Income before income taxes was up 36 percent to $171 million. Diluted earnings per share rose 33 percent to $2.91 from $2.18.

The company also reported record total revenues and earnings for 2006. Total revenues climbed 22 percent to $1.1 billion for the year, compared with $890 million for 2005. Net income rose 33 percent to $407 million, versus $307 million a year ago. Diluted earnings per share increased 32 percent to $11.60 from $8.81 per diluted share in 2005.

"This past year marked the sixth consecutive year of record performance for CME as we continued to grow our business organically - delivering volume growth of 25 percent or more across all product lines - while expanding into new markets and building new alliances," said CME Executive Chairman Terry Duffy. "Most important, our proposed merger with the Chicago Board of Trade is expected to close midyear, pending shareholder and regulatory approval. This will enable us to serve customers more efficiently and effectively, and in turn further benefit our shareholders, as we position CME more strategically to better compete in the dynamic global marketplace."

"Successful execution of our growth strategy enabled CME to achieve record revenues and earnings in 2006, with overall volume surging 28 percent to more than 1.3 billion contracts and electronic trading expanding to 75 percent of total volume in the fourth quarter," said CME Chief Executive Officer Craig Donohue. "Our strong results reflect continued record annual volumes in foreign exchange and interest rate products and greater than expected NYMEX volume on CME Globex, which more than doubled from average daily volume of 175,000 contracts in the third quarter to average daily volume of 370,000 contracts in the fourth quarter."

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

Fourth-Quarter Results

For the fourth quarter of 2006, clearing and transaction fees rose 25 percent to $220 million from $176 million, reflecting a 29 percent increase in average daily volume to 5.3 million contracts for the quarter. The fourth- quarter growth was led by a 36 percent increase in foreign exchange product volume, to a record 508,000 contracts per day. In addition, CME interest rate volume increased 35 percent compared with the same quarter a year ago, averaging 3.0 million contracts per day; CME E-mini products grew 19 percent, averaging 1.6 million contracts per day; and CME commodity products increased by 27 percent with average daily volume of 72,000 contracts.

Processing services, which includes support for the Chicago Board of Trade, NYMEX and OneChicago, generated $28 million in the fourth quarter. This represents a 79 percent increase from $16 million for the same period in 2005. Quotation data fees were $20 million, versus $17 million in fourth- quarter 2005.

Total operating expenses were $123 million for the fourth quarter of 2006. This represents a 15 percent increase from $107 million for the same period in 2005, driven by compensation, professional fees and marketing-related costs. Capital expenditures, including capitalized software development costs, were $29 million for fourth-quarter 2006, compared with $25 million for the final quarter of 2005.

Fourth-quarter income before income taxes was $171 million, an increase of 36 percent from $126 million for the year-ago period. The company's pre-tax margin was 58 percent, compared with 54 percent for the same period last year. Pre-tax margin is defined as income before income taxes expressed as a percentage of total revenues added to total non-operating income and expense.

CME's working capital increased by more than $73 million during the fourth quarter, to $1.3 billion at December 31, 2006.

Full-Year 2006 Results

Average daily volume was 5.3 million contracts in 2006, up 28 percent from 4.2 million contracts in 2005. Volume on the CME Globex electronic platform increased 31 percent year over year to an average of 3.8 million contracts per day.

For 2006, revenue from clearing and transaction fees grew 24 percent to $866 million from $696 million a year ago, benefiting from higher trading volume. Processing services increased 31 percent to $90 million from $69 million a year ago.

Total operating expenses were $469 million for 2006, up 14 percent from $412 million for 2005. In 2007, the company expects operating expenses on a stand-alone basis to total $530 to $540 million, which includes a full-year of expenditures related to Swapstream, a European based market-leading multilateral electronic trading platform for interest rate swaps, CBOT merger planning, and costs associated with FXMarketSpace to support the service level agreements in place.

Capital expenditures and capitalized software development costs were $87 million for 2006, primarily due to continued investments in capacity related to volume growth and functionality. In 2007, the company expects capital expenditures to total between $110 and $115 million, on a stand-alone basis, net of leasehold allowances.

Income before income taxes was $672 million for 2006, compared with $508 million for 2005. The pre-tax margin was 59 percent, compared with 55 percent for the year-earlier period.

For the year 2006, the company paid dividends of $2.52 per common share, totaling $88 million.

During 2006, CME's working capital grew by $321 million.