CME GROUP INC.CME
CME GROUP INC. Income Taxes Disclosure
INCOME TAXES
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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, 2025, 2024 and 2023:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Income before income taxes: | ||||||||||||||||||||
| Domestic | $ | 4,807.6 | $ | 4,305.9 | $ | 3,900.5 | ||||||||||||||
| Foreign | 522.9 | 235.5 | 253.1 | |||||||||||||||||
| Total | $ | 5,330.5 | $ | 4,541.4 | $ | 4,153.6 | ||||||||||||||
| Income tax provision: | ||||||||||||||||||||
| Current: | ||||||||||||||||||||
| Federal | $ | 920.7 | $ | 776.9 | $ | 751.7 | ||||||||||||||
| State | 295.6 | 252.8 | 205.8 | |||||||||||||||||
| Foreign | 48.1 | 52.3 | 44.9 | |||||||||||||||||
| Total | 1,264.4 | 1,082.0 | 1,002.4 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| Federal | (25.8) | (49.6) | 21.9 | |||||||||||||||||
| State | 20.2 | (17.0) | (33.8) | |||||||||||||||||
| Foreign | (0.5) | 0.2 | (63.1) | |||||||||||||||||
| Total | (6.1) | (66.4) | (75.0) | |||||||||||||||||
| Total Income Tax Provision | $ | 1,258.3 | $ | 1,015.6 | $ | 927.4 | ||||||||||||||
Reconciliation of the U.S. federal income tax provision and rate (statutory tax rate) to the effective tax rate is as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| (amounts in millions) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||
| U.S. federal statutory tax rate | $ | 1,119.4 | 21.0 | % | $ | 953.7 | 21.0 | % | $ | 872.2 | 21.0 | % | ||||||||||||||||||||||||||
State and local taxes, net of federal income tax effect(1) | 221.0 | 4.1 | % | 186.2 | 4.1 | % | 147.3 | 3.5 | % | |||||||||||||||||||||||||||||
| Foreign tax effects: | ||||||||||||||||||||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||||||||||||||
| Gain on sale of investments | (72.3) | (1.3) | % | — | — | % | (16.2) | (0.4) | % | |||||||||||||||||||||||||||||
| Other | (0.5) | — | % | (2.6) | (0.1) | % | (5.4) | (0.1) | % | |||||||||||||||||||||||||||||
| Other foreign jurisdictions | 7.4 | 0.1 | % | 13.7 | 0.3 | % | (5.3) | (0.1) | % | |||||||||||||||||||||||||||||
| Effect of cross-border tax laws: | ||||||||||||||||||||||||||||||||||||||
| Foreign derived intangible income deduction | (88.2) | (1.7) | % | (86.4) | (1.9) | % | (69.9) | (1.7) | % | |||||||||||||||||||||||||||||
| Subpart F income | 59.5 | 1.1 | % | — | — | % | 16.3 | 0.4 | % | |||||||||||||||||||||||||||||
| Other, net | 12.0 | 0.3 | % | (49.0) | (1.0) | % | (11.6) | (0.3) | % | |||||||||||||||||||||||||||||
| Effective Tax Expense Benefit Rate | $ | 1,258.3 | 23.6 | % | 1,015.6 | 22.4 | % | 927.4 | 22.3 | % | ||||||||||||||||||||||||||||
(1) State taxes in Illinois made up the majority (greater than 50 percent) of the tax effect in this category.
In 2025, 2024 and 2023, the effective tax rates were higher than the statutory tax rate. The increases to the effective tax rate for the state taxes were partially offset by the foreign-derived intangible income (FDII) deduction.
At December 31, 2025 and 2024, deferred income tax assets (liabilities) consisted of the following:
| (in millions) | 2025 | 2024 | ||||||||||||
| Deferred Income Tax Assets: | ||||||||||||||
| Net operating losses | $ | 4.5 | $ | 5.3 | ||||||||||
| Property | — | 12.8 | ||||||||||||
| Accrued expenses, compensation, leases and other | 119.7 | 123.9 | ||||||||||||
| Subtotal | 124.2 | 142.0 | ||||||||||||
| Valuation allowance | — | — | ||||||||||||
| Total deferred income tax assets | 124.2 | 142.0 | ||||||||||||
| Deferred Income Tax Liabilities: | ||||||||||||||
| Purchased intangible assets | (5,224.3) | (5,240.6) | ||||||||||||
| Other | (117.6) | (114.1) | ||||||||||||
| Property | (6.8) | — | ||||||||||||
| Total deferred income tax liabilities | (5,348.7) | (5,354.7) | ||||||||||||
| Net Deferred Income Tax Liabilities | $ | (5,224.5) | $ | (5,212.7) | ||||||||||
| Reported as: | ||||||||||||||
| Net non-current deferred tax assets | $ | 17.7 | $ | 34.1 | ||||||||||
| Net non-current deferred tax liabilities | (5,242.2) | (5,246.8) | ||||||||||||
| Net Deferred Income Tax Liabilities | $ | (5,224.5) | $ | (5,212.7) | ||||||||||
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 taxes 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, 2025, the company had domestic income tax loss carryforwards of $21.3 million of which $19.3 million will expire between 2030 and 2036 and $2.0 million can be carried forward indefinitely. These amounts primarily relate to losses from the acquisition of NEX Group plc and the acquisition of Pivot, Inc. At December 2025, the company determined that it was more-likely-than-not that certain foreign deferred income tax assets will be fully realized. No valuation allowance was recorded at December 31, 2025 and 2024.
The following is a summary of the company’s unrecognized tax benefits for the year ended December 31, 2025, 2024 and 2023:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Gross unrecognized tax benefits | $ | 294.8 | $ | 251.6 | $ | 264.1 | ||||||||||||||
| Unrecognized tax benefits, net of tax impacts in other jurisdictions | 272.2 | 238.1 | 251.9 | |||||||||||||||||
| Interest and penalties related to uncertain tax positions | 29.9 | 18.8 | 16.6 | |||||||||||||||||
| Interest and penalties recognized on the consolidated statements of income | 11.1 | 2.1 | (4.0) | |||||||||||||||||
A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance at January 1 | $ | 251.6 | $ | 264.1 | $ | 280.3 | ||||||||||||||
| Additions based on tax positions related to the current year | 26.2 | 12.0 | 10.0 | |||||||||||||||||
| Additions for tax positions of prior years | 27.0 | 3.9 | 4.3 | |||||||||||||||||
| Reductions for tax positions of prior years | (5.1) | (17.7) | (8.0) | |||||||||||||||||
| Reductions resulting from the lapse of statutes of limitations | (4.9) | (5.6) | (5.2) | |||||||||||||||||
| Settlements with taxing authorities | — | (5.1) | (17.3) | |||||||||||||||||
| Balance at December 31 | $ | 294.8 | $ | 251.6 | $ | 264.1 | ||||||||||||||
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, 2025, substantially all federal income tax matters have been concluded through 2016 other than the Section 199 deduction, all United Kingdom income tax matters have been concluded through 2023, and all state income tax matters have been concluded through 2019.
The following is a summary of income taxes paid (net of refunds) by jurisdiction at December 31, 2025, 2024 and 2023:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Federal | $ | 910.2 | $ | 859.3 | $ | 782.0 | ||||||||||||||
| State | 219.9 | 292.0 | 247.2 | |||||||||||||||||
| Foreign | 33.9 | 45.2 | 42.5 | |||||||||||||||||
| Total | $ | 1,164.0 | $ | 1,196.5 | $ | 1,071.7 | ||||||||||||||
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| State and City: | ||||||||||||||||||||
| Illinois | $ | 122.6 | $ | 171.3 | $ | 126.0 | ||||||||||||||
| New York and New York City | 83.0 | 93.2 | 97.7 | |||||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.