News Release

Chicago Mercantile Exchange Holdings Inc. Reports 34 Percent Increase in Net Income for Fourth-Quarter 2005; Diluted Earnings Per Share Rose 33 Percent to $2.18

Tue Jan 31 2006

CHICAGO, Jan. 31 /PRNewswire-FirstCall/ -- Chicago Mercantile Exchange Holdings Inc. (NYSE: CME)(NASDAQ: CME), today reported a 24 percent increase in net revenues to $233 million and a 34 percent increase in net income to $76 million for fourth-quarter 2005 compared with fourth-quarter 2004. Income before income taxes grew 34 percent to $126 million. Diluted earnings per share rose 33 percent to $2.18 from $1.64.

The company also reported record revenues and earnings for 2005. Net revenues climbed 25 percent to $921 million for the year, compared with $734 million for 2004. Net income rose 40 percent to $307 million, versus $220 million a year ago. Diluted earnings per share increased 38 percent to $8.81 from $6.38 per diluted share in 2004.

"One of CME's core strengths is its product diversity, and in 2005 CME delivered impressive volume growth across the board," said CME Chairman Terry Duffy. "Total average daily volume grew 34 percent and total volume exceeded one billion contracts for the first time ever in a single year. Furthermore, 70 percent of our volume was traded electronically on our CME® Globex® platform, up from 57 percent in 2004. These results are particularly significant since market volatility measures were muted during 2005."

"Our 2005 record revenues and earnings were driven by volume growth of more than 20 percent in every product category and 62 percent growth in electronic trading," said CME Chief Executive Officer Craig Donohue. "In 2006 we will continue to invest in technology to improve the speed, functionality and reliability of our CME Globex electronic trading platform. We will also continue to focus on growing our foreign exchange markets, increasing electronic trading of our financial options products and expanding our European and Asian client segments."

Fourth-Quarter Results

For the fourth quarter of 2005, net revenues increased 24 percent to $233 million from $188 million for the same period in 2004. Clearing and transaction fees rose 27 percent to $176 million from $139 million a year ago, reflecting a 33 percent increase in average daily volume to 4.1 million contracts for the quarter. The fourth-quarter growth was led by a 49 percent increase in foreign exchange product volume, to a record 375,000 contracts per day. In addition, CME interest rate volume increased 34 percent compared with the same quarter a year ago, averaging 2.2 million contracts per day; CME E- mini™ products grew 30 percent, averaging a record 1.3 million contracts per day; and CME commodity products increased by 20 percent with average daily volume of 51,000 contracts.

Processing services, which includes support for the Chicago Board of Trade, NYMEX and OneChicago, generated $16 million in the fourth quarter, versus $15 million in fourth-quarter 2004. Quotation data fees were $17 million, versus $16 million in fourth-quarter 2004.

Total expenses were $107 million for the fourth quarter of 2005. This represents a 14 percent increase from $94 million for the same period in 2004, driven primarily by technology related costs. Capital expenditures and capitalized software development costs were $25 million for fourth-quarter 2005, compared with $19 million for the final quarter of 2004.

Income before income taxes was $126 million for fourth-quarter 2005, compared with $94 million for the same period during 2004. Operating margin, defined as income before income taxes expressed as a percentage of net revenues, was 54 percent in fourth-quarter 2005, compared with 50 percent in fourth-quarter 2004.

The company reported net income of $76 million, or $2.18 per diluted share, for fourth- quarter 2005, compared with $57 million, or $1.64 per diluted share, for the same period in 2004.

CME's working capital increased $70 million during fourth-quarter 2005, to $953 million at December 31, 2005.

Full-Year 2005 Results

Average daily volume was 4.2 million contracts in 2005, up 34 percent from 3.1 million contracts in 2004. Volume on the CME Globex electronic platform increased 62 percent for the year, with total volume of 730 million contracts and average daily volume of 2.9 million contracts.

For 2005, revenue from clearing and transaction fees increased 26 percent, to $696 million, from $553 million for 2004. Processing services revenue rose 23 percent to $69 million, from $56 million in 2004, and quotation data fees were up 18 percent to $72 million, from $61 million in 2004.

Total expenses were $412 million for 2005, compared with $366 million for 2004. This 12.6 percent increase was driven primarily by technology spending related to additional functionality and capacity. In 2006, the company expects total expense growth in the 11 to 13 percent range, in line with recent expense patterns.

Capital expenditures and capitalized software development costs were $88 million for 2005, primarily due to continued investments in capacity related to volume growth and functionality. In 2006, the company expects capital expenditures to be in the $90 to $100 million range, due primarily to further investment in technology.

Income before income taxes was $508 million for 2005, compared with $368 million for 2004. Operating margin was 55 percent, compared with 50 percent during 2004. The company reported record net income of $307 million, or $8.81 per diluted share, for the year, compared with $220 million, or $6.38 per diluted share, for 2004.

For the year 2005, the company paid dividends of $1.84 per common share, totaling $63 million.

During 2005, CME's working capital grew by $281 million.

CME will hold a conference call to discuss year-end and fourth-quarter results at 8:30 a.m. Eastern Time today. A live audio Web cast of the call will be available on the Investor Relations section of CME's Web site at http://www.cme.com/ . An archived recording will be available after the call.

Chicago Mercantile Exchange Holdings Inc. became the first publicly traded U.S. financial exchange on Dec. 6, 2002. The company was added to the Russell 1000® Index on July 1, 2003. It is the parent company of Chicago Mercantile Exchange Inc. ( http://www.cme.com/ ), the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on its CME Globex electronic trading platform and on its trading floors. CME offers futures and options on futures primarily in interest rates, equities, foreign exchange and commodities. The exchange moved an average of $1.4 billion per day in settlement payments in 2005 and managed $45.6 billion in collateral deposits at December 30, 2005, including $3.2 billion in deposits for non-CME products.

Chicago Mercantile Exchange, CME and Globex are registered trademarks of Chicago Mercantile Exchange Inc. E-mini is a trademark of CME. TRAKRS, Total Return Asset Contracts and other trade names, service marks, trademarks and registered trademarks that are not proprietary to Chicago Mercantile Exchange Inc. are the property of their respective owners, and are used herein under license. Further information about CME and its products is available on the CME Web site at http://www.cme.com/ .

Statements in this news release that are not historical facts are forward- looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. Among the factors that might affect our performance are: increasing competition by foreign and domestic competitors, including new entrants into our markets; our ability to keep pace with rapid technological developments, including our ability to complete the development and implementation of the enhanced functionality required by our customers; our ability to continue introducing competitive new products and services on a timely, cost-effective basis, including through our electronic trading capabilities, and our ability to maintain the competitiveness of our existing products and services; our ability to efficiently and simultaneously operate both open outcry trading and electronic trade execution facilities; our ability to adjust our fixed costs and expenses if our revenues decline; our ability to continue to realize the benefits of our transaction processing agreement with the Chicago Board of Trade; our ability to maintain existing customers and attract new ones; changes in domestic and foreign regulations; changes in government policy, including policies relating to common or directed clearing; the costs associated with protecting our intellectual property rights and our ability to operate our business without violating the intellectual property rights of others; our ability to generate market data fees that may be reduced or eliminated by the growth of electronic trading; changes in our rate per contract due to shifts in the mix of the products traded, the trading venue and the mix of customers ( whether the customer receives member or non-member fees or participates in one of our various incentive programs) and the impact of our tiered pricing structure; the ability of our financial safeguards package to adequately protect us from the credit risk of our clearing members; changes in price levels and volatility in the derivatives markets and in underlying fixed income, equity, foreign exchange and commodities markets; economic, political and market conditions; our ability to accommodate increases in trading volume without failure or degradation of performance of our systems; our ability to execute our growth strategy and maintain our growth effectively; our ability to manage the risks and control the costs associated with our acquisition, investment and alliance strategy; industry and customer consolidation; decreases in trading and clearing activity; and seasonality of the futures business. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q, which is available in the Investor Information section of the CME Web site. We undertake no obligation to publicly update any forward- looking statements, whether as a result of new information, future events or otherwise.

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, and CME Auction Markets™ products.

  CME-E


          Chicago Mercantile Exchange Holdings Inc. and Subsidiaries
                         Consolidated Balance Sheets
                            (dollars in thousands)

                                            Dec. 31, 2005   Dec. 31, 2004
  ASSETS
  Current Assets:
    Cash and cash equivalents                   $610,891       $357,562
    Collateral from securities lending         2,160,893      1,582,985
    Short-term investments of interest
     earning facilities                                -         87,521
    Marketable securities, including
     pledged securities                          292,862        302,429
    Accounts receivable                           86,980         78,825
    Other current assets                          39,669         18,959
    Cash performance bonds and security
     deposits                                    592,127        269,919
  Total current assets                         3,783,422      2,698,200
  Property, net of accumulated
   depreciation and amortization                 153,329        131,361
  Other assets                                    32,643         27,905
  TOTAL ASSETS                                $3,969,394     $2,857,466

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current Liabilities:
    Accounts payable                             $23,553        $23,045
    Payable under securities lending
     agreements                                2,160,893      1,582,985
    Payable to participants in interest
     earning facilities                                -         87,521
    Other current liabilities                     53,354         62,153
    Cash performance bonds and
     security deposits                           592,127        269,919
  Total current liabilities                    2,829,927      2,025,623
  Other liabilities                               20,783         19,246
  Total liabilities                            2,850,710      2,044,869
  Shareholders' Equity                         1,118,684        812,597
  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $3,969,394     $2,857,466

Balance Sheet Items Excluding Cash Performance Bonds and Security Deposits,

          Securities Lending and Interest Earning Facilities (1)

                                             Dec. 31, 2005   Dec. 31, 2004

  Current assets                              $1,030,402       $757,775
  Total assets                                 1,216,374        917,041
  Current liabilities                             76,907         85,198
  Total liabilities                               97,690        104,444

  (1) Securities lending, cash performance bonds and security deposits, and
      interest earnings facilities are excluded from this presentation, as
      these current assets have equal and offsetting current liabilities.
      This presentation results in a more meaningful indication to investors
      of the assets owned and related obligations of the company.  Clearing
      firms are subject to performance bond requirements pursuant to the
      rules of the exchange.  The clearing firm can elect to satisfy these
      requirements in cash, which is reflected on the consolidated balance
      sheets, or by depositing securities, which are not reflected on the
      consolidated balance sheets.  The balance of cash performance bonds
      and security deposits that are deposited by clearing firms may change
      daily as a result of changes in the clearing firms' open positions and
      how clearing firms elect to satisfy their performance bond
      requirements.  Securities lending transactions utilize a portion of
      the securities that clearing firms have deposited to satisfy their
      proprietary performance bond requirements.  Deposits received from
      clearing firms in the first interest earning facilities were included
      on the consolidated financial statements of CME Holdings until
      December 1, 2005 when these facilities were discontinued.  These
      interest earning facilities were invested on a short-term basis and
      payable to the clearing firm participants on demand.


          Chicago Mercantile Exchange Holdings Inc. and Subsidiaries
                      Consolidated Statements of Income
                   (in thousands, except per share amounts)

                                   Quarter Ended          Year Ended
                                    December 31,         December 31,
                                   2005      2004      2005       2004
  REVENUES
    Clearing and
     transaction fees          $ 176,457 $ 139,191  $ 696,201  $ 552,953
    Processing services           15,562    14,877     68,730     55,882
    Quotation data fees           17,370    15,742     71,741     60,940
    Access fees                    4,743     4,500     18,866     16,393
    Communication fees             2,140     2,455      8,964     10,035
    Investment income             10,252     5,426     31,441     14,520
    Securities lending
     interest income              19,188     8,429     58,725     20,320
    Other                          5,850     5,403     22,628     21,759
      TOTAL REVENUES             251,562   196,023    977,296    752,802
    Securities lending
     interest expense            (18,666)   (7,996)   (56,778)   (19,013)
      NET REVENUES               232,896   188,027    920,518    733,789

  EXPENSES
    Compensation and benefits     45,469    42,693    179,594    164,843
    Occupancy                      7,208     6,632     28,529     27,193
    Professional fees,
     outside services and
     licenses                     12,975    10,250     44,832     37,200
    Communications and
     computer and software
     maintenance                  15,745    11,340     57,935     48,264
    Depreciation and
     amortization                 16,799    13,942     64,917     53,408
    Marketing, advertising
     and public relations          3,767     3,115     13,278     10,973
    Other operating expense        5,191     5,964     23,054     24,252
      TOTAL EXPENSES             107,154    93,936    412,139    366,133

  Income before income taxes     125,742    94,091    508,379    367,656
  Income tax provision           (49,462)  (37,307)  (201,522)  (148,101)
      NET INCOME                $ 76,280  $ 56,784  $ 306,857  $ 219,555

  EARNINGS PER SHARE:
      Basic                        $2.21     $1.67      $8.94      $6.55
      Diluted                      $2.18     $1.64      $8.81      $6.38

  Weighted average number
   of common shares:
      Basic                       34,476    34,057     34,315     33,545
      Diluted                     34,974    34,652     34,839     34,411


                           4Q         1Q         2Q          3Q        4Q
                          2004       2005       2005        2005      2005
  Trading Days             64         61         64          64        63


             Average Daily Volume (Round Turns, in Thousands)

  Interest rates        1,654      2,235      2,577       2,489     2,209
  Equity E-mini         1,026      1,237      1,301       1,181     1,335
  Equity standard-size    119        129        124         124       147
  Foreign exchange        252        294        332         336       375
  Commodities              42         51         46          50        51
      Subtotal          3,093      3,946      4,380       4,180     4,117
  TRAKRS                   73         30         21          27       595
      Total             3,166      3,976      4,401       4,207     4,712
  Open outcry             965      1,276      1,210       1,263     1,107
  Electronic
   (including TRAKRS)   2,155      2,648      3,144       2,897     3,556
  Privately negotiated     46         52         47          47        49
      Total             3,166      3,976      4,401       4,207     4,712


                     Transaction Fees (in Thousands)

                         4Q         1Q         2Q          3Q        4Q
                        2004       2005       2005        2005      2005
  Interest rates     $ 56,556   $ 71,003   $ 83,429    $ 79,955  $ 70,840
  Equity E-mini        44,586     50,048     57,185      53,255    59,427
  Equity standard-size 10,071     10,319     10,552      11,125    13,271
  Foreign exchange     25,404     26,621     28,796      29,079    29,442
  Commodities           2,510      2,832      2,589       2,896     3,009
      Subtotal        139,127    160,823    182,551     176,310   175,989
  TRAKRS                   64         23         17          20       468
      Total          $139,191   $160,846   $182,568    $176,330  $176,457
  Open outcry         $34,665    $36,987    $36,190     $37,438   $35,677
  Electronic
   (including TRAKRS)  93,407    112,416    135,429     127,812   129,088
  Privately
   negotiated          11,119     11,443     10,949      11,080    11,692
      Total          $139,191   $160,846   $182,568    $176,330  $176,457


                     Average Rate Per Contract (RPC)

                         4Q         1Q         2Q          3Q        4Q
                        2004       2005       2005        2005      2005
  Interest rates      $ 0.534    $ 0.521    $ 0.506     $ 0.502   $ 0.509
  Equity E-mini         0.679      0.663      0.687       0.705     0.706
  Equity standard-size  1.317      1.315      1.330       1.400     1.436
  Foreign exchange      1.577      1.483      1.357       1.353     1.246
  Commodities           0.932      0.904      0.870       0.904     0.944
  Average
   (excluding TRAKRS) $ 0.703    $ 0.668    $ 0.651     $ 0.659   $ 0.678
  TRAKRS                0.014      0.012      0.012       0.011     0.012
   Overall average
    RPC               $ 0.687    $ 0.663    $ 0.648     $ 0.655   $ 0.594

  Open outcry         $ 0.562    $ 0.475    $ 0.467     $ 0.463   $ 0.512
  Electronic
   (including TRAKRS)   0.677      0.696      0.673       0.690     0.576
  Electronic
   (excluding TRAKRS)   0.701      0.704      0.678       0.696     0.690
  Privately negotiated  3.671      3.611      3.615       3.674     3.759
   Overall average
    RPC               $ 0.687    $ 0.663    $ 0.648     $ 0.655   $ 0.594

First Call Analyst:
FCMN Contact:

SOURCE: Chicago Mercantile Exchange Holdings Inc.

CONTACT: Media, Anita Liskey, +1-312-466-4613, or William Parke,
+1-312-930-3467, or news@cme.com , or Investor, John Peschier,
+1-312-930-8491, all of Chicago Mercantile Exchange Holdings Inc.

Web site: http://www.cme.com/

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