Message from Executive Chairman and President
We continued to expand CME Group’s business worldwide, broke numerous volume and open interest records, and returned $1.3 billion to shareholders in 2014.
Terrence A. Duffy Executive Chairman and President
The year 2014 was a remarkable one for CME Group, as we not only broke numerous volume and open interest records, but in some cases shattered them. We averaged a record 13.7 million contracts per day for the year and, on October 15, set an all-time daily record of 39.6 million contracts traded. Our open interest rose to a record 109 million contracts in the fourth quarter.
Despite market volatility being at the lowest level in two decades across virtually all of our asset classes, we were able to grow volumes in interest rates by almost 20 percent for the year and 40 percent in the fourth quarter. Our interest rate futures and options complex averaged 7 million contracts per day, nearly doubling the 4 million per day average we saw at the bottom of the recession in 2009. So far in 2015, we are averaging 8 million interest rate contracts per day. Volatility picked up across the board in fourth-quarter 2014, leading to growth in all of our major product lines.
Total trading volume in 2014 was nearly 3.5 billion contracts, and we generated $1.3 billion in cash from operations. Reflecting our strong financial performance, we paid out four quarterly dividends totaling $630 million, as well as the companyâs annual variable dividend, which was $670 million in 2014. In total, through both regular and variable dividends, the company has returned more than $4 billion to shareholders since implementation of the variable dividend policy in early 2012. Our dividend yield over the last three years has averaged between 4 and 5 percent, and the combination of earnings growth and dividend income is compelling.
Over the last five years, we have focused on expanding our global reach. Notably, in the fourth quarter of 2014, we saw an increase in the growth rate of trading activity in our core products coming from Europe and Asia. During the year, we launched CME Europe, our London-based derivatives exchange, enabling us to further serve our customers in the region who prefer to trade in their own jurisdiction. We offer locally relevant contracts based on agricultural commodities and energy as well as foreign exchange.
On the regulatory front, the most significant aspects of U.S. financial reform under Dodd-Frank have been implemented. As the European Union is now advancing its financial reforms, we have been particularly focused on cross-border regulation that recognizes the U.S. exchanges as equivalent to those in the European Union. Additionally, we have been working to gain recognition of CME Europe as well as CME Clearing Europe under Europeâs regulatory framework, and have also been involved in the implementation of Basel III capital standards. Our objective is to make sure that these new capital requirements do not negatively impact exchange-traded and centrally cleared markets.
In all of these efforts, our overriding goal is to drive value by continuing to expand the business worldwide and enhance our role in the global economy while returning capital to our shareholders.
Terrence A. Duffy
Executive Chairman and President