operating	results,	the	price	of	our	Class	A	common	stock	could	decline	substantially.

# Our	cost	structure	is	largely	fixed.	If	our	revenues	decline	and	we	are	unable	to	reduce	our	costs,	our	profitability	will	be	adversely	affected.

Our	cost	structure	is	largely	fixed.	If	demand	for	our	products	and	services	and	our	resulting	revenues	decline,	we	may	not	be	able	to	adjust	our	cost	structure	on	a	timely basis.	In	that	event,	our	profitability	would	be	adversely	affected.

Twelve	of	our	board	members	own	trading	rights	or	are	officers	or	directors	of	firms	that	own	trading	rights	on	our	exchanges.	As	members,	these	individuals	may have	interests	that	differ	from	or	conflict	with	those	of	shareholders	who	are	not	also	members.	Our	dependence	on	the	trading	and	clearing	activities	of	our members,	combined	with	the	CME	members'	rights	to	elect	six	directors,	may	enable	them	to	exert	substantial	influence	over	the	operation	of	our	business.

Twelve	of	our	directors	own	or	are	officers	or	directors	of	firms	that	own	trading	rights	on	our	exchanges.	We	are	dependent	on	the	revenues	from	the	trading	and clearing	activities	of	our	members.	In	2017,	83%	of	our	contract	volume	was	derived	from	our	members.	This	dependence	may	give	them	substantial	influence	over	how we	operate	our	business.

Many	of	our	members	and	clearing	firms	derive	a	substantial	portion	of	their	income	from	their	trading	or	clearing	activities	on	or	through	our	exchanges.	In	addition, trading	rights	on	our	exchanges	have	substantial	independent	value.	The	amount	of	income	that	members	derive	from	their	trading,	brokering	and	clearing	activities	and the	value	of	their	trading	rights	are,	in	part,	dependent	on	the	fees	they	are	charged	to	trade,	broker,	clear	and	access	our	markets,	and	the	rules	and	structure	of	our markets.	As	a	result,	members	may	not	have	the	same	economic	interests	as	holders	of	our	Class	A	common	stock.	In	addition,	our	members	may	have	differing interests	among	themselves	depending	on	the	roles	they	serve	in	our	markets,	their	methods	of	trading	and	the	products	they	trade.	Consequently,	members	may advocate	that	we	enhance	and	protect	their	clearing	and	trading	opportunities	and	the	value	of	their	trading	privileges	over	their	investment	in	our	Class	A	common stock,	if	any.

# Our	members	have	been	granted	special	rights,	which	protect	their	trading	privileges,	require	that	we	maintain	open	outcry	for	options	products	still	meeting certain	volume	thresholds	and,	in	the	case	of	our	Class	B	shareholders,	provide	them	with	special	board	representation.

Under	the	terms	of	the	organizational	documents	of	our	exchanges,	our	members	have	certain	rights	that	relate	primarily	to	trading	right	protections,	certain	trading	fee protections	and	certain	membership	benefit	protections.	Additionally,	our	Class	B	shareholders,	who	are	members	of	our	CME	exchange,	are	entitled	to	elect	six directors	to	our	board	even	if	their	Class	A	share	ownership	interest	is	very	small	or	non-existent.	In	connection	with	these	rights,	our	ability	to	take	certain	actions	that we	may	deem	to	be	in	the	best	interests	of	the	company	and	its	shareholders,	including	actions	relating	to	certain	pricing	decisions,	may	be	limited	by	the	rights	of	our members.

# ITEM	1B.				UNRESOLVED	STAFF	COMMENTS

Not	applicable.

# ITEM	2.				PROPERTIES

Our	global	headquarters	are	located	in	Chicago,	Illinois,	at	20	South	Wacker	Drive.	The	following	is	a	description	of	our	key	locations	and	facilities.

| Location | Primary	Use | Owned/Leased | Lease	Expiration | (in	square	feet)(1) |
| :--- | :--- | :--- | :--- | :--- |
| 20\tSouth\tWacker\tDrive\tChicago,\tIllinois | Global\theadquarters\tand\toffice\tspace | Leased | 2032(2) | 512,000 |
| 141\tWest\tJackson\nChicago,\tIllinois | Trading\tfloor\tand\toffice\tspace | Leased | 2027(3) | 150,000 |
| 333\tS.\tLaSalle\nChicago,\tIllinois | Trading\tfloor\tand\toffice\tspace | Owned | N/A | 300,000 |
| 550\tWest\tWashington\nChicago,\tIllinois | Office\tspace | Leased | 2023 | 250,000 |
| One\tNorth\tEnd\nNew\tYork,\tNew\tYork | Trading\tfloor\tand\toffice\tspace | Leased | 2028(4) | 240,000 |
| One\tNew\tChange\tLondon | Office\tspace | Leased | 2026 | 58,000 |
| Data\tCenter\t3\nChicagoland\tarea | Business\tcontinuity\tand\tco-location | Leased | 2031(5) | 83,000 |
| Bagmane\tTech\tPark\tBangalore,\tIndia | Office\tspace | Leased | 2020(6) | 72,000 |

(1) Size	represents	the	amount	of	space	leased	or	owned	by	us	unless	otherwise	noted.

(2) The	initial	lease	expires	in	2032	with	two	consecutive	options	to	extend	the	term	for	five	years	each.

(3) The	initial	lease	expires	in	2027	and	contains	options	to	extend	the	term	and	expand	the	premises.

(4) The	initial	lease	expires	in	2028	and	contains	options	to	extend	the	term	and	expand	the	premises.	In	2019,	the	premises	will	be	reduced	to	225,000	square	feet.

(5) In	March	2016,	the	company	sold	its	datacenter	in	the	Chicago	area	for	$130.0	million.	At	the	time	of	the	sale,	the	company	leased	back	a	portion	of	the	property.

(6) The	initial	lease	expires	in	2020	and	contains	an	option	to	extend	the	term	as	well	as	an	option	to	terminate	early.

# ITEM	3. LEGAL	PROCEEDINGS

See	"Legal	and	Regulatory	Matters"	in	note	12.	Contingencies	to	the	Consolidated	Financial	Statements	beginning	on	page	75	for	CME	Group's	legal	proceedings disclosure	which	is	incorporated	herein	by	reference.

# ITEM	4. MINE	SAFETY	DISCLOSURES

# PART	II

# ITEM	5. MARKET	FOR	REGISTRANT'S	COMMON	EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF EQUITY	SECURITIES

# Class	A	Common	Stock

Our	Class	A	common	stock	is	currently	listed	on	NASDAQ	under	the	ticker	symbol	"CME."	As	of	February	7,	2018,	there	were	approximately	2,715	holders	of	record of	our	Class	A	common	stock.

The	following	table	sets	forth	the	high	and	low	sales	prices	per	share	of	our	Class	A	common	stock	on	a	quarterly	basis,	as	reported	on	NASDAQ.

# Class	B	Common	Stock

Our	Class	B	common	stock	is	not	listed	on	a	national	securities	exchange	or	traded	in	an	organized	over-the-counter	market.	Each	class	of	our	Class	B	common	stock	is associated	with	a	membership	in	a	specific	division	of	our	CME	exchange.	CME's	rules	provide	exchange	members	with	trading	rights	and	the	ability	to	use	or	lease these	trading	rights.	Each	share	of	our	Class	B	common	stock	can	be	transferred	only	in	connection	with	the	transfer	of	the	associated	trading	rights.

Class	B	shares	and	the	associated	trading	rights	are	bought	and	sold	or	leased	through	our	membership	department.	Although	our	Class	B	shareholders	have	special voting	rights,	because	our	Class	B	shares	have	the	same	equitable	interest	in	our	earnings	and	the	same	dividend	payments	as	our	Class	A	shares,	we	expect	that	the market	price	of	our	Class	B	common	stock,	if	reported	separately	from	the	associated	trading	rights,	would	be	primarily	determined	by	the	value	of	our	Class	A common	stock.	As	of	February	7,	2018,	there	were	approximately	1,590	holders	of	record	of	our	Class	B	common	stock.

# Dividends

The	following	table	sets	forth	the	dividends	we	declared	on	our	Class	A	and	Class	B	common	stock	in	the	last	two	years:

| Record	Date | Dividend	per	Share | Record	Date | Dividend	per	Share |
| :--- | :--- | :--- | :--- |
| March\t10,\t2017 | $0.66 | \t March\t10,\t2016 | $0.60 |
| June\t9,\t2017 | 0.66 | June\t10,\t2016 | 0.60 |
| September\t8,\t2017 | 0.66 | September\t9,\t2016 | 0.60 |
| December\t8,\t2017 | 0.66 | \t December\t9,\t2016 | 0.60 |
| December\t28,\t2017 | 3.50 | \t December\t28,\t2016 | 3.25 |

We	intend	to	continue	to	pay	a	regular	quarterly	dividend	to	our	shareholders	according	to	our	annual	dividend	policy,	which	is	set	at	between	50%	and	60%	of	the	prior year's	cash	earnings.	The	decision	to	declare	a	dividend	and	the	amount	of	the	dividend,	however,	remains	within	the	discretion	of	our	board	of	directors	and	may	be affected	by	various	factors,	including	our	future	earnings,	financial	condition,	capital	requirements,	levels	of	indebtedness	and	other	considerations	our	board	of directors	deems	relevant.	On	February	7,	2018,	the	board	of	directors	declared	a	regular	quarterly	dividend	of	$0.70	per	share.	The	dividend	will	be	payable	on	March 26,	2018,	to	shareholders	of	record	on	March	9,	2018.	Assuming	no	changes	in	the	number	of	shares	outstanding,	the	total	first	quarter	dividend	payment	will	be approximately	$237.0	million.	The	board	of	directors	also	declared	an	additional,	annual	variable	dividend	of	$3.50	per	share	on	December	6,	2017,	paid	on	January	16, 2018,	to	the	shareholders	of	record	on	December	28,	2017.	In	general,	the	amount	of	the	annual	variable	dividend	will	be	determined	at	the	end	of	each	year,	and	the level	will	increase	or	decrease	from	year	to	year	based	on	operating	results,	capitalization	expenditures,	potential	merger	and	acquisition	activity,	and	other	forms	of capital	return	including	regular	dividends	and	share	buybacks	during	the	prior	year.

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

For	example,	under	our	senior	credit	facility,	we	are	required	to	remain	in	compliance	with	a	consolidated	net	worth	test,	defined	as	our	consolidated	shareholders' equity	as	of	September	30,	2017	after	giving	effect	to	actual	share	repurchases	made	and	special	dividends	paid	(including	annual	variable	dividends),	but	only	up	to	the amount	of	such	repurchases	and	dividends	publicly	announced	and	made	or	paid	after	September	30,	2017	(and	in	no	event	greater	than	$2.0	billion	in	the	aggregate	for such	repurchases	and	dividends	during	the	term	of	the	agreement),	multiplied	by	0.65.	In	addition,	our	364-day	clearing	house	credit	facility	contains	a	requirement	that CME	remain	in	compliance	with	a	consolidated	tangible	net	worth	test,	defined	as	consolidated	shareholder's	equity	less	intangible	assets	(as	defined	in	the	agreement), of	not	less	than	$800.0	million.

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

CME	Group	and	its	subsidiaries	are	also	required	to	comply	with	restrictions	contained	in	the	general	corporation	laws	of	their	state	of	incorporation	which	could	also limit	its	(or	their)	ability	to	declare	and	pay	dividends.

# PERFORMANCE	GRAPH

The	following	graph	and	table	compares	the	cumulative	five-year	total	return	provided	to	shareholders	on	our	Class	A	common	stock	relative	to	the	cumulative	total returns	of	the	S&P	500	index	and	our	customized	peer	group.	The	peer	group	includes	CBOE	Holdings,	Inc.,	IntercontinentalExchange	Group,	Inc.	and	Nasdaq,	Inc.	An investment	of	$100	(with	reinvestment	of	all	dividends)	is	assumed	to	have	been	made	in	our	Class	A	common	stock,	in	the	peer	group	and	the	S&P	500	index	on December	31,	2012,	and	its	relative	performance	is	tracked	through	December	31,	2017.

# totalreturn2017a.jpg

# The	stock	price	performance	included	in	this	graph	is	not	necessarily	indicative	of	future	stock	price	performance.

|  | 2013 | 2014 | 2015 | 2016 | 2017 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| CME\tGroup\tInc. | $164.01 | $194.06 | $208.95 | $279.85 | $370.32 |
| S&P\t500 | 132.39 | 150.51 | 152.59 | 170.84 | 208.14 |
| Peer\tGroup | 176.61 | 187.48 | 219.99 | 249.31 | 323.23 |

# Unregistered	Sales	of	Equity	Securities

During	the	past	three	years	there	have	not	been	any	unregistered	sales	by	the	company	of	equity	securities.

# Issuer	Purchases	of	Equity	Securities

| Period | Total	Number<br>of	Shares	(or	Units)<br>Purchased(1) | Average	Price<br>Paid	Per	Share	(or<br>Unit) | Total	Number	of<br>Shares	(or	Units)<br>Purchased	as<br>Part	of	Publicly<br>Announced<br>Plans	or	Programs | Maximum	Number	(or	Approximate	Dollar<br>Value)<br>of	Shares	(or	Units)	that	May	Yet<br>Be	Purchased	Under<br>the	Plans	or	Programs	(in	millions) |
| :--- | :--- | :--- | :--- | :--- |
| October\t1\tto\tOctober\t31 | 119 | $137.17 | — | $— |
| November\t1\tto\tNovember\t30 | — | — | — | — |
| December\t1\tto\tDecember\t31 | 5,764 | 146.98 | — | — |
| Total | 5,883 |  | — |  |

(1) Shares	purchased	consist	of	an	aggregate	of	5,883	shares	of	Class	A	common	stock	surrendered	to	satisfy	employee	tax	obligations	upon	the	vesting	of	restricted	stock.

# ITEM	6. SELECTED	FINANCIAL	DATA

| (in	millions,	except	per	share	data) | 2017 | 2016 | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Income\tStatement\tData: |  |  |  |  |  |
| Total\trevenues | $3,644.7 | $3,595.2 | $3,326.8 | $3,112.5 | $2,936.3 |
| Operating\tincome | 2,312.0 | 2,202.7 | 1,988.7 | 1,768.4 | 1,637.0 |
| Non-operating\tincome\t(expense) | 214.3 | 84.9 | (31.9) | 3.0 | (36.0) |
| Income\tbefore\tincome\ttaxes | 2,526.3 | 2,287.6 | 1,956.8 | 1,771.4 | 1,601.0 |
| Net\tincome\tattributable\tto\tCME\tGroup | 4,063.4 | 1,534.1 | 1,247.0 | 1,127.1 | 976.8 |
| Earnings\tper\tcommon\tshare\tattributable\tto\tCME\nGroup: |  |  |  |  |  |
| Basic | $12.00 | $4.55 | $3.71 | $3.37 | $2.94 |
| Diluted | 11.94 | 4.53 | 3.69 | 3.35 | 2.92 |
| Cash\tdividends\tper\tshare | 6.14 | 5.65 | 4.90 | 3.88 | 4.40 |
| Balance\tSheet\tData: |  |  |  |  |  |
| Total\tassets | $75,791.2 | $69,369.4 | $67,359.4 | $72,228.6 | $54,263.8 |
| Short-term\tdebt | — | — | — | — | 749.9 |
| Long-term\tdebt | 2,233.1 | 2,231.2 | 2,229.3 | 2,095.0 | 2,093.2 |
| CME\tGroup\tshareholders'\tequity | 22,411.8 | 20,340.7 | 20,551.8 | 20,923.5 | 21,154.8 |

The	following	table	presents	key	statistical	information	on	the	volume	of	contracts	traded,	expressed	in	round	turn	trades.	All	amounts	exclude	our	interest	rate	swaps and	credit	default	swaps	contracts.

| (in	thousands) | 2017 | 2016 | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Average\tDaily\tVolume: |  |  |  |  |  |
| Product\tLines: |  |  |  |  |  |
| Interest\trate | 8,189 | 7,517 | 6,720 | 7,009 | 5,903 |
| Equity | 2,682 | 3,061 | 2,792 | 2,764 | 2,642 |
| Foreign\texchange | 922 | 858 | 872 | 803 | 886 |
| Agricultural\tcommodity | 1,353 | 1,321 | 1,265 | 1,120 | 1,053 |
| Energy | 2,578 | 2,432 | 1,970 | 1,630 | 1,676 |
| Metal | 568 | 460 | 344 | 337 | 386 |
| Total\tAverage\tDaily\tVolume | 16,292 | 15,649 | 13,963 | 13,663 | 12,546 |
| Method\tof\tTrade: |  |  |  |  |  |
| Electronic | 14,513 | 13,766 | 12,185 | 11,805 | 10,826 |
| Open\toutcry | 1,107 | 1,149 | 1,139 | 1,176 | 1,040 |
| Privately\tnegotiated | 672 | 734 | 639 | 682 | 680 |
| Total\tAverage\tDaily\tVolume | 16,292 | 15,649 | 13,963 | 13,663 | 12,546 |
| Other\tData: |  |  |  |  |  |
| Total\tContract\tVolume\t(round\tturn\ttrades) | 4,089,175 | 3,943,670 | 3,532,521 | 3,443,051 | 3,161,477 |
| Open\tInterest\tat\tYear\tEnd\t(contracts) | 108,043 | 102,930 | 91,369 | 93,664 | 83,726 |

# ITEM	7. MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF

# INTRODUCTION

Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	is	organized	as	follows:

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

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

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

•Results	of	Operations:	Includes	an	analysis	of	our	2017,	2016	and	2015	financial	results	and	a	discussion	of	any	known	events	or	trends	which	are	likely	to impact	future	results.

•Liquidity	and	Capital	Resources:	Includes	a	discussion	of	our	future	cash	requirements,	capital	resources,	significant	planned	expenditures	and	financing arrangements.

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

# EXECUTIVE	SUMMARY

# Business	Overview

CME	Group,	a	Delaware	stock	corporation,	is	the	holding	company	for	CME,	CBOT,	NYMEX,	COMEX	and	their	respective	subsidiaries.	The	holding	company structure	is	designed	to	provide	strategic	and	operational	flexibility.	CME	Group's	Class	A	common	stock	is	listed	on	the	NASDAQ	Global	Select	Market	(NASDAQ) under	the	ticker	symbol	"CME."

Our	exchange	consists	of	designated	contract	markets	for	the	trading	of	futures	and	options	on	futures	contracts.	We	also	clear	futures,	options	on	futures	and	swaps contracts	through	our	clearing	house.	Futures	contracts,	options	on	futures	contracts	and	swaps	contracts	provide	investors	with	vehicles	for	protecting	against,	and potentially	profiting	from,	price	changes	in	financial	instruments	and	physical	commodities.

We	are	a	global	exchange	with	customer	access	available	virtually	all	over	the	world.	Our	customers	consist	of	professional	traders,	financial	derivatives	institutions, individual	and	institutional	investors,	major	corporations,	manufacturers,	producers	and	governments.	Customers	include	both	members	of	the	exchange	and	non- members.

We	offer	our	customers	the	opportunity	to	trade	futures	contracts	and	options	on	futures	contracts	on	a	range	of	products	including	those	based	on	interest	rates,	equities, foreign	exchange,	agricultural	commodities,	energy	and	metals.	We	also	clear	interest	rate	swaps	and	credit	default	swaps	contracts.	In	September	2017,	we	announced we	will	exit	the	credit	default	swaps	business	by	mid-2018.

Our	products	provide	a	means	for	hedging,	speculating	and	allocating	assets.	We	identify	new	products	by	monitoring	economic	trends	and	their	impact	on	the	risk management	and	speculative	needs	of	our	existing	and	prospective	customers.

Most	of	our	products	are	available	for	trading	through	our	electronic	trading	platform.	This	execution	facility	offers	our	customers	immediate	trade	execution	and	price transparency.	In	addition,	trades	can	be	executed	through	privately	negotiated	transactions	that	are	cleared	and	settled	through	our	clearing	house.

Our	clearing	house	clears,	settles	and	guarantees	futures	and	options	contracts	traded	through	our	exchanges,	in	addition	to	cleared	swaps	products.	Our	clearing	house's performance	guarantee	is	an	important	function	of	our	business.	Because	of	this	guarantee,	our	customers	do	not	need	to	evaluate	the	credit	of	each	potential counterparty	or	limit	themselves	to	a	selected	set	of	counterparties.	This	flexibility	increases	the	potential	liquidity	available	for	each	trade.	Additionally,	the	substitution of	our	clearing	house	as	the	counterparty	to	every	transaction	allows	our	customers	to	establish	a	position	with	one	party	and	offset	the	position	with	another	party.	This contract	offsetting	process	provides	our	customers	with	flexibility	in	establishing	and	adjusting	positions	and	provides	for	collateral	and	margining	efficiencies.

In	addition,	CME	serves	as	a	swap	execution	facility,	which	is	a	regulated	platform	for	swap	trading,	and	serves	as	a	swap	data	repository,	which	provides	public	data	on swap	transactions	and	stores	confidential	swap	data	for	regulatory	purposes.

# Business	Trends

Economic	Environment.	Our	customers	continue	to	use	our	markets	as	an	effective	and	transparent	means	to	manage	risk	and	meet	their	investment	needs	despite economic	uncertainty	and	volatility.	Trading	activity	in	our	centralized	markets	has	fluctuated	due	to	the	ongoing	uncertainty	in	the	financial	markets	caused	by	the United	States	and	European	credit	crises,	fluctuations	in	the	availability	of	credit,	variations	in	the	amount	of	assets	under	management	as	well	as	the	Federal	Reserve Bank's	interest	rate	policy	and	quantitative	easing.	We	continue	to	maintain	high	quality	and	diverse	products	as	well	as	various	clearing	and	market	data	services	which support	our	customers	in	any	economic	environment.

Competitive	Environment.	Our	industry	is	competitive	and	we	continue	to	encounter	competition	in	all	aspects	of	our	business.	We	expect	competition	to	continue	to intensify,	especially	in	light	of	ongoing	regulatory	reform	in	the	financial	services	industry.	Competition	is	influenced	by	our	brand	and	reputation;	the	efficiency	and security	of	our	services;	depth	and	liquidity	of	our	markets;	breadth	of	product	offerings	including	rate	and	quality	of	new	product	development	and	innovative	services; our	ability	to	position	and	expand	upon	existing	products;	efficient	and	seamless	customer	experience;	transparency,	reliability	and	anonymity	of	transaction	processing; the	regulatory	environment;	efficient	and	innovative	technology	and	connectivity,	as	well	as	transaction	costs.	We	believe	we	are	very	well	positioned	with	respect	to these	factors.	Our	asset	classes	contain	products	designed	to	address	differing	risk	management	needs,	and	customers	are	able	to	achieve	operational	and	capital efficiencies	by	accessing	our	diverse	products	through	our	platforms	and	our	clearing	house.	We	now	face	competition	from	other	futures,	securities	and	securities option	exchanges;	clearing	organizations;	swap	execution	facilities;	alternative	trade	execution	facilities;	technology	firms,	including	market	data	distributors	and electronic	trading	system	developers;	and	others.	As	markets	continue	to	evolve,	we	will	continue	to	adapt	our	trading	technology	and	clearing	services	to	meet	the	needs of	our	customers.

Regulatory	Environment.	Exchange-traded	derivatives	have	historically	been	subject	to	extensive	regulation.	As	a	result	of	the	widespread	difficulties	across	the economy	over	the	last	several	years,	various	domestic	and	foreign	governments	have	undertaken	reviews	of	the	existing	legal	framework	governing	financial	markets and	have	passed	laws	and	regulations	that	apply	to	our	business.	Compliance	with	regulations	may	require	us	and	our	customers	to	dedicate	significant	financial	and operational	resources	which	could	adversely	affect	our	profitability.

Our	U.S.	futures	exchanges	and	our	clearing	house	are	subject	to	extensive	regulation	by	the	U.S.	Commodity	Futures	Trading	Commission	(CFTC),	which	carries	out the	regulation	of	the	futures	markets	in	accordance	with	the	provisions	of	the	Commodity	Exchange	Act,	the	Commodity	Futures	Modernization	Act	and	the	Dodd-Frank Wall	Street	Reform	and	Consumer	Protection	Act	(Dodd-Frank).	We	believe	that	the	regulations	provide	opportunities	for	our	business.	Our	U.S.	clearing	house	has been	designated	by	the	CFTC	as	a	systemically	important	derivatives	clearing	organization,	which	imposes	various	procedural	and	substantive	requirements.	Our	U.S. swap	data	repository	service	swap	execution	facility	is	also	subject	to	the	requirements	of	the	Commodity	Exchange	Act	and	the	regulations	of	the	CFTC.	We	have incurred	and	expect	to	continue	to	incur	significant	additional	costs	to	comply	with	the	provisions	of	Dodd-Frank	and	any	new	regulations.	In	February	2017,	President Trump	signed	an	executive	order	calling	for	the	current	U.S.	presidential	administration	to	review	U.S.	financial	laws	and	regulations	to	determine	their	consistency	with a	set	of	core	principles	identified	in	the	order.	Some	areas	identified	as	subject	to	potential	change,	amendment	or	repeal	include	the	Dodd-Frank	Act	and	the	authorities of	the	Federal	Reserve	and	the	Financial	Stability	Oversight	Council.	We	cannot	predict,	which,	if	any,	of	these	or	other	actions	will	be	taken	or,	if	taken,	their	effect	on our	business.

As	a	global	company	with	operations	and	locations	around	the	world,	we	are	also	subject	to	laws	and	regulations	in	foreign	locations	where	we	do	business.	The	financial services	industry	in	Europe	has	recently	undergone	regulatory	reform	and	a	re-organization	of	its	regulatory	framework.	Our	European	operations	are	overseen	by several	regulators,	including	the	European	Securities	Market	Authority	(ESMA)	and	the	Financial	Conduct	Authority	(FCA).	In	June	2016,	the	United	Kingdom	held	a referendum	in	which	voters	decided	in	favor	of	withdrawal	from	the	European	Union.	The	ultimate	impact	of	this	referendum	in	regards	to	the	laws	and	regulations applicable	to	our	European	operations	remains	unclear	and	is	contingent	on	the	terms	of	the	withdrawal	and	the	ongoing	relationship	between	the	United	Kingdom	and the	European	Union.	We	have	incurred	and	expect	to	continue	to	incur	significant	additional	costs	to	comply	with	the	new	regulations	in	Europe	as	well	as	the	effects	of this	referendum.

# Business	Strategy

Our	strategy	focuses	on	building	upon	our	benchmark	products,	globalizing	our	company,	expanding	our	customer	base,	extending	our	risk	management	and	post	trade offerings,	and	establishing	ourselves	as	the	leading	exchange	company	provider	of	information	products	and	index	services	as	well	as	enhancing	our	intellectual	property portfolio.	We	focus	specifically	on	opportunities	created	by	increased	market	awareness	and	acceptance	of	derivatives,	increased	price	volatility,	technological	advances and	the	increasing	need	for	counterparty	risk	mitigation	and	clearing	services.	This	strategy	allows	us	to	continue	to

develop	into	a	more	broadly	diversified	financial	exchange	that	provides	trading	and	clearing	solutions	across	a	wide	range	of	products	and	asset	classes.	Our	strategic initiatives	are	discussed	in	"Item	1.	Business"	on	page	5.

# Revenues

Clearing	and	transaction	fees.	A	majority	of	our	revenue	is	derived	from	clearing	and	transaction	fees,	which	include	electronic	trading	fees,	surcharges	for	privately negotiated	transactions	and	other	volume-related	charges	for	exchange-traded	and	cleared	swaps	contracts.	Because	clearing	and	transaction	fees	are	assessed	on	a	per- contract	or	notional	value	basis,	revenues	and	profitability	fluctuate	with	changes	in	contract	volume.	In	addition	to	the	business	trends	noted	earlier,	our	contract volume,	and	consequently	our	revenues,	tend	to	increase	during	periods	of	economic	and	geopolitical	uncertainty	as	our	customers	seek	to	manage	their	exposure	to,	or speculate	on,	the	market	volatility	resulting	from	that	uncertainty.

While	volume	has	the	most	significant	impact	on	our	clearing	and	transaction	fees	revenue,	there	are	four	other	factors	that	also	influence	this	source	of	revenue:

•rate	structure;

•product	mix;

•venue,	and

•the	percentage	of	trades	executed	by	customers	who	are	members	compared	with	non-member

Rate	structure.	Customers	benefit	from	volume	discounts	and	limits	on	fees	as	part	of	our	effort	to	increase	liquidity	in	certain	products.	We	offer	various	incentive programs	to	promote	trading	and	clearing	in	various	products	and	geographic	locations.	We	may	periodically	change	fees,	volume	discounts,	fee	limits	and	member discounts,	perhaps	significantly,	based	on	our	review	of	operations	and	the	business	environment.

Product	mix.	We	offer	exchange-traded	futures	and	options	on	futures	contracts	as	well	as	cleared-only	interest	rate	and	credit	default	swap	contracts.	Rates	are	varied	by product	in	order	to	optimize	revenue	on	existing	products	and	to	encourage	contract	volume	upon	introduction	of	new	products.

Venue.	Our	exchange	is	an	international	marketplace	that	brings	together	buyers	and	sellers	mainly	through	our	electronic	trading	as	well	as	through	open	outcry	trading and	privately	negotiated	transactions.	Any	customer	who	is	guaranteed	by	a	clearing	firm	and	who	agrees	to	be	bound	by	our	exchange	rules	is	able	to	obtain	direct access	to	our	electronic	platforms.	Open	outcry	trading	is	conducted	exclusively	by	our	members,	who	may	execute	trades	on	behalf	of	customers	or	for	themselves.

Typically,	customers	submitting	trades	through	our	electronic	platforms	are	charged	fees	for	using	the	platforms	in	addition	to	the	fees	assessed	on	all	transactions executed	on	our	exchange.	Customers	entering	into	privately	negotiated	transactions	also	incur	additional	charges	beyond	the	fees	assessed	on	other	transactions. Privately	negotiated	transactions	include	block	trades,	which	are	large	transactions	that	are	executed	between	selected	parties	off	the	public	auction	market	on	CME Globex	or	the	trading	floor.	Privately	negotiated	transactions	also	include	volume	submitted	through	CME	ClearPort	and	Exchange	for	Related	Positions	(EFRPs).

Member/non-member	mix.	Generally,	member	customers	are	charged	lower	fees	than	our	non-member	customers.	Holding	all	other	factors	constant,	revenue	decreases if	the	percentage	of	trades	executed	by	members	increases,	and	increases	if	the	percentage	of	non-member	trades	increases.

Other	sources.	Revenue	is	also	derived	from	other	sources	including	market	data	and	information	services,	access	and	communication	fees	and	other	various	services related	to	our	exchange	operations.

Market	data	and	information	services.	We	receive	market	data	and	information	services	revenue	from	the	dissemination	of	our	market	data	to	subscribers.	Subscribers can	obtain	access	to	our	market	data	services	either	directly	or	through	third	party	distributors.

Our	service	offerings	include	access	to	real-time,	delayed	and	end-of-day	quotations,	trade	and	summary	market	data	for	our	products	and	other	data	sources.	Users	of our	basic	service	receive	real-time	quotes	and	pay	a	flat	monthly	fee	for	each	screen,	or	device,	displaying	our	market	data.	Alternatively,	customers	can	subscribe	to market	data	provided	on	a	limited	group	of	products.	The	fee	for	this	service	is	also	a	flat	rate	per	month.

Pricing	for	our	market	data	services	is	based	on	the	value	of	the	service	provided	and	the	price	of	comparable	services	offered	by	our	competitors.	Increases	or	decreases in	our	market	data	and	information	services	revenue	are	influenced	by	changes	in	our	price	structure	for	existing	market	data	offerings,	introduction	of	new	market	data services	and	changes	in	the	number	of	devices	in	use.	General	economic	factors	that	affect	the	financial	services	industry,	which	constitutes	our	primary	customer	base, also	influence	revenue	from	our	market	data	services.

Access	and	communication	fees.	Access	and	communication	fees	are	charges	to	members	and	clearing	firms	that	utilize	our	various	telecommunications	networks	and communications	services.	Our	communication	services	include	our	co-location	program	as	well	as	the	connectivity	charges	to	customers	of	the	CME	Globex	platform. Access	fee	revenue	varies	depending	on	the	type	of	connection	provided	to	customers.

Other	revenues.	Other	revenues	include	fees	for	collateral	management	and	fees	for	trade	order	routing	through	agreements	from	various	strategic	relationships	as	well as	other	services	to	members	and	clearing	firms.

# Expenses

The	majority	of	our	expenses	do	not	vary	directly	with	changes	in	our	contract	volume.	However,	licensing	and	other	fee	agreements	can	vary	directly	with	certain equity,	energy	and	swap	volumes	as	well	as	the	majority	of	our	employee	bonuses	vary	directly	with	overall	contract	volume.

Compensation	and	benefits.	Compensation	and	benefits	expense	is	our	most	significant	expense	and	includes	employee	wages,	bonuses,	stock-based	compensation, benefits	and	employer	taxes.	Changes	in	this	expense	are	driven	by	fluctuations	in	the	number	of	employees,	increases	in	wages	as	a	result	of	inflation	or	labor	market conditions,	changes	in	rates	for	employer	taxes	and	other	cost	increases	affecting	benefit	plans.	In	addition,	this	expense	is	affected	by	the	composition	of	our	workforce. The	expense	associated	with	our	bonus	and	stock-based	compensation	plans	can	also	have	a	significant	impact	on	this	expense	category.

The	bonus	component	of	our	compensation	and	benefits	expense	is	based	on	our	financial	performance.	Under	the	performance	criteria	of	our	annual	incentive	plans,	the bonus	funded	under	the	plans	is	based	on	achieving	certain	financial	performance	targets	established	by	the	compensation	committee	of	our	board	of	directors.	The compensation	committee	has	discretion	to	make	equitable	adjustments	to	the	cash	earnings	performance	calculation	to	reflect	effects	of	unplanned	operating	results	or capital	expenditures	to	meet	intermediate-	to	long-term	growth	opportunities.

Stock-based	compensation	is	a	non-cash	expense	related	to	restricted	stock	and	performance	share	grants.	Stock-based	compensation	varies	depending	on	the	quantity and	fair	value	of	awards	granted.	The	fair	value	of	restricted	stock	awards	and	other	performance	share	grants	is	based	on	either	the	share	price	on	the	date	of	the	grant	or a	model	of	expected	future	stock	prices.

Professional	fees	and	outside	services.	This	expense	includes	fees	for	consulting	services	received	on	strategic	and	technology	initiatives;	regulatory	and	other compliance	matters;	temporary	labor	as	well	as	legal	and	accounting	fees.	This	expense	may	fluctuate	as	a	result	of	changes	in	services	required	to	complete	initiatives, handle	legal	proceedings	and	comply	with	regulatory	and	compliance	requirements.

Depreciation	and	amortization.	Depreciation	and	amortization	expense	results	from	the	depreciation	of	long-lived	assets	such	as	buildings,	leasehold	improvements, furniture,	fixtures	and	equipment.	This	expense	also	includes	the	amortization	of	purchased	and	internally	developed	software.

Other	expenses.	We	incur	amortization	of	intangible	assets	and	additional	ongoing	expenses	for	communications,	technology	support	services	and	various	other activities	necessary	to	support	our	operations.

•Communications	expense	includes	costs	for	network	connections	for	our	electronic	platforms	and	some	market	data	customers;	telecommunications	costs	of our	exchange,	and	fees	paid	for	access	to	external	market	data.	This	expense	may	be	impacted	by	growth	in	electronic	contract	volume,	our	capacity requirements	and	changes	in	the	number	of	telecommunications	hubs	and	connections	which	allow	customers	outside	the	United	States	to	access	our	electronic platforms	directly.

•Technology	support	services	expense	consists	of	costs	related	to	maintenance	of	the	hardware	and	software	required	to	support	our	technology.	Our	technology support	services	costs	are	driven	by	system	capacity,	functionality	and	redundancy	requirements.

•Amortization	of	purchased	intangibles	includes	amortization	of	intangible	assets	obtained	in	our	mergers	with	CBOT	Holdings,	Inc.	and	NYMEX	Holdings, Inc.	as	well	as	other	asset	and	business	acquisitions.	Intangible	assets	subject	to	amortization	consist	primarily	of	clearing	firm,	market	data	and	other	customer relationships.

•Occupancy	and	building	operations	expense	consists	of	costs	related	to	leased	property	including	rent,	maintenance,	real	estate	taxes,	utilities	and	other	related costs.	We	have	significant	operations	located	in	Chicago,	New	York,	India	and	the	United	Kingdom	as	well	as	other	smaller	offices	located	throughout	the world.

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

•Other	expenses	include	marketing	and	travel-related	expenses	as	well	as	general	and	administrative	costs.	Marketing,	advertising	and	public	relations	expense includes	media,	print	and	other	advertising	costs,	as	well	as	costs	associated	with	our	product	promotion.	Other	expenses	also	include	litigation	and	customer settlements,	impairment	charges	on	operating	assets,	gains	and	losses	on	disposals	of	operating	assets,	and	foreign	currency	transaction	gains	and	losses resulting	from	changes	in	exchange	rates	on	certain	foreign	deposits.

# Non-Operating	Income	and	Expenses

Income	and	expenses	incurred	through	activities	outside	of	our	core	operations	are	considered	non-operating.	These	activities	include	non-core	investing	and	financing activities.

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

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

•Equity	in	net	earnings	(losses)	of	unconsolidated	subsidiaries	includes	income	and	losses	from	our	investments	in	S&P/Dow	Jones	Indices	LLC	(S&P/DJI), Dubai	Mercantile	Exchange	and	Bursa	Malaysia	Derivatives	Berhad.

•Other	income	(expense)	includes	expenses	related	to	the	distribution	of	interest	earned	on	performance	bond	collateral	reinvestment	to	the	clearing	firms	as well	as	other	various	income	and	expenses	outside	our	core	operations.

# CRITICAL	ACCOUNTING	POLICIES

The	notes	to	our	consolidated	financial	statements	include	disclosure	of	our	significant	accounting	policies.	In	establishing	these	policies	within	the	framework	of accounting	principles	generally	accepted	in	the	United	States,	management	must	make	certain	assessments,	estimates	and	choices	that	will	result	in	the	application	of these	principles	in	a	manner	that	appropriately	reflects	our	financial	condition	and	results	of	operations.	Critical	accounting	policies	are	those	policies	that	we	believe present	the	most	complex	or	subjective	measurements	and	have	the	most	potential	to	affect	our	financial	position	and	operating	results.	While	all	decisions	regarding accounting	policies	are	important,	there	are	certain	accounting	policies	that	we	consider	to	be	critical.	These	critical	policies,	which	are	presented	in	detail	in	the	notes	to our	consolidated	financial	statements,	relate	to	the	valuation	of	financial	instruments,	goodwill	and	intangible	assets,	revenue	recognition,	income	taxes	and	internal	use software	costs.

Valuation	of	financial	instruments.	Fair	value	is	defined	as	the	price	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,	or	an	exit	price.	We	have	categorized	financial	instruments	measured	at	fair	value	into	the	following	three-level fair	value	hierarchy	based	upon	the	level	of	judgment	associated	with	the	inputs	used	to	measure	the	fair	value:

•Level	1—Inputs	are	unadjusted,	quoted	prices	in	active	markets	for	identical	assets	or	liabilities	at	the	measurement

date.

•Level	2—Inputs	are	either	directly	or	indirectly	observable	and	corroborated	by	market	data	or	are	based	on	quoted	prices	in	markets	that	are	not active.

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

For	further	discussion	regarding	the	fair	value	of	financial	assets	and	liabilities,	see	note	17	of	the	notes	to	the	consolidated	financial	statements.

Goodwill	and	intangible	assets.	We	review	goodwill	for	impairment	on	a	quarterly	basis	and	whenever	events	or	circumstances	indicate	that	its	carrying	value	may	not be	recoverable.	Goodwill	may	be	tested	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	the	use	of	valuation	techniques	that	rely	on	significant	estimates	and	assumptions.	These	estimates	and	assumptions	may	include forecasted	revenue	growth	rates;	forecasted	operating	margins;	risk-adjusted	discount	rates;	forecasted	economic	and	market	conditions,	and	industry	multiples.	We	base our	fair	value	estimates	on	assumptions	we	believe	to	be	reasonable	given	the	information	that	is	available	to	us	at	the	time	of	our	assessment;	however,	actual	future results	may	differ	significantly	from	those	estimates.	Under	certain	favorable	circumstances,	goodwill	may	be	reviewed	qualitatively	for	indications	of	impairment without	utilizing	valuation	techniques	to	estimate	fair	value.	The	qualitative	assessment	of	goodwill	may	rely	on	significant

assumptions	about	forecasts	of	revenue	growth,	operating	margins	and	economic	conditions	as	well	as	overall	market	and	industry-specific	trends.

We	also	review	indefinite-lived	intangible	assets	on	a	quarterly	basis	or	more	frequently	when	events	and	circumstances	indicate	that	their	carrying	values	may	not	be recoverable.	Indefinite-lived	intangible	assets	may	be	tested	quantitatively	for	impairment	by	comparing	their	carrying	values	to	their	estimated	fair	values.	Estimating the	fair	value	of	indefinite-lived	intangible	assets	involves	the	use	of	valuation	techniques	that	rely	on	significant	estimates	and	assumptions.	These	estimates	and assumptions	may	include	forecasted	revenue	growth	rates,	forecasted	allocations	of	expense	and	risk-adjusted	discount	rates.	We	base	our	fair	value	estimates	on assumptions	we	believe	to	be	reasonable	given	the	information	that	is	available	to	us	at	the	time	of	our	assessment;	however,	actual	future	results	may	differ	significantly from	those	estimates.	Similar	to	goodwill,	under	certain	favorable	circumstances,	indefinite-lived	intangible	assets	may	be	reviewed	qualitatively	for	indications	of impairment	without	utilizing	valuation	techniques	to	estimate	fair	value.	The	qualitative	assessment	of	indefinite-lived	intangible	assets	may	rely	on	significant assumptions	about	forecasts	of	revenue	growth,	operating	margins	and	economic	conditions	as	well	as	overall	market	and	industry-specific	trends.

Intangible	assets	subject	to	amortization	are	also	assessed	for	impairment	on	a	quarterly	basis	or	more	frequently	when	indicated	by	a	change	in	economic	or	operational circumstances.	The	impairment	assessment	of	these	assets	requires	management	to	first	compare	the	book	value	of	the	amortizing	asset	to	undiscounted	cash	flows.	If	the book	value	exceeds	the	undiscounted	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	and	annually	challenge	the	useful	lives.

Revenue	recognition.	A	significant	portion	of	our	revenue	is	derived	from	the	clearing	and	transaction	fees	we	assess	on	each	contract	executed	through	our	trading venues	and	cleared	through	our	clearing	house.	Clearing	and	transaction	fees	are	recognized	as	revenue	when	a	buy	and	sell	order	are	matched	and	when	the	trade	is cleared.	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	in the	affected	accounts.	When	this	information	is	corrected	within	the	time	period	allowed	by	the	exchange,	a	fee	adjustment	is	provided	to	the	clearing	firm.	An	accrual	is established	for	estimated	fee	adjustments	to	reflect	corrections	to	customer	exchange	trading	privileges.	The	accrual	is	based	on	the	historical	pattern	of	adjustments processed	as	well	as	specific	adjustment	requests.

Income	taxes.	Calculation	of	the	income	tax	provision	includes	an	estimate	of	the	income	taxes	that	will	be	paid	for	the	current	year	as	well	as	an	estimate	of	income tax	liabilities	or	benefits	deferred	into	future	years.	Deferred	tax	assets	are	reviewed	to	determine	if	they	will	be	realized	in	future	periods.	To	the	extent	it	is	determined that	some	deferred	tax	assets	may	not	be	fully	realized,	the	assets	are	reduced	to	their	realizable	value	by	a	valuation	allowance.	The	calculation	of	our	tax	provision involves	uncertainty	in	the	application	of	complex	tax	regulations.	We	recognize	potential	liabilities	for	anticipated	tax	audit	issues	in	the	United	States	and	other applicable	foreign	tax	jurisdictions	using	a	more-likely-than-not	recognition	threshold	based	on	the	technical	merits	of	the	tax	position	taken	or	expected	to	be	taken.	If the	actual	obligation	of	these	amounts	varies	from	our	estimate,	our	income	tax	provision	would	be	reduced	or	increased	at	the	time	that	determination	is	made.	This determination	may	not	be	known	for	several	years.	Past	tax	audits	have	not	resulted	in	tax	adjustments	that	resulted	in	a	material	change	to	the	income	tax	provision	in the	year	the	audit	was	completed.	The	effective	tax	rate,	defined	as	the	income	tax	provision	as	a	percentage	of	income	before	income	taxes,	will	vary	from	year	to	year based	on	changes	in	tax	jurisdictions,	tax	rates	and	regulations.	In	addition,	the	effective	tax	rate	will	vary	with	changes	to	income	that	are	not	subject	to	income	tax	and changes	in	expenses	or	losses	that	are	not	deductible,	such	as	the	utilization	of	foreign	net	operating	losses.

Internal	use	software	costs.	Certain	internal	and	external	costs	that	are	incurred	in	connection	with	developing	or	obtaining	computer	software	for	internal	use	are capitalized.	Software	development	costs	incurred	during	the	planning	or	maintenance	stages	of	a	software	project	are	expensed	as	incurred,	while	costs	incurred	during the	application	development	stage	are	capitalized	and	are	amortized	over	the	estimated	useful	life	of	the	software,	generally	two	to	four	years.	Amortization	of capitalized	costs	begins	only	when	the	software	becomes	ready	for	its	intended	use.	We	also	enter	into	software	hosting	arrangements	for	software	projects	maintained	in the	cloud.	The	costs	associated	with	these	cloud-based	hosting	arrangements	do	not	qualify	for	capitalization	and	are	expensed	as	incurred.

# RECENT	ACCOUNTING	PRONOUNCEMENTS

Refer	to	Note	2	in	our	notes	to	the	consolidated	financial	statements	for	information	on	new	and	recently	adopted	accounting	pronouncements	that	are	applicable	to	us.

# RESULTS	OF	OPERATIONS

# Financial	Highlights

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

# Clearing	and	Transaction	Fees

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

|  | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Total\tcontract\tvolume\t(in\tmillions) | 4,089.2 | 3,943.7 | 3,532.5 | 4\t% | 12\t% |
| Clearing\tand\ttransaction\tfees\t(in\tmillions) | $3,029.9 | $2,974.4 | $2,716.9 | 2 | 9 |
| Average\trate\tper\tcontract | 0.741 | 0.754 | 0.769 | (2) | (2) |

We	estimate	the	following	increases	(decreases)	in	clearing	and	transaction	fees	based	on	changes	in	total	contract	volume	and	changes	in	average	rate	per	contract during	2017	compared	with	2016,	and	during	2016	compared	with	2015.

| (in	millions) | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- |
| Increases\tdue\tto\tchange\tin\ttotal\tcontract\tvolume | $109.8 | $316.2 |
| Increase\t(decrease)\tdue\tto\tchange\tin\taverage\trate\tper\tcontract | (54.3) | (58.7) |
| Net\tincreases\tin\tclearing\tand\ttransaction\tfees | $55.5 | $257.5 |

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

# Contract	Volume

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

| (amounts	in	thousands) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Average\tDaily\tVolume\tby\tProduct\tLine: |  |  |  |  |  |
| Interest\trate | 8,189 | 7,517 | 6,720 | 9\t% | 12\t% |
| Equity | 2,682 | 3,061 | 2,792 | (12) | 10 |
| Foreign\texchange | 922 | 858 | 872 | 7 | (2) |
| Agricultural\tcommodity | 1,353 | 1,321 | 1,265 | 2 | 4 |
| Energy | 2,578 | 2,432 | 1,970 | 6 | 23 |
| Metal | 568 | 460 | 344 | 23 | 34 |
| Aggregate\taverage\tdaily\tvolume | 16,292 | 15,649 | 13,963 | 4 | 12 |
| Average\tDaily\tVolume\tby\tVenue: |  |  |  |  |  |
| Electronic | 14,513 | 13,766 | 12,185 | 5 | 13 |
| Open\toutcry | 1,107 | 1,149 | 1,139 | (4) | 1 |
| Privately\tnegotiated | 672 | 734 | 639 | (9) | 15 |
| Aggregate\taverage\tdaily\tvolume | 16,292 | 15,649 | 13,963 | 4 | 12 |
| Electronic\tVolume\tas\ta\tPercentage\tof\tTotal\nVolume | 89% | 88% | 87% |  |  |

Overall	contract	volume	increased	in	2017	when	compared	with	2016.	Interest	rate	volatility	remained	high	in	2017	as	the	markets	continued	to	experience	uncertainty surrounding	the	Federal	Reserve's	interest	rate	policy.	In	December,	the	Federal	Open	Markets	Committee	raised	the	federal	funds	rate	for	the	third	time	in	2017	and	also raised	the	expectation	for	additional	rate	increases	in	2018.	The	equity	markets	experienced	lower	volatility	in	2017	due	to	fewer	market-moving	geopolitical	events, which	resulted	in	lower	equity	contract	volume.	Crude	oil	volumes	continued	to	grow	throughout	2017	as	crude	oil	market	volatility	remained	high,	which	contributed	to an	increase	in	energy	contract	volume.	There	was	a	shift	in	crude	oil	supplies	caused	by	an	increase	in	United	States	crude	oil	production	following	the	Organization	of Petroleum	Exporting	Countries'	(OPEC)	decision	to	cut	oil	supplies	in	the	fourth	quarter	of	2016.

In	2016	when	compared	with	2015,	overall	contract	volume	remained	high	throughout	2016	due	to	periods	of	high	volatility.	Throughout	2016,	we	believe	that	global market	concerns,	considerable	uncertainty	regarding	the	Federal	Reserve's	interest	rate	policy	and	the	anticipation	of	the	United	Kingdom's	European	Union	membership referendum	contributed	to	considerable	volatility.	In	the	second	half	of	2016,	volume	across	most	of	our	products	lines	spiked	as	the	U.S.	presidential	and	congressional elections	injected	considerable	uncertainty	into	the	markets.	The	crude	oil	markets	continued	to	show	considerable	uncertainty	in	early	2016	regarding	the	direction	of future	oil	prices	as	global	supplies	continued	to	remain	high,	which	resulted	in	an	increase	in	energy	contract	volume.

# Interest	Rate	Products

The	following	table	summarizes	average	daily	contract	volume	for	our	key	interest	rate	products.	Eurodollar	front	8	contracts	include	contracts	expiring	within	two years.	Eurodollar	back	32	contracts	include	contracts	expiring	within	three	to	ten	years.

| (amounts	in	thousands) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Eurodollar\tfutures\tand\toptions: |  |  |  |  |  |
| Front\t8\tfutures | 1,745 | 1,828 | 1,580 | (5)% | 16\t% |
| Back\t32\tfutures | 769 | 729 | 724 | 5 | 1 |
| Options | 1,368 | 1,225 | 963 | 12 | 27 |
| U.S.\tTreasury\tfutures\tand\toptions: |  |  |  |  |  |
| 10-Year | 1,914 | 1,717 | 1,613 | 11 | 6 |
| 5-Year | 1,003 | 886 | 830 | 13 | 7 |
| 2-Year | 396 | 331 | 338 | 20 | (2) |
| Treasury\tbond | 380 | 347 | 355 | 9 | (2) |
| Federal\tFunds\tfutures\tand\toptions | 191 | 133 | 81 | 44 | 63 |

Overall	interest	rate	contract	volume	from	2015	to	2017	increased	due	to	volatility	caused	by	continued	uncertainty	surrounding	the	Federal	Reserve's	interest	rate policy,	including	volatility	resulting	from	the	Federal	Open	Markets	Committee	raising	the	federal	funds	rate	three	times	during	2017.	The	increase	in	short-term	interest rate	contract	volume	was	also	due	to	the	uncertainty	surrounding	other	global	events,	including	the	2017	elections	throughout	Europe	and	the	U.S.	presidential	and congressional	elections	in	the	fourth	quarter	of	2016.	In	addition,	we	believe	the	increase	in	long-term	interest	rate	contract	volume	was	due	to	the	volatility	resulting from	the	uncertainty	surrounding	the	policies	of	the	political	administration	in	the	United	States,	concern	regarding	future	rates	of	inflation,	and	potential	for	changes	in fiscal	policy.

# Equity	Products

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

| (amounts	in	thousands) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| E-mini\tS&amp;P\t500\tfutures\tand\toptions | 2,062 | 2,449 | 2,200 | (16)% | 11% |
| E-mini\tNASDAQ\t100\tfutures\tand\toptions | 289 | 271 | 272 | 6 | — |

The	decrease	in	overall	equity	contract	volume	in	2017	when	compared	with	2016	resulted	from	periods	of	lower	equity	market	volatility,	as	measured	by	the	CBOE Volatility	Index.	The	comparatively	low	volatility	is	believed	to	be	caused	by	fewer	market-moving	geopolitical	and	macro-level	events	that	impacted	these	indexes	in 2017.	During	2016,	there	were	periods	of	higher	volatility	within	the	equity	markets	due	to	uncertainty	regarding	whether	the	Federal	Open	Markets	Committee	would begin	to	raise	the	federal	funds	rate	in	2016,	the	deceleration	of	the	Chinese	economy,	the	results	of	the	U.S.	presidential	and	congressional	elections,	and	declining global	crude	oil	prices.

Overall	equity	contract	volume	increased	in	2016	when	compared	with	2015	as	the	equity	markets	experienced	periods	of	higher	volatility	due	to	the	continued ambiguity	surrounding	the	Federal	Reserve's	interest	rate	policy,	uncertainty	surrounding	the	United	Kingdom's	European	Union	membership	referendum	and	declining global	crude	oil	prices.	The	results	of	the	U.S.	presidential	and	congressional	elections	injected	new	uncertainty	into	the	markets	in	the	fourth	quarter	of	2016,	which	we believe	led	to	additional	volatility.

# Foreign	Exchange	Products

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

| (amounts	in	thousands) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Euro | 261 | 226 | 307 | 15\t% | (26)% |
| Japanese\tyen | 181 | 159 | 154 | 14 | 3 |
| British\tpound | 137 | 125 | 106 | 10 | 18 |
| Australian\tdollar | 102 | 106 | 98 | (4) | 8 |
| Canadian\tdollar | 84 | 80 | 74 | 5 | 9 |

Foreign	exchange	contract	volume	increased	in	2017	when	compared	with	2016,	primarily	due	to	higher	Euro	contract	volume	due	to	uncertainty	surrounding	the European	Central	Bank	policy.	We	believe	the	Japanese	yen	contract	volume	increased	as	market	participants	turned	to	the	yen	as	a	safe-haven	currency	as	currency rates	steadied.

In	2016	when	compared	with	2015,	the	overall	foreign	exchange	contract	volume	remained	relatively	flat.	The	decline	in	Euro	contract	volume	resulted	from	low volatility,	which	we	believe	was	due	to	a	lack	of	global	macroeconomic	drivers	meaningfully	affecting	the	Euro	in	2016.	The	decline	in	Euro	contract	volume	was partially	offset	by	an	increase	in	British	pound	contract	volume,	which	we	believe	was	caused	by	volatility	resulting	from	the	uncertainty	surrounding	the	United Kingdom	European	Union	membership	referendum	in	mid-2016.

# Agricultural	Commodity	Products

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

| (amounts	in	thousands) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Corn | 449 | 424 | 415 | 6\t% | 2% |
| Soybean | 283 | 323 | 284 | (12) | 14 |
| Wheat | 217 | 191 | 183 | 14 | 4 |
| Soybean\tOil | 129 | 126 | 123 | 2 | 3 |

Agricultural	commodity	contract	volume	increased	in	2017	when	compared	with	2016	largely	due	to	higher	corn	and	wheat	volumes	resulting	from	greater	uncertainty related	to	weather	conditions	in	2017.	The	increase	was	partially	offset	by	lower	soybean	volume	due	to	lower	uncertainty	related	to	crop	production	versus	2016.

In	2016	when	compared	with	2015,	agricultural	commodity	contract	volume	increased	due	to	higher	price	volatility	in	the	first	half	of	2016,	which	we	believe	was	caused by	greater	uncertainty	related	to	weather	conditions	and	crop	production	for	the	2016	growing	season.

# Energy	Products

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

| (amounts	in	thousands) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| WTI\tcrude\toil | 1,442 | 1,321 | 994 | 9\t% | 33\t% |
| Natural\tgas | 597 | 549 | 468 | 9 | 17 |
| Refined\tproducts | 392 | 363 | 328 | 8 | 11 |
| Brent\tcrude\toil | 94 | 98 | 108 | (4) | (10) |

In	2017	when	compared	with	2016,	overall	energy	contract	volume	increased	largely	due	to	an	increase	in	crude	oil	contract	volume	caused	by	higher	volatility	in	2017. We	believe	the	increased	volatility	was	caused	by	a	shift	in	crude	oil	supplies	as	United	States	crude	oil	production	rose	along	with	the	Organization	of	Petroleum Exporting	Countries'	decision	to	cut	oil	supplies	in	the	fourth	quarter	of	2016.	Natural	gas	and	refined	products	contract	volumes	also	increased	in	2017	due	to	higher price	volatility	caused	by	shifts	in	supply	and	demand	in	the	underlying	markets.

Overall	energy	contract	volume	increased	in	2016	when	compared	with	2015	largely	due	to	an	increase	in	WTI	crude	oil	trading,	which	we	believe	resulted	from continued	price	volatility	caused	by	excess	global	crude	oil	supplies	and	the	marketplace's	increased	weighting	of	WTI	pricing	as	a	global	benchmark	price	for	crude	oil.

# Metal	Products

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

| (amounts	in	thousands) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Gold | 335 | 273 | 197 | 23% | 38% |
| Copper | 108 | 86 | 67 | 26 | 27 |
| Silver | 98 | 78 | 58 | 25 | 34 |

The	overall	increase	in	metal	contract	volume	from	2015	to	2017	was	due	to	investors	using	gold	and	other	precious	metals	as	safe-haven	alternative	investments	to	other markets.	The	increase	in	metal	contract	volume	was	driven	by	consistent	periods	of	high	price	volatility	caused	by	the	uncertainties	surrounding	the	policies	of	the political	administration	in	the	United	States	and	future	rates	of	inflation.

# Average	Rate	per	Contract

The	average	rate	per	contract	decreased	in	2017	when	compared	with	2016	as	interest	rate,	energy,	and	metal	contract	volumes	collectively	increased	by	3	percentage points,	as	a	percentage	of	total	volume,	while	agricultural	commodity	and	equity	contract	volumes	collectively	decreased	by	3	percentage	points.	Agricultural commodity	and	equity	contracts	have	a	higher	average	rate	per	contract	compared	with	interest	rate	contracts.	The	overall	decreases	in	average	rates	per	contract	were partially	offset	by	a	rate	increase	that	was	effective	in	the	first	quarter	of	2017.

In	2016	when	compared	with	2015,	the	average	rate	per	contract	decreased	due	to	an	increase	in	trades	executed	by	members,	as	a	percentage	of	total	trading	volume,	as well	as	higher	volume-based	incentives.	This	decrease	was	partially	offset	by	the	impact	from	a	rate	increase	in	early	2016.

# Concentration	of	Revenue

We	bill	a	substantial	portion	of	our	clearing	and	transaction	fees	to	our	clearing	firms.	The	majority	of	clearing	and	transaction	fees	received	from	clearing	firms represent	charges	for	trades	executed	and	cleared	on	behalf	of	their	customers.	One	firm	represented	13%	and	another	firm	represented	12%	of	our	clearing	and transaction	fees	revenue	in	2017.	One	firm	represented	13%	and	another	firm	represented	11%	of	our	clearing	and	transaction	fees	revenue	in	2016,	and	one	firm represented	13%	of	our	clearing	and	transaction	fees	revenue	in	2015.	Should	a	clearing	firm	withdraw,	we	believe	that	the	customer	portion	of	the	firm's	trading	activity would	likely	transfer	to	another	clearing	firm	of	the	exchange.	Therefore,	we	do	not	believe	we	are	exposed	to	significant	risk	from	an	ongoing	loss	of	revenue	received from	or	through	a	particular	clearing	firm.

# Other	Sources	of	Revenue

Market	data	and	information	services.	Beginning	in	2016,	the	partial	fee	waivers	that	existed	in	2015	ended,	contributing	to	an	increase	in	market	data	and	information services	revenue	in	2016	when	compared	with	2015.	The	increase	was	partially	offset	in	2016	and	fully	offset	in	2017	due	to	declines	in	screen	counts	from	cost-cutting initiatives	at	member	firms	and	some	rationalization	as	customer	firms	transitioned	into	full-priced	offerings.

The	two	largest	resellers	of	our	market	data	represented,	in	aggregate,	45%,	40%	and	43%	of	our	market	data	and	information	services	revenue	in	2017,	2016	and	2015, respectively.	Despite	this	concentration,	we	consider	exposure	to	significant	risk	of	revenue	loss	to	be	minimal.	In	the	event	that	one	of	these	vendors	no	longer subscribes	to	our	market	data,	we	believe	the	majority	of	that	vendor's	customers	would	likely	subscribe	to	our	market	data	through	another	reseller.	Additionally, several	of	our	largest	institutional	customers	that	utilize	services	from	our	two	largest	resellers	report	usage	and	remit	payment	of	their	fees	directly	to	us.

| (dollars	in	millions) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Compensation\tand\tbenefits | $562.5 | $541.0 | $553.7 | 4\t% | (2)% |
| Communications | 24.3 | 26.8 | 27.8 | (9) | (4) |
| Technology\tsupport\tservices | 77.3 | 70.8 | 64.5 | 9 | 10 |
| Professional\tfees\tand\toutside\tservices | 117.6 | 144.4 | 122.8 | (19) | 18 |
| Amortization\tof\tpurchased\tintangibles | 95.5 | 96.1 | 99.4 | (1) | (3) |
| Depreciation\tand\tamortization | 113.0 | 129.2 | 129.2 | (13) | — |
| Occupancy\tand\tbuilding\toperations | 80.2 | 86.7 | 92.5 | (8) | (6) |
| Licensing\tand\tother\tfee\tagreements | 146.3 | 135.8 | 123.8 | 8 | 10 |
| Other | 116.0 | 161.7 | 124.4 | (28) | 30 |
| Total\tExpenses | $1,332.7 | $1,392.5 | $1,338.1 | (4) | 4 |

Operating	expenses	decreased	by	$59.8	million	in	2017	when	compared	with	2016.	The	following	table	shows	the	estimated	impact	of	key	factors	resulting	in	the	net decrease	in	operating	expenses.

| (dollars	in	millions) | Year-<br>Over-Year<br>Change | Change	as	a<br>Percentage	of<br>2016	Expenses |
| :--- | :--- | :--- |
| Foreign\tcurrency\texchange\trate\tfluctuation | $(33.9) | (2)% |
| Loss\ton\tdatacenter\tand\trelated\tlegal\tfees | (28.6) | (2) |
| Professional\tfees\tand\toutside\tservices | (26.8) | (2) |
| Licensing\tand\tother\tfee\tagreements | 10.5 | 1 |
| Salaries,\tbenefits\tand\temployer\ttaxes | 19.6 | 1 |
| Other\texpenses,\tnet | (0.6) | — |
| Total | $(59.8) | (4)% |

Decreases	in	operating	expenses	in	2017	when	compared	with	2016	were	as	follows:

•In	2017,	we	recognized	a	net	gain	of	$9.4	million	due	to	a	favorable	change	in	exchange	rates	on	foreign	cash	balances,	compared	with	a	net	loss	of	$24.5 million	in	2016.	Gains	and	losses	from	exchange	rate	fluctuations	result	when	subsidiaries	with	a	U.S.	dollar	functional	currency	hold	cash	as	well	as	certain other	monetary	assets	and	liabilities	denominated	in	foreign	currencies.

•In	the	first	quarter	of	2016,	we	sold	and	leased	back	our	datacenter	in	the	Chicago	area.	The	transaction	was	recognized	under	the	financing	method	under generally	accepted	accounting	principles.	We	recognized	total	losses	and	expenses	of	$28.6	million,	including	a	net	loss	on	write-down	to	fair	value	of	the assets	and	certain	other	transaction	fees	of	$27.1	million	within	other	expenses	and	$1.5	million	of	legal	and	other	fees.

•Professional	fees	and	outside	services	expense	decreased	in	2017	compared	to	2016,	largely	due	to	higher	legal	and	regulatory	fees	in	2016	related	to	our business	activities	and	product	offerings	as	well	as	higher	professional	fees	related	to	a	greater	reliance	on	consultants	for	security	and	systems	enhancement work.

The	overall	decrease	in	operating	expenses	in	2017	when	compared	with	2016	was	partially	offset	by	the	following	increases:

•Licensing	and	other	fee	sharing	agreements	expense	increased	due	to	higher	expense	resulting	from	incentive	payments	made	to	facilitate	the	transition	of	the Russell	contract	open	interest,	as	well	as	increased	costs	of	revenue	sharing	agreements	for	certain	licensed	products.	The	overall	increase	in	2017	was	partially offset	by	lower	expense	related	to	revenue	sharing	agreements	for	certain	equity	and	energy	contracts	due	to	lower	volume	for	these	products	compared	to 2016.

•Compensation	and	benefits	expense	increased	as	a	result	of	higher	average	headcount	primarily	in	our	international	locations	as	well	as	normal	cost	of	living adjustments.

Operating	expenses	increased	by	$54.4	million	in	2016	when	compared	with	2015.	The	following	table	shows	the	estimated	impact	of	key	factors	resulting	in	the	net decrease	in	operating	expenses.

| (dollars	in	millions) | Year-<br>Over-Year<br>Change | Change	as	a<br>Percentage	of<br>2015	Expenses |
| :--- | :--- | :--- |
| Loss\ton\tdatacenter\tand\trelated\tlegal\tfees | $28.6 | 2\t% |
| Professional\tfees\tand\toutside\tservices | 24.4 | 2 |
| Foreign\tcurrency\texchange\trate\tfluctuation | 13.2 | 1 |
| Licensing\tand\tother\tfee\tagreements | 12.0 | 1 |
| Reorganization,\tseverance\tand\tretirement\tcosts | (8.1) | (1) |
| Real\testate\ttaxes\tand\tfees | (10.0) | (1) |
| Other\texpenses,\tnet | (5.7) | — |
| Total | $54.4 | 4\t% |

Overall	operating	expenses	increased	in	2016	when	compared	with	2015	due	to	the	following	reasons:

•In	2016,	we	recognized	total	losses	and	expenses	of	$28.6	million,	including	a	net	loss	on	write-down	to	fair	value	of	the	assets	and	certain	other	transaction fees	of	$27.1	million	within	other	expenses	and	$1.5	million	of	legal	and	other	fees	as	a	result	of	our	sale	and	leaseback	of	our	datacenter.

•Professional	fees	and	outside	services	expense	increased	in	2016	largely	due	to	an	increase	in	legal	and	regulatory	efforts	related	to	our	business	activities	and product	offerings	as	well	as	an	increase	in	professional	fees	related	to	a	greater	reliance	on	consultants	for	security	and	systems	enhancement	work.

•In	2016,	we	recognized	a	net	loss	of	$24.5	million	due	to	an	unfavorable	change	in	exchange	rates	on	foreign	cash	balances,	compared	with	a	net	loss	of	$11.3 million	in	2015.

•Licensing	and	other	fee	sharing	agreements	expense	increased	due	to	higher	expense	related	to	revenue	sharing	agreements	for	certain	equity	and	energy contracts	due	to	both	higher	volume	and	an	increase	in	license	rates	for	certain	equity	and	energy	products.

The	increase	in	overall	operating	expenses	in	2016	when	compared	with	2015	was	partially	offset	by	the	following	decreases:

•Severance	and	other	costs	related	to	the	reorganization	announced	in	October	2014	and	the	reduction	of	our	trading	floors	in	mid-2015	were	recognized	in	the first	quarter	of	2015,	in	addition	to	costs	related	to	a	reorganization	in	the	third	quarter	of	2015.	At	the	end	of	2016,	our	CEO	announced	his	retirement,	leading to	additional	compensation	and	stock-based	compensation	expense	in	2016.	We	also	recognized	additional	severance	and	other	costs	related	to	the	reduction	of our	New	York	trading	floors	in	2016.	These	factors	resulted	in	a	net	decrease	in	compensation	and	benefits	expense	in	2016	when	compared	with	the	same period	in	2015.

•In	2015,	we	recognized	additional	real	estate	taxes	and	fees	related	to	the	transfer	of	the	ownership	of	the	NYMEX building.

# Non-Operating	Income	(Expense)

| (dollars	in	millions) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Investment\tincome | $531.7 | $141.8 | $30.1 | n.m. | n.m. |
| Gains\t(losses)\ton\tderivative\tinvestments | — | — | (1.8) | — | n.m. |
| Interest\tand\tother\tborrowing\tcosts | (117.0) | (123.5) | (117.4) | (5) | 5 |
| Equity\tin\tnet\tearnings\t(losses)\tof\tunconsolidated\nsubsidiaries | 129.2 | 110.2 | 100.0 | 17 | 10 |
| Other\tincome\t(expense) | (329.6) | (43.6) | (42.8) | n.m. | 2 |
| Total\tNon-Operating | $214.3 | $84.9 | $(31.9) | n.m. | n.m. |

n.m.	not	meaningful

Investment	income.	The	increase	in	investment	income	from	2015	to	2017	was	largely	due	to	an	increase	in	earnings	from	cash	performance	bond	and	guaranty	fund contributions	that	are	reinvested,	which	resulted	primarily	from	higher	average	reinvestment	balances	and	higher	rates	of	interest	earned	in	the	cash	account	at	the Federal	Reserve	Bank	of	Chicago.	In	addition,	the	increase	in	investment	income	from	2015	to	2017	was	also	due	to	higher	net	gains	on	sales	of	investments.	In	2017, we	sold	our	remaining	ownership	interest	in	BM&FBOVESPA	S.A.	(BM&FBOVESPA)	and	recognized	a	gain	of	$86.5	million,	net	of	transaction	costs.	We	also	sold our	2%	interest	in	Bolsa	Mexicana	de	Valores,	S.A.B.	de	C.V.	and	recognized	a	gain	of	$2.3	million,	net	of	transaction	costs.	In	2016,	we	recognized	a	net	gain	of	$48.4 million	on	sales	of	28.0	million	shares	of	our	investment	in	BM&FBOVESPA	compared	with	a	net	loss	of	$8.5	million	on	sales	of	41.0	million	shares	of BM&FBOVESPA	in	2015.	The	increases	in	investment	income	were	partially	offset	by	decreases	in	dividend	income	from	2015	to	2017.

Interest	and	other	borrowing	costs.	Interest	and	other	borrowing	costs	were	higher	in	2016	when	compared	with	2015	and	2017	due	to	an	increase	in	line	of	credit commitment	fees	in	2016.

Equity	in	net	earnings	(losses)	of	unconsolidated	subsidiaries.	Higher	income	generated	from	our	S&P/DJI	business	venture	contributed	to	increases	in	equity	in	net earnings	(losses)	of	unconsolidated	subsidiaries	from	2015	through	2017.

Other	income	(expense).	From	2015	to	2017,	we	recognized	higher	expenses	related	to	the	distribution	of	interest	earned	on	performance	bond	collateral	reinvestment	to the	clearing	firms.	These	expenses	are	included	in	other	non-operating	income	(expense).

In	April	2015,	we	repurchased	the	$612.5	million	4.40%	notes	due	2018	and	paid	a	call	premium	of	$60.5	million.	As	a	result	of	the	transaction,	we	recognized	debt prepayment	costs	of	$61.8	million,	including	the	call	premium,	as	other	non-operating	income	(expense).	In	the	first	quarter	of	2015,	we	received	a	termination	fee	of $22.5	million,	net	of	the	portion	paid	to	outside	advisers,	related	to	our	proposed	acquisition	of	GFI	Group,	which	also	was	classified	as	other	non-operating	income (expense).

# Income	Tax	Provision

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

The	overall	decrease	in	the	effective	tax	rate	in	2017	when	compared	with	2016	was	primarily	due	to	the	remeasurement	of	the	deferred	tax	liabilities	as	a	result	of	the recent	U.S.	income	tax	reform.	The	decrease	was	partially	offset	by	expense	from	a	state	and	local	tax	law	change	recorded	in	the	third	quarter	of	2017	as	well	as	from reclassifying	income	tax	expense	from	other	comprehensive	income	for	the	sale	of	the	remaining	BM&FBOVESPA	shares	in	the	first	quarter	of	2017.

The	overall	decrease	in	the	effective	tax	rate	in	2016	when	compared	with	2015	was	due	to	an	implementation	of	strategies	to	realize	additional	income	tax	benefits	from the	investment	in	BM&FBOVESPA	stock.	The	overall	decrease	in	the	effective	tax	rate	was	partially	offset	by	additional	tax	expense	recognized	from	the remeasurement	of	tax	positions	resulting	from	a	state	and	local	income	tax	law	change	in	the	second	quarter	of	2016.

# LIQUIDITY	AND	CAPITAL	RESOURCES

# Cash	Requirements

We	have	historically	met	our	funding	requirements	with	cash	generated	by	our	ongoing	operations.	While	our	cost	structure	is	fixed	in	the	short	term,	our	sources	of operating	cash	are	largely	dependent	on	contract	trading	volume	levels.	We	believe	that	our	existing	cash,	cash	equivalents,	marketable	securities	and	cash	generated from	operations	will	be	sufficient	to	cover	our	working	capital	needs,	capital	expenditures	and	other	commitments.	However,	it	is	possible	that	we	may	need	to	raise additional	funds	to	finance	our	activities	through	issuances	of	commercial	paper,	future	public	debt	offerings	or	by	direct	borrowings	from	financial	institutions	through our	committed	revolving	credit	facilities.

Cash	will	also	be	required	for	operating	leases	and	non-cancellable	purchase	obligations	as	well	as	other	obligations	reflected	as	long-term	liabilities	in	our	consolidated balance	sheet	at	December	31,	2017.	These	were	as	follows:

| (in	millions) | Operating<br>Leases | Purchase<br>Obligations | Debt	Obligations | Other<br>Long-Term<br>Liabilities | Total(1) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year |  |  |  |  |  |
| 2018 | $64.3 | $23.8 | $84.8 | $36.2 | $209.1 |
| 2019-2020 | 125.4 | 23.7 | 169.5 | — | 318.6 |
| 2021-2022 | 113.3 | 15.3 | 169.5 | — | 298.1 |
| Thereafter | 435.2 | 5.4 | 3,141.0 | — | 3,581.6 |
| Total | $738.2 | $68.2 | $3,564.8 | $36.2 | $4,407.4 |

(1) The	liability	for	gross	unrecognized	income	tax	benefits,	including	interest	and	penalties,	of	$342.8	million	for	uncertain	tax	positions	are	not	included	in	the	table	due	to uncertainty	about	the	date	of	their	settlement.

Operating	leases	include	rent	payments	for	office	space	in	Chicago,	New	York	and	other	smaller	offices	in	the	United	States	and	in	various	foreign	countries.	The operating	lease	for	our	headquarters	in	Chicago	expires	in	2032.	Annual	minimum	rental	payments	under	this	lease	range	from	$12.5	million	to	$19.7	million.	We	also maintain	operating	leases	for	additional	office	spaces	and	datacenter	spaces	in	Chicago,	which	expire	in	November	2023,	April	2027	and	March	2031.	Annual	minimum rental	payments	under	these	leases	range	from	$5.7	million	to	$6.2	million,	$3.4	million	to	$4.3	million,	and	$16.8	million	to	$18.3	million,	respectively.	The	operating lease	for	our	office	space	in	New	York	expires	in	December	2028.	Annual	minimum	rental	payments	under	this	lease	range	from	$13.1	million	to	$14.5	million.

Purchase	obligations	include	minimum	payments	due	under	agreements	to	advertising,	licensing,	hardware,	software	and	maintenance	as	well	as	telecommunication services.	Debt	obligations	include	repayment	of	principal	and	interest	associated	with	the	debt	obligations.	Other	long-term	liabilities	include	funding	obligations	for other	post-retirement	benefit	plans.

Future	capital	expenditures	for	technology	are	anticipated	as	we	continue	to	support	our	growth	through	increased	system	capacity,	performance	improvements	as	well as	improvements	to	some	of	our	office	spaces.	Each	year,	capital	expenditures	are	incurred	for	improvements	to	and	expansion	of	our	offices,	remote	data	centers, telecommunications	network	and	other	operating	equipment.	In	2018,	we	expect	capital	expenditures	to	total	approximately	$90.0	million	to	$100.0	million.	We continue	to	monitor	our	capital	needs	and	may	revise	our	forecasted	expenditures	as	necessary	in	the	future.

We	intend	to	continue	to	pay	a	regular	quarterly	dividend	to	our	shareholders,	which	is	set	at	between	50%	to	60%	of	the	prior	year's	cash	earnings.	The	decision	to	pay a	dividend	and	the	amount	of	the	dividend;	however,	remains	within	the	discretion	of	our	board	of	directors	and	may	be	affected	by	various	factors,	including	our earnings,	financial	condition,	capital	requirements,	levels	of	indebtedness	and	other	considerations	our	board	of	directors	deems	relevant.	CME	Group	is	also	required	to comply	with	restrictions	contained	in	the	general	corporation	laws	of	its	state	of	incorporation,	which	could	also	limit	its	ability	to	declare	and	pay	dividends.	On February	7,	2018,	the	board	of	directors	declared	a	regular	quarterly	dividend	of	$0.70	per	share.	The	dividend	will	be	payable	on	March	26,	2018	to	shareholders	of record	on	March	9,	2018.	Assuming	no	changes	in	the	number	of	shares	outstanding,	the	first	quarter	dividend	payment	will	total	approximately	$237.0	million.	The board	of	directors	also	declared	an	additional,	annual	variable	dividend	of	$3.50	per	share	on	December	6,	2017	paid	on	January	16,	2018	to	the	shareholders	of	record on	December	28,	2017.	In	general,	the	amount	of	the	annual	variable	dividend	will	be	determined	by	the	end	of	each	year,	and	the	level	will	increase	or	decrease	from year	to	year	based	on	operating	results,	capitalization	expenditures,	potential	merger	and	acquisition	activity	and	other	forms	of	capital	return	including	regular	dividends and	share	buybacks	during	the	prior	year.

# Sources	and	Uses	of	Cash

The	following	is	a	summary	of	cash	flows	from	operating,	investing	and	financing	activities.

| (dollars	in	millions) | 2017 | 2016 | 2015 | 2017-2016 | 2016-2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $1,840.4 | $1,742.8 | $1,532.5 | 6% | 14% |
| Net\tcash\tprovided\tby\tinvesting\tactivities | 179.9 | 53.7 | 17.9 | n.m. | n.m. |
| Net\tcash\tused\tin\tfinancing\tactivities | (1,985.3) | (1,620.5) | (1,223.9) | 23 | 32 |

# Operating	activities

The	increase	in	net	cash	provided	by	operating	activities	in	2017	when	compared	with	2016	was	largely	attributable	to	higher	investment	income	related	to	our reinvestment	of	cash	performance	bonds	and	guaranty	fund	collateral,	net	of	the	distribution	of	interest	earned	to	the	clearing	firms,	as	well	as	an	increase	in	trading volumes	and	the	reduction	of	restricted	cash	related	to	the	CME	Clearing	Europe	Limited	(CMECE)	guaranty	fund.

The	increase	in	2016	when	compared	with	2015	was	attributable	to	higher	clearing	and	transaction	fees	and	market	data	revenue.

# Investing	activities

The	increases	in	cash	provided	by	investing	activities	from	2015	through	2017	were	due	to	proceeds	from	the	sale	of	BM&FBOVESPA	shares	as	well	as	declines	in purchases	of	property	and	equipment.	The	increase	in	2017	when	compared	with	2016	was	also	attributable	to	the	sale	of	the	remaining	Bolsa	Mexicana	de	Valores, S.A.B.	de	C.V.	shares.

# Financing	activities

The	increases	in	cash	used	by	financing	activities	from	2015	through	2017	were	attributable	to	higher	cash	dividends	declared	in	2017	and	2016.	The	increase	in	2016 was	partially	offset	by	proceeds	from	a	finance	lease	obligation	related	to	the	sale	leaseback	of	the	datacenter	in	the	first	quarter	of	2016.

# Debt	Instruments

The	following	table	summarizes	our	debt	outstanding	as	of	December	31,	2017:

| (in	millions) | Par	Value |
| :--- | :--- |
| Fixed\trate\tnotes\tdue\tSeptember\t2022,\tstated\trate\tof\t3.00%\t(1) | $750.0 |
| Fixed\trate\tnotes\tdue\tMarch\t2025,\tstated\trate\tof\t3.00%\t(2) | 750.0 |
| Fixed\trate\tnotes\tdue\tSeptember\t2043,\tstated\trate\tof\t5.30%\t(3) | 750.0 |

(1) In	August	2012,	we	entered	into	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	3.32%.

(2) In	December	2014,	we	entered	into	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%.

(3) In	August	2012,	we	entered	into	a	forward-starting	interest	rate	swap	agreement	that	modified	the	interest	obligation	associated	with	these	notes	so	that	the	interest	payable effectively	became	fixed	at	a	rate	of	4.73%.

We	maintain	a	$2.3	billion	multi-currency	revolving	senior	credit	facility	with	various	financial	institutions,	which	matures	in	November	2022.	The	proceeds	from	this facility	can	be	used	for	general	corporate	purposes,	which	includes	providing	liquidity	for	our	clearing	house	in	certain	circumstances	at	CME	Group's	discretion	and,	if necessary,	for	maturities	of	commercial	paper.	As	long	as	we	are	not	in	default	under	this	facility,	we	have	the	option	to	increase	it	up	to	$3.0	billion	with	the	consent	of the	agent	and	lenders	providing	the	additional	funds.	This	facility	is	voluntarily	pre-payable	from	time	to	time	without	premium	or	penalty.	Under	this	facility,	we	are required	to	remain	in	compliance	with	a	consolidated	net	worth	test,	which	is	defined	as	our	consolidated	shareholders'	equity	at	September	30,	2017,	giving	effect	to share	repurchases	made	and	special	dividends	paid

during	the	term	of	the	agreements	(and	in	no	event	greater	than	$2.0	billion	in	aggregate),	multiplied	by	0.65.	We	currently	do	not	have	any	borrowings	outstanding under	this	facility.

We	maintain	a	364-day	multi-currency	revolving	secured	credit	facility	with	a	consortium	of	domestic	and	international	banks	to	be	used	in	certain	situations	by	CME Clearing.	The	facility	provides	for	borrowings	of	up	to	$7.0	billion.	We	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	for	our	collateral),	or	in	the	event	of	a	temporary	disruption	with	the	domestic	payments system	that	would	delay	payment	of	settlement	variation	between	us	and	our	clearing	firms.	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.	At	December	31,	2017,	guaranty	funds available	to	collateralize	the	facility	totaled	$7.8	billion.	We	have	the	option	to	request	an	increase	in	the	line	from	$7.0	billion	to	$10.0	billion.	Our	364-day	facility contains	a	requirement	that	CME	remain	in	compliance	with	a	consolidated	tangible	net	worth	test,	defined	as	CME	consolidated	shareholder's	equity	less	intangible assets	(as	defined	in	the	agreement),	of	not	less	than	$800.0	million.	We	currently	do	not	have	any	borrowings	outstanding	under	this	facility.

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

In	March	2016,	we	sold	our	datacenter	in	the	Chicago	area	for	$130.0	million.	At	the	time	of	the	sale,	we	leased	back	a	portion	of	the	property.	Under	generally accepted	accounting	principles,	the	transaction	has	been	accounted	for	under	the	financing	method	instead	of	a	sale	leaseback	arrangement	because	our	participation	in future	revenues	and	development	work	constitute	continuing	involvement	in	the	datacenter.	Under	the	financing	method,	the	assets	remain	on	the	consolidated	balance sheet	throughout	the	term	of	the	lease	and	the	proceeds	of	$130.0	million	from	the	transaction	are	recognized	as	a	finance	lease	obligation	within	other	liabilities	and other	current	liabilities	in	the	consolidated	balance	sheet.	A	portion	of	the	lease	payments	will	be	recognized	as	a	reduction	of	the	finance	lease	obligation	and	a	portion will	be	recognized	as	interest	expense	based	on	an	imputed	interest	rate.

At	December	31,	2017,	we	have	excess	borrowing	capacity	for	general	corporate	purposes	of	approximately	$2.3	billion	under	our	multi-currency	revolving	senior	credit facilities.

At	December	31,	2017,	we	were	in	compliance	with	the	various	covenant	requirements	of	all	our	debt	facilities.

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

To	satisfy	our	performance	bond	obligation	with	Singapore	Exchange	Limited,	we	may	pledge	CME-owned	U.S.	Treasury	securities	or	U.S.	dollars	in	lieu	of,	or	in combination	with,	irrevocable	letters	of	credit.	At	December	31,	2017,	we	had	pledged	letters	of	credit	totaling	$285.0	million.

The	following	table	summarizes	our	credit	ratings	as	of	December	31,	2017:

Given	our	cash	flow	generation,	our	ability	to	pay	down	debt	levels	and	our	ability	to	refinance	existing	debt	facilities,	if	necessary,	we	expect	to	maintain	an	investment grade	rating.	If	our	ratings	are	downgraded	below	investment	grade	due	to	a	change	of	control,	we	are	required	to	make	an	offer	to	repurchase	our	fixed	rate	notes	at	a price	equal	to	101%	of	the	principal	amount,	plus	accrued	and	unpaid	interest.

# Off-Balance	Sheet	Arrangements

As	of	December	31,	2017,	we	did	not	have	any	off-balance	sheet	arrangements	as	defined	by	Securities	and	Exchange	Commission	rules	and	regulations.

# Liquidity	and	Cash	Management

Cash	and	cash	equivalents	totaled	$1.9	billion	at	both	December	31,	2017	and	2016.	The	balance	retained	in	cash	and	cash	equivalents	is	a	function	of	anticipated	or possible	short-term	cash	needs,	prevailing	interest	rates,	our	investment	policy	and	alternative	investment	choices.	A	majority	of	our	cash	and	cash	equivalents	balance	is invested	in	money	market	mutual	funds	that	invest	only	in	U.S.	Treasury	securities,	U.S.	government	agency	securities	and	U.S.	Treasury	security	reverse	repurchase agreements.	Our	exposure	to	credit	and	liquidity	risk	is	minimal	given	the	nature	of	the	investments.	Cash	that	is	not	available

for	general	corporate	purposes	because	of	regulatory	requirements	or	other	restrictions	is	classified	as	restricted	cash	and	is	included	in	other	current	assets	or	other assets	in	the	consolidated	balance	sheets.

Our	practice	is	to	have	our	pension	plan	100%	funded	at	each	year	end	on	a	projected	benefit	obligation	basis,	while	also	satisfying	any	minimum	required	contribution and	obtaining	the	maximum	tax	deduction.	Based	on	our	actuarial	projections,	we	estimate	that	no	contribution	will	be	necessary	in	2018	as	we	have	exceeded	our funding	goal	by	$74.1	million	in	2017.	However,	the	amount	of	the	actual	contribution	is	contingent	on	various	factors,	including	the	actual	rate	of	return	on	our	plan assets	during	2018	and	the	December	31,	2018	discount	rate.

# Regulatory	Requirements

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

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

# ITEM	7A. QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET

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

# Interest	Rate	Risk

Debt	outstanding	at	December	31,	2017	consisted	of	fixed-rate	borrowings	of	$2.2	billion.	Changes	in	interest	rates	impact	the	fair	values	of	fixed-rate	debt,	but	do	not impact	earnings	or	cash	flows.	We	did	not	have	any	variable-rate	borrowings	at	December	31,	2017.

# Credit	Risk

Our	clearing	house	acts	as	the	counterparty	to	all	trades	consummated	on	our	exchanges	as	well	as	through	third	party	exchanges	and	swaps	markets	for	which	we provide	clearing	services.	As	a	result,	we	are	exposed	to	significant	credit	risk	of	third	parties,	including	clearing	firms.	We	are	also	exposed,	indirectly,	to	the	credit	risk of	customers	of	our	clearing	firms.	These	parties	may	default	on	their	obligations	due	to	bankruptcy,	lack	of	liquidity,	operational	failure	or	other	reasons.

In	order	to	ensure	performance,	we	establish	and	monitor	financial	requirements	for	our	clearing	firms.	We	set	minimum	performance	bond	requirements	for	exchange- traded	and	swaps	products,	including	interest	rate	swaps	and	credit	default	swaps.	For	clearing	firms,	we	establish	performance	bond	requirements	to	cover	at	least	99% of	expected	price	changes	for	a	given	product	within	a	given	historical	period	with	further	quantitative	and	qualitative	considerations	based	on	market	risk.	We	establish haircuts	applied	to	collateral	deposited	to	meet	performance	bond	requirements	to	cover	at	least	99%	of	expected	price	changes	and	foreign	currency	changes	for	a	given asset	within	a	given	historical	period	with	further	quantitative	and	qualitative	considerations.	Haircuts	vary	depending	on	the	type	of	collateral	and	maturity.	We	mark- to-market	open	positions	of	clearing	firms	at	least	once	a	day	(twice	a	day	for	futures	and	options	contracts)	and	require	payment	from	clearing	firms	whose	positions have	lost	value	and	make	payments	to	clearing	firms	whose	positions	have	gained	value.	We	have	the	capability	to	mark-to-market	more	frequently	as	market	conditions warrant.	These	practices	allow	our	clearing	house	to	quickly	identify	any	clearing	firms	that	may	not	be	able	to	satisfy	the	financial	obligations	resulting	from	changes	in the	prices	of	their	open	positions	before	those	financial	obligations	become	exceptionally	large	and	jeopardize	the	ability	of	our	clearing	house	to	ensure	performance	of their	open	positions.

Although	we	have	policies	and	procedures	to	help	ensure	that	our	clearing	firms	can	satisfy	their	obligations,	these	policies	and	procedures	may	not	succeed	in	detecting problems	or	preventing	defaults.	We	also	have	in	place	various	measures	intended	to	enable	us	to	cover	any	default	and	maintain	liquidity.

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

# We	maintain	three	separate	financial	safeguard	packages:

•a	financial	safeguard	package	for	all	futures	and	options	contracts	other	than	cleared	interest	rate	swap	and	credit	default	swap	contracts	(base package);

•a	financial	safeguard	package	for	cleared	interest	rate	swap	contracts;

•a	financial	safeguard	package	for	cleared	credit	default	swap

contracts.

In	the	unlikely	event	of	a	payment	default	by	a	clearing	firm,	we	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.	In	addition,	we	would	make	a	demand	for	payment	pursuant	to	any	applicable	guarantee	provided	to	us	by	the	parent	company	of	the	clearing firm.	Thereafter,	if	the	payment	default	remains	unsatisfied,	we	would	use	our	corporate	contributions	designated	for	the	respective	financial	safeguard	package.	We 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.

We	maintain	a	$7.0	billion	364-day	multi-currency	line	of	credit	with	a	consortium	of	domestic	and	international	banks	to	be	used	in	certain	situations	by	CME	Clearing. We	have	the	option	to	request	an	increase	in	the	line	from	$7.0	billion	to	$10.0	billion.	We	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 payments	systems	that	would	delay	payment	of	settlement	variation	between	us	and	our	clearing	firms.	The	credit	agreement	requires	us	to	pledge	certain	assets	to	the line	of	credit	custodian	prior	to	drawing	on	the	line	of	credit.	Pledged	assets	may	include	clearing	firm	guaranty	fund	deposits	held	by	us	in	the	form	of	cash	or	U.S. Treasury	securities.	Performance	bond	collateral	of	a	defaulting	clearing	firm	may	also	be	used	to	secure	a	draw	on	the	line.	In	addition	to	the	364-day	multi-currency line	of	credit,	we	also	have	the	option	to	use	our	$2.3	billion	multi-currency	revolving	senior	credit	facility	to	provide	liquidity	for	our	clearing	house	in	the	unlikely event	of	default.

At	December	31,	2017,	aggregate	performance	bond	deposits	for	clearing	firms	for	all	three	financial	safeguard	packages	was	$130.9	billion,	including	$41.8	billion	of cash	performance	bond	deposits	and	$2.3	billion	of	letters	of	credit.	A	defaulting	firm's	performance	bond	deposits	can	be	used	in	the	event	of	default	of	that	clearing firm.

The	following	shows	the	available	assets	at	December	31,	2017	in	the	event	of	a	payment	default	by	a	clearing	firm	for	the	base	financial	safeguard	package	after	first utilizing	the	defaulting	firm's	available	assets:

(1) CME	Clearing	designates	$100.0	million	of	corporate	contributions	to	satisfy	a	clearing	firm	default	in	the	event	that	the	defaulting	clearing	firm's	guaranty	contributions and	performance	bonds	do	not	satisfy	the	deficit.

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

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

The	following	shows	the	available	assets	for	the	interest	rate	swap	financial	safeguard	package	at	December	31,	2017	in	the	event	of	a	payment	default	by	a	clearing	firm that	clears	interest	rate	swap	contracts,	after	first	utilizing	the	defaulting	firm's	available	assets:

| (in	millions) | CME	Clearing<br>Available	Assets |
| :--- | :--- |
| Designated\tcorporate\tcontributions\tfor\tinterest\trate\tswap\tcontracts(1) | $150.0 |
| Guaranty\tfund\tcontributions(2) | 2,571.7 |
| Assessment\tpowers(3) | 1,292.1 |

(1) CME	Clearing	designates	$150.0	million	of	corporate	contributions	to	satisfy	a	clearing	firm	default	in	the	event	that	the	defaulting	clearing	firm's	guaranty	contributions and	performance	bonds	do	not	satisfy	the	deficit.

(2) Guaranty	fund	contributions	of	clearing	firms	for	interest	rate	swap	contracts	include	guaranty	fund	contributions	required	of	those	clearing	firms.

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

The	following	shows	the	available	assets	for	the	credit	default	swap	financial	safeguard	package	at	December	31,	2017	in	the	event	of	a	payment	default	by	a	clearing firm	that	clears	credit	default	swap	contracts,	after	first	utilizing	the	defaulting	firm's	available	assets:

| (in	millions) | CME	Clearing<br>Available	Assets |
| :--- | :--- |
| Designated\tcorporate\tcontributions\tfor\tcredit\tdefault\tswap\tcontracts(1) | $50.0 |
| Guaranty\tfund\tcontributions(2) | 600.0 |
| Assessment\tpowers(3) | 86.4 |

(1) CME	Clearing	designates	corporate	contributions	to	satisfy	a	clearing	firm	default	in	the	event	that	the	defaulting	clearing	firm's	guaranty	contributions	and	performance bonds	do	not	satisfy	the	deficit.	The	working	capital	contributed	by	us	would	be	equal	to	the	greater	of	$50.0	million	and	5%	of	the	credit	default	swap	guaranty	fund,	up	to a	maximum	of	$100.0	million.

(2) Guaranty	fund	contributions	of	clearing	firms	for	credit	default	swap	contracts	include	guaranty	fund	contributions	required	of	those	clearing	firms.

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

In	September	2017,	we	announced	our	plans	to	exit	the	credit	default	swap	business	by	mid-2018.

# Foreign	Currency	Exchange	Rate	Risk

# Foreign	Currency	Transaction	Risk

We	have	foreign	currency	transaction	risk	related	to	changes	in	exchange	rates	on	British	pound	cash	balances	held	at	subsidiaries	with	a	U.S.	dollar	functional currency.	Gains	and	losses	on	foreign	currency	transactions	result	when	subsidiaries	with	a	U.S.	dollar	functional	currency	hold	cash	as	well	as	certain	other	assets	and liabilities	denominated	in	foreign	currencies.	During	2017,	the	exchange	rate	between	the	British	pound	and	the	U.S.	dollar	fluctuated	from	a	high	of	$1.36	per	pound	to a	low	of	$1.20	per	pound.	Aggregate	transaction	gains	(losses)	for	2017,	2016	and	2015	were	$9.4	million,	$(24.5)	million	and	$(11.3)	million,	respectively.	We	expect the	foreign	currency	gain/loss	to	continue	to	fluctuate	as	long	as	we	continue	to	hold	cash	as	well	as	certain	assets	and	liabilities	at	those	subsidiaries.

# Foreign	Currency	Translation	Risk

We	have	foreign	currency	translation	risk	related	to	the	translation	of	our	foreign	subsidiaries'	assets	and	liabilities	from	their	respective	functional	currencies	to	the	U.S. dollar	at	each	reporting	date.	Fluctuations	in	exchange	rates	may	impact	the	amount	of	assets	and	liabilities	we	report	in	our	consolidated	balance	sheets.	The	financial statements	of	certain	of	our	foreign	subsidiaries	are	denominated	in	various	currencies	and	are	translated	into	U.S.	dollars	using	a	current	exchange	rate.	Gains	and losses	resulting	from	this	translation	are	recognized	as	a	foreign	currency	translation	adjustment	within	accumulated	other	comprehensive	income,	which	is	a	component of	shareholders'	equity	and	comprehensive	income.	Aggregate	translation	gains	(losses),	net	of	tax,	for	2017,	2016	and	2015	were	$7.5	million,	$(6.9)	million	and	$(6.6) million,	respectively.

# Foreign	Currency	Exchange	Risk	Related	to	Customer	Collateral

A	portion	of	performance	bond	deposits	is	denominated	in	foreign	currency.	We	mark-to-market	all	deposits	daily	and	require	payment	from	clearing	firms	whose collateral	has	lost	value	due	to	changes	in	foreign	currency	rates	and	price.	Therefore,	our	exposure	to	foreign	currency	risk	related	to	performance	bond	deposits	is considered	minimal	and	is	not	expected	to	be	material	to	our	financial	condition	or	operating	results.

# 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)

|  | 2017 | 2016 |
| :--- | :--- | :--- |
| Assets |  |  |
| Current\tAssets: |  |  |
| Cash\tand\tcash\tequivalents | $1,903.6 | $1,868.6 |
| Marketable\tsecurities | 90.1 | 83.3 |
| Accounts\treceivable,\tnet\tof\tallowance\tof\t$2.2\tand\t$3.5 | 359.7 | 364.4 |
| Other\tcurrent\tassets\t(includes\t$0\tand\t$30.0\tin\trestricted\tcash) | 367.8 | 171.7 |
| Performance\tbonds\tand\tguaranty\tfund\tcontributions | 44,185.3 | 37,543.5 |
| Total\tcurrent\tassets | 46,906.5 | 40,031.5 |
| Property,\tnet | 399.7 | 425.2 |
| Intangible\tassets—trading\tproducts | 17,175.3 | 17,175.3 |
| Intangible\tassets—other,\tnet | 2,346.3 | 2,441.8 |
| Goodwill | 7,569.0 | 7,569.0 |
| Other\tassets\t(includes\t$2.4\tand\t$61.7\tin\trestricted\tcash) | 1,394.4 | 1,726.6 |
| Total\tAssets | $75,791.2 | $69,369.4 |
| Liabilities\tand\tEquity |  |  |
| Current\tLiabilities: |  |  |
| Accounts\tpayable | $31.3 | $26.2 |
| Other\tcurrent\tliabilities | 1,456.3 | 1,376.7 |
| Performance\tbonds\tand\tguaranty\tfund\tcontributions | 44,185.3 | 37,542.7 |
| Total\tcurrent\tliabilities | 45,672.9 | 38,945.6 |
| Long-term\tdebt | 2,233.1 | 2,231.2 |
| Deferred\tincome\ttax\tliabilities,\tnet | 4,857.7 | 7,291.0 |
| Other\tliabilities | 615.7 | 560.9 |
| Total\tLiabilities | 53,379.4 | 49,028.7 |
| Shareholders'\tEquity: |  |  |
|  | — | — |
| and\t338,240\tshares\tissued\tand\toutstanding\tas\tof\tDecember\t31,\t2017\tand\t2016,\trespectively | 3.4 | 3.4 |
| 2016 | — | — |
| Additional\tpaid-in\tcapital | 17,896.9 | 17,826.9 |
| Retained\tearnings | 4,497.2 | 2,524.5 |
| Accumulated\tother\tcomprehensive\tincome\t(loss) | 14.3 | (14.1) |
| Total\tshareholders'\tequity | 22,411.8 | 20,340.7 |
| Total\tLiabilities\tand\tEquity | $75,791.2 | $69,369.4 |

See	accompanying	notes	to	consolidated	financial	statements.

# CONSOLIDATED	STATEMENTS	OF	INCOME

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Revenues |  |  |  |
| Clearing\tand\ttransaction\tfees | $3,098.6 | $3,036.4 | $2,783.9 |
| Market\tdata\tand\tinformation\tservices | 391.8 | 406.5 | 399.4 |
| Access\tand\tcommunication\tfees | 100.8 | 91.4 | 86.1 |
| Other | 53.5 | 60.9 | 57.4 |
| Total\tRevenues | 3,644.7 | 3,595.2 | 3,326.8 |
| Expenses |  |  |  |
| Compensation\tand\tbenefits | 562.5 | 541.0 | 553.7 |
| Communications | 24.3 | 26.8 | 27.8 |
| Technology\tsupport\tservices | 77.3 | 70.8 | 64.5 |
| Professional\tfees\tand\toutside\tservices | 117.6 | 144.4 | 122.8 |
| Amortization\tof\tpurchased\tintangibles | 95.5 | 96.1 | 99.4 |
| Depreciation\tand\tamortization | 113.0 | 129.2 | 129.2 |
| Occupancy\tand\tbuilding\toperations | 80.2 | 86.7 | 92.5 |
| Licensing\tand\tother\tfee\tagreements | 146.3 | 135.8 | 123.8 |
| Other | 116.0 | 161.7 | 124.4 |
| Total\tExpenses | 1,332.7 | 1,392.5 | 1,338.1 |
| Operating\tIncome | 2,312.0 | 2,202.7 | 1,988.7 |
| Non-Operating\tIncome\t(Expense) |  |  |  |
| Investment\tincome | 531.7 | 141.8 | 30.1 |
| Gains\t(losses)\ton\tderivative\tinvestments | — | — | (1.8) |
| Interest\tand\tother\tborrowing\tcosts | (117.0) | (123.5) | (117.4) |
| Equity\tin\tnet\tearnings\t(losses)\tof\tunconsolidated\tsubsidiaries | 129.2 | 110.2 | 100.0 |
| Other\tnon-operating\tincome\t(expense) | (329.6) | (43.6) | (42.8) |
| Total\tNon-Operating\tIncome\t(Expense) | 214.3 | 84.9 | (31.9) |
| Income\tbefore\tIncome\tTaxes | 2,526.3 | 2,287.6 | 1,956.8 |
| Income\ttax\tprovision\t(benefit) | (1,537.1) | 753.5 | 709.8 |
| Net\tIncome | $4,063.4 | $1,534.1 | $1,247.0 |
| Earnings\tper\tCommon\tShare: |  |  |  |
| Basic | $12.00 | $4.55 | $3.71 |
| Diluted | 11.94 | 4.53 | 3.69 |
| Weighted\tAverage\tNumber\tof\tCommon\tShares: |  |  |  |
| Basic | 338,707 | 337,496 | 336,224 |
| Diluted | 340,226 | 338,966 | 337,894 |

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME

# (in	millions)

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Net\tincome | $4,063.4 | $1,534.1 | $1,247.0 |
| Other\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |
| Investment\tsecurities: |  |  |  |
| Net\tunrealized\tholding\tgains\t(losses)\tarising\tduring\tthe\tperiod | 30.2 | 170.0 | (78.0) |
| Reclassification\tof\tgains\t(losses)\ton\tsale\tincluded\tin\tinvestment\tincome | (89.5) | (48.7) | 8.5 |
| Income\ttax\tbenefit\t(expense) | 79.4 | (45.8) | (2.6) |
| Investment\tsecurities,\tnet | 20.1 | 75.5 | (72.1) |
| Defined\tbenefit\tplans: |  |  |  |
| Net\tchange\tin\tdefined\tbenefit\tplans\tarising\tduring\tthe\tperiod | 0.3 | (5.1) | (11.2) |
| Amortization\tof\tnet\tactuarial\t(gains)\tlosses\tand\tprior\tservice\tcosts\tincluded\tin\tcompensation\tand\nbenefits\texpense | 2.9 | 3.2 | 2.7 |
| Income\ttax\tbenefit\t(expense) | (1.5) | 0.7 | 3.2 |
| Defined\tbenefit\tplans,\tnet | 1.7 | (1.2) | (5.3) |
| Derivative\tinvestments: |  |  |  |
| Net\tunrealized\tholding\tgains\t(losses)\tarising\tduring\tthe\tperiod | — | — | (4.7) |
| Ineffectiveness\ton\tcash\tflow\thedges | — | — | 1.8 |
| Amortization\tof\teffective\tportion\tof\tnet\t(gains)\tlosses\ton\tcash\tflow\thedges\tincluded\tin\tinterest\nexpense | (1.2) | (1.2) | (1.2) |
| Income\ttax\tbenefit\t(expense) | 0.3 | 0.5 | 1.1 |
| Derivative\tinvestments,\tnet | (0.9) | (0.7) | (3.0) |
| Foreign\tcurrency\ttranslation: |  |  |  |
| Foreign\tcurrency\ttranslation\tadjustments | 10.4 | (8.2) | (10.6) |
| Income\ttax\tbenefit\t(expense) | (2.9) | 1.3 | 4.0 |
| Foreign\tcurrency\ttranslation,\tnet | 7.5 | (6.9) | (6.6) |
| Other\tcomprehensive\tgain\t(loss),\tnet\tof\ttax | 28.4 | 66.7 | (87.0) |
| Comprehensive\tIncome | $4,091.8 | $1,600.8 | $1,160.0 |

# CONSOLIDATED	STATEMENTS	OF	EQUITY

|  | Class	A<br>Common<br>Stock<br>(Shares) | Class	B<br>Common<br>Stock<br>(Shares) | Common<br>Stock	and<br>Additional<br>Paid-in<br>Capital | Retained<br>Earnings | Accumulated<br>Other<br>Comprehensive<br>Income	(Loss) | Total<br>Shareholders'<br>Equity |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2014 | 335,452 | 3 | $17,600.0 | $3,317.3 | $6.2 | $20,923.5 |
| Net\tincome |  |  |  | 1,247.0 |  | 1,247.0 |
| Other\tcomprehensive\tincome\tattributable\tto\tCME\tGroup |  |  |  |  | (87.0) | (87.0) |
| Dividends\ton\tcommon\tstock\tof\t$4.90\tper\tshare |  |  |  | (1,656.7) |  | (1,656.7) |
| Tax\teffect\tand\tgain\trelated\tto\tpurchase\tof\tnon-controlling\tinterests |  |  | 9.3 |  |  | 9.3 |
| Exercise\tof\tstock\toptions | 984 |  | 64.0 |  |  | 64.0 |
| Excess\ttax\tbenefits\tfrom\toption\texercises\tand\trestricted\tstock\nvesting |  |  | 3.8 |  |  | 3.8 |
| Vesting\tof\tissued\trestricted\tClass\tA\tcommon\tstock | 456 |  | (17.2) |  |  | (17.2) |
| Shares\tissued\tto\tBoard\tof\tDirectors | 26 |  | 2.4 |  |  | 2.4 |
| Shares\tissued\tunder\tEmployee\tStock\tPurchase\tPlan | 20 |  | 1.9 |  |  | 1.9 |
| Stock-based\tcompensation |  |  | 60.8 |  |  | 60.8 |
| Balance\tat\tDecember\t31,\t2015 | 336,938 | 3 | $17,725.0 | $2,907.6 | $(80.8) | $20,551.8 |

# CONSOLIDATED	STATEMENTS	OF	EQUITY	(continued)

|  | Class	A<br>Common<br>Stock<br>(Shares) | Class	B<br>Common<br>Stock<br>(Shares) | Common<br>Stock	and<br>Additional<br>Paid-in<br>Capital | Retained<br>Earnings | Accumulated<br>Other<br>Comprehensive<br>Income	(Loss) | Total<br>Shareholders'<br>Equity |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2015 | 336,938 | 3 | $17,725.0 | $2,907.6 | $(80.8) | $20,551.8 |
| Net\tincome |  |  |  | 1,534.1 |  | 1,534.1 |
| Other\tcomprehensive\tincome\tattributable\tto\tCME\tGroup |  |  |  |  | 66.7 | 66.7 |
| Dividends\ton\tcommon\tstock\tof\t$5.65\tper\tshare |  |  |  | (1,917.2) |  | (1,917.2) |
| Exercise\tof\tstock\toptions | 686 |  | 51.8 |  |  | 51.8 |
| Excess\ttax\tbenefits\tfrom\toption\texercises\tand\trestricted\tstock\tvesting |  |  | 9.5 |  |  | 9.5 |
| Vesting\tof\tissued\trestricted\tClass\tA\tcommon\tstock | 570 |  | (26.8) |  |  | (26.8) |
| Shares\tissued\tto\tBoard\tof\tDirectors | 26 |  | 2.5 |  |  | 2.5 |
| Shares\tissued\tunder\tEmployee\tStock\tPurchase\tPlan | 20 |  | 2.1 |  |  | 2.1 |
| Stock-based\tcompensation |  |  | 66.2 |  |  | 66.2 |
| Balance\tat\tDecember\t31,\t2016 | 338,240 | 3 | $17,830.3 | $2,524.5 | $(14.1) | $20,340.7 |

|  | Class	A<br>Common<br>Stock<br>(Shares) | Class	B<br>Common<br>Stock<br>(Shares) | Common<br>Stock	and<br>Additional<br>Paid-in<br>Capital | Retained<br>Earnings | Accumulated<br>Other<br>Comprehensive<br>Income	(Loss) | Total	Shareholders'<br>Equity |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2016 | 338,240 | 3 | $17,830.3 | $2,524.5 | $(14.1) | $20,340.7 |
| Net\tincome |  |  |  | 4,063.4 |  | 4,063.4 |
| Other\tcomprehensive\tincome\tattributable\tto\tCME\tGroup |  |  |  |  | 28.4 | 28.4 |
| Dividends\ton\tcommon\tstock\tof\t$6.14\tper\tshare |  |  |  | (2,088.5) |  | (2,088.5) |
| Impact\tof\tadoption\tof\tstandards\tupdate\ton\temployee\tshare-\nbased\tpayments,\tnet\tof\ttax |  |  | 1.4 | (2.2) |  | (0.8) |
| Exercise\tof\tstock\toptions | 444 |  | 36.7 |  |  | 36.7 |
| Vesting\tof\tissued\trestricted\tClass\tA\tcommon\tstock | 511 |  | (31.3) |  |  | (31.3) |
| Shares\tissued\tto\tBoard\tof\tDirectors | 20 |  | 2.4 |  |  | 2.4 |
| Shares\tissued\tunder\tEmployee\tStock\tPurchase\tPlan | 20 |  | 2.8 |  |  | 2.8 |
| Stock-based\tcompensation |  |  | 58.0 |  |  | 58.0 |
| Balance\tat\tDecember\t31,\t2017 | 339,235 | 3 | $17,900.3 | $4,497.2 | $14.3 | $22,411.8 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Cash\tFlows\tfrom\tOperating\tActivities |  |  |  |
| Net\tincome | $4,063.4 | $1,534.1 | $1,247.0 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Stock-based\tcompensation | 58.0 | 66.2 | 60.8 |
| Amortization\tof\tpurchased\tintangibles | 95.5 | 96.1 | 99.4 |
| Depreciation\tand\tamortization | 113.0 | 129.2 | 129.2 |
| Loss\ton\tdatacenter | — | 27.1 | — |
| (Gain)\tloss\ton\tsale\tof\tBM&amp;FBOVESPA\tshares | (86.5) | (48.4) | 8.5 |
|  | (2.3) | — | — |
| Income\ttax\texpense\treclassified\tfrom\taccumulated\tother\tcomprehensive\tincome\tupon\tfinal\tsale\nof\tBM&amp;FBOVESPA\tshares | 87.8 | — | — |
| Debt\tprepayment\tcosts | — | — | 61.8 |
| Undistributed\tearnings,\tnet\tof\tlosses,\tof\tunconsolidated\tsubsidiaries | (26.8) | (2.3) | (5.1) |
| Deferred\tincome\ttaxes | (2,445.6) | (83.0) | 63.3 |
| Change\tin: |  |  |  |
| Accounts\treceivable | 6.0 | (8.1) | (17.3) |
| Other\tcurrent\tassets | 3.9 | 3.2 | (12.7) |
| Other\tassets | (17.8) | 5.4 | (4.0) |
| Accounts\tpayable | 5.1 | (2.6) | (8.2) |
| Income\ttaxes\tpayable | 3.5 | 60.5 | (82.1) |
| Other\tcurrent\tliabilities | (8.9) | (12.4) | (3.9) |
| Other\tliabilities | (8.5) | (22.5) | (9.8) |
| Other | 0.6 | 0.3 | 5.6 |
| Net\tCash\tProvided\tby\tOperating\tActivities | 1,840.4 | 1,742.8 | 1,532.5 |
| Cash\tFlows\tfrom\tInvesting\tActivities |  |  |  |
| Proceeds\tfrom\tmaturities\tand\tsales\tof\tavailable-for-sale\tmarketable\tsecurities | 2.5 | 41.7 | 38.3 |
| Purchases\tof\tavailable-for-sale\tmarketable\tsecurities | (3.0) | (45.9) | (35.3) |
| Purchases\tof\tproperty,\tnet |  |  |  |
|  | (81.9) | (91.8) | (114.2) |
| Investments\tin\tbusiness\tventures | (5.3) | (9.1) | (16.7) |
| Proceeds\tfrom\tsale\tof\tbusiness\tventures | 4.0 | 8.8 | — |
| Proceeds\tfrom\tsale\tof\tBM&amp;FBOVESPA\tshares | 244.0 | 150.0 | 138.8 |
|  | 19.6 | — | — |
| Settlement\tof\tderivative\trelated\tto\tdebt\tissuance | — | — | 7.0 |
| Net\tCash\tProvided\tby\tInvesting\tActivities | 179.9 | 53.7 | 17.9 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS	(continued)

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Cash\tFlows\tfrom\tFinancing\tActivities |  |  |  |
| Proceeds\tfrom\tother\tborrowings,\tnet\tof\tissuance\tcosts | $— | $— | $743.7 |
| Repayment\tof\tother\tborrowings | — | — | (673.0) |
| Cash\tdividends | (1,993.5) | (1,787.2) | (1,343.4) |
| Proceeds\tfrom\tfinance\tlease\tobligation | — | 130.0 | — |
| Proceeds\tfrom\texercise\tof\tstock\toptions | 36.7 | 51.8 | 64.0 |
| Excess\ttax\tbenefits\trelated\tto\temployee\toption\texercises\tand\trestricted\tstock\tvesting | — | 9.5 | 7.1 |
| Employee\ttaxes\tpaid\ton\trestricted\tstock\tvesting | (31.3) | (26.8) | (17.2) |
| Settlement\tof\tcontingent\tconsideration | — | — | (7.0) |
| Other | 2.8 | 2.2 | 1.9 |
| Net\tCash\tUsed\tin\tFinancing\tActivities | (1,985.3) | (1,620.5) | (1,223.9) |
| Net\tchange\tin\tcash\tand\tcash\tequivalents | 35.0 | 176.0 | 326.5 |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tperiod | 1,868.6 | 1,692.6 | 1,366.1 |
| Cash\tand\tCash\tEquivalents,\tEnd\tof\tPeriod | $1,903.6 | $1,868.6 | $1,692.6 |
| Supplemental\tDisclosure\tof\tCash\tFlow\tInformation |  |  |  |
| Income\ttaxes\tpaid | $762.8 | $706.7 | $716.6 |
| Interest\tpaid | 84.8 | 84.8 | 89.1 |
| Non-cash\tfinancing\tactivities: |  |  |  |
| Declaration\tof\tannual\tvariable\tdividend,\tpayable\tin\tJanuary\t2018,\tJanuary\t2017\tand\nJanuary\t2016 | 1,187.3 | 1,099.3 | 977.1 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# 1.	ORGANIZATION	AND	BUSINESS

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	Inc.	(CME	Group),	are	designated	contract	markets	for	the	trading	of	futures	and	options	on futures	contracts.	CME,	CBOT,	NYMEX,	COMEX	and	their	subsidiaries	are	referred	to	collectively	as	"the	exchange"	in	the	notes	to	the	consolidated	financial statements.	CME	Group	and	its	subsidiaries	are	referred	to	collectively	as	"the	company"	in	the	notes	to	the	consolidated	financial	statements.

CME	Group	offers	a	wide	range	of	products	for	trading	and/or	clearing,	including	those	based	on	interest	rates,	equity	indexes,	foreign	exchange,	energy,	agricultural commodities	and	metals.	Trades	are	executed	through	CME	Group's	electronic	trading	platforms,	open	outcry	and	privately	negotiated	transactions.	Through	its	clearing house,	CME	Group	offers	clearing,	settlement	and	guarantees	for	all	products	cleared	through	the	exchange.

In	April	2017,	the	company	announced	the	wind	down	of	CME	Clearing	Europe	Limited	(CMECE)	and	CME	Europe	Limited	(CME	Europe)	which	was	completed	by year	end.	In	September	2017,	the	company	also	announced	we	will	exit	the	credit	default	swaps	business	by	mid-2018.

# 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	United States	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	in	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	available-for-sale	or	trading	securities.	Available-for-sale investments	are	carried	at	their	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.	Also,	the	company	maintains	long-term	investments	accounted	for	under	the	cost	method	and	equity	method, depending	upon	the	degree	of	influence	over	the	investee	as	held	by	the	company.

The	company	reviews	its	investments	to	determine	whether	a	decline	in	fair	value	below	the	cost	basis	is	other-than-temporary.	If	events	and	circumstances	indicate	that a	decline	in	the	value	of	the	assets	has	occurred	and	is	deemed	to	be	other-than-temporary,	the	carrying	value	of	the	investments	is	reduced	to	its	fair	value	and	a corresponding	impairment	is	charged	to	earnings.

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	uses	derivative	instruments,	designated	as	cash	flow	hedges,	to	limit	exposure	to	changes	in	interest	rates.	Derivatives	are recorded	at	fair	value	in	the	consolidated	balance	sheets.	The	effective	portion	of	the	changes	in	the	fair	value	of	cash	flow	hedges	is	deferred	in	accumulated	other comprehensive	income.	Any	realized	gains	and	losses	from	effective	hedges	are	classified	as	interest	expense	in	the	consolidated	statements	of	income,	and	any ineffective	or	excluded	portion	of	a	hedge	is	recognized	in	earnings	immediately.

Accounts	Receivable.	Accounts	receivable	are	comprised	of	trade	receivables	and	unbilled	revenue.	All	accounts	receivable	are	stated	at	cost.	Exposure	to	losses	on receivables	for	clearing	and	transaction	fees	and	other	amounts	owed	by	clearing	firms	is	dependent	on	each	clearing	firm's	financial	condition	and	the	memberships	that collateralize	fees	owed	to	the	exchange.	The

exchange	retains	the	right	to	liquidate	exchange	memberships	to	satisfy	a	clearing	firm's	receivable.	The	allowance	for	doubtful	accounts	is	calculated	based	on	historical losses	and	management's	assessment	of	probable	future	collections.

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,	reverse	repurchase	agreements	secured	with	highly	rated	government	securities,	money	market	funds	or	through	CME's	Interest	Earning	Facility	(IEF) program.	Any	interest	earned	on	CME	investments	accrues	to	CME	and	is	included	in	investment	income	in	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	risks	of	ownership accrue	to	CME,	cash	performance	bonds	and	guaranty	fund	contributions	are	reflected	in	the	consolidated	balance	sheets.	Performance	bonds	and	guaranty	fund contributions	assets	on	the	consolidated	balance	sheets	can	include	reinvestments	in	U.S.	Treasury	and	U.S.	government	agency	securities	with	maturity	dates	of	90	days or	less.	U.S.	Treasury	and	U.S.	government	agency	securities	can	be	purchased	by	CME,	at	its	discretion,	using	cash	collateral.

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.	Because	the	benefits	and	risks	of	ownership	accrue	to	the	clearing	firm,	non-cash performance	bonds	and	guaranty	fund	contributions	are	not	reflected	in	the	consolidated	balance	sheets.

Property,	Equipment	and	Leasehold	Improvements.	Property,	equipment	and	leasehold	improvements	are	stated	at	cost,	less	accumulated	depreciation	and amortization.	Depreciation	and	amortization	are	calculated	using	the	straight-line	method,	generally	over	two	to	thirty-nine	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	or	obtaining	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.

Operating	Leases.	Most	leases	in	which	the	company	is	the	tenant	are	accounted	for	as	operating	leases.	Landlord	allowances	are	recorded	as	a	reduction	to	rent expense	on	a	straight-line	basis	over	the	term	of	the	lease.	For	sale	leaseback	transactions,	the	company	evaluates	the	sale	and	the	lease	arrangement	based	on	the company's	continuing	involvement	and	recognizes	the	sale	leaseback	as	either	a	sale	leaseback	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	finance	lease	obligation.	A	portion	of	the	lease payments	is	recognized	as	a	reduction	of	the	finance	lease	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	and	indefinite-lived	intangible	assets	for	impairment	at	least	quarterly	and	whenever	events	or	circumstances	indicate	that	their	carrying values	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.

The	company	evaluates	the	recoverability	of	indefinite-lived	intangible	assets	at	least	quarterly	by	comparing	the	estimated	fair	value	of	the	intangible	asset	to	its carrying	value.	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	book	value	of	the	amortizing	asset	to	undiscounted	cash	flows.	If	the	book	value exceeds	the	undiscounted	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	and	annually challenge	the	useful	lives.

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	in	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.	Foreign	currency	denominated	assets	and	liabilities	are	re-measured	into	the	functional	currency	using	period-end	exchange	rates. Gains	and	losses	from	foreign	currency	transactions	are	included	in	other	expense	in	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	execution,	clearing,	trading	on	the	company's	electronic trading	platform	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.	Clearing	and	transaction	fees	are	recognized	as	revenue	when	a	buy	and	sell	order	are	matched	and	the	trade	is	cleared. 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	exchange, 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	specific	adjustment	requests.	The	company	believes	the	allowances	are adequate	to	cover	estimated	adjustments.

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.	The	exchange	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.

Access	and	Communication	Fees.	Access	fees	are	the	connectivity	charges	to	customers	of	the	company's	electronic	trading	platform	that	are	also	used	by	market data	vendors	and	customers.	The	fees	include	co-location	fees,	access	fees	for	the	electronic	trading	platform,	line	charges	and	hardware	rental	charges	and	can vary	depending	on	the	type	of	connection	provided.	An	additional	installation	fee	may	be	charged	depending	on	the	type	of	service	requested	and	a	disconnection fee	may	also	be	charged	if	certain	conditions	are	met.	Revenue	is	generally	recognized	monthly	as	the	service	is	provided.

Communication	fees	consist	of	equipment	rental	and	usage	charges	to	customers	and	firms	that	utilize	various	telecommunications	hubs	located	internationally	as well	as	networks	and	services	in	the	Chicago	and	New	York	City	facilities.	Revenue	is	billed	and	recognized	on	a	monthly	basis.

Other	Revenues.	Other	revenues	include	fees	for	collateral	management	and	fees	for	trade	order	routing	through	agreements	from	various	strategic	relationships	as well	as	other	services	to	members	and	clearing	firms.	Revenue	is	recognized	as	services	are	provided.

Concentration	of	Revenue.	One	firm	represented	13%	and	another	firm	represented	12%	of	the	company's	clearing	and	transaction	fees	revenue	in	2017.	One	firm represented	13%	and	another	firm	represented	11%	of	the	company's	clearing	and	transaction	fees	revenue	in	2016.	One	firm	represented	13%	of	the	company's clearing	and	transaction	fees	revenue	in	2015.	Should	a	clearing	firm	withdraw	from	the	exchange,	management	believes	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	45%	of	market	data	and	information	services	revenue	in	2017,	40%	in	2016,	and	43%	in	2015. 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.	Beginning	in	2017,	the	company	recognizes	expense	for	forfeitures	of	stock	grants	as	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	classifies	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	CME,	CBOT,	NYMEX	and	COMEX.	The remaining	operations	do	not	meet	the	thresholds	for	reporting	separate	segment	information.

Newly	Adopted	and	Recently	Issued	Accounting	Pronouncements.	In	March	2016,	the	Financial	Accounting	Standards	Board	(FASB)	issued	a	standards	update	that changes	certain	aspects	of	accounting	for	share-based	payments	to	employees.	The	guidance	requires	all	income	tax	effects	of	awards	to	be	recognized	in	the	income statement	when	the	awards	vest	or	are	settled.	It	also	allows	an	employer	to	repurchase	more	of	an	employee's	shares	for	tax	withholding	purposes	without	triggering liability	accounting	and	to	make	a	policy	election	to	account	for	forfeitures	as	they	occur.	The	company	implemented	this	standards	update	as	of	January	1,	2017	on	a prospective	basis.	Starting	in	the	first	quarter	of	2017,	all	income	tax	effects	of	awards	are	recognized	in	the	income	statement	as	part	of	income	tax	expense	when	the awards	vest	or	are	settled.	For	the	year-ended	2017,	the	company	recognized	a	net	tax	benefit	of	$13.9	million	related	to	the	income	tax	effects	of	awards	as	part	of income	tax	expense.	The	company	also	adopted	a	policy	to	recognize	forfeitures	as	compensation	expense	as	the	forfeitures	occur.	Previously,	the	company	estimated	the number	of	awards	that	would	be	forfeited	and	recognized	the	estimate	as	part	of	compensation	expense.	This	policy	change	was	adopted	on	a	modified	retrospective basis	with	a	cumulative-effect	adjustment	to	additional	paid	in	capital	and	retained	earnings	as	of	January	1,	2017.	The	excess	tax	benefits	are	now	reported	as	an operating	activity	within	the	change	in	income	taxes	payable	instead	of	a	financing	activity	on	the	statements	of	cash	flows.	Prior	periods	have	not	been	adjusted	for	this change.	The	employee	taxes	paid	by	the	company	when	the	company	withholds	shares	for	tax-withholding	purposes	when	restricted	stock	awards	vest	are	now	classified as	a	financing	activity	on	the	statements	of	cash	flows.	Prior	periods	have	been	adjusted	for	this	change.

In	May	2014,	the	FASB	issued	a	new	standard	on	revenue	recognition	that	replaces	numerous,	industry-specific	requirements	and	converges	U.S.	accounting	standards with	International	Financial	Reporting	Standards.	The	new	standard	introduces	a	framework	for	recognizing	revenue	that	focuses	on	the	transfer	of	control	rather	than risks	and	rewards.	The	new	standard	also	requires	significant	additional	disclosures	about	the	nature,	amount,	timing	and	uncertainty	of	revenue	and	cash	flows	arising from	customer	contracts,	including	significant	judgments,	changes	in	judgments	and	assets	recognized	from	costs	incurred	to	obtain	or	fulfill	a	contract.	The	application of	the	new	standard	becomes	effective	in	the	first	annual	period	beginning	after	December	15,	2017,	with	early	adoption	permitted.	This	guidance	may	be	adopted	using one	of	two	transition	methods:	retrospectively	to	each	prior	reporting	period	presented	(full	retrospective	method)	or	retrospectively	with	the	cumulative	effect	of initially	applying	the	guidance	recognized	at	the	date	of	initial	adoption	(the	modified	retrospective	approach).	The	company	has	completed	the	contract	review	and implementation	phases	and	will	adopt	the	standard	as	of	January	1,	2018	using	the	modified	retrospective	approach.	Management	will	recognize	a	$8.7	million	reduction to	the	opening	balance	of	retained	earnings	as	of	January	1,	2018	upon	adoption	of	the	standard,	which	it	believes	to	be	an	immaterial	impact	to	the	consolidated financial	statements.	The	adjustment	to	the	opening	balance	of	retained	earnings	primarily	relates	to	a	deferral	of	a	portion	of	clearing	and	transaction	fees	revenue earned	and	recognized	subsequent	to	the	contract	trade	execution	date.	The	on-going	application	of	the	new	standard	is	not	expected	to	have	a	material	impact	on	the company's	financial	statements.	The	adoption	of	the	guidance	will	also	include	expanded	disclosures	within	the	notes	to	the	consolidated	financial	statements.

In	January	2016,	the	FASB	issued	a	standards	update	that	will	change	how	entities	measure	certain	equity	investments.	It	does	not	change	the	guidance	for	classifying and	measuring	investments	in	debt	securities	and	loans.	Under	the	new	guidance,	entities	will	have	to	measure	many	equity	investments	at	fair	value	and	recognize	any changes	in	fair	value	in	net	income,	unless	the	investments	qualify	for	a	practicability	exception.	Entities	will	no	longer	be	able	to	recognize	unrealized	holding	gains	and losses	on	equity	securities	classified	today	as	available	for	sale	in	other	comprehensive	income.	The	update	is

effective	for	reporting	periods	beginning	after	December	15,	2017.	Early	adoption	is	permitted.	The	company	does	not	believe	that	the	adoption	of	this	guidance	in	2018 will	have	a	material	impact	on	the	consolidated	financial	statements.

In	February	2016,	the	FASB	issued	a	standards	update	that	requires	lessees	to	recognize	on	the	balance	sheet	the	assets	and	liabilities	associated	with	the	rights	and obligations	created	by	those	leases.	The	guidance	for	lessors	is	largely	unchanged	from	current	U.S.	GAAP.	Under	the	new	guidance,	a	lessee	will	be	required	to recognize	assets	and	liabilities	for	leases	with	lease	terms	of	more	than	12	months.	Consistent	with	current	U.S.	GAAP,	the	recognition,	measurement,	and	presentation of	expenses	and	cash	flows	arising	from	a	lease	by	a	lessee	primarily	will	depend	on	its	classification	as	a	finance	or	operating	lease.	The	update	is	effective	for	reporting periods	beginning	after	December	15,	2018.	Early	adoption	is	permitted.	Adoption	of	the	guidance	in	2019	will	result	in	the	gross-up	of	our	balance	sheet	to	reflect	the present	value	of	the	lease	payments	over	the	lease	term	and	offsetting	lease	liability	at	the	lease	commencement	date.	Presentation	of	lease	expense	and	the	pattern	of expense	recognition	in	the	income	statement	is	expected	to	remain	materially	consistent	with	existing	lease	accounting	guidance.

In	June	2016,	the	FASB	issued	guidance	that	changes	how	credit	losses	are	measured	for	most	financial	assets	measured	at	amortized	cost	and	certain	other	instruments. The	standard	requires	an	entity	to	estimate	its	lifetime	expected	credit	loss	and	record	an	allowance,	that	when	deducted	from	the	amortized	cost	basis	of	the	financial asset,	presents	the	net	amount	expected	to	be	collected	on	the	financial	asset.	This	forward-looking	expected	loss	model	generally	will	result	in	the	earlier	recognition	of allowances	for	losses.	The	standard	also	amends	the	impairment	model	for	available	for	sale	debt	securities	and	requires	entities	to	determine	whether	all	or	a	portion	of the	unrealized	loss	on	an	available	for	sale	debt	security	is	a	credit	loss.	Severity	and	duration	of	the	unrealized	loss	are	no	longer	permissible	factors	in	concluding whether	a	credit	loss	exists.	Entities	will	recognize	improvements	to	estimated	credit	losses	on	available	for	sale	debt	securities	immediately	in	earnings	rather	than	as interest	income	over	time.	The	standard	is	effective	for	reporting	periods	beginning	after	December	15,	2019.	The	standard's	provisions	must	be	applied	as	a cumulative-effect	adjustment	to	retained	earnings	as	of	the	beginning	of	the	first	reporting	period	in	which	the	guidance	is	effective.	Early	adoption	is	permitted	for reporting	periods	beginning	in	2019.	The	company	does	not	believe	that	the	adoption	of	this	guidance	in	2020	will	have	a	material	impact	on	the	consolidated	financial statements.

In	November	2016,	the	FASB	issued	a	standards	update	aimed	at	promoting	consistency	in	the	classification	and	presentation	of	changes	in	restricted	cash	on	the statement	of	cash	flows.	Previously,	there	was	diversity	in	practice	as	to	whether	the	change	in	restricted	cash	was	included	in	the	reconciliation	of	beginning-of-period and	end-of-period	total	cash	amounts	shown	on	the	statement	of	cash	flows.	The	amendments	require	that	a	statement	of	cash	flows	explain	the	change	during	the	period in	the	total	of	cash,	cash	equivalents,	as	well	as	amounts	described	as	restricted	cash	on	the	balance	sheet.	This	guidance	is	effective	for	fiscal	years	beginning	after December	15,	2017	and	interim	periods	within	those	fiscal	years.	Early	adoption	is	permitted.	The	amendments	must	be	applied	using	a	retrospective	transition	method to	each	period	presented.	The	adoption	of	this	guidance	in	2018	will	not	have	a	material	impact	on	the	consolidated	financial	statements.

In	March	2017,	the	FASB	issued	a	standards	update	that	will	change	certain	presentation	and	disclosure	requirements	for	employers	that	sponsor	defined	benefit	pension as	well	as	other	postretirement	benefit	plans.	Under	current	accounting	rules,	defined	benefit	pension	cost	and	postretirement	benefit	cost	(net	benefit	cost)	comprise several	components	that	reflect	different	aspects	of	an	employer's	financial	arrangements	as	well	as	the	cost	of	benefits	provided	to	the	employees.	Those	components are	aggregated	for	reporting	in	the	financial	statements	within	compensation	and	benefits	on	the	income	statement.	The	amendments	in	the	update	require	that	the	service cost	component	is	reported	in	the	same	line	as	other	compensation	costs,	whereas	the	other	components	of	net	benefit	cost	are	required	to	be	presented	in	the	income statement	separately	from	the	service	cost	component.	The	amendments	are	effective	for	reporting	periods	beginning	after	December	15,	2017.	Early	adoption	is permitted	as	of	the	beginning	of	an	annual	period	for	which	financial	statements	have	not	been	issued.	The	company	will	change	the	presentation	of	certain	components of	pension	cost	upon	adoption	of	this	guidance	in	2018;	however,	this	change	will	not	have	a	material	impact	on	the	consolidated	financial	statements.

In	August	2017,	the	FASB	issued	a	standards	update	that	amends	the	existing	hedge	accounting	model	to	enable	entities	to	better	reflect	their	risk	management	activities in	the	financial	statements.	The	amendments	expand	an	entity's	ability	to	hedge	nonfinancial	and	financial	risk	components	and	reduce	complexity	in	fair	value	hedges of	interest	rate	risk.	The	guidance	eliminates	the	requirement	to	separately	measure	and	report	hedge	ineffectiveness	and	generally	requires	the	entire	change	in	the	fair value	of	a	hedging	instrument	to	be	presented	in	the	same	income	statement	line	as	the	hedged	item.	The	guidance	also	eases	certain	documentation	and	assessment requirements	and	modifies	the	accounting	for	components	excluded	from	the	assessment	of	hedge	effectiveness.	The	guidance	is	effective	for	fiscal	years	beginning	after December	15,	2018.	Early	adoption	is	permitted.	The	company	does	not	believe	that	the	adoption	of	this	standard	will	have	a	material	impact	on	the	consolidated financial	statements.

In	December	2017,	the	staff	of	the	Securities	and	Exchange	Commission	(SEC)	issued	a	staff	accounting	bulletin	that	addresses	situations	where	the	accounting	is incomplete	for	certain	income	tax	effects	of	the	Tax	Cuts	and	Jobs	Act	(2017	Tax	Act)	by	the	time	an	entity	issues	its	financial	statements	for	2017.	The	guidance provides	for	a	measurement	period	of	up	to	one	year	after	the	enactment	date	to	finalize	the	recording	of	the	related	tax	impacts.	Under	existing	accounting	guidance, entities	are	required	to	adjust	current	and	deferred	tax	liabilities	and	assets	for	the	effects	of	changes	in	tax	laws	or	rates	at	their	date	of

enactment.	However,	pursuant	to	the	staff	accounting	bulletin,	if	an	entity	does	not	have	the	necessary	information	available,	prepared,	or	analyzed	for	certain	income tax	effects	of	the	2017	Tax	Act	at	the	time	an	entity's	financial	statements	are	issued,	an	entity	may	include	provisional	amounts	to	reflect	its	accounting	for	the	change in	tax	law.	The	measurement	period	ends	when	the	company	has	obtained,	prepared	and	analyzed	the	information	necessary	to	finalize	its	accounting,	but	cannot	extend beyond	one	year.	Additional	information	regarding	the	adoption	of	this	guidance	is	contained	in	note	9.

In	February	2018,	the	FASB	issued	guidance	that	gives	entities	the	option	to	reclassify	to	retained	earnings	the	tax	effects	related	to	items	in	accumulated	other comprehensive	income	(AOCI)	that	were	previously	stranded	within	AOCI	as	a	result	of	applying	the	2017	Tax	Act.	An	entity	that	elects	to	reclassify	these	amounts must	reclassify	stranded	tax	effects	related	to	the	change	in	federal	tax	rate	for	all	items	accounted	for	within	AOCI.	Entities	can	also	elect	to	reclassify	other	stranded	tax effects	that	relate	to	the	2017	Tax	Act	but	do	not	directly	relate	to	the	change	in	federal	rate.	Tax	effects	that	are	stranded	in	AOCI	for	other	reasons	may	not	be reclassified.	These	amendments	should	be	applied	either	in	the	period	of	adoption	as	a	cumulative	adjustment	to	the	opening	balance	of	retained	earnings	or retrospectively	to	each	period	in	which	the	effect	of	the	2017	Tax	Act	is	recognized.	This	guidance	is	effective	for	entities	with	fiscal	years	beginning	after	December	15, 2018.	Early	adoption	is	permitted.	The	company	is	in	the	process	of	evaluating	the	impact	of	this	guidance	on	the	consolidated	financial	statements.

# 3.	MARKETABLE	SECURITIES

Available-for-Sale	Securities.	Certain	marketable	securities	have	been	classified	as	available-for-sale.	The	amortized	cost	and	fair	value	of	these	securities	at December	31	were	as	follows:

| (in	millions) | Amortized<br>Cost | Fair<br>Value | Amortized<br>Cost | Fair<br>Value |
| :--- | :--- | :--- | :--- | :--- |
| Corporate\tdebt\tsecurities(1) | $20.0 | $20.8 | $20.0 | $20.2 |
| Asset-backed\tsecurity | 0.6 | 0.3 | 0.6 | 0.3 |
| Equity\tsecurities | — | 0.1 | 0.1 | 0.1 |
| Total | $20.6 | $21.2 | $20.7 | $20.6 |

(1)	The	corporate	debt	securities	are	maintained	for	a	non-qualified	retirement	and	benefit	plan	under	the	COMEX	Members'	Recognition	and	Retention	Plan	(MRRP)	(note	10).

Net	unrealized	gains	(losses)	on	marketable	securities	classified	as	available-for-sale	are	reported	as	a	component	of	other	comprehensive	income	(loss)	and	included	in the	accompanying	consolidated	statements	of	comprehensive	income	and	consolidated	statements	of	equity.

The	fair	value	and	gross	unrealized	losses	of	the	asset-backed	security	were	$0.3	million	and	$0.3	million,	respectively,	at	December	31,	2017.	The	asset-backed	security was	in	an	unrealized	loss	position	for	more	than	12	months	at	December	31,	2017	and	was	deemed	not	to	be	other-than-temporarily	impaired.	The	company	does	not intend	to	sell	and	is	not	required	to	sell	this	asset-backed	security	prior	to	maturity.

The	amortized	cost	and	fair	value	of	the	corporate	debt	securities	and	asset-backed	security	at	December	31,	2017,	by	contractual	maturity,	were	as	follows:

| (in	millions) | Amortized<br>Cost | Fair<br>Value |
| :--- | :--- | :--- |
| Maturity\tof\tone\tyear\tor\tless | $1.5 | $1.5 |
| Maturity\tbetween\tone\tand\tfive\tyears | 7.8 | 7.8 |
| Maturity\tbetween\tfive\tand\tten\tyears | 4.2 | 4.3 |
| Maturity\tgreater\tthan\tten\tyears | 7.1 | 7.5 |
| Total | $20.6 | $21.1 |

Trading	Securities.	The	company	maintains	additional	investments	in	a	diverse	portfolio	of	mutual	funds	related	to	its	non-qualified	deferred	compensation	plans	(note 10).	The	fair	value	of	these	securities	was	$68.9	million	and	$62.7	million	at	December	31,	2017	and	2016,	respectively.

# 4.	PERFORMANCE	BONDS	AND	GUARANTY	FUND	CONTRIBUTIONS

The	clearing	house	clears	and	guarantees	the	settlement	of	contracts	traded	in	its	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.	Clearing	firm	positions	in	the	United	States are	held	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	investments	to	satisfy	performance	bond	and	guaranty	fund	requirements.	All	non-cash	deposits	are	marked-to-market	and	haircut	on	a	daily basis.	Securities	deposited	by	the	clearing	firms	are	not	reflected	in	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.

In	addition,	the	rules	and	regulations	of	CBOT	require	that	collateral	be	provided	for	delivery	of	physical	commodities,	maintenance	of	capital	requirements	and deposits	on	pending	arbitration	matters.	To	satisfy	these	requirements,	clearing	firms	that	have	accounts	that	trade	certain	CBOT	products	have	deposited	cash,	U.S. Treasury	securities	or	letters	of	credit.

The	clearing	house	marks-to-market	open	positions	at	least	once	a	day	(twice	a	day	for	futures	and	options	contracts),	and	require	payment	from	clearing	firms	whose positions	have	lost	value	and	make	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	related	to positions	other	than	credit	default	and	interest	rate	swap	contracts	would	be	one	half	day	of	changes	in	fair	value	of	all	open	positions,	before	considering	the	clearing houses'	ability	to	access	defaulting	clearing	firms'	collateral	deposits.	For	cleared	credit	default	swap	and	interest	rate	swap	contracts,	the	maximum	exposure	related	to CME's	guarantee	would	be	one	full	day	of	changes	in	fair	value	of	all	open	positions,	before	considering	CME's	ability	to	access	defaulting	clearing	firms'	collateral. During	2017,	the	clearing	house	transferred	an	average	of	approximately	$2.4	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	the	guarantee	exposure	through	initial	and	maintenance performance	bond	requirements	and	mandatory	guaranty	fund	contributions.	The	company	believes	that	the	guarantee	liability	is	immaterial	and	therefore	has	not recorded	any	liability	at	December	31,	2017.

At	December	31,	2016,	performance	bond	and	guaranty	fund	contribution	assets	on	the	consolidated	balance	sheets	included	cash	as	well	as	U.S.	Treasury	and	U.S. government	agency	securities	with	maturity	dates	of	90	days	or	less.	The	U.S.	Treasury	and	U.S.	government	agency	securities	were	purchased	by	CME,	at	its	discretion, using	cash	collateral.	The	benefits,	including	interest	earned,	and	risks	of	ownership	accrue	to	CME.	Interest	earned	is	included	in	investment	income	on	the	consolidated statements	of	income.	There	were	no	U.S.	Treasury	and	U.S.	government	agency	securities	held	at	December	31,	2017.

The	amortized	cost	and	fair	value	of	these	securities	at	December	31,	2016	were	as	follows:

| (in	millions) | Amortized<br>Cost | Fair<br>Value |
| :--- | :--- | :--- |
| U.S.\tTreasury\tsecurities | $5,548.9 | $5,549.0 |
| U.S.\tgovernment\tagency\tsecurities | 1,228.3 | 1,228.3 |

CME	has	been	designated	as	a	systemically	important	financial	market	utility	by	the	Financial	Stability	Oversight	Council	and	maintains	a	cash	account	at	the	Federal Reserve	Bank	of	Chicago.	At	December	31,	2017	and	December	31,	2016,	CME	maintained	$34.2	billion	and	$6.2	billion,	respectively,	within	the	cash	account	at	the Federal	Reserve	Bank	of	Chicago.

Clearing	firms,	at	their	option,	may	instruct	CME	to	deposit	the	cash	held	by	CME	into	one	of	the	IEF	programs.	The	total	principal	in	the	IEF	programs	was	$1.1	billion at	December	31,	2017	and	$6.8	billion	at	December	31,	2016.

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	50%	each	to	CME	and	OCC.	The	company believes	that	the	guarantee	liability	is	immaterial	and	therefore	has	not	recorded	any	liability	at	December	31,	2017.

In	addition,	CME	has	perpetual	cross-margin	agreements	with	Fixed	Income	Clearing	Corporation	(FICC)	whereby	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	depending	on the	net	offsetting	positions	between	CME	and	FICC,	each	clearing	house	may	reduce	that	firm's	performance	bond	requirements.	In	the	event	of	a	firm	default,	the	total liquidation	net	gain	or	loss	on	the	firm's	offsetting	open	positions	and	the	proceeds	from	the	liquidation	of	the	performance	bond	collateral	held	by	each	clearing	house's supporting	offsetting	positions	would	be	divided	evenly	between	CME	and	FICC.	Additionally,	if,	after	liquidation	of	all	the	positions	and	collateral	of	the	defaulting firm	at	each	respective	clearing	organization,	and	taking	into	account	any	cross-margining	loss	sharing	payments,	any	of	the	participating	clearing	organizations	has	a remaining	liquidating	surplus,	and	any	other	participating	clearing	organization	has	a	remaining	liquidating	deficit,	any	additional	surplus	from	the	liquidation	would	be shared	with	the	other	clearing	house	to	the	extent	that	it	has	a	remaining	liquidating	deficit.	Any	remaining	surplus	funds	would	be	passed	to	the	bankruptcy	trustee.	The company	believes	that	the	guarantee	liability	is	immaterial	and	therefore	has	not	recorded	any	liability	at	December	31,	2017.

Each	CME	clearing	firm	for	futures	and	options	is	required	to	deposit	and	maintain	specified	guaranty	fund	contributions	in	the	form	of	cash	or	approved	securities.	In the	event	that	performance	bonds,	guaranty	fund	contributions	and	other	assets	required	to	support	clearing	membership	of	a	defaulting	CME	clearing	firm	are inadequate	to	fulfill	that	clearing	firm's	outstanding	financial	obligation,	the	base	guaranty	fund	for	contracts	other	than	credit	default	and	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.

CME	maintains	separate	guaranty	funds	to	support	the	clearing	firms	that	clear	interest	rate	swap	products	and	credit	default	swap	products.	The	funds	for	interest	rate and	credit	default	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	and	cleared	credit	default	swaps	is	required	to	deposit	and	maintain	specified	guaranty	fund	contributions	in	the	form	of	cash	or	approved 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.	In	the	event	that	performance	bonds,	guaranty	fund	contributions	and	other	assets	required	to	support	clearing	membership	of	a defaulting	clearing	firm	for	cleared	credit	default	swap	contracts	are	inadequate	to	fulfill	that	clearing	firm's	outstanding	financial	obligation,	the	credit	default	swaps contracts	guaranty	fund	is	available	to	cover	potential	losses	after	first	utilizing	corporate	contributions	designated	by	CME	to	be	used	in	the	event	of	default	of	a	cleared credit	default	swap	clearing	firm,	which	is	equal	to	the	greater	of	$50.0	million	and	5%	of	the	credit	default	swap	guaranty	fund,	up	to	a	maximum	of	$100.0	million.	In September	2017,	the	company	announced	its	plan	to	exit	the	credit	default	business	by	mid-2018.	The	disposal	of	the	credit	default	swap	business	does	not	represent	a strategic	shift	that	would	have	a	major	effect	on	the	company's	operations	and	financial	results	and	therefore	will	not	be	classified	as	discontinued	operations.

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,	2017,	guaranty	fund contributions	available	for	CME	clearing	firms	were	$7.8	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.

CME	is	required	under	the	Commodity	Exchange	Act	in	the	United	States	to	segregate	cash	and	securities	deposited	by	clearing	firms	on	behalf	of	its	customers.	In addition,	CME	requires	segregation	of	all	funds	deposited	by	its	clearing	firms	from	operating	funds.

Cash	and	non-cash	deposits	held	as	performance	bonds	and	guaranty	fund	contributions	at	fair	value	at	December	31	were	as	follows:

| (in	millions) | Cash | Non-Cash<br>Deposits<br>and<br>IEF	Funds | Cash | Non-Cash<br>Deposits<br>and<br>IEF	Funds |
| :--- | :--- | :--- | :--- | :--- |
| Performance\tbonds(1) | $41,809.5 | $86,730.4 | $35,726.5 | $111,764.2 |
| Guaranty\tfund\tcontributions | 2,281.2 | 6,102.4 | 1,702.4 | 5,246.3 |
| Cross-margin\tarrangements | 93.4 | 21.5 | 107.9 | 351.3 |
| Performance\tbond\tcollateral\tfor\tdelivery | 1.2 | — | 6.7 | — |
| Total | $44,185.3 | $92,854.3 | $37,543.5 | $117,361.8 |

(1)	Cash	performance	bonds	include	cash	collateral	reinvested	in	U.S.	Treasury	securities	and	U.S.	government	agency	securities	at	December	31,	2016.

Cross-margin	arrangements	include	collateral	for	the	cross-margin	accounts	with	OCC	and	FICC.	The	performance	bond	collateral	for	delivery	includes	deposits	to	meet CBOT	delivery	requirements.

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	$111.0	million	and	$131.7	million	at	December	31,	2017	and	2016,	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, these	letters	of	credit,	which	are	not	included	in	the	accompanying	consolidated	balance	sheets,	were	as	follows:

| (in	millions) | 2017 | 2016 |
| :--- | :--- | :--- |
| Performance\tbonds | $2,348.4 | $2,273.7 |
| Cross-margin\tarrangements | 59.5 | — |
| Performance\tbond\tcollateral\tfor\tdelivery | 3,438.5 | 1,759.8 |
| Total\tLetters\tof\tCredit | $5,846.4 | $4,033.5 |

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	is	presented	below:

| (in	millions) | 2017 | 2016 | Estimated	Useful	Life |
| :--- | :--- | :--- | :--- |
| Land\tand\tland\timprovements | $7.8 | $7.8 | 10\t-\t20\tyears\t(1) |
| Building\tand\tbuilding\timprovements | 173.8 | 179.4 | 3\t-\t39\tyears |
| Leasehold\timprovements | 180.5 | 180.3 | 3\t-\t24\tyears |
| Furniture,\tfixtures\tand\tequipment | 309.9 | 293.4 | 2\t-\t7\tyears |
| Software\tand\tsoftware\tdevelopment\tcosts | 404.3 | 361.5 | 2\t-\t4\tyears |
| Total\tproperty | 1,076.3 | 1,022.4 |  |
| Less\taccumulated\tdepreciation\tand\tamortization | (676.6) | (597.2) |  |
| Property,\tnet | $399.7 | $425.2 |  |

(1)	Estimated	useful	life	applies	only	to	land	improvements.

# 6.	INTANGIBLE	ASSETS	AND	GOODWILL

Intangible	assets	consisted	of	the	following	at	December	31:

|  |  | 2017 |  |  | 2016 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Assigned\tValue | Accumulated\nAmortization | Net\tBook\nValue | Assigned\tValue | Accumulated\nAmortization | Net\tBook\nValue |
| Amortizable\tIntangible\tAssets: |  |  |  |  |  |  |
| Clearing\tfirm,\tmarket\tdata\tand\tother\tcustomer\nrelationships | $2,838.8 | $(943.7) | $1,895.1 | $2,838.8 | $(849.2) | $1,989.6 |
| Technology-related\tintellectual\tproperty | 29.4 | (29.4) | — | 29.4 | (28.6) | 0.8 |
| Other | 2.4 | (1.2) | 1.2 | 2.4 | (1.0) | 1.4 |
| Total\tAmortizable\tIntangible\tAssets | $2,870.6 | $(974.3) | 1,896.3 | $2,870.6 | $(878.8) | 1,991.8 |
| Indefinite-Lived\tIntangible\tAssets: |  |  |  |  |  |  |
| Trade\tnames |  |  | 450.0 |  |  | 450.0 |
| Total\tIntangible\tAssets—Other,\tNet |  |  | $2,346.3 |  |  | $2,441.8 |
| Trading\tproducts\t(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,	2017	are	as	follows:

| Clearing	firm,	market	data	and	other	customer	relationships | 5	-	30	years |
| :--- | :--- |
| Technology-related\tintellectual\tproperty | 5\tyears |
| Other | 3\t-\t24.5\tyears |

Total	amortization	expense	for	intangible	assets	was	$95.5	million,	$96.1	million	and	$99.4	million	for	the	years	ended	December	31,	2017,	2016	and	2015,	respectively.

As	of	December	31,	2017,	the	future	estimated	amortization	expense	related	to	amortizable	intangible	assets	is	expected	to	be	as	follows:

| (in	millions) |  |
| :--- | :--- |
| 2018 | $94.7 |
| 2019 | 94.7 |
| 2020 | 94.7 |
| 2021 | 94.7 |
| 2022 | 94.7 |
| Thereafter | 1,422.8 |

There	were	no	changes	within	goodwill	during	the	years	ended	December	31,	2017	and	2016.

# 7.	LONG-TERM	INVESTMENTS

The	company	maintains	various	long-term	investments	as	described	below.	The	investments	are	recorded	in	other	assets	in	the	consolidated	balance	sheets.

BM&FBOVESPA	S.A.	In	2017,	the	company	sold	its	remaining	43.4	million	shares	of	BM&FBOVESPA	S.A.	(BM&FBOVESPA)	and	recognized	a	gain	of	$86.5 million,	net	of	transaction	costs,	within	investment	income	on	the	consolidated	statements	of	income	based	on	the	average	cost	method.	In	conjunction	with	the	final	sale of	shares,	the	company	reclassified	income	tax	expense	of	$87.8	million	from	accumulated	other	comprehensive	income	to	the	income	tax	provision.	The	company accounted	for	its	investment	in	BM&FBOVESPA	as	an	available-for-sale	security.	The	fair	value	and	cost	basis	of	the	investment	were	$218.7	million	and	$157.0 million,	respectively,	at	December	31,	2016.

Bolsa	Mexicana	de	Valores,	S.A.B	de	C.V.	In	2017,	the	company	sold	its	approximate	2%	interest	in	Bolsa	Mexicana	de	Valores,	S.A.B.	de	C.V.	(Bolsa	Mexicana),	a financial	exchange	operator	in	Mexico,	and	recognized	a	gain	of	$2.3	million,	net	of	transaction	costs,	within	investment	income	on	the	consolidated	statements	of income.	The	company	accounted	for	its	investment	in	Bolsa	Mexicana	stock	as	an	available-for-sale	security.	The	fair	value	and	cost	basis	of	the	investment	in	Bolsa Mexicana	at	December	31,	2016	was	$15.4	million	and	$17.3	million,	respectively.

Bursa	Malaysia	Derivatives	Berhad.	The	company	owns	a	25%	interest	in	Bursa	Malaysia	Derivatives	Berhad	(Bursa	Malaysia),	and	accounts	for	its	investment	in Bursa	Malaysia	using	the	equity	method	of	accounting.	The	company's	investment	in	Bursa	Malaysia	was	$27.1	million	at	December	31,	2017.	The	company	and	Bursa Malaysia	have	entered	into	several	agreements	including	agreements	to	provide	licensing,	order	routing	and	trade	matching	services.

DME	Holdings	Limited.	The	company	owns	an	approximate	50%	interest	in	DME	Holdings	Limited	(DME	Holdings),	and	accounts	for	its	investment	in	DME Holdings	using	the	equity	method	of	accounting.	The	company's	investment	in	DME	Holdings	was	$16.9	million	at	December	31,	2017.	The	company	and	DME Holdings	maintain	an	agreement	for	Dubai	Mercantile	Exchange	futures	contracts	to	be	exclusively	traded	on	the	CME	Globex	platform.

S&P/DJI	Indices	LLC.	The	company	owns	a	27%	interest	in	S&P/Dow	Jones	Indices	LLC	(S&P/DJI)	and	accounts	for	its	investment	in	S&P/DJI	using	the	equity method	of	accounting.	The	company's	investment	in	S&P/DJI	was	$955.0	million	at	December	31,	2017.	The	company	has	long-term	exclusive	licensing	agreements with	S&P/DJI	to	list	products	based	on	the	Standard	&	Poor's	Indices	and	Dow	Jones	Indices.

Long-term	debt	outstanding	consisted	of	the	following	at	December	31:

(1) In	August	2012,	the	company	entered	into	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	3.32%.

(2) In	December	2014,	the	company	entered	into	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	maturities,	at	par	value,	were	as	follows	as	of	December	31,	2017:

| (in	millions) | Par	Value |
| :--- | :--- |
| 2018 | $— |
| 2019 | — |
| 2020 | — |
| 2021 | — |
| 2022 | 750.0 |
| Thereafter | 1,500.0 |

# 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:

| (in	millions) | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Income\tbefore\tincome\ttaxes: |  |  |  |
| Domestic | $2,464.2 | $2,221.8 | $1,927.3 |
| Foreign | 62.1 | 65.8 | 29.5 |
| Total | $2,526.3 | $2,287.6 | $1,956.8 |
| Income\ttax\tprovision: |  |  |  |
| Current: |  |  |  |
| Federal | $783.7 | $684.4 | $554.5 |
| State | 85.7 | 118.6 | 81.0 |
| Foreign | 39.1 | 33.5 | 11.0 |
| Total | 908.5 | 836.5 | 646.5 |
| Deferred: |  |  |  |
| Federal | (2,576.3) | (95.4) | 75.6 |
| State | 130.8 | 10.0 | (12.0) |
| Foreign | (0.1) | 2.4 | (0.3) |
| Total | (2,445.6) | (83.0) | 63.3 |
| Total\tIncome\tTax\tProvision\t(Benefit) | $(1,537.1) | $753.5 | $709.8 |

On	December	22,	2017,	the	U.S.	government	enacted	comprehensive	tax	legislation	commonly	referred	to	as	the	Tax	Cuts	and	Jobs	Act	(the	2017	Tax	Act).	The	2017 Tax	Act	establishes	new	tax	laws	that	will	affect	2018	and	after,	including	a	reduction	in	the	U.S.	federal	corporate	income	tax	rate	from	35%	to	21%.	The	2017	Tax	Act makes	broad	and	complex	changes	to	the	U.S.	tax	code	including,	but	not	limited	to,	the	repeal	of	the	IRC	Section	199	domestic	production	activities	deduction	in	2018 and	accelerated	depreciation	that	allows	for	full	expensing	of	qualified	property	beginning	in	the	fourth	quarter	of	2017.

On	December	22,	2017,	the	SEC	staff	issued	a	staff	accounting	bulletin	that	provides	guidance	on	accounting	for	the	tax	effects	of	the	2017	Tax	Act.	The	guidance provides	a	measurement	period	that	should	not	extend	beyond	one	year	from	the	2017	Tax	Act	enactment	date	for	companies	to	complete	the	accounting	for	income taxes	related	to	changes	associated	with	the	2017	Tax	Act.	According	to	the	staff	accounting	bulletin,	entities	must	recognize	the	impact	in	the	financial	statements	for the	activities	that	they	have	completed	the	work	to	understand	the	impact	as	a	result	of	the	tax	reform	law.	For	those	activities	which	have	not	completed,	the	company would	include	provisional	amounts	if	a	reasonable	estimate	is	available.

As	a	result	of	the	reduction	of	the	federal	corporate	income	tax	rate,	the	company	has	revalued	its	net	deferred	tax	liability,	excluding	after	tax	credits,	as	of	December 31,	2017.	Based	on	this	revaluation	and	other	impacts	of	the	2017	Tax	Act,	the	company	has	recognized	a	net	tax	benefit	of	$2.6	billion,	which	was	recorded	as	a reduction	to	income	tax	expense	for	the	year	ended	December	31,	2017.	The	company	has	recognized	provisional	adjustments	but	management	has	not	completed	its accounting	for	income	tax	effects	for	certain	elements	of	the	2017	Tax	Act,	principally	due	to	the	accelerated	depreciation	that	will	allow	for	full	expensing	of	qualified property.

Reconciliation	of	the	statutory	U.S.	federal	income	tax	rate	to	the	effective	tax	rate	is	as	follows:

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Statutory\tU.S.\tfederal\ttax\trate | 35.0\t% | 35.0\t% | 35.0\t% |
| State\ttaxes,\tnet\tof\tfederal\tbenefit | 2.1 | 3.7 | 3.0 |
| Domestic\tproduction\tactivities\tdeduction | (1.0) | (1.3) | (1.3) |
| Increase\t(decrease)\tin\tdomestic\tvaluation\tallowance | (0.1) | (4.7) | 0.1 |
| Impact\tof\trevised\tstate\tand\tlocal\tapportionment\testimates | 3.1 | 0.5 | (0.7) |
| Reclassification\tof\taccumulated\tother\tcomprehensive\tincome | 3.5 | — | — |
| Impact\tof\t2017\tTax\tAct | (101.6) | — | — |
| Other,\tnet | (1.8) | (0.3) | 0.2 |
| Effective\tTax\tExpense\t(Benefit)\tRate | (60.8)% | 32.9\t% | 36.3\t% |

In	2017,	the	effective	rate	was	lower	than	the	statutory	tax	rate	due	to	the	remeasurement	of	the	deferred	tax	liabilities	as	a	result	of	the	2017	Tax	Act.	This	decrease	was partially	offset	by	an	increase	in	the	state	apportionment	impact	of	the	Illinois	income	tax	rate	change	on	deferred	tax	liabilities	as	well	as	the	reclassification	of	income tax	expense	from	accumulated	other	comprehensive	income	related	to	the	disposal	of	BM&FBOVESPA	shares.

In	2016,	the	effective	rate	was	lower	than	the	statutory	tax	rate	largely	due	to	the	release	of	the	valuation	allowances	related	to	the	sale	of	BM&FBOVESPA	shares.	The decrease	was	partially	offset	by	an	increase	in	state	tax	expense	and	the	state	apportionment	impact	on	deferred	tax	liabilities.

In	2015,	the	effective	rate	was	higher	than	the	statutory	tax	rate	primarily	due	to	the	impact	of	state	and	local	income	taxes.	The	effective	rate	was	primarily	reduced	by the	Section	199	Domestic	Productions	Activities	Deduction	(Section	199	deduction)	and	the	impact	of	state	and	local	apportionment	factors	in	deferred	tax	expense.	The Section	199	deduction	is	related	to	certain	activities	performed	by	the	company's	electronic	platform.

At	December	31,	deferred	income	tax	assets	(liabilities)	consisted	of	the	following:

| (in	millions) | 2017 | 2016 |
| :--- | :--- | :--- |
| Deferred\tIncome\tTax\tAssets: |  |  |
| Net\toperating\tlosses | $13.0 | $18.8 |
| Property | 5.5 | 31.4 |
| Accrued\texpenses,\tcompensation\tand\tother | 37.2 | 119.0 |
| Subtotal | 55.7 | 169.2 |
| Valuation\tallowance | (11.2) | (14.9) |
| Total\tdeferred\tincome\ttax\tassets | 44.5 | 154.3 |
| Deferred\tIncome\tTax\tLiabilities: |  |  |
| Purchased\tintangible\tassets | (4,902.2) | (7,445.3) |
| Total\tdeferred\tincome\ttax\tliabilities | (4,902.2) | (7,445.3) |
| Net\tDeferred\tIncome\tTax\tLiabilities | $(4,857.7) | $(7,291.0) |

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,	2017	and	2016,	the	company	had	domestic	and	foreign	income	tax	loss	carry	forwards	of	$73.3	million	and	$96.8	million,	respectively.	These	amounts primarily	related	to	losses	from	the	acquisition	of	Swapstream	Limited	and	its	affiliates,	the	acquisition	of	Pivot,	Inc.,	losses	incurred	in	the	operation	of	various	foreign entities	and	capital	losses	from	the	sales	of	securities.	At	December	31,	2016,	the	company	also	had	a	net	built-in,	unrealized	capital	gain	of	$19.3	million.	At	December 31,	2017	and	2016,	the	company	determined	that	it	was	not	more-likely-than-not	that	deferred	income	tax	assets	related	to	the	acquisition	of	Swapstream	Limited	and	its affiliates	and	other	deferred	income	tax	assets	created	from	the	start-up	of	various	foreign	operations	will	be	fully	realized.	As	a	result,	valuation	allowances	of	$11.2 million	and	$14.9	million	were	recorded	at	December	31,	2017	and	2016,	respectively.

The	following	is	a	summary	of	the	company's	unrecognized	tax	benefits:

| (in	millions) | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Gross\tunrecognized\ttax\tbenefits | $308.8 | $252.1 | $206.9 |
| Unrecognized\ttax\tbenefits,\tnet\tof\ttax\timpacts\tin\tother\tjurisdictions | 276.0 | 216.1 | 179.6 |
| Unrecognized\tinterest\tand\tpenalties\trelated\tto\tuncertain\ttax\tpositions | 34.0 | 32.7 | 19.5 |
| Interest\tand\tpenalties\trecognized\tin\tthe\tconsolidated\tstatements\tof\tincome | 1.3 | 13.2 | 8.6 |

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	unrecognized	tax	benefits	is	as	follows:

| (in	millions) | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tJanuary\t1 | $252.1 | $206.9 | $187.6 |
| Additions\tbased\ton\ttax\tpositions\trelated\tto\tthe\tcurrent\tyear | 41.8 | 29.6 | 20.4 |
| Additions\tfor\ttax\tpositions\tof\tprior\tyears | 47.7 | 18.5 | 2.7 |
| Reductions\tfor\ttax\tpositions\tof\tprior\tyears | (8.7) | (2.8) | (3.8) |
| Reductions\tresulting\tfrom\tthe\tlapse\tof\tstatutes\tof\tlimitations | (2.1) | (0.1) | — |
| Settlements\twith\ttaxing\tauthorities | (22.0) | — | — |
| Balance\tat\tDecember\t31 | $308.8 | $252.1 | $206.9 |

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,	2017, substantially	all	federal	and	state	income	tax	matters	had	been	concluded	through	2007	and	2006,	respectively.

# 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) | 2017 | 2016 |
| :--- | :--- | :--- |
| Balance\tat\tJanuary\t1 | $239.9 | $217.3 |
| Service\tcost | 18.7 | 16.7 |
| Interest\tcost | 10.8 | 10.3 |
| Actuarial\t(gain)\tloss | 15.1 | 5.3 |
| Benefits\tpaid | (10.6) | (9.7) |
| Balance\tat\tDecember\t31 | $273.9 | $239.9 |

The	aggregate	accumulated	benefit	obligation	was	$245.4	million	and	$211.4	million	at	December	31,	2017	and	2016,	respectively.

The	following	is	a	summary	of	the	change	in	fair	value	of	plan	assets:

| (in	millions) | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tJanuary\t1 | $238.8 | $217.5 | $225.1 |
| Actual\treturn\ton\tplan\tassets | 29.8 | 16.0 | (7.2) |
| Employer\tcontributions | 90.0 | 15.0 | 22.6 |
| Benefits\tpaid | (10.6) | (9.7) | (23.0) |
| Balance\tat\tDecember\t31 | $348.0 | $238.8 | $217.5 |

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	is	indicated below.

| (in	millions) | 2017 | 2016 |
| :--- | :--- | :--- |
| Level\t2: |  |  |
| Money\tmarket\tfunds | $95.8 | $31.5 |
| Mutual\tfunds: |  |  |
| Fixed\tincome | 109.7 | 68.6 |
| U.S.\tequity | 83.6 | 63.9 |
| Foreign\tequity | 58.9 | 64.5 |
| Commodity | — | 10.3 |
| Total | $348.0 | $238.8 |

At	December	31,	2017,	the	fair	value	of	pension	plan	assets	exceeded	the	projected	benefit	obligation	by	$74.1	million	and	the	excess	was	recorded	as	a	non-current pension	asset	in	other	assets.	At	December	31,	2016,	the	projected	benefit	obligation	exceeded	the	fair	value	of	pension	plan	asset	by	$1.1	million	and	the	excess	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	satisfying	any	minimum	required contribution	and	obtaining	the	maximum	tax	deduction.	In	2017,	the	company	contributed	$90.0	million	to	the	plan,	which	resulted	in	plan	assets	exceeding	the projected	benefit	obligation	by	$74.1	million.	Year-end	2017	assumptions	have	been	used	to	project	the	assets	and	liabilities	from	December	31,	2017	to	December	31, 2018.	The	result	of	this	projection	is	that	estimated	liabilities	would	not	exceed	the	fair	value	of	the	plan	assets	at	December	31,	2018.	Accordingly,	the	company anticipates	based	on	this	projection	that	no	additional	contribution	in	2018	will	be	necessary	for	it	to	meet	its	funding	goal.	However,	the	amount	of	the	actual contribution	is	contingent	on	various	factors,	including	the	actual	rate	of	return	on	the	plan	assets	during	2018	and	the	December	31,	2018	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	are indicated	below:

| (in	millions) | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Components\tof\tNet\tPension\tExpense: |  |  |  |
| Service\tcost | $18.7 | $16.7 | $18.4 |
| Interest\tcost | 10.8 | 10.3 | 9.8 |
| Expected\treturn\ton\tplan\tassets | (15.1) | (15.7) | (16.3) |
| Recognized\tnet\tactuarial\tloss | 2.9 | 3.2 | 2.7 |
| Net\tPension\tExpense | $17.3 | $14.5 | $14.6 |
| Assumptions\tUsed\tto\tDetermine\tEnd-of-Year\tBenefit\tObligation: |  |  |  |
| Discount\trate | 3.70% | 4.30% | 4.60% |
| Rate\tof\tcompensation\tincrease | 5.00 | 5.00 | 5.00 |
| Cash\tbalance\tinterest\tcrediting\trate | 4.00 | 4.00 | 4.00 |
| Assumptions\tUsed\tto\tDetermine\tNet\tPension\tExpense: |  |  |  |
| Discount\trate | 4.30% | 4.60% | 4.20% |
| Rate\tof\tcompensation\tincrease | 5.00 | 5.00 | 5.00 |
| Expected\treturn\ton\tplan\tassets | 6.50 | 7.50 | 7.50 |
| Interest\tcrediting\trate | 4.00 | 4.00 | 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	was	as	follows:

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.

The	pre-tax	balance	and	activity	of	actuarial	losses	for	the	pension	plan,	which	are	included	in	other	comprehensive	income	(loss),	for	2017	are	as	follows:

| (in	millions) | Actuarial<br>Loss |
| :--- | :--- |
| Balance\tat\tJanuary\t1 | $62.8 |
| Unrecognized\tnet\tloss | 0.3 |
| Recognized\tas\ta\tcomponent\tof\tnet\tpension\texpense | (2.9) |
| Balance\tat\tDecember\t31 | $60.2 |

The	company	expects	to	amortize	$2.9	million	of	actuarial	loss	and	prior	service	costs	from	accumulated	other	comprehensive	income	(loss)	into	net	periodic	benefit costs	in	2018.

At	December	31,	2017,	anticipated	benefit	payments	from	the	plan	in	future	years	are	as	follows:

| (in	millions) |  |
| :--- | :--- |
| 2018 | $16.6 |
| 2019 | 18.3 |
| 2020 | 18.6 |
| 2021 | 20.0 |
| 2022 | 20.3 |
| 2023-2027 | 112.4 |

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	amounted	to	$11.8	million,	$11.3	million	and	$11.7	million	in	2017,	2016	and	2015,	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	exchange	and	totaled	$68.9	million	and	$62.7	million	at	December	31,	2017	and	2016	respectively.	Although	the	value	of the	plans	is	recorded	as	an	asset	in	marketable	securities	in	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.

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	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	2017.	Total	contributions	to	the	plan	were	$3.0	million	in	2016	and	$2.0	million	in	2015.	At	December	31,	2017	and	2016,	the	obligation for	the	MRRP	totaled	$18.6	million	and	$19.4	million,	respectively.	Assets	with	a	fair	value	of	$21.6	million	and	$22.0	million	have	been	allocated	to	this	plan	at December	31,	2017	and	2016,	respectively,	and	are	included	in	marketable	securities	and	cash	and	cash	equivalents	in	the	consolidated	balance	sheets.	The	balances	in this	plan	are	subject	to	the	claims	of	general	creditors	of	COMEX.

# 11.	COMMITMENTS

Operating	Leases.	CME	Group	has	entered	into	various	non-cancellable	operating	lease	agreements,	with	the	most	significant	being	as	follows:

•In	March	2016,	the	company	sold	its	datacenter	and	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	operating	lease,	which	has	an	initial	lease	term	ending	in	March	2031,	contains	two	consecutive	renewal options	for	five	years.

•In	November	2013,	the	company	sold	a	building	in	New	York	and	leased	back	a	portion	of	the	property.	The	operating	lease,	which	has	an	initial	lease	term ending	on	December	31,	2028,	contains	two	consecutive	renewal	options	for	five	years.

•In	April	2012,	the	company	sold	two	buildings	in	Chicago	at	141	W.	Jackson	and	leased	back	a	portion	of	the	property.		The	operating	lease,	which	has	an initial	lease	term	ending	on	April	30,	2027,	contains	four	consecutive	renewal	options	for	five	years.

•In	January	2011,	the	company	entered	into	an	operating	lease	for	office	space	in	London.	The	initial	lease	term	terminates	on	March	24,	2026,	with	an	option	to terminate	without	penalty	in	January	2021.

•The	company	maintains	an	operating	lease	for	its	headquarters	at	20	South	Wacker	Drive	in	Chicago.	In	January	2018,	the	company	signed	a	lease	extension. The	new	lease	expires	in	2032	and	contains	two	consecutive	renewal	options	for	five	years	each.

•In	August	2006,	the	company	entered	into	an	operating	lease	for	additional	office	space	in	Chicago.	The	initial	lease	term	ends	on	November	30,	2023.	The lease	contains	two	5-year	renewal	options	beginning	in	2023.

At	December	31,	2017,	future	minimum	payments	under	non-cancellable	operating	leases	were	payable	as	follows	(in	millions):

| Year |  |
| :--- | :--- |
| 2018 | $64.3 |
| 2019 | 63.8 |
| 2020 | 61.6 |
| 2021 | 56.8 |
| 2022 | 56.5 |
| Thereafter | 435.2 |
| Total | $738.2 |

Other	Commitments.	Commitments	include	material	contractual	purchase	obligations	that	are	non-cancellable.	Purchase	obligations	relate	to	advertising,	licensing, hardware,	software	and	maintenance	as	well	as	telecommunication	services.	At	December	31,	2017,	future	minimum	payments	due	under	purchase	obligations	were payable	as	follows	(in	millions):

| Year |  |
| :--- | :--- |
| 2018 | $23.8 |
| 2019 | 12.7 |
| 2020 | 11.0 |
| 2021 | 8.8 |
| 2022 | 6.5 |
| Thereafter | 5.4 |
| Total | $68.2 |

# 12.	CONTINGENCIES

Legal	and	Regulatory	Matters.	In	2013,	the	CFTC	filed	suit	against	NYMEX	and	two	former	employees	alleging	disclosure	of	confidential	customer	information	in violation	of	the	Commodity	Exchange	Act.	NYMEX's	motion	to	dismiss	was	denied	in	2014.	Based	on	its	investigation	to	date	and	advice	from	legal	counsel,	the company	believes	that	it	has	strong	factual	and	legal	defenses	to	the	claim.

In	2003,	the	U.S.	Futures	Exchange,	L.L.C.	(Eurex	U.S.)	and	U.S.	Exchange	Holdings,	Inc.	filed	suit	in	federal	court	alleging	that	CBOT	and	CME	violated	the	antitrust laws	and	tortuously	interfered	with	the	business	relationship	and	contract	between	Eurex	U.S.	and	The	Clearing	Corporation.	While	the	complaint	requests	treble damages,	given	the	uncertainty	of	factors	which	may	potentially	impact	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	in	the	matter.	A	trial	date	is	set	for	June	4,	2018.	Based	on	its investigation	to	date	and	advice	from	legal	counsel,	the	company	believes	that	it	has	strong	factual	and	legal	defenses	to	the	claim.

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	its	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.

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	legal	and	regulatory	matters	that	were	probable	and	estimable	as	of	December	31,	2017	and	2016.

Intellectual	Property	Indemnifications.	Certain	agreements	with	customers	and	other	third	parties	related	to	accessing	the	CME	platforms,	utilizing	market	data	services and	licensing	CME	SPAN	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)	have	a	mutual	offset	agreement	with	a	current	term	through	October	2018.	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	unless	either	party	provides	advance	notice	of	its	intent	to	terminate.	CME	can	maintain	collateral	in	the	form	of	U.S.	Treasury	securities	or	irrevocable,	standby letters	of	credit.	At	December	31,	2017,	CME	was	contingently	liable	to	SGX	on	irrevocable	letters	of	credit	totaling	$285.0	million.	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.	The	company	believes	that	its	guarantee	liability	is	immaterial	and therefore	has	not	recorded	any	liability	at	December	31,	2017.

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	members	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	immaterial	and	therefore	has	not recorded	any	liability	at	December	31,	2017.

# 14.	CAPITAL	STOCK

Shares	Outstanding.	The	following	table	presents	information	regarding	capital	stock:

| (in	thousands) | 2017 | 2016 |
| :--- | :--- | :--- |
| Class\tA\tcommon\tstock\tauthorized | 1,000,000 | 1,000,000 |
| Class\tA\tcommon\tstock\tissued\tand\toutstanding | 339,235 | 338,240 |
| Class\tB-1\tcommon\tstock\tauthorized,\tissued\tand\toutstanding | 0.6 | 0.6 |
| Class\tB-2\tcommon\tstock\tauthorized,\tissued\tand\toutstanding | 0.8 | 0.8 |
| Class\tB-3\tcommon\tstock\tauthorized,\tissued\tand\toutstanding | 1.3 | 1.3 |
| Class\tB-4\tcommon\tstock\tauthorized,\tissued\tand\toutstanding | 0.4 | 0.4 |

CME	Group	has	no	shares	of	preferred	stock	issued	and	outstanding.

Associated	Trading	Rights.	Members	of	CME,	CBOT,	NYMEX	and	COMEX	own	or	lease	trading	rights	which	entitle	them	to	access	open	outcry	trading,	discounts on	trading	fees	and	the	right	to	vote	on	certain	exchange	matters	as	provided	for	by	the	rules	of	the	particular	exchange	and	CME	Group's	or	the	subsidiaries' 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	representation	on	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.

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	20	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	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.	Awards	totaling	24.0	million	shares	have	been	granted	and	are	outstanding	or	have been	exercised	under	this	plan	at	December	31,	2017	(note	15).

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.	A total	of	625,000	Class	A	shares	have	been	reserved	under	this	plan,	and	approximately	366,000	shares	have	been	awarded	through	December	31,	2017.

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.	A	total	of	500,000	Class	A	shares	have	been	reserved	under	this	plan,	of	which	approximately	260,000 shares	have	been	purchased	through	December	31,	2017	(note	15).

# 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	24.0	million	shares	have	been	granted	and	are	outstanding	or	have	been	exercised	under	the	plan	as	of	December	31,	2017. 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	stock-based	payments	and	total	income	tax	benefit	recognized	in	the	consolidated	statements	of	income	for	stock-based	awards	were	as follows:

| (in	millions) | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Compensation\texpense | $58.3 | $66.4 | $61.0 |
| Income\ttax\tbenefit\trecognized | 42.6 | 38.6 | 32.4 |

At	December	31,	2017,	there	was	$106.6	million	of	total	unrecognized	compensation	expense	related	to	employee	stock-based	compensation	arrangements	that	had	not yet	vested.	This	expense	is	expected	to	be	recognized	over	a	weighted	average	period	of	2.2	years.

Stock	options	have	not	been	granted	since	2012.	The	following	table	summarizes	stock	option	activity	for	2017.	Aggregate	intrinsic	value	is	in	millions.

|  | Number	of	Shares | Weighted<br>Average<br>Exercise<br>Price | Weighted	Average<br>Remaining<br>Contractual	Life	(in<br>years) | Aggregate	Intrinsic<br>Value |
| :--- | :--- | :--- | :--- | :--- |
| Outstanding\tat\tDecember\t31,\t2016 | 1,021,537 | $69 | 2.9 | $47.4 |
| Exercised | (443,911) | 83 |  |  |
| Cancelled | (4,650) | 74 |  |  |
| Outstanding\tat\tDecember\t31,\t2017 | 572,976 | 58 | 2.7 | 50.3 |
| Exercisable\tat\tDecember\t31,\t2017 | 572,976 | 58 | 2.7 | 50.3 |

In	2017,	the	company	granted	440,076	shares	of	restricted	Class	A	common	stock	and	7,568	shares	of	restricted	stock	units.	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	$58.7	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	2017,	the	company	also	granted	203,298	performance	shares.	The	fair	value	related	to	these	grants	was	$25.3	million,	which	is	recognized	as	compensation expense	on	an	accelerated	and	straight-lined	basis	over	the	vesting	period.	The	vesting	of	these	shares	is	contingent	on	meeting	stated	performance	or	market	conditions.

The	following	table	summarizes	restricted	stock,	restricted	stock	units,	and	performance	shares	activity	for	2017:

|  | Number	of	Shares | Weighted<br>Average<br>Grant	Date<br>Fair	Value |
| :--- | :--- | :--- |
| Outstanding\tat\tDecember\t31,\t2016 | 1,820,578 | $98 |
| Granted | 650,942 | 129 |
| Vested | (510,590) | 87 |
| Cancelled | (401,699) | 95 |
| Outstanding\tat\tDecember\t31,\t2017 | 1,559,231 | 116 |

The	total	fair	value	of	restricted	stock,	restricted	stock	units,	and	performance	shares	that	vested	during	2017,	2016	and	2015	was	$66.0	million,	$59.8	million	and	$43.3 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	2017,	2016	and 2015,	a	total	of	19,936,	19,858	and	19,756	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	$0.3	million	for	the	purchase	discount	was	recognized	in	2017,	and	$0.2	million	was	recognized	in	both	2016	and	2015.

Non-executive	directors	receive	an	annual	award	of	Class	A	common	stock	with	a	value	equal	to	$100,000.	Non-executive	directors	may	also	elect	to	receive	some	or all	of	the	cash	portion	of	their	annual	stipend,	up	to	$60,000,	in	shares	of	stock	based	on	the	closing	price	at	the	date	of	distribution.	As	a	result,	19,736	shares,	26,439 shares	and	25,853	shares	of	Class	A	common	stock	were	issued	to	non-executive	directors	during	2017,	2016	and	2015,	respectively.	These	shares	are	not	subject	to	any vesting	restrictions.	Expense	of	$2.5	million,	$2.4	million	and	$2.5	million	related	to	these	stock-based	payments	was	recognized	for	the	years	ended	December	31, 2017,	2016	and	2015,	respectively.

# 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<br>Plans | Derivative	Investments | Foreign	Currency<br>Translation | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2016 | $(19.5) | $(37.8) | $58.9 | $(15.7) | $(14.1) |
| Other\tcomprehensive\tincome\tbefore\treclassifications\tand\nincome\ttax\tbenefit\t(expense) | 30.2 | 0.3 | — | 10.4 | 40.9 |
| Amounts\treclassified\tfrom\taccumulated\tother\ncomprehensive\tincome | (89.5) | 2.9 | (1.2) | — | (87.8) |
| Income\ttax\tbenefit\t(expense) | 79.4 | (1.5) | 0.3 | (2.9) | 75.3 |
| Net\tcurrent\tperiod\tother\tcomprehensive\tincome | 20.1 | 1.7 | (0.9) | 7.5 | 28.4 |
| Balance\tat\tDecember\t31,\t2017 | $0.6 | $(36.1) | $58.0 | $(8.2) | $14.3 |

| (in	millions) | Investment	Securities | Defined	Benefit<br>Plans | Derivative	Investments | Foreign	Currency<br>Translation | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2015 | $(95.0) | $(36.6) | $59.6 | $(8.8) | $(80.8) |
| Other\tcomprehensive\tincome\tbefore\treclassifications\tand\nincome\ttax\tbenefit\t(expense) | 170.0 | (5.1) | — | (8.2) | 156.7 |
| Amounts\treclassified\tfrom\taccumulated\tother\ncomprehensive\tincome | (48.7) | 3.2 | (1.2) | — | (46.7) |
| Income\ttax\tbenefit\t(expense) | (45.8) | 0.7 | 0.5 | 1.3 | (43.3) |
| Net\tcurrent\tperiod\tother\tcomprehensive\tincome | 75.5 | (1.2) | (0.7) | (6.9) | 66.7 |
| Balance\tat\tDecember\t31,\t2016 | $(19.5) | $(37.8) | $58.9 | $(15.7) | $(14.1) |

| (in	millions) | Investment	Securities | Defined	Benefit<br>Plans | Derivative<br>Investments | Foreign	Currency<br>Translation | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2014 | $(22.9) | $(31.3) | $62.6 | $(2.2) | $6.2 |
| Other\tcomprehensive\tincome\tbefore\treclassifications\tand\nincome\ttax\tbenefit\t(expense) | (78.0) | (11.2) | (4.7) | (10.6) | (104.5) |
| Amounts\treclassified\tfrom\taccumulated\tother\ncomprehensive\tincome | 8.5 | 2.7 | 0.6 | — | 11.8 |
| Income\ttax\tbenefit\t(expense) | (2.6) | 3.2 | 1.1 | 4.0 | 5.7 |
| Net\tcurrent\tperiod\tother\tcomprehensive\tincome | (72.1) | (5.3) | (3.0) | (6.6) | (87.0) |
| Balance\tat\tDecember\t31,\t2015 | $(95.0) | $(36.6) | $59.6 | $(8.8) | $(80.8) |

# 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,	other	than	level	1	inputs,	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.

Level	1	assets	generally	include	U.S.	Treasury	securities,	U.S.	government	agency	securities,	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	and	equity	investments.	If	quoted	prices	are	not	available	to	determine	fair	value,	the	company	uses	other	inputs	that	are	directly	observable.

Assets	included	in	level	2	generally	consist	of	asset-backed	securities.	Asset-backed	securities	were	measured	at	fair	value	based	on	matrix	pricing	using	prices	of	similar securities	with	similar	inputs	such	as	maturity	dates,	interest	rates	and	credit	ratings.

Financial	assets	and	liabilities	recorded	at	fair	value	in	the	consolidated	balance	sheets	as	of	December	31,	2017	and	2016	were	classified	in	their	entirety	based	on	the lowest	level	of	input	that	was	significant	to	each	asset	or	liability's	fair	value	measurement.

# Financial	Instruments	Measured	at	Fair	Value	on	a	Recurring	Basis:

| (in	millions) | Level	1 | Level	2 | Level	3 | Total |
| :--- | :--- | :--- | :--- | :--- |
| Assets\tat\tFair\tValue: |  |  |  |  |
| Marketable\tsecurities: |  |  |  |  |
| Corporate\tdebt\tsecurities | $20.8 | $— | $— | $20.8 |
| Mutual\tfunds | 68.9 | — | — | 68.9 |
| Equity\tsecurities | 0.1 | — | — | 0.1 |
| Asset-backed\tsecurities | — | 0.3 | — | 0.3 |
| Total\tMarketable\tSecurities | 89.8 | 0.3 | — | 90.1 |
| Total\tAssets\tat\tFair\tValue | $89.8 | $0.3 | $— | $90.1 |

| (in	millions) | Level	1 | Level	2 | Level	3 | Total |
| :--- | :--- | :--- | :--- | :--- |
| Assets\tat\tFair\tValue: |  |  |  |  |
| Marketable\tsecurities: |  |  |  |  |
| Corporate\tdebt\tsecurities | $20.2 | $— | $— | $20.2 |
| Mutual\tfunds | 62.7 | — | — | 62.7 |
| Equity\tsecurities | 0.1 | — | — | 0.1 |
| Asset-backed\tsecurities | — | 0.3 | — | 0.3 |
| Total\tMarketable\tSecurities | 83.0 | 0.3 | — | 83.3 |
| Performance\tbonds\tand\tguaranty\tfund\tcontributions\t(1): |  |  |  |  |
| \t\t\t\t\t\t\tU.S.\tTreasury\tsecurities | 5,549.0 | — | — | 5,549.0 |
| U.S.\tgovernment\tagencies\tsecurities | 1,228.3 | — | — | 1,228.3 |
| Equity\tinvestments | 234.1 | — | — | 234.1 |
| Total\tAssets\tat\tFair\tValue | $7,094.4 | $0.3 | $— | $7,094.7 |

(1)	Performance	bonds	and	guaranty	fund	contributions	on	the	consolidated	balance	sheet	at	December	31,	2016	include	cash	collateral	that	has	been	invested	in	U.S.	Treasury securities	and	U.S.	government	agencies	securities.

There	were	no	transfers	of	assets	between	level	1,	level	2	and	level	3	during	2017	and	2016.	There	were	no	level	3	assets	or	liabilities	valued	at	fair	value	on	a	recurring basis	during	2017	and	2016.

The	following	is	a	reconciliation	of	level	3	liabilities	valued	at	fair	value	on	a	recurring	basis	during	2017	and	2016.

In	the	first	quarter	of	2016,	the	company	sold	a	datacenter	and	leased	back	a	portion	of	the	property.	Under	generally	accepted	accounting	principles,	the	transaction	has been	recognized	under	the	financing	method	instead	of	recognized	as	a	sale	leaseback	arrangement.	As	a	result,	the	property	and	equipment	legally	sold	will	continue	to be	recognized	on	the	consolidated	balance	sheets	and	was	written	down	to	a	fair	value	of	$130.0	million	at	March	31,	2016.	During	2016,	the	company	also	recorded impairment	charges	totaling	$5.5	million	on	one	of	its	strategic	investments.	The	fair	value	of	the	investment	was	estimated	to	be	zero	at	September	30,	2016.	Both assessments	were	based	on	qualitative	indications	of	impairment	and	a	quantitative	analysis	of	undiscounted	cash	flows.	The	fair	values	of	the	datacenter	and	strategic investment	are	considered	level	3	and	nonrecurring.	There	were	no	other	level	3	assets	or	liabilities	valued	at	fair	value	on	a	nonrecurring	basis	during	2017	and	2016.

The	following	presents	the	estimated	fair	values	of	long-term	debt	notes,	which	are	carried	at	amortized	cost	on	the	consolidated	balance	sheets.	The	fair	values,	which are	classified	as	level	2	under	the	fair	value	hierarchy,	were	estimated	using	quoted	market	prices.	At	December	31,	2017,	the	fair	values	were	as	follows:

# 18.	EARNINGS	PER	SHARE

Basic	earnings	per	share	is	computed	by	dividing	net	income	by	the	weighted	average	number	of	shares	of	all	classes	of	common	stock	outstanding	for	each	reporting period.	Diluted	earnings	per	share	reflects	the	increase	in	shares	using	the	treasury	stock	method	to	reflect	the	impact	of	an	equivalent	number	of	shares	of	common	stock if	stock	options	were	exercised	and	restricted	stock	awards	were	converted	into	common	stock.	Anti-dilutive	stock	options	and	stock	awards	were	as	follows	for	the years	presented:

# 19.	QUARTERLY	INFORMATION	(UNAUDITED)

| (in	millions,	except	per	share	data) | First<br>Quarter | Second<br>Quarter | Third<br>Quarter | Fourth<br>Quarter | Year	to	Date |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tEnded\tDecember\t31,\t2017 |  |  |  |  |  |
| Total\trevenues | $929.3 | $924.6 | $890.8 | $900.0 | $3,644.7 |
| Operating\tincome | 601.2 | 605.6 | 567.9 | 537.3 | 2,312.0 |
| Non-operating\tincome\t(expense) | 105.8 | 31.7 | 39.4 | 37.4 | 214.3 |
| Income\tbefore\tincome\ttaxes | 707.0 | 637.3 | 607.3 | 574.7 | 2,526.3 |
| Net\tincome | 399.8 | 415.8 | 308.6 | 2,939.2 | 4,063.4 |
| Earnings\tper\tcommon\tshare: |  |  |  |  |  |
| Basic | $1.18 | $1.23 | $0.91 | $8.67 | $12.00 |
| Diluted | 1.18 | 1.22 | 0.91 | 8.63 | 11.94 |
| Year\tEnded\tDecember\t31,\t2016 |  |  |  |  |  |
| Total\trevenues | $934.2 | $906.4 | $841.7 | $912.9 | $3,595.2 |
| Operating\tincome | 573.9 | 563.3 | 525.3 | 540.2 | 2,202.7 |
| Non-operating\tincome\t(expense) | 4.6 | 2.8 | 23.5 | 54.0 | 84.9 |
| Income\tbefore\tincome\ttaxes | 578.5 | 566.1 | 548.8 | 594.2 | 2,287.6 |
| Net\tincome | 367.8 | 320.1 | 472.8 | 373.4 | 1,534.1 |
| Earnings\tper\tcommon\tshare: |  |  |  |  |  |
| Basic | $1.09 | $0.95 | $1.40 | $1.10 | $4.55 |
| Diluted | 1.09 | 0.95 | 1.39 | 1.10 | 4.53 |

# 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.

# ITEM	9. CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL

# DISCLOSURE

# ITEM	9A. CONTROLS	AND

# PROCEDURES

# Evaluation	of	Disclosure	Controls	and	Procedures

Our	management,	with	the	participation	of	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	has	evaluated	the	effectiveness	of	our	disclosure	controls	and procedures	(as	such	term	is	defined	in	Rules	13a-15(e)	and	15d-15(e)	under	the	Securities	Exchange	Act	of	1934,	as	amended	(Exchange	Act))	as	of	the	end	of	the	period covered	by	this	Annual	Report	on	Form	10-K.	Based	on	such	evaluation,	our	Chief	Executive	Officer	and	Chief	Financial	Officer	have	concluded	that,	as	of	the	end	of such	period,	our	disclosure	controls	and	procedures	are	effective.

# Changes	in	Internal	Control	over	Financial	Reporting

As	required	by	Rule	13a-15(d)	under	the	Exchange	Act,	the	company's	management,	including	the	company's	Chief	Executive	Officer	and	Chief	Financial	Officer,	have evaluated	the	company's	internal	control	over	financial	reporting	(as	such	term	is	defined	in	Rules	13a-15(f)	and	15d-15(f)	under	the	Exchange	Act)	to	determine	whether any	changes	occurred	during	the	fourth	quarter	of	2017	that	have	materially	affected,	or	are	reasonably	likely	to	materially	affect,	the	company's	internal	control	over financial	reporting.	During	2017,	we	completed	the	implementation	of	our	new	enterprise	resource	planning	(ERP)	system.	The	company	has	evaluated	the	impact	of	the system	on	its	internal	control	over	financial	reporting	and	where	appropriate,	made	changes	to	these	controls	to	address	related	system	functionality	and	potential	gaps. There	were	no	other	changes	in	the	company's	internal	control	over	financial	reporting	which	occurred	during	2017,	that	have	materially	affected,	or	are	reasonably likely	to	materially	affect,	the	company's	internal	control	over	financial	reporting.

# Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting

Management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting.	Our	internal	control	system	has	been	designed	to	provide reasonable	assurance	to	management	and	the	board	of	directors	regarding	the	preparation	and	fair	presentation	of	published	financial	statements.

Management	assessed	the	effectiveness	of	the	Company's	internal	control	over	financial	reporting	as	of	December	31,	2017.	Management	based	its	assessment	on criteria	for	effective	internal	control	over	financial	reporting	described	in	Internal	Control-Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations of	the	Treadway	Commission	(2013	framework).	Management's	assessment	included	evaluating	the	design	of	our	internal	control	over	financial	reporting	and	testing the	operational	effectiveness	of	our	internal	control	over	financial	reporting.	The	results	of	its	assessment	were	reviewed	with	the	audit	committee	of	the	board	of directors.

Based	on	this	assessment,	management	believes	that,	as	of	December	31,	2017,	our	internal	control	over	financial	reporting	is	effective.	The	effectiveness	of	our	internal control	over	financial	reporting	as	of	December	31,	2017	has	been	audited	by	Ernst	&	Young	LLP,	an	independent	registered	public	accounting	firm,	as	stated	in	the report	on	page	84.

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

To	the	Shareholders	and	the	Board	of	Directors	of	CME	Group	Inc.	and	Subsidiaries

# Opinion	on	the	Financial	Statements

We	have	audited	the	accompanying	consolidated	balance	sheets	of	CME	Group	Inc.	and	subsidiaries	(the	Company)	as	of	December	31,	2017	and	2016,	the	related consolidated	statements	of	income,	comprehensive	income,	equity	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2017,	and	the	related notes	and	financial	statement	schedule	 listed	 in	 the	Index	at	Item	15(a)	(collectively	referred	 to	as	 the	"consolidated	financial	statements").	 In	 our	 opinion,	 the consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	financial	position	of	the	Company	at	December	31,	2017	and	2016,	and	the	results	of	its operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2017,	in	conformity	with	U.S.	generally	accepted	accounting	principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States)	(PCAOB),	the	Company's	internal	control over	financial	reporting	as	of	December	31,	2017,	based	on	criteria	established	in	Internal	Control-Integrated	Framework	issued	by	the	Committee	of	Sponsoring Organizations	of	the	Treadway	Commission	(2013	framework)	and	our	report	dated	February	28,	2018	expressed	an	unqualified	opinion	thereon.

# Basis	for	Opinion

These	financial	statements	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	the	Company's	financial	statements	based on	our	audits.	We	are	a	public	accounting	firm	registered	with	the	PCAOB	and	are	required	to	be	independent	with	respect	to	the	Company	in	accordance	with	the	U.S. federal	securities	laws	and	the	applicable	rules	and	regulations	of	the	Securities	and	Exchange	Commission	and	the	PCAOB.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	PCAOB.	Those	standards	require	that	we	plan	and	perform	the	audit	to	obtain	reasonable	assurance about	whether	the	financial	statements	are	free	of	material	misstatement,	whether	due	to	error	or	fraud.	Our	audits	included	performing	procedures	to	assess	the	risks	of material	misstatement	of	the	financial	statements,	whether	due	to	error	or	fraud,	and	performing	procedures	that	respond	to	those	risks.	Such	procedures	included examining,	on	a	test	basis,	evidence	regarding	the	amounts	and	disclosures	in	the	financial	statements.	Our	audits	also	included	evaluating	the	accounting	principles	used and	significant	estimates	made	by	management,	as	well	as	evaluating	the	overall	presentation	of	the	financial	statements.	We	believe	that	our	audits	provide	a	reasonable basis	for	our	opinion.

# /s/	Ernst	&	Young	LLP

We	have	served	as	the	Company's	auditor	since	2002.

Chicago,	Illinois

# Opinion	on	Internal	Control	over	Financial	Reporting

We	have	audited	CME	Group	Inc.	and	subsidiaries'	internal	control	over	financial	reporting	as	of	December	31,	2017,	based	on	criteria	established	in	Internal	Control- Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(2013	framework)	(the	COSO	criteria).	In	our	opinion,	CME Group	Inc.	and	subsidiaries	(the	Company)	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	December	31,	2017,	based	on	the COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States)	(PCAOB),	the	consolidated	balance	sheets of	CME	Group	Inc.	and	subsidiaries	as	of	December	31,	2017	and	2016,	the	related	consolidated	statements	of	income,	comprehensive	income,	equity,	and	cash	flows for	each	of	the	three	years	in	the	period	ended	December	31,	2017,	and	the	related	notes	and	financial	statement	schedule	listed	in	the	Index	at	Item	15(a)	and	our	report dated	February	28,	2018	expressed	an	unqualified	opinion	thereon.

The	Company's	management	is	responsible	for	maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal control	over	financial	reporting	included	in	the	accompanying	Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting.	Our	responsibility	is	to express	an	opinion	on	the	Company's	internal	control	over	financial	reporting	based	on	our	audit.	We	are	a	public	accounting	firm	registered	with	the	PCAOB	and	are required	to	be	independent	with	respect	to	the	Company	in	accordance	with	the	U.S.	federal	securities	laws	and	the	applicable	rules	and	regulations	of	the	Securities	and Exchange	Commission	and	the	PCAOB.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	PCAOB.	Those	standards	require	that	we	plan	and	perform	the	audit	to	obtain	reasonable	assurance about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.

Our	audit	included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances. We	believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

# Definition	and	Limitations	of	Internal	Control	Over	Financial	Reporting

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of management	 and	 directors	 of	 the	 company;	 and	 (3)	 provide	 reasonable	 assurance	 regarding	 prevention	 or	 timely	 detection	 of	 unauthorized	 acquisition,	 use,	 or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of	effectiveness to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or procedures	may	deteriorate.

/s/	Ernst	&	Young	LLP Chicago,	Illinois

# ITEM	9B. OTHER	INFORMATION

# ITEM	10. DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

We	have	adopted	a	written	code	of	conduct	applicable	to	all	of	our	employees,	including	our	Chairman	and	Chief	Executive	Officer,	President,	Chief	Financial	Officer, Chief	Accounting	Officer	and	other	senior	financial	officers.	In	accordance	with	SEC	rules	and	regulations,	our	Code	of	Conduct	is	available	on	our	website	at www.cmegroup.com	under	the	"Investor	Relations	—	Corporate	Governance"	link.	We	intend	to	disclose	promptly	on	our	Web	site	any	substantive	amendments	to	our Code	of	Conduct	and,	in	accordance	with	the	listing	requirements	of	the	NASDAQ,	any	waivers	granted	to	our	executive	officers	or	Board	members	will	be	promptly disclosed	on	a	Current	Report	on	Form	8-K.	In	addition,	we	have	adopted	Corporate	Governance	Principles	which	govern	the	practices	of	our	board	of	directors.	You may	also	obtain	a	copy	of	our	Code	of	Conduct	and	our	Corporate	Governance	Principles	by	following	the	instructions	in	the	section	of	this	Annual	Report	on	Form	10- K	entitled	"Item	1.	Business	—	Available	Information."

Certain	of	the	information	called	for	by	this	item	is	hereby	incorporated	herein	by	reference	to	the	relevant	portions	of	CME	Group's	definitive	proxy	statement	for	the Annual	Meeting	of	Shareholders	to	be	held	on	May	9,	2018,	to	be	filed	by	CME	Group	with	the	SEC	pursuant	to	Regulation	14A	within	120	days	after	December	31, 2017	(Proxy	Statement).	Additional	information	called	for	by	this	item	is	contained	in	Item	1	of	this	Annual	Report	on	Form	10-K	under	the	caption	"Employees	— Executive	Officers."

# ITEM	11. EXECUTIVE	COMPENSATION

Certain	of	the	information	called	for	by	this	item	is	hereby	incorporated	herein	by	reference	to	the	relevant	portions	of	the	Proxy	Statement.

# ITEM	12. SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED	SHAREHOLDER	MATTERS

Certain	of	the	information	called	for	by	this	item	relating	to	the	security	ownership	of	certain	beneficial	owners	and	management	is	hereby	incorporated	herein	by reference	to	the	relevant	portions	of	the	Proxy	Statement.

# EQUITY	COMPENSATION	PLAN	INFORMATION

We	currently	maintain	the	following	equity	compensation	plans:	CME	Group	Inc.	Amended	and	Restated	Omnibus	Stock	Plan,	CME	Group	Inc.	Director	Stock	Plan and	CME	Group	Inc.	Amended	and	Restated	Employee	Stock	Purchase	Plan.	We	do	not	maintain	any	equity	compensation	plans	not	approved	by	shareholders.	A description	of	each	of	these	plans	and	the	number	of	shares	authorized	and	available	for	future	awards	is	included	in	note	15	of	the	notes	to	consolidated	financial statements.	The	numbers	in	the	following	table	are	as	of	December	31,	2017.

| Plan	Category | Number	of	Securities<br>to	be	Issued	Upon<br>Exercise	of<br>Outstanding	Options<br>(a) | Weighted-Average	Exercise	Price	of<br>Outstanding	Options | Number	of	Securities	Remaining	Available	for	Future<br>Issuance	Under	Equity	Compensation	Plans	(excluding<br>securities	reflected	in	column	(a)) |
| :--- | :--- | :--- | :--- |
| Equity\tcompensation\tplans\tapproved\tby\tsecurity\nholders | 572,976 | $58.20 | 16,776,402 |
| Equity\tcompensation\tplans\tnot\tapproved\tby\nsecurity\tholders | — | — | — |
| Total | 572,976 |  | 16,776,402 |

# ITEM	13. CERTAIN	RELATIONSHIPS,	RELATED	TRANSACTIONS	AND	DIRECTOR	INDEPENDENCE

# ITEM	14. PRINCIPAL	ACCOUNTANT	FEES	AND SERVICES

# PART	IV

# ITEM	15. EXHIBITS	AND	FINANCIAL	STATEMENT	SCHEDULES

# (a)	Financial	Statements,	Financial	Statement	Schedules	and	Exhibits

# (1)	Financial	Statements

The	following	Consolidated	Financial	Statements	and	related	Notes	included	within	Item	8,	together	with	the	Reports	of	Independent	Registered	Public	Accounting Firm	with	respect	thereto	and	included	within	Item	9A,	are	hereby	incorporated	by	reference:

# Reports	of	Independent	Registered	Public	Accounting	Firm

# Consolidated	Balance	Sheets	at	December	31,	2017	and	2016

Consolidated	Statements	of	Income	for	the	Years	Ended	December	31,	2017,	2016	and	2015

Consolidated	Statements	of	Comprehensive	Income	for	the	Years	Ended	December	31,	2017,	2016	and	2015 Consolidated	Statements	of	Equity	for	the	Years	Ended	December	31,	2017,	2016	and	2015 Consolidated	Statements	of	Cash	Flows	for	the	Years	Ended	December	31,	2017,	2016	and	2015 Notes	to	Consolidated	Financial	Statements

(2)	Financial	Statement	Schedules

The	following	Financial	Statement	Schedule	is	filed	as	part	of	this	Annual	Report	on	Form	10-K:

# Schedule	II—Valuation	and	Qualifying	Accounts

(dollars	in	millions)

|  | Balance	at<br>beginning<br>of	year | Charged<br>(credited)	to<br>costs	and<br>expenses | Other(1) | Balance<br>at	end<br>of	year |
| :--- | :--- | :--- | :--- | :--- |
| Year\tEnded\tDecember\t31,\t2017 |  |  |  |  |
| Allowance\tfor\tdoubtful\taccounts | $3.5 | $0.6 | $(1.9) | $2.2 |
| Allowance\tfor\tdeferred\ttax\tassets | 14.9 | (3.7) | — | 11.2 |
| Year\tEnded\tDecember\t31,\t2016 |  |  |  |  |
| Allowance\tfor\tdoubtful\taccounts | $1.9 | $2.4 | $(0.8) | $3.5 |
| Allowance\tfor\tdeferred\ttax\tassets | 122.3 | (107.4) | — | 14.9 |
| Year\tEnded\tDecember\t31,\t2015 |  |  |  |  |
| Allowance\tfor\tdoubtful\taccounts | $1.2 | $1.1 | $(0.4) | $1.9 |
| Allowance\tfor\tdeferred\ttax\tassets | 99.2 | (2.4) | 25.5 | 122.3 |

(1) Includes	write-offs	of	doubtful	accounts	and	additions	to	allowance	for	deferred	tax	assets	through	accumulated	other	comprehensive	income (loss).

All	other	schedules	have	been	omitted	because	the	information	required	to	be	set	forth	in	those	schedules	is	not	applicable	or	is	shown	in	the	consolidated	financial statements	or	notes	thereto.

(3) Exhibits

See	(b)	Exhibits	below

# (b)	Exhibits

4.8 Seventh	Supplemental	Indenture	(including	the	form	of	3.000%	note	due	2025),	dated	as	of	March	9,	2015,	between	CME	Group	Inc.	and	U.S. Bank	National	Association	(incorporated	by	reference	to	Exhibit	4.2	to	CME	Group	Inc.'s	Current	Report	on	Form	8-K,	filed	with	the	SEC	on March	9,	2015).

10.4(1) CME	Group	Inc.	Director	Stock	Plan,	amended	and	restated	effective	as	of	May	21,	2014	(incorporated	by	reference	to	Exhibit	10.1	to	CME	Group Inc.'s	Current	Report	on	Form	8-K,	filed	with	the	SEC	on	May	28,	2014).

10.6(1) CME	Group	Inc.'s	Amended	and	Restated	Employee	Stock	Purchase	Plan,	amended	and	restated	as	of	May	23,	2012	(incorporated	by	reference	to Exhibit	10.2	to	CME	Group	Inc.'s	Form	8-K,	filed	with	the	SEC	on	May	29,	2012;	First	Amendment	to	the	Amended	and	Restated	Employee	Stock Purchase	Plan,	effective	as	of	December	5,	2012	(incorporated	by	reference	to	Exhibit	10.7	to	CME	Group	Inc.'s	Form	10-K,	filed	with	the	SEC	on February	28,	2013).

10.9(1) Chicago	Mercantile	Exchange	Inc.	Supplemental	Executive	Retirement	Plan	consisting	of	the	Grandfathered	Supplemental	Retirement	Plan, amended	and	restated	as	of	January	1,	2008,	and	the	Amended	and	Restated	409A	Supplemental	Executive	Retirement	Plan,	amended	and	restated as	of	January	1,	2008	(incorporated	by	reference	to	Exhibit	10.9	to	CME	Group	Inc.'s	Form	10-K,	filed	with	the	SEC	on	February	28,	2008).

10.10(1) Chicago	Mercantile	Exchange	Inc.	Supplemental	Executive	Retirement	Trust;	First	Amendment	thereto,	dated	September	7,	1993	(incorporated	by reference	to	Exhibit	10.5	to	Chicago	Mercantile	Exchange	Inc.'s	Form	S-4,	filed	with	the	SEC	on	February	24,	2000).

10.11(1) Recognition	and	Retention	Plan	for	Members	of	the	COMEX	Division	of	New	York	Mercantile	Exchange	(incorporated	by	reference	to	Exhibit 10.11	to	NYMEX	Holdings,	Inc.'s	Form	10-K,	filed	with	the	SEC	on	March	29,	2001);	Amendment	to	the	Recognition	and	Retention	Plan	for Members	of	the	COMEX	Division	of	the	New	York	Mercantile	Exchange,	dated	October	22,	2015	(incorporated	by	reference	to	Exhibit	10.1	to CME	Group's	Form	10-Q,	filed	with	the	SEC	on	November	6,	2015).

10.12(1) Second	Amended	and	Restated	CME	Group	Inc.	Incentive	Plan	for	Named	Executive	Officers	(Amended	and	Restated	as	of	May	24,	2017) (incorporated	by	reference	to	Exhibit	10.1	to	CME	Group	Inc.'s	Form	8-K,	filed	with	the	SEC	on	May	30,	2017).

10.13(1) CME	Group	Inc.	Severance	Plan	for	Eligible	Executives,	amended	and	restated	effective	January	1,	2013	(incorporated	by	reference	to	Exhibit 10.16	to	CME	Group	Inc.'s	Form	10-K,	filed	with	the	SEC	on	February	28,	2014);	First	Amendment	to	CME	Group	Inc.	Severance	Plan	for	Eligible Executives,	effective	as	of	October	13,	2014	(incorporated	by	reference	to	Exhibit	10.16	to	CME	Group's	10-K,	filed	with	the	SEC	on	February	26, 2015).

10.14(1) CME	Group	Inc.	Severance	Plan,	amended	and	restated	effective	January	1,	2013	(incorporated	by	reference	to	Exhibit	10.17	to	CME	Group	Inc.'s Form	10-K,	filed	with	the	SEC	on	February	28,	2014);	First	Amendment	to	the	Amended	and	Restated	CME	Group	Inc.	Severance	Plan,	effective October	13,	2014	(incorporated	by	reference	to	Exhibit	10.17	to	CME	Group's	10-K,	filed	with	the	SEC	on	February	26,	2015).

10.21(2) License	Agreement,	dated	June	29,	2012,	between	Standard	&	Poor's	Financial	Services	LLC	and	Chicago	Mercantile	Exchange	Inc.	(incorporated by	reference	to	Exhibit	10.6	to	CME	Group	Inc.'s	Form	10-Q,	filed	with	the	SEC	on	August	8,	2012).

10.22(2) Amended	and	Restated	Index	License	Agreement,	between	CME	Group	Index	Services	LLC	and	the	Board	of	Trade	of	the	City	of	Chicago,	Inc., effective	as	of	July	1,	2011	(incorporated	by	reference	to	Exhibit	10.5	to	CME	Group	Inc.'s	Form	10-Q,	filed	with	the	SEC	on	August	8,	2012).

* Filed	herewith.

(1) Management	contract	or	compensatory	plan	or arrangement.

(2) Confidential	treatment	pursuant	to	Rule	406	of	the	Securities	Act	has	been	previously	granted	by	the	SEC	for	portions	of	this exhibit.

None.

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf by	the	undersigned,	thereunto	duly	authorized,	in	the	City	of	Chicago	and	State	of	Illinois	on	the	28th	day	of	February,	2018.

/S/		JOHN	W.		PIETROWICZ

# Terrence	A.	Duffy

John	W.	Pietrowicz

Jack	Tobin

/S/				LEO	MELAMED Leo	Melamed

/S/				JEFFREY	M.	BERNACCHI

Jeffrey	M.	Bernacchi

/S/				TIMOTHY	S.	BITSBERGER Timothy	S.	Bitsberger

		 Senior	Managing	Director	and	Chief	Financial	Officer

		 Managing	Director	and	Chief	Accounting	Officer

		 Chairman	Emeritus	and	Director

		 Director

/S/				CHARLES	P.	CAREY Director Charles	P.	Carey

/S/				DENNIS	H.	CHOOKASZIAN 		 Director Dennis	H.	Chookaszian /s/	ANA	DUTRA Director Ana	Dutra /S/				MARTIN	J.	GEPSMAN 		 Director Martin	J.	Gepsman

/S/				LARRY	G.	GERDES Larry	G.	Gerdes

/S/				DANIEL	R.	GLICKMAN Daniel	R.	Glickman

/s/	GEDON	HERTSHTEN Gedon	Hertshten

Ronald	A.	Pankau

/s/	ALEX	J.	POLLOCK

Alex	J.	Pollock

		 Lead	Director

# John	F.	Sandner

/S/	TERRY	L.	SAVAGE

Terry	L.	Savage



Question: what is the anualized return for cme group from 2012 to 2017?
Calculation: cme_group_return = 370.32
snp_return = 100
peer_group_return = 100
cme_group_to_snp_return_difference = cme_group_return / snp_return
peer_group_to_snp_return_difference = peer_group_return / snp_return
annualized_return = (cme_group_to_snp_return_difference - peer_group_to_snp_return_difference) ** (1/5) - 1
answer = annualized_return * 100
Answer: 22%