On November 13, 2000, the Chicago Mercantile Exchange became the first U.S. financial exchange to demutualize by converting its membership interests into two classes of common stock shares and transforming into a for-profit corporation, Chicago Mercantile Exchange Inc. (�CME�). Shares of Class A common stock represent pure equity in CME, and shares of Class B common stock represent trading rights and privileges at CME plus equity. Transfer restrictions prohibit the independent sale or transfer of any Class A shares until May 14, 2001.

As Class A shares are currently non-transferable and both Class A and Class B shares are subject to the claims of CME, the shares should be reflected as non-current (i.e. non-allowable) assets at original cost in the financial statements. The financial statement presentation would remain identical to the classification of memberships prior to demutualization as the amount should be reported on 1-FR Line 15 � Exchange memberships at cost or FOCUS Line 12.B. � Memberships in exchanges: Owned at cost, as appropriate.

As the restrictions are eliminated on the Class A shares and a ready market develops, we will issue an Audit Information Bulletin discussing any changes in financial statement presentation.

If you have any questions, please call the Audit Department at (312) 930-3230 or e-mail us at audits@cme.com.