Chicago Mercantile Exchange Inc. Reports Highly Profitable First Quarter 2001

Net Income of $20.0 Million Fueled by Record Volume, Other Factors



Apr 16, 2001, 01:00 ET from Chicago Mercantile Exchange Inc.

    CHICAGO, April 16 /PRNewswire/ -- Due to the highest volume quarter in its
 103-year history, as well as expense reductions, a new pricing framework and
 increased distribution of its GLOBEX(R)2 electronic trading system, Chicago
 Mercantile Exchange Inc. (CME) today reported strong profits of $20.0 million
 for the first quarter of 2001.
     Revenues for the first quarter ended March 31, 2001 climbed 60 percent to
 $92.2 million from $57.6 million for the same period of 2000.  The largest
 contributors were clearing and transaction fees, which rose 77 percent to
 $70.9 million for the current quarter from $40.0 million in the year-earlier
 period.  Other operating revenue, investment income, quotation data fees and
 communication fee revenues also increased.
     First quarter 2001 net income was $20.0 million, or 69 cents per diluted
 Class A equivalent share, compared with a net loss of $2.9 million for the
 first quarter of 2000, or 10 cents per diluted Class A equivalent share.*
 First quarter 2001 expenses were $58.8 million, versus $61.4 million for the
 same period a year ago.  The comparison benefited from nonrecurring expenses
 in the first quarter of 2000 associated with management changes and
 preparations for CME's demutualization and issuing of shares in November 2000.
 CME recorded a tax provision of $13.4 million for the current quarter, versus
 a tax benefit (due to operating losses) of $1.9 million for the first quarter
 of 2000.
     "While market volatility has increased demand for our risk management
 products, we also are seeing the results of new programs," said Chairman Scott
 Gordon.  "For example, expanding access to our trading platforms last year has
 fueled demand for our open outcry and electronically traded products alike.
 Our Eurodollar contract is now the world's most actively traded futures
 product, and our E-mini stock index futures continue to set new trading
 records."
     "We continue to improve access to CME products and services," added
 President and Chief Executive Officer Jim McNulty.  "Earlier this month, we
 began 'side-by-side' electronic and open outcry trading of our currency and
 cross-rate futures contracts.  The new program has been well-received by our
 customers on and off our trading floors, with new requests to connect to our
 electronic trading platform coming in daily.  Our business strategy continues
 to emphasize having the right products, platforms and processes to meet the
 needs of today's market participants."
     For the first quarter of 2001, CME's trading volume rose 56 percent to
 92.7 million contracts, topping the previous quarterly record of 62.9 million
 contracts traded in the third quarter of 1998.  March 2001 was CME's busiest
 single volume month ever, with 34.3 million contracts traded -- besting the
 previous record of 31.7 million contracts set in January 2001.  Underlying
 value of the contracts traded in March totaled $23 trillion, while first-
 quarter underlying value -- or dollar volume -- reached $66.4 trillion.
     CME's working capital position increased to $86.4 million at the end of
 March 2001, compared with $69.1 million at Dec. 31, 2000.  Excluding cash
 performance bonds and security deposits of $909.0 million, which are both
 current assets and current liabilities, the current ratio was 2.7 to 1 at
 March 31, 2001, unchanged from year-end 2000.  This ratio (current assets
 divided by current liabilities) is a measure of short-term debt-paying
 ability.
     Chicago Mercantile Exchange Inc. is an international marketplace that
 brings together buyers and sellers on its trading floors and GLOBEX2
 around-the-clock electronic trading system.  CME offers futures contracts and
 options on futures primarily in four product areas:  interest rates, stock
 indexes, foreign currencies and agricultural commodities.  All over the world,
 pension funds and investment advisers, portfolio managers, corporate
 treasurers, commercial and investment banks, broker/dealers and individuals
 are among those who trade on CME as an integral part of their financial
 management strategy.  The exchange moves about $1 billion per day in
 settlement payments, manages $30 billion in collateral deposits and
 administers more than $1 billion of letters of credit.  Earnings releases are
 available on the company's Web site at www.cme.com/exchange/investor.html .
 SEC filings are available at www.freeedgar.com .
     Statements in this news release that are not historical facts are
 forward-looking statements.  They are based on current expectations,
 estimates, forecasts and projections about the industry in which CME operates,
 management's beliefs and assumptions made by management.  These statements are
 not guarantees of future performance and involve certain risks, uncertainties
 and assumptions which are difficult to predict.  Therefore, actual outcomes
 and results may differ materially from what is expressed or forecasted in such
 forward-looking statements.  CME undertakes no obligation to publicly update
 any forward-looking statements, whether as a result of new information, future
 events or otherwise.  These factors that might affect CME's performance
 include increasing competition by foreign and domestic competitors, including
 new entrants; rapid technological developments; CME's ability to continue
 introducing competitive new products and services on a timely, cost-effective
 basis; CME's mix of products/services; its ability to lower costs and
 expenses; changes in domestic and foreign regulations; protection and validity
 of our intellectual property rights; reliance on large customers;
 technological, implementation and cost/financial risks associated with the
 increasing use of large, multi-year contracts; the outcome of pending and
 future litigation and governmental proceedings; and continued availability of
 financing, financial instruments and financial resources in the amounts, at
 the times and on the terms required to support CME's future business.  These
 are representative of factors that could affect the outcome of our
 forward-looking statements.  In addition, such statements could be affected by
 general industry and market conditions and growth rates; general domestic and
 international economic conditions, including interest rate and currency
 exchange rate fluctuations; and other factors.
     The statements contained in this news release are not intended to be, and
 shall not constitute, an offer of any securities of Chicago Mercantile
 Exchange Inc. for sale in any jurisdiction.  Any offer, if and when made, will
 only be made by way of a prospectus contained in a registration statement
 filed with the Securities and Exchange Commission under the Securities Act of
 1933, as amended.
 
 
                        CHICAGO MERCANTILE EXCHANGE INC.
                       Consolidated Statements of Income
                             (dollars in thousands)
 
                                                     Quarter Ended March 31,
                                                       2001           2000
     Revenues
       Clearing and transaction fees                  $70,938        $40,046
       Quotation data fees                             10,225          9,883
       Communication fees                               2,256          2,242
       Investment income                                2,573          2,148
       Other operating revenue                          6,178          3,270
         Total revenues                                92,170         57,589
     Expenses                                          58,823         61,409
     Income (loss) before limited partners'
         interest in PMT and income taxes              33,347         (3,820)
     Limited partners' interest in PMT                    ---           (988)
     Income tax (provision) benefit                   (13,357)         1,924
         Net income (loss)                           $ 19,990       $ (2,884)
         Earnings per share - basic*                    $0.69         $(0.10)
         Earnings per share - diluted*                  $0.69         $(0.10)
 
     *  CME became a public company and issued shares on November 13, 2000.
        The earnings per share calculation is based on all Class B shares
        converted to an equivalent number of Class A shares, plus the actual
        number of Class A shares outstanding.  Calculation of 2000 earnings per
        share is based on the same number of shares as the 2001 calculation and
        is shown for comparison only.  In 2000, net loss per share assuming
        dilution is the same as basic net loss per share, since shares issuable
        for stock options would be anti-dilutive.
 
 
                            Balance Sheet Highlights
 
                                  At March 31, 2001           At Dec. 31, 2000
     Current assets**                  $136,524                    $110,583
     Total assets**                     252,017                     224,595
     Current liabilities**               50,127                      41,445
     Long-term debt                       5,067                       6,063
     Total liabilities**                 68,100                      60,924
     Shareholders' equity               183,917                     163,671
 
     **  Excludes cash performance bonds and security deposits, which totaled
         $909.0 million at March 31, 2001 and $156.0 million at Dec. 31, 2000.
 
 

SOURCE Chicago Mercantile Exchange Inc.
    CHICAGO, April 16 /PRNewswire/ -- Due to the highest volume quarter in its
 103-year history, as well as expense reductions, a new pricing framework and
 increased distribution of its GLOBEX(R)2 electronic trading system, Chicago
 Mercantile Exchange Inc. (CME) today reported strong profits of $20.0 million
 for the first quarter of 2001.
     Revenues for the first quarter ended March 31, 2001 climbed 60 percent to
 $92.2 million from $57.6 million for the same period of 2000.  The largest
 contributors were clearing and transaction fees, which rose 77 percent to
 $70.9 million for the current quarter from $40.0 million in the year-earlier
 period.  Other operating revenue, investment income, quotation data fees and
 communication fee revenues also increased.
     First quarter 2001 net income was $20.0 million, or 69 cents per diluted
 Class A equivalent share, compared with a net loss of $2.9 million for the
 first quarter of 2000, or 10 cents per diluted Class A equivalent share.*
 First quarter 2001 expenses were $58.8 million, versus $61.4 million for the
 same period a year ago.  The comparison benefited from nonrecurring expenses
 in the first quarter of 2000 associated with management changes and
 preparations for CME's demutualization and issuing of shares in November 2000.
 CME recorded a tax provision of $13.4 million for the current quarter, versus
 a tax benefit (due to operating losses) of $1.9 million for the first quarter
 of 2000.
     "While market volatility has increased demand for our risk management
 products, we also are seeing the results of new programs," said Chairman Scott
 Gordon.  "For example, expanding access to our trading platforms last year has
 fueled demand for our open outcry and electronically traded products alike.
 Our Eurodollar contract is now the world's most actively traded futures
 product, and our E-mini stock index futures continue to set new trading
 records."
     "We continue to improve access to CME products and services," added
 President and Chief Executive Officer Jim McNulty.  "Earlier this month, we
 began 'side-by-side' electronic and open outcry trading of our currency and
 cross-rate futures contracts.  The new program has been well-received by our
 customers on and off our trading floors, with new requests to connect to our
 electronic trading platform coming in daily.  Our business strategy continues
 to emphasize having the right products, platforms and processes to meet the
 needs of today's market participants."
     For the first quarter of 2001, CME's trading volume rose 56 percent to
 92.7 million contracts, topping the previous quarterly record of 62.9 million
 contracts traded in the third quarter of 1998.  March 2001 was CME's busiest
 single volume month ever, with 34.3 million contracts traded -- besting the
 previous record of 31.7 million contracts set in January 2001.  Underlying
 value of the contracts traded in March totaled $23 trillion, while first-
 quarter underlying value -- or dollar volume -- reached $66.4 trillion.
     CME's working capital position increased to $86.4 million at the end of
 March 2001, compared with $69.1 million at Dec. 31, 2000.  Excluding cash
 performance bonds and security deposits of $909.0 million, which are both
 current assets and current liabilities, the current ratio was 2.7 to 1 at
 March 31, 2001, unchanged from year-end 2000.  This ratio (current assets
 divided by current liabilities) is a measure of short-term debt-paying
 ability.
     Chicago Mercantile Exchange Inc. is an international marketplace that
 brings together buyers and sellers on its trading floors and GLOBEX2
 around-the-clock electronic trading system.  CME offers futures contracts and
 options on futures primarily in four product areas:  interest rates, stock
 indexes, foreign currencies and agricultural commodities.  All over the world,
 pension funds and investment advisers, portfolio managers, corporate
 treasurers, commercial and investment banks, broker/dealers and individuals
 are among those who trade on CME as an integral part of their financial
 management strategy.  The exchange moves about $1 billion per day in
 settlement payments, manages $30 billion in collateral deposits and
 administers more than $1 billion of letters of credit.  Earnings releases are
 available on the company's Web site at www.cme.com/exchange/investor.html .
 SEC filings are available at www.freeedgar.com .
     Statements in this news release that are not historical facts are
 forward-looking statements.  They are based on current expectations,
 estimates, forecasts and projections about the industry in which CME operates,
 management's beliefs and assumptions made by management.  These statements are
 not guarantees of future performance and involve certain risks, uncertainties
 and assumptions which are difficult to predict.  Therefore, actual outcomes
 and results may differ materially from what is expressed or forecasted in such
 forward-looking statements.  CME undertakes no obligation to publicly update
 any forward-looking statements, whether as a result of new information, future
 events or otherwise.  These factors that might affect CME's performance
 include increasing competition by foreign and domestic competitors, including
 new entrants; rapid technological developments; CME's ability to continue
 introducing competitive new products and services on a timely, cost-effective
 basis; CME's mix of products/services; its ability to lower costs and
 expenses; changes in domestic and foreign regulations; protection and validity
 of our intellectual property rights; reliance on large customers;
 technological, implementation and cost/financial risks associated with the
 increasing use of large, multi-year contracts; the outcome of pending and
 future litigation and governmental proceedings; and continued availability of
 financing, financial instruments and financial resources in the amounts, at
 the times and on the terms required to support CME's future business.  These
 are representative of factors that could affect the outcome of our
 forward-looking statements.  In addition, such statements could be affected by
 general industry and market conditions and growth rates; general domestic and
 international economic conditions, including interest rate and currency
 exchange rate fluctuations; and other factors.
     The statements contained in this news release are not intended to be, and
 shall not constitute, an offer of any securities of Chicago Mercantile
 Exchange Inc. for sale in any jurisdiction.  Any offer, if and when made, will
 only be made by way of a prospectus contained in a registration statement
 filed with the Securities and Exchange Commission under the Securities Act of
 1933, as amended.
 
 
                        CHICAGO MERCANTILE EXCHANGE INC.
                       Consolidated Statements of Income
                             (dollars in thousands)
 
                                                     Quarter Ended March 31,
                                                       2001           2000
     Revenues
       Clearing and transaction fees                  $70,938        $40,046
       Quotation data fees                             10,225          9,883
       Communication fees                               2,256          2,242
       Investment income                                2,573          2,148
       Other operating revenue                          6,178          3,270
         Total revenues                                92,170         57,589
     Expenses                                          58,823         61,409
     Income (loss) before limited partners'
         interest in PMT and income taxes              33,347         (3,820)
     Limited partners' interest in PMT                    ---           (988)
     Income tax (provision) benefit                   (13,357)         1,924
         Net income (loss)                           $ 19,990       $ (2,884)
         Earnings per share - basic*                    $0.69         $(0.10)
         Earnings per share - diluted*                  $0.69         $(0.10)
 
     *  CME became a public company and issued shares on November 13, 2000.
        The earnings per share calculation is based on all Class B shares
        converted to an equivalent number of Class A shares, plus the actual
        number of Class A shares outstanding.  Calculation of 2000 earnings per
        share is based on the same number of shares as the 2001 calculation and
        is shown for comparison only.  In 2000, net loss per share assuming
        dilution is the same as basic net loss per share, since shares issuable
        for stock options would be anti-dilutive.
 
 
                            Balance Sheet Highlights
 
                                  At March 31, 2001           At Dec. 31, 2000
     Current assets**                  $136,524                    $110,583
     Total assets**                     252,017                     224,595
     Current liabilities**               50,127                      41,445
     Long-term debt                       5,067                       6,063
     Total liabilities**                 68,100                      60,924
     Shareholders' equity               183,917                     163,671
 
     **  Excludes cash performance bonds and security deposits, which totaled
         $909.0 million at March 31, 2001 and $156.0 million at Dec. 31, 2000.
 
 SOURCE  Chicago Mercantile Exchange Inc.