CME » Topics » CME Group Inc. Reports Strong Fourth-Quarter and Full-Year Revenues and Net Income

This excerpt taken from the CME 8-K filed Feb 5, 2008.

CME Group Inc. Reports Strong Fourth-Quarter and Full-Year Revenues and Net Income

 

   

Seventh consecutive year of record volume on a combined basis fueled strong 2007 revenues and net income

 

   

GAAP fourth-quarter earnings per share increased 29 percent to $3.75

 

   

Pro forma non-GAAP fourth-quarter earnings per share increased 41 percent to $3.77

 

   

First quarter dividend of $1.15 declared, up 34 percent compared to prior dividend

CHICAGO, February 5, 2008 – CME Group Inc. (NYSE, NASDAQ: CME) today reported total revenues increased 88 percent to $530 million and net income increased 96 percent to $201 million for fourth-quarter 2007 compared with fourth-quarter 2006. Diluted earnings per share rose 29 percent to $3.75. These GAAP results include the operations of both Chicago Mercantile Exchange (CME) and Board of Trade of the City of Chicago, Inc. (CBOT); $12.5 million of merger-related operating expenses consisting of restructuring charges, integration and legal costs, and the acceleration of depreciation related to CBOT data centers; and an $11.3 million reduction to non-operating expenses associated with the guarantee for holders of the Chicago Board Options Exchange (CBOE) exercise right privilege (ERP). The comparative results for 2006 reflect the operations of CME only.

Pro forma non-GAAP revenues increased 23 percent to $530 million and net income increased 37 percent to $202 million for fourth-quarter 2007 compared with fourth-quarter 2006. Pro forma non-GAAP diluted earnings per share in the fourth quarter were $3.77, a 41 percent increase versus fourth-quarter 2006. Fourth-quarter 2007 pro forma results exclude $12.5 million of merger-related operating expenses and the $11.3 million reduction to non-operating expenses associated with the ERP guarantee. The pro forma comparative results for 2006 reflect the operating results of both CME and CBOT as if they were combined. 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 in the attached tables.

All references to volume and rate per contract information in the text of this document exclude our non-traditional TRAKRS products, for which CME Group receives significantly lower clearing fees than other CME Group products, CME Group Auction Markets products, which were available to trade prior to July 2007, and Swapstream products.

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Total GAAP revenues for 2007 increased 61 percent to $1.8 billion and 2007 net income increased 62 percent to $659 million. Diluted earnings per share for the year, on a GAAP basis, rose 29 percent to $14.93 versus 2006. Full-year 2007 pro forma non-GAAP revenues increased 30 percent to $2.1 billion and net income increased 50 percent to $817 million compared with 2006. Diluted earnings per share, on a pro forma non-GAAP basis, grew 51 percent to $14.96 in 2007 versus 2006. Full-year 2007 pro forma results exclude $76.2 million of merger-related operating expenses and $17.2 million of non-operating expense associated with the ERP guarantee.

“CME Group has consistently delivered strong volume growth and 2007 was no exception, with combined average daily trading volume up 28 percent,” said CME Group Executive Chairman Terry Duffy. “This demonstrates the value of our markets for a customer base that is expanding globally. Moreover, our successful merger with the Chicago Board of Trade enables us to serve these customers more efficiently and effectively, as represented by the recent migration of all e-cbot interest rate, equity and agricultural products to the CME Globex electronic platform.”

“In a year of extraordinary achievement and strategic growth, CME Group delivered exceptional financial results while executing an historic merger, integrating operations, providing transaction processing services, launching new products and continuing to expand globally in Europe, Asia and South America,” said CME Chief Executive Officer Craig Donohue. “During 2007, CME Group combined trading volume surged to nearly 2.8 billion contracts worth more than $1.2 quadrillion. So far in 2008, volumes have grown 65 percent compared with combined volumes during the same period last year. This is evidence that customers are turning to the transparency and liquidity of our diverse product set, and the safety and soundness that a centrally cleared market provides.”

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