Net income for the quarter increased 32.7% to $18.5 million, or $0.46 per share on a fully diluted basis. This compares to $14.0 million, or $0.35 per share on a fully diluted basis, in the same period in 2006. Included in the results for the quarter are $11.4 million, or $0.16 per diluted share, of direct costs and associated accelerated stock-based compensation charges related to our pending merger with Eurex. Excluding these expenses, proforma net income for the quarter increased to $25.0 million, or $0.62 per share on a fully diluted basis.

Total consolidated revenues for the quarter increased 70.8% to $85.6 million from $50.1 million in the prior year. Gross margin increased 62.3% to $72.1 million from $44.5 million in the third quarter of 2006. Included in our consolidated results are revenues and expenses from the ISE Stock Exchange, our stock exchange business segment.

Total revenues for the quarter in our options exchange business segment increased 44.1% to $72.2 million. Gross margin, or total revenues less cost of revenues, increased 53.7% to $68.3 million. The average daily volume of equity and index options contracts traded increased 53.0% to a record 3.4 million contracts.

The stock exchange business segment recorded revenues of $13.7 million, gross margin of $4.1 million and earned $0.3 million, all of which was allocated to our strategic investors. The stock exchange traded an average of 48.5 million shares per day in the third quarter of 2007. Please refer to the section titled "Segment Information" for further information.

"Our record trading volume and profitability were fueled by the volatility in the financial markets and the operating leverage in our business," said David Krell, ISE's President and Chief Executive Officer. "We continue to witness volume growth in index options and we are now the second largest U.S. index options exchange. We are gaining traction in our recent new business initiatives, including our foreign exchange offering, ISE FX Options(SM), and our Second Market. Additionally, the new functionalities that we developed to target institutional investors have enabled us to make further inroads into this key segment of the options market," concluded Krell.

"We are pleased to report that the ISE Stock Exchange continued to experience increases in trading volume during the quarter," stated Gary Katz, ISE's Chief Operating Officer. "Although the business is still in its infancy, investors are further embracing our differentiated and value-added platform to trade equities."

"We are looking forward to our merger with Eurex, and we are taking the necessary steps to ensure the seamless integration of our businesses. We are confident that our combined expertise will better position us to compete in the globalization that is accelerating across all financial markets," said Katz.

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