Cbot Holdings, (CBOT) (NYSE:BOT), holding company for the Chicago Board of Trade, today announced record revenue of $169.3 million for the fourth quarter ended December 31, 2006, a 48 percent increase over the prior year period.
Net income for the fourth quarter was $44.9 million, more than double last year's fourth quarter net income of $17.7 million. Diluted earnings per share were $0.85 and $0.34, for the fourth quarter of 2006 and 2005, respectively. Growth in trading volume, higher average exchange fee rates and disciplined expense management drove these strong financial results.
Included in the fourth-quarter 2006 results are $9.5 million in merger- related expenses, which are non-deductible for tax purposes and consist primarily of professional fees incurred in connection with the CBOT's proposed merger with Chicago Mercantile Exchange Holdings Inc. (CME). On a non-GAAP basis, excluding the merger-related expenses, net income for the quarter ending December 31, 2006 was $54.4 million or $1.03 per diluted share.
For the year ended December 31, 2006, the company achieved record revenue of $621.1 million, a 35 percent increase from $461.5 million a year ago. Net income for the year of $172.2 million was the best ever for the company, reflecting a 125 percent increase compared with last year's net income of $76.5 million. Diluted earnings per share were $3.26 for the year.
Excluding non-tax deductible, merger-related expenses of $9.7 million for the year, non- GAAP net income was $181.9 million, or $3.44 per diluted share, for the 2006 fiscal year.
"Our record-setting results for the quarter and the year reflect the success of our strategic growth initiatives and our ability to capitalize on our scaleable business model," said Bernard W. Dan, president and CEO of the CBOT. These results were particularly rewarding given the changing dynamics in our marketplace. The financial services industry is witnessing an expansion in global access to risk management vehicles, and with that, competition among cash, futures and over-the-counter markets is intensifying."
"This past year unquestionably has been a momentous one for the CBOT, as we took important steps to strengthen our com competitive position in a consolidating marketplace. Our decision to merge with CME was paramount in our efforts to secure a stronger future for the CBOT, while benefiting our market users. Other initiatives such as our move to offer electronic trading of Agricultural futures during daytime trading hours and our launch of the Asian-based commodities Exchange, JADE, lay the groundwork for future growth of the CBOT. In 2007, we will focus on serving the diverse needs of our customer base with innovative products and services while successfully completing our merger with CME," said Dan.
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