CME Revenues Increase 20% Earnings Down 16%

CME Group Inc. (NASDAQ:CME) today reported total GAAP revenues increased 20 percent to $681 million, and GAAP operating income increased 22 percent to $421 million. Net income for the third quarter was $169 million, down 16 percent versus the prior year due primarily to an income tax adjustment and other non-core items. Diluted earnings per share on a GAAP basis were $2.81. The 2008 GAAP results reflect the operations of both Chicago Mercantile Exchange (CME) and Board of Trade of the City of Chicago (CBOT), as well as the results of NYMEX Holdings, Inc. (NYMEX) after August 22, 2008 when the acquisition closed.

Pro forma non-GAAP diluted earnings per share in the third quarter were $4.13. All pro forma results reflect the operations of both CME Group Inc. and NYMEX, as if they were combined for all periods reported. Additionally, third-quarter 2008 pro forma non-GAAP results exclude a net impact of $76 million of merger-related and other items, which are listed in detail in Table 1. Total revenues increased six percent to $787 million and total operating expenses decreased three percent compared with the same period last year at $269 million. A strong rate per contract and continued focus on expense discipline helped the company reach third-quarter operating income of $518 million, an increase of 11 percent from $468 million for the year-ago period, and its second highest pro forma operating margin ever, at 66 percent. Operating margin is defined as operating income as a percentage of total revenues. Pro forma net income was $278 million for third-quarter 2008. Pro forma measures do not replace and are not a substitute for GAAP financial results. They are provided to improve overall understanding of current financial performance and to provide a meaningful comparison with prior periods. A full reconciliation of these pro forma results is included with the attached financial statements.

"CME Group's record quarterly volumes in our E-mini and FX complexes in the third quarter highlight the diversity and strength of our product base," said CME Group Executive Chairman Terry Duffy. "We are focused on continued innovation across our product lines and our technology and to that end are very excited about the strategic opportunities offered by the completion of the NYMEX acquisition. NYMEX's energy and metals products, as well as the ClearPort over-the-counter clearing platform, provide additional ways for our customers to manage risk during even the most challenging market conditions. By combining these offerings with the extensive distribution and strong international presence established by CME, we look forward to ongoing growth in these globally significant products."