CME Group
Annual Report 2008

Plain-text annual report

The value of confidence CME GROUP 2008 ANNUAL REVIEW It’s an uncertain world. CO NtENts 2 Executive Chairman’s Letter 4 Message from CEO and President 8 2008 Accomplishments and Financial Highlights 10 CME Group Overview 16 Strategic Profiles 30 CFO Report 32 Financial Information 38 Board of Directors 41 Management 42 Company Information Risks can lurk even where least expected. CME Group is here to help you manage them. For more than 160 years, we’ve given customers the confidence to move forward in good times and bad. By providing benchmark products and risk-management services across all major asset classes, and the safety and soundness of centralized clearing, we offer the security that market participants around the globe need to operate confidently, invest and grow. That’s why CME Group is where the world comes to manage risk. TERRENCE A. DUFFY Executive Chairman 2 The value of confidence  “We are proud of our performance during what many consider the worst financial crisis since the Great Depression. We believe that it speaks to the attributes of our business model and the safety and soundness of our markets.” Our ability to manage risk is not limited to futures markets. We are successfully applying our central counterparty model in the over- the-counter (OTC) market. There is increasing interest from OTC market participants in clear- ing solutions that mitigate counterparty risks and provide credit efficiencies. CME Group can work with the banking community and institu- tional, or buy-side, participants to facilitate their current hedging, trading and dealing activities while providing them with capital efficiencies and the benefit of central counterparty clearing. In 2008, we continued to position CME Group in the marketplace to deliver significant value for customers around the world. The ac- quisition of the New York Mercantile Exchange DEAR SHAREHOLDERS: Our world experienced unprecedented chal- created an even stronger international company lenges in 2008. The subprime market melt- as we continue to grow our business globally, down and ensuing credit crisis are just two compete with other exchanges and expand examples of the forces that had an impact on services to the OTC market. financial markets. We are proud of our perfor- Looking forward, I believe we are entering mance during what many consider the worst a new era in financial markets where central- financial crisis since the Great Depression. We ized clearing will take on even greater impor- believe that it speaks to the attributes of our tance. Regulators are calling with new vigor for business model and the safety and soundness increased market transparency and efficiency, of our markets. which our central counterparty model offers. Against this backdrop, CME Group per- Our customers are more focused on credit lines formed well. Total revenues grew to $2.6 billion and capital deployment, which also will make and net income to $715 million, while volume our clearing model more attractive to financial increased to an average of 13 million contracts market participants. per day. Contracts traded electronically in 2008 As new financial market models evolve, accounted for nearly 80 percent of total volume it is important that we not forget the lessons as traders from around the world participated we have learned from the dramatic events of in our markets through the CME Globex elec- 2008. Markets follow liquidity. Markets follow tronic trading platform. technology. Now, given current economic con- The world increasingly is realizing the im- ditions, markets will migrate to platforms that portance of risk management, and that is what are designed to provide safety and security. we do at CME Group. For more than a century, These trends bode well for CME Group. our company has provided competitive, trans- parent and liquid markets, which help our cus- tomers manage their risks across all major asset classes. In our history, no clearing member has ever defaulted and no customer has ever lost funds due to counterparty failure. Now more than ever, CME Group is where the world TERRENCE A. DUFFY Executive Chairman comes to manage risk. March 2, 2009 CME GROUP 2008 ANNUAL REVIEW 3 CRAIG S. DONOHUE Chief Executive Officer 4 The value of confidence  “As one of the best functioning business models, our transparent and regulated markets made us a safe haven for customers involved in managing volatile risks across all major asset classes.” Trade (CBOT) and achieved our annual synergy targets. We further strengthened our company’s competitive position and extended its global reach through our acquisition of the New York Mercantile Exchange (NYMEX) in August 2008. The addition of NYMEX energy and COMEX metals products, as well as ClearPort – which provides services for the OTC energy and metals markets – has enabled us to further diversify our revenue mix, making us less dependent on U.S. financial markets. In the fourth quarter, $169 million, or 29 percent of our clearing and trans- action fees, was derived from energy and metals products and OTC transactions. These new busi- ness lines are among our fastest growing. GROW THE CORE BUSINESS CME Group’s ability TO OUR SHAREHOLDERS: The year 2008 presented extraordinary chal- to continue to grow our core business demon- lenges to the world economy and placed tre- strates the effectiveness of the diversified prod- mendous stress on global financial markets. uct model that we have pursued over the past Throughout the economic crisis, CME Group few years. Trading in E-mini equity index con- distinguished itself as one of the best function- tracts exceeded our expectations, with average ing business models – providing deep liquidity daily volume increasing by 36 percent to 3.5 mil- and hedging opportunities in financial, energy lion contracts per day. Foreign exchange aver- and commodity markets around the world. Our aged 623,000 contracts per day, up 10 percent, liquid, transparent and regulated markets made reflecting a notional value of $85 billion. Com- us a safe haven for customers involved in manag- modity and alternative investment product vol- ing volatile risks across all major asset classes. ume averaged 848,000 contracts per day, up The emergence of significant concerns 16 percent. NYMEX volume averaged 1.7 million about counterparty credit risks in the over-the- counter (OTC) markets highlighted the extraor- dinary value of our centralized clearing services. contracts per day. Cyclical pressures had a neg- ative impact on interest rate and fixed-income markets. As a result, volume in our interest rate Our financial safeguards package, valued at product group declined 14 percent, averaging approximately $7 billion as of year end, elimi- 6.1 million contracts per day. nates third-party credit concerns. In this diffi- cult environment, the strengths of our business GLOBALIZE THE BUSINESS CME Group’s global model made it possible for us to grow, achieving strategy is multi-faceted. We continued to deve- record revenues and net income. lop globally relevant products and to provide our In addition to delivering strong results, we overseas customers with increased resources. It significantly advanced our global strategy of is noteworthy that 17 percent of our electronic growing our core business, expanding our cus- volume is now transacted outside of U.S. trading tomer base and trading activity in our products hours, up from only 9 percent in 2007. Also, around the world, serving the OTC markets we furthered our efforts to expand our strate- with centralized clearing and ach ieving opera- gic relationships with the leading exchanges in tional excellence. We completed the integration emerging markets in Latin America, Asia and of our historic merger with the Chicago Board of the Middle East. CME GROUP 2008 ANNUAL REVIEW 5 In Latin America, we are excited about the venture company with Citadel Investment Group. potential of our order routing agreement with BM&FBOVESPA (BM&F), Latin America’s largest exchange. Our customers now have access to CMDX will combine CME Group’s proven central counterparty clearing, settlement and risk manage ment capabilities with Citadel’s state- BM&F’s products via our CME Globex electronic of-the-art technology. The services we will offer trading platform. CME Group products are listed will help reduce gross exposures, decrease bilat- on the BM&F electronic distribution system for eral credit risk, and provide increased efficien- customers in Brazil. cies that will improve overall functioning of the Asia remains a significant region of focus credit markets. for us. We now are able to offer customers in that region dedicated product specialists in com - ACHIEVE OPERATIONAL EXCELLENCE We contin- modities and in foreign exchange, while enhanc- ued to improve our technology to ensure that ing our overall level of customer support. In CME Globex remains the industry-leading elec- addition, CME Group has secured a five-year tronic trading platform. In 2008, CME Globex agreement with the Korea Exchange to list KOSPI handled an average of 10 million contracts per 200 futures on CME Globex for after-hours day with an average response time of 9.5 milli- trading in Korea. seconds at year end. We expanded the plat- The NYMEX acquisition has provided us form’s cap abilities and extended our predefined, with an opportunity to expand our presence in intercommodity spread capabilities to our inter- the Middle East. CME Group now has a signifi- est rate product group. Our migration to the cant ownership stake in the Dubai Mercantile Exchange (DME), the Middle East’s first futures exchange. In the first quarter of this year, DME’s FIX/FAST protocol, the new industry standard for market data, was a success, providing our customers more efficient delivery of market data three crude oil benchmark products began with reduced bandwidth utilization. trad ing exclusively on CME Globex. Our pres- The challenges that our industry faced in ence in this important region was also stren- 2008 will continue to play out during 2009. It is gthened when the Dubai Financial Services already apparent that the financial crisis will Authority extended its recognition to include change the nature of our industry. We feel that CBOT products. CME Group is in a strong position to continue safeguarding our customers regardless of finan- SERVE OTC MARKETS The financial market cial market stresses, as well as to take advan- crisis has brought to light issues in the OTC tage of new opportunities as they emerge. market around the lack of transparency, as well as counterparty concerns. By working closely with the OTC participants, we believe we can develop solutions that will allow these markets to function smoothly again and restore inves- tor confidence in them. We already have a highly successful, rapidly growing OTC business through our CME Clear- Port facility, part of our NYMEX acquisition. We plan to leverage CME ClearPort’s capabilities in other markets such as interest rates, foreign exchange and agricultural swaps. In addition, we plan to provide a clearing solution for credit CRAIG S. DONOHUE Chief Executive Officer PHUPINDER S. GILL President default swaps (CDS) through CMDX, a joint March 2, 2009 6 The value of confidence PHUPINDER S. GILL President CME GROUP 2008 ANNUAL REVIEW 7 Accomplishments in 2008 GROW THE CORE BUSINESS » Delivered eighth consecutive year of record volume. » Traded 3 billion contracts reflecting $1.2 quadrillion in notional value. » Acquired New York Mercantile Exchange (NYMEX), the premier energy and metals exchange. » Achieved record trading volume across multiple product categories. » Expanded side-by-side trading of commodity options. » Extended exclusive, long-term license with NASDAQ OMX Group. GLOBALIZE THE BUSINESS » Inaugurated order routing agreement with Latin America’s largest exchange, BM&FBOVESPA. » Instituted agreement with Korea Exchange to list KOSPI 200 futures on CME Globex electronic trading platform. » Launched Euro-denominated E-mini S&P 500 futures. » Received recognition from Dubai Financial Services Authority for CBOT products. SERVE OTC MARKETS » Expanded presence in over-the-counter (OTC) market through CME ClearPort, an electronic system that extends the benefits of centralized clearing to OTC business. » Increased range of products available on CME ClearPort, including petroleum swap futures contracts, natural gas liquids swaps, plastic futures contracts, gasoil options contracts, central Appalachian coal options and PJM electricity swap futures. » Acquired Credit Market Analysis, a leading provider of credit derivatives market data. » Partnered with Citadel to create CMDX – an open-architecture marketplace for trading and migration of credit default swaps (CDS) – which is designed to provide the benefits of central clearing to CDS trades. ACHIEVE OPERATIONAL EXCELLENCE » Maintained unsurpassed risk management standards despite enormous market stress. » Provided $7 billion in financial safeguards to help mitigate systemic risk. » Held more than $100 billion of collateral on deposit. » Delivered Chicago Board of Trade (CBOT) merger synergies. » Completed migration of CBOT products to CME Globex. » Commenced NYMEX integration process. » Implemented technology upgrades that helped reduce average futures response time by 71 percent. 8 The value of confidence FINANCIAL HIGHLIGHTS Y E A R E N D E D O R AT D ECE M B E R 3 1 (in millions, except per share data and notional value) Income Statement Data Total revenues Operating income Income before income taxes Net income Earnings per share: Basic Diluted Balance Sheet Data Current assets ¹ Total assets ¹ Current liabilities ¹ Total liabilities ¹ Shareholders’ equity Other Data Total trading volume (round turn trades) Total electronic volume (round turn trades) Open interest at year end (contracts) Notional value of trading volume (in trillions) 2008 2007 Change $ 2,561 $ 1,756 1,582 1,248 715 1,052 1,096 659 $ 12.18 12.13 $ 15.05 14.93 $ 1,458 $ 4,154 30,505 989 11,817 18,689 2,988 2,430 63 19,473 3,243 7,168 12,306 2,250 1,739 54 $ 1,227 $ 1,134 46% 50 14 9 (19) (19) (65) % 57 (69) 65 52 33% 40 17 8 ¹ Amounts exclude cash performance bonds and security deposits. All references to volume, notional value and rate per contract information in this document exclude our non-traditional TRAKRS, auction-traded and Swapstream products. All references to options in this document refer to options on futures contracts. 8 8 9 , 2 0 5 2 , 2 1 6 5 , 2 6 5 7 , 1 2 6 0 6 7 5 4 5 9 4 5 1 7 9 5 6 1 4 3 , 1 8 4 0 , 1 7 8 7 0 9 0 , 1 0 9 8 2 2 7 7 0 4 7 0 3 0 2 2 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 TOTAL TRADING VOLUME (in millions of round turn trades) TOTAL REVENUES (in millions of dollars) OPERATING MARGIN (in percentages) NET INCOME (in millions of dollars) CME GROUP 2008 ANNUAL REVIEW 9 Around the world and around the clock. 10 The value of confidence It’s all about access. In today’s global marketplace, CME Group provides the tools business leaders need to manage risk whenever and wherever it might arise. We offer around-the-clock electronic access to some of the world’s most dynamic markets, with the safety and soundness that stem from central counterparty clearing and the financial strength of CME Clearing. Our CME Globex electronic trading platform is available on more than 130,000 terminals in 85 countries and territories around the world, with an average response time of less than 10 milliseconds at year-end 2008. CME GROUP 2008 ANNUAL REVIEW 11 Extending our offerings to meet new market challenges. 12 The value of confidence Markets evolve and so do needs. CME Group offers the broadest range of products across all major asset classes, including interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals and alternative investment products such as weather and real estate. In 2008, we introduced more new products to meet changing custo mer demands. On exchange, these included Euro-denominated E-mini S&P 500 futures, weather contracts in seven new cities, 3-month Overnight Index Swaps futures and options, and futures and options on the U.S. Bureau of Labor Statistics Nonfarm Payrolls data. We broad ened our array of products available on CME ClearPort, adding new petroleum swap futures contracts, gasoil options, natural gas liquids swap futures and plastic futures, as well as platinum and palladium futures. CME GROUP 2008 ANNUAL REVIEW 13 Know where you stand. 14 The value of confidence Even during times of unprecedented market stress, CME Group’s business model continues to work. Our customers have confidence in us and count on our ability to deliver highly liquid markets with tight bid-ask spreads in all major asset classes, virtually 24 hours a day. We continuously monitor market conditions. Our twice- daily mark-to-market protocol limits the accumulation of losses, which means that our customers can better manage their risks. Ongoing, highly sophisticated market surveillance ensures the integrity of our trading environment. CME GROUP 2008 ANNUAL REVIEW 15 More than ever, we’re essential. 16 The value of confidence More than ever, we’re essential. 2008 was a very challenging year, but for our customers and markets worldwide, CME Group was a source of stability, security and sensibility. We helped reduce and contain systemic risks. We guaranteed the safety and soundness of every trade. And we enabled our customers to reduce operational costs and improve capital efficiencies – making it easier and safer for them to act. And making us essential for managing risk. CME GROUP 2008 ANNUAL REVIEW 17  “Product breadth and depth, sophisticated technology and credit efficiencies are just three of the reasons why hedge funds find our markets attractive.” KELLY BROWN Director, Hedge Funds CME Group 18 The value of confidence BENCHMARK PRODUCTS: SEARCH FOR QUALITY IN UNCERTAIN TIMES CME Group offers the widest array of products of any exchange in the world – including derivatives based on fixed- income, interest rates, equity indexes, foreign exchange, energy, agricultural commodities and metals. Even during times of tremendous market dislocation, CME Group offers unparalleled liquidity and transparency virtually 24 hours a day. “In turbulent times, you need to constantly adjust your strategy, so having access to all asset classes and benchmark products on one platform is an advantage.” TRACY WILLS-ZAPATA Managing Director, Business Development Campbell & Company CME GROUP 2008 ANNUAL REVIEW 19  “There is no such thing as fast enough – we are constantly improving CME Globex’s functionality, speed and distribution capabilities.” KEVIN KOMETER Managing Director and Chief Information Officer CME Group “Exchanges around the world want to leverage CME Globex’s distribution capabilities for their own products – that is a tremendous opportunity for CME Group and our customers.” CHARLES FARRA Director, International Sales CME Group 20 The value of confidence TECHNOLOGY: BORDERLESS OPPORTUNITIES The CME Globex platform continues to set the global standard in electronic derivatives trading. Our commitment to leading-edge technology means trades are executed in milliseconds with unparalleled functionality capable of handling even the most complex transactions. Electronic hubs in Amsterdam, Dublin, London, Milan, Paris, Sao Paulo and Singapore improve connectivity while reducing customer costs. “Having direct electronic access to CME Group’s commodity markets, through BM&FBOVESPA, offers new ways to hedge farmers’ soybean business in Mato Grosso against adverse price moves.” BLAIRO MAGGI Governor of the State of Mato Grosso Brazil CME GROUP 2008 ANNUAL REVIEW 21  “CME Group has stepped up to provide concrete solutions for today’s challenges.” JAMES WALLIN Senior Vice President, Fixed Income Alliance Bernstein 22 The value of confidence  “CME Group is flexible so that customers can select the clearing solution that works for them.” KIM TAYLOR Managing Director and President, CME Clearing CME Group CLEARING: OPPORTUNITIES EMERGE ACROSS ALL MARKETS In an environment of balance sheet constraints and growing counterparty concerns, the case for central counterparty clearing is more critical than ever. CME Clearing offers financial safeguards, valued at $7 billion as of year- end 2008, designed to eliminate counterparty risk. In CME Group’s core futures markets, participants benefit from integrated execution and clearing services with straight-through processing. And CME ClearPort continues to expand its clearing capabilities for the over-the-counter market. CME GROUP 2008 ANNUAL REVIEW 23 “In today’s volatile environment, we are always seeking a smarter approach to managing market fluctuations.” STEPHEN SEMLITZ Managing Director Hess Energy Trading Company 24 The value of confidence  “The energy market is looking for ways to more effectively balance risk and reward – offense is now as important as defense.” JOSEPH RAIA Managing Director, Energy and Metals Products CME Group NYMEX: FUELING THE FUTURE Through our acquisition of NYMEX, CME Group offers the largest and most liquid regulated marketplace for futures and options on global bench- mark energy products, including crude oil, natural gas, heating oil, gasoline, ethanol, propane and other products. This extensive slate of energy futures, options and fully cleared over-the- counter contracts provides global market participants the opportunity to manage their exposure to energy market fluctuations, reducing their risk and creating opportunities around the world. CME GROUP 2008 ANNUAL REVIEW 25  “Including precious metals in a portfolio really makes sense from a diversification standpoint.” BARRY WAINSTEIN Vice Chairman Scotia Capital “At CME Group, we are developing new products and expanding our clearing services to meet the challenges of today’s marketplace.” PATRICIA CAULEY Associate Director, Metals Marketing CME Group 26 The value of confidence  “CME Group offers us broad accessibility to the markets as well as the counterparty risk mitigation we require.” ROBERT MIZRAHI Managing Director, Precious Metals ScotiaMocatta “As a global, client-driven business, ScotiaMocatta regularly utilizes the depth of liquidity that CME Group provides.” TIMOTHY DINNEY Managing Director ScotiaMocatta COMMODITIES: METALS SHINE BRIGHTLY IN AN UNCERTAIN ECONOMY The increased demand in emerging markets for certain metals such as copper, and the role of gold as a traditional safe haven during troubled economic times, have fueled market interest in CME Group’s metals complex. These metals contracts comprise the world’s largest complex of precious, base and ferrous metals available in a single trading venue. CME GROUP 2008 ANNUAL REVIEW 27  “At a time of unprecedented volatility, our customers are looking for tools that restore some predictability to their business.” THOMAS COYLE Vice President and General Manager, Chicago & Illinois River Marketing, LLC, a wholly owned subsidiary of Nidera, Inc. COMMODITIES: HUNGER FOR SOLUTIONS DRIVES MARKET DEMAND Global food shortages, rapidly changing commodity prices and the debate about biofuels have impacted the agribusiness marketplace tremendously, creating unpre cedented volatility and a greater need for risk management tools. With CME and CBOT products now available on a single platform and trading floor, new opportunities are unfolding for customers that look to CME Group’s markets for price discovery and to manage risk. 28 The value of confidence  “Commodity market participants have become increasingly sophisticated in how they approach their risk management needs.” DAVID LEHMAN Director, Commodity Research and Product Development CME Group CME GROUP 2008 ANNUAL REVIEW 29 JAMES E. PARISI Chief Financial Officer 30 The value of confidence Financial Milestones in 2008 » Integrated Chicago Board of Trade – migrating all electronic trading to CME Globex platform, combining trading floors and reducing expenses by more than $100 million. » Completed acquisition of New York Mercantile Exchange (NYMEX) and began integration – expanding product diversity and adding strategic benefit of ClearPort. » Obtained debt financing for NYMEX acquisition – achieving reasonable terms in a challenging market. » Completed equity swap agreement with BM&FBOVESPA and acquisition of Credit Market Analysis – contributing to long-term growth initiatives. , 4 8 4 8 8 2 8 4 1 2 3 10 4 1 1 , 3 1 1 1 , 1 1 , 7 1 8 1 1 , 8 0 1 1 , 0 1 1 6 6 1 6 , 8 6 8 , 23 , 3 4 3 3 4 8 5 3 5 8 5 1 , 5 1 4 1 1 1 , 1 4 , 3 1 1 , , 3 2007 , 5 9 5 8 9 6 2 8 8 6 2 7 , 8 1 7 , 35 , 1 8 0 8 8 0 3 8 , , 3 48 7 2008 38 04 04 05 06 07 05 06 07 08 08 AVERAGE DAILY TRADING VOLUME AVERAGE DAILY TRADING VOLUME (in thousands) (in thousands) 04 04 05 06 07 05 06 07 08 08 32 AVERAGE DAILY ELECTRONIC TRADING VOLUME AVERAGE DAILY ELECTRONIC TRADING VOLUME (in thousands) (in thousands) PRODUCT LINE REVENUES (as a percentage of total clearing and transaction fees) Interest Rates Equities Foreign Exchange Commodities and Alternative Investments 7 7 2 2 7 2 , 1 2 , 1 4 3 4 1 , 3 1 1 , 1 7 0 6 0 9 6 . . 9 10 4 2 4 8 2 8 8 3 8 6 3 6 3 6 3 4 6 4 4 4 4 3 4 . . 3 35 . 2 5 2 4 2 5 8 4 2 4 1 8 0 4 1 . 1 0 . . . . 1 04 04 05 06 07 05 06 07 08 08 04 04 05 06 07 05 06 07 08 08 NOTIONAL VALUE NOTIONAL VALUE (in trillions of dollars) (in trillions of dollars) DIVIDEND PAYOUT* DIVIDEND PAYOUT* (in dollars per share) (in dollars per share) *The total dividend for 2008 includes a special dividend of $5.00 per common share. 10 23 23 2007 48 2007 7 48 2008 7 38 2008 38 35 PRODUCT LINE REVENUES (as a percentage of total clearing and transaction fees) (as a percentage of total clearing and transaction fees) 32 PRODUCT LINE REVENUES 32 CME GROUP 2008 ANNUAL REVIEW 31 CME GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) Assets Current assets Property, net Intangible assets – trading products Intangible assets – other, net Goodwill Other assets Total Assets Liabilities and Shareholders’ Equity Current liabilities Long-term debt Deferred tax liabilities Other liabilities Total Liabilities Shareholders’ Equity Total Liabilities and Shareholders’ Equity 2008 AT D ECE M B E R 3 1 2007 $ 19,111,528 $ 4,987,055 707,215 16,982,000 3,369,373 7,519,209 469,329 377,452 7,987,000 1,796,789 5,049,211 108,690 $ 48,158,654 $ 20,306,197 $ 18,642,975 2,966,079 7,728,286 132,745 29,470,085 18,688,569 $ 48,158,654 $ 4,076,063 — 3,848,240 76,257 8,000,560 12,305,637 $ 20,306,197 32 The value of confidence CME GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Revenues Clearing and transaction fees Quotation data fees Processing services Access and communication fees Other Total Revenues Expenses Compensation and benefits Communications Technology support services Professional fees and outside services Amortization of purchased intangibles Depreciation and amortization Occupancy and building operations Licensing and other fee agreements Restructuring Other Total Expenses Operating Income Non-Operating Income (Expense) Investment income Impairment of long-term investment Gains (losses) on derivative investments Securities lending interest income Securities lending interest and other costs Interest and other borrowing costs Guarantee of exercise right privileges Equity in losses of unconsolidated subsidiaries Other income (expense) Total Non-Operating Income Before Income Taxes Income tax provision Net Income Earnings per Common Share: Basic Diluted Weighted Average Number of Common Shares: Basic Diluted 2008 2007 2006 Y E A R E N D E D D ECE M B E R 3 1 $ 2,115,366 $ 1,427,320 $ 866,089 279,533 54,073 43,618 68,429 2,561,019 317,554 52,339 59,611 71,944 98,682 137,341 71,388 70,259 4,839 94,867 978,824 145,054 106,404 36,511 40,812 1,756,101 263,347 43,471 50,480 53,142 33,878 105,653 48,202 35,651 8,892 61,477 704,193 80,836 90,148 29,021 23,853 1,089,947 202,966 31,580 31,226 33,184 1,267 72,783 29,614 25,728 — 40,136 468,484 1,582,195 1,051,908 621,463 45,514 (274,507) (8,148) 38,323 (51,722) (56,501) 12,824 (31,556) (8,458) (334,231) 1,247,964 532,478 73,157 — (98) 121,494 (115,868) (3,629) (17,167) (13,995) — 43,894 1,095,802 437,269 55,792 — — 94,028 (92,488) (223) — (6,915) 50,194 671,657 264,309 $ 715,486 $ 658,533 $ 407,348 $ 12.18 12.13 $ 15.05 14.93 $ 11.74 11.60 58,738 58,967 43,754 44,107 34,696 35,124 CME GROUP 2008 ANNUAL REVIEW 33 CME GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Cash Flows from Operating Activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Impairment of long-term investment Deferred income taxes Other Net Cash Provided by Operating Activities Cash Flows from Investing Activities Proceeds from maturities of marketable securities Purchases of marketable securities Net change in NYMEX securities lending program investments Purchases of property, net Cash acquired in merger with CBOT Holdings Acquisition of Credit Market Analysis Limited, net of cash received Acquisition of NYMEX Holdings, net of cash received NYMEX membership rights payment Other Net Cash Used in Investing Activities Cash Flows from Financing Activities Proceeds from issuance of commercial paper, net of maturities Proceeds from other borrowings, net of issuance costs Repayment of other borrowings Net change in NYMEX securities lending program liabilities Cash dividends Repurchase of common stock, including costs Other Net Cash Provided by (Used in) Financing Activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and Cash Equivalents, End of Period 2008 2007 2006 Y E A R E N D E D D ECE M B E R 3 1 $ 715,486 $ 658,533 $ 407,348 137,341 274,507 (115,111) 184,974 1,197,197 265,112 (367,554) 110,089 (200,102) — (94,141) (2,769,894) (612,000) (80,578) (3,749,068) 1,330,336 2,881,941 (1,282,909) (110,089) (615,193) (224,029) 24,397 2,004,454 (547,417) 845,312 105,653 — (50,583) 100,771 814,374 203,801 (129,125) — (163,644) 116,010 — — — (105,680) (78,638) 162,853 — — — (151,582) (949,340) 78,141 (859,928) (124,192) 969,504 72,783 — (24,847) 16,412 471,696 73,668 (29,681) — (87,810) — — — — (42,037) (85,860) — — — — (87,537) — 60,314 (27,223) 358,613 610,891 $ 297,895 $ 845,312 $ 969,504 34 The value of confidence FORWARD-LOOKING STATEMENTS From time to time, in written reports and oral statements, we discuss our expectations regarding future performance. These forward-looking statements are identified by their use of terms and phrases such as “believe,” “anticipate,” “could,” “estimate,” “intend,” “may,” “plan,” “expect” and similar expressions, including references to assumptions. These forward-looking statements are based on currently available competitive, financial and economic data, current expectations, estimates, forecasts and projections about the industries in which we operate and management’s beliefs and assumptions. 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. We want to caution you not to place undue reliance on any forward-looking statements. We undertake no obligation to publicly update any forward- looking statements, whether as a result of new information, future events or otherwise. Among the factors that might affect our performance are: • Our ability to realize the benefits and control the costs of our acquisi- • Changes in our rate per contract due to shifts in the mix of the prod- tion of NYMEX Holdings and our ability to successfully integrate the ucts traded, the trading venue and the mix of customers (whether businesses of CME Group and NYMEX Holdings, including the fact the customer receives member or non-member fees or participates that such integration may be more difficult, time consuming or costly in one of our various incentive programs) and the impact of our tiered than expected and revenues following the transaction may be lower pricing structure; than expected and expected cost savings from the transaction may • The ability of our financial safeguards package to adequately protect not be fully realized within the expected time frames or at all; us from the credit risks of clearing members; • Increasing competition by foreign and domestic entities, including • The ability of our compliance and risk management methods to effec- increased competition from new entrants into our markets and tively monitor and manage our risks; consolidation of existing entities; • Changes in price levels and volatility in the derivatives markets and • Our ability to keep pace with rapid technological developments, in underlying fixed income, equity, foreign exchange and commodi- including our ability to complete the development and implementa- ties markets; tion of the enhanced functionality required by our customers; • Economic, political and market conditions, including the recent • Our ability to continue introducing competitive new products and volatility of the capital and credit markets and the impact of current services on a timely, cost-effective basis, including through our economic conditions on the trading activity of our current and poten- electronic trading capabilities, and our ability to maintain the compet- tial customers; itiveness of our existing products and services; • Our ability to accommodate increases in trading volume and order • Our ability to adjust our fixed costs and expenses if our revenues transaction traffic without failure or degradation of the performance decline; of our systems; • Our ability to continue to generate revenues from our processing • Our ability to execute our growth strategy and maintain our growth services; effectively; • Our ability to maintain existing customers, develop strategic relation- • Our ability to manage the risks and control the costs associated with ships and attract new customers; our acquisition, investment and alliance strategy; • Our ability to expand and offer our products in foreign jurisdictions; • Our ability to continue to generate funds and/or manage our indebt- • Changes in domestic and foreign regulations; edness to allow us to continue to invest in our business; • Changes in government policy, including policies relating to common • Industry and customer consolidation; or directed clearing, changes as a result of a combination of the Secu- • Decreases in trading and clearing activity; rities and Exchange Commission (SEC) and the U.S. Commodity • The imposition of a transaction tax on futures and options on futures Futures Trading Commission (CFTC), or changes relating to the transactions; recently enacted or proposed legislation relating to the current • The unfavorable resolution of material legal proceedings; economic crisis, including the Emergency Economic Stabilization Act • The seasonality of the futures business; and of 2008 and other stimulus packages; • Changes in the regulation of our industry with respect to speculative • The costs associated with protecting our intellectual property rights trading in commodity interests and derivative contracts. and our ability to operate our business without violating the intellec- tual property rights of others; • Our ability to generate revenue from our market data that may be reduced or eliminated by the growth of electronic trading or declines in subscriptions; CME GROUP 2008 ANNUAL REVIEW 35 PERFORMANCE GRAPH The following graph compares the cumulative five-year total return provided shareholders on our Class A common stock relative to the cumulative total returns of the S&P 500 index, and a customized peer group described below as of the end of the year. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock, in the peer group, and the index on December 31, 2003, and its relative performance is tracked through December 31, 2008. As a result of our acquisition of NYMEX Holdings, Inc. in August 2008, NYMEX Holdings, Inc. is no longer included in the customized peer group. Peer Group: • IntercontinentalExchange, Inc. • The Nasdaq OMX Group Inc. • NYSE Euronext CUMUL ATIVE TOTAL RETURN $1,200 1,000 800 600 400 200 0 03 C M E G R O U P I N C . S & P 5 0 0 P E E R G R O U P 04 05 06 07 08 * $100 invested on 12/31/03 in stock and index - including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2009 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. 36 The value of confidence SHARE INFORMATION CL ASS A COMMON STOCK Our Class A common stock is currently listed on NASDAQ under the ticker symbol “CME.” In June 2008, we elected to delist from the New York Stock Exchange and become solely listed on NASDAQ. As of February 18, 2009, there were approximately 2,200 holders of record of our Class A common stock. The following table sets forth the high and low sales prices per share of our Class A common stock on a quarterly basis, as reported on NASDAQ. 2008 First Quarter Second Quarter Third Quarter Fourth Quarter CL ASS B COMMON STOCK High Low 2007 $ 686.43 $ 399.01 First Quarter 526.98 422.24 440.00 375.38 Second Quarter 282.00 Third Quarter 155.49 Fourth Quarter High Low $ 596.26 $ 510.00 565.00 609.92 714.48 497.00 506.50 593.58 Our Class B common stock is not listed on a national securities exchange or traded in an organized over-the-counter market. Each class of our Class B common stock is associated with a membership in a specific division of our CME exchange. CME’s rules provide exchange members with trading rights and the ability to use or lease these trading rights. Each share of our Class B common stock can be transferred only in connection with the transfer of the associated trading rights. The memberships by class are CME (Chicago Mercantile Exchange), IMM (International Mon- etary Market), IOM (Index and Option Market) and GEM (Growth and Emerging Markets). Class B shares and the associated trading rights are bought and sold through our shareholder relations and membership services department. In addition, trading rights may be leased through the department. Trading rights sales are reported on our Web site. Although our Class B sharehold- ers have special voting rights, because our Class B shares have the same equitable interest in our earnings and the same dividend payments as our Class A shares, we expect that the market price of our Class B common stock, if reported separately from the associated trading rights, would be determined by the value of our Class A common stock. As of February 18, 2009, there were approximately 1,800 holders of record of our Class B common stock. DIVIDENDS The following table sets forth the dividends we paid on our Class A and Class B common stock in the last two years: Record Date March 10, 2008 June 10, 2008 September 10, 2008 September 25, 2008 December 10, 2008 Dividend per Share Record Date $ 1.15 March 9, 2007 June 8, 2007 September 10, 2007 December 10, 2007 1.15 1.15 5.00 1.15 Dividend per Share $ 0.86 0.86 0.86 0.86 We intend to pay regular quarterly dividends to our shareholders. The decision to pay a dividend, however, remains within the discretion of our board of directors and may be affected by various factors, including our earnings, financial condition, capital requirements, level of indebtedness and other considerations our board of directors deems relevant. Our existing credit facility as well as future credit facilities, other future debt obligations and statutory provisions may limit our ability to pay dividends. The September 25, 2008, dividend was a special dividend. On February 4, 2009, the board of directors declared a regular quarterly dividend of $1.15 per share to be paid on March 25, 2009, to shareholders of record on March 10, 2009. CME GROUP 2008 ANNUAL REVIEW 37 BOARD OF DIRECTORS TERRENCE A . DUFF Y Executive Chairman CHARLES P. CAREY Vice Chairman CRAIG S. DONOHUE Chief Executive Officer LEO MEL AMED Chairman Emeritus Chairman and Chief Executive Officer, Melamed and Associates, Inc., Chicago, Ill. JOHN F. SANDNER Retired Chairman of the Board Chairman, E*Trade Futures, LLC, Chicago, Ill. 38 The value of confidence TIMOTHY S. BITSBERGER Consultant, Washington, D.C. Former Treasurer, Federal Home Loan and Mortgage Company, Washington, D.C. MARK E . CERMAK Director, Execution Services, Fortis Clearing Americas, Chicago, Ill. DENNIS H. CHOOK ASZIAN Chairman, Financial Accounting Standards Advisory Council, Norwalk, Conn. Former Chairman and Chief Executive Officer, CNA Insurance Companies, Chicago, Ill. JACKIE M. CLEGG Managing Partner, ROBERT F. CORVINO Independent Trader, Chicago, Ill. Clegg International Consultants, LLC, Washington, D.C. JAMES A . DONALDSON Independent Trader, Chicago, Ill. MARTIN J. GEPSMAN Independent Broker and Trader, Chicago, Ill. L ARRY G. GERDES Chairman, President and Chief Executive Officer, Transcend Services, Inc., Atlanta, Ga. General Partner, Gerdes Huff Investments, Atlanta, Ga. DANIEL R. GLICKMAN Chairman and Chief Executive J. DENNIS HASTERT Retired Speaker of the House Officer, Motion Picture Association of America, Inc., Washington, D.C. U.S. Secretary of Agriculture (1995–2001) Member of Congress, Kansas (1977–1995) of Representatives Member of Congress, Illinois (1987–2007) BRUCE F. JOHNSON Independent Trader, Chicago, Ill. GARY M. K ATLER Vice President, Fortis Clearing PATRICK B. LYNCH Independent Trader, Chicago, Ill. WILLIAM P. MILLER II Deputy Director of Investments, Americas, Chicago, Ill. Ohio Public Employees Retirement System, Columbus, Ohio JAMES E . NEWSOME Former President, New York Mercantile Exchange, New York, N.Y. Former Chairman, Commodities Futures Trading Commission, Washington, D.C. CME GROUP 2008 ANNUAL REVIEW 39 BOARD OF DIRECTORS JOSEPH NICIFORO Chairman, Twinfields Capital Management, Greenwich, Conn. C.C. ODOM II Independent Member/Trader Sole Proprietor, Odom Investments and Argent Venture Capital, San Antonio, Texas JAMES E . OLIFF President, FILO Corp., Chicago, Ill. JOHN L . PIETRZAK Managing Partner, Longwood Partners, Chicago, Ill. General Partner, Sparta Group, Chicago, Ill. ALEX J. POLLOCK Resident Fellow, American Enterprise Institute, Washington, D.C. WILLIAM G. SAL ATICH, JR. Independent Broker and Trader, Chicago, Ill. TERRY L . SAVAGE Financial Journalist and Author President, Terry Savage Productions, Ltd., Chicago, Ill. HOWARD J. SIEGEL Independent Trader, Chicago, Ill. ROBERT H. STEELE Vice Chairman, John Ryan CHRISTOPHER STEWART Chief Executive Officer, Company, Minneapolis, Minn. Director, NLC Mutual Insurance Company, Norwich, Conn. Member of Congress, Connecticut (1970-1974) Gelber Group, LLC, Chicago, Ill. DENNIS A . SUSKIND Former Councilman, Southampton, N.Y. (2001-2004) DAVID J. WESCOT T President, The Wescott Group Ltd., Chicago, Ill. Vice President, MF Global, Chicago, Ill. WILLIAM R. SHEPARD (not pictured) President and Founder, Shepard International, Inc. Chicago, Ill. 40 The value of confidence MANAGEMENT Management Team Managing Directors CRAIG S. DONOHUE Chief Executive Officer PHUPINDER S. GILL President K ATHLEEN M. CRONIN Managing Director, General Counsel and Corporate Secretary ANNE E . BAGAN Managing Director, Audits CHRISTOPHER MEAD Managing Director, Marketing DAVID BOBERSKI Managing Director, OTC Research and Product Development DALE A . MICHAELS Managing Director, Credit and Market Risk Management NEAL B. BRADY Managing Director, Business Development MICHAEL O’CONNELL Managing Director, Clearing Business Development BRYAN T. DURKIN Managing Director and Chief Operating Officer BO CHAMBLISS Managing Director, Government Relations JOSEPH A . PANFIL Managing Director, Operations and Systems Engineering BARRY C. GOLDBL AT T Managing Director, Commodities, Energy and Metals Products JULIE HOL ZRICHTER Managing Director, Global Operations KEVIN KOMETER Managing Director and Chief Information Officer JAMES E . PARISI Managing Director and Chief Financial Officer HILDA HARRIS PIELL Managing Director and Chief Human Resources Officer RICHARD H. REDDING Managing Director, Products and Services KIMBERLY S. TAYLOR Managing Director and President, CME Clearing KENDAL L . VROMAN Managing Director and Chief Corporate Development Officer JOHN F. CURRAN Managing Director, Product Strategy EVANS PAPANIKOL AOU Managing Director, CME Globex Market Operations TIMOTHY J. DOAR Managing Director, Risk Management PHILIP J. PAPESH Managing Director, Software Engineering DE’ANA DOW Managing Director, Government Relations DEAN P. PAY TON Managing Director and Chief Regulatory Officer DANIELLE DYCUS Managing Director, Europe, Middle East and Africa JOHN C. PESCHIER Managing Director, Investor Relations JAMES W. FARRELL Managing Director, Software Engineering JOHN W. PIETROWICZ Managing Director, Corporate Finance and Treasury EDWARD M. GOGOL Managing Director, Clearing Solutions JOSEPH RAIA Managing Director, Energy and Metals Products JILL A . HARLEY Managing Director and Chief Accounting Officer ROBERT D. RAY Managing Director, International Products and Services JOHN K . HART Managing Director, Technology Engineering BRIAN REGAN Managing Director, Regulatory Counsel DAVID HOAG Managing Director, Clearing Technology CHRISTOPHER RODRIGUEZ Managing Director, Business Development SCOT T R. K AUFMAN Managing Director, Architecture ROBIN S. ROSS Managing Director, Interest Rate Products SEAN KEATING Managing Director, NYMEX Operations DEREK L . SAMMANN Managing Director, Foreign Exchange Products RICHARD J. KOKOSZK A Managing Director, Internal Audit JOHN L . SANTANA Managing Director, Software Engineering JOHN W. L ABUSZEWSKI Managing Director, Research and Product Development DONALD D. SERPICO Managing Director, Facilities and Business Continuity Planning RICHARD H. L AMM Managing Director, Chief Regulatory Counsel ANN K . SHUMAN Managing Director and Deputy General Counsel THOMAS L aSAL A Managing Director, NYMEX Chief Regulatory Officer IAN WALL Managing Director, NYMEX Information Technology TINA F. LEMIEUX Managing Director, Hedge Funds and Broker Services SCOT E . WARREN Managing Director, Equity Products KEVIN LENNON Managing Director, Real Estate JASON WELLER Managing Director, Corporate Strategy ROBERT LEVIN Managing Director, Energy Research and Product Development ANITA S. LISKEY Managing Director, Corporate Marketing and Communications ARTHUR McCOY Managing Director, NYMEX Clearing JULIE M. WINKLER Managing Director, Research and Product Development C. F. WONG Managing Director, Asia CME GROUP 2008 ANNUAL REVIEW 41 COMPANY INFORMATION HEADQUARTERS CME Group Inc. 20 South Wacker Drive Chicago, Illinois 60606-7499 312.930.1000 TEL 312.466.4410 FA X www.cmegroup.com info@cmegroup.com INVESTOR REL ATIONS CME Group Inc. 20 South Wacker Drive Chicago, Illinois 60606-7499 312.930.8491 SHAREHOLDER REL ATIONS CME Group Inc. 20 South Wacker Drive Chicago, Illinois 60606-7499 312.930.3484 MEMBERSHIP SERVICES CME Group Inc. 20 South Wacker Drive Chicago, Illinois 60606-7499 312.435.3480 FINANCIAL REPORTS Copies of the CME Group 2008 Annual Review, as well as its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission, are available online at www.cmegroup.com, or to shareholders upon written request to Shareholder Rela- tions at the above address. The company is required to file as an exhibit to its 2008 Annual Report on Form 10-K a certification under Section 302 of the Sarbanes-Oxley Act of 2002 signed by the chief executive officer and the chief financial officer. Copies of these certifications are available to shareholders upon written request to Shareholder Relations at the above address. STOCK LISTING CME Group Class A common stock is listed on The NASDAQ Global Select Market under the ticker symbol “CME.” As of February 18, 2009, there were approximately 2,200 holders of record of the company’s Class A common stock. CME Group Class B common stock is not listed on a national securities exchange or traded in an organized over-the-counter market. Each class of Class B common stock is associated with membership in a specific division of the exchange. As of February 18, 2009, there were approximately 1,800 holders of record of the company’s Class B common stock. TRANSFER AGENT Computershare Investor Services Stock Transfer Department 2 North LaSalle Street Chicago, Illinois 60602 312.360.5104 (Automated interactive voice response systems are available 24 hours a day. Press zero for live customer support 8:00 a.m. to 5:00 p.m. Central Time on any day the U.S. equity markets are open.) www.computershare.com DIVIDENDS The company’s current dividend policy, subject to the discretion of the board of directors, is to pay out approximately 30 percent of the prior year’s cash earnings as dividends to shareholders. Quarterly dividends are generally paid in March, June, September and December. ANNUAL MEETING The 2009 Annual Meeting of Shareholders will be held at 4:00 p.m., Central Time, on Wednesday, May 13, 2009, at the University of Chicago Gleacher Center, located at 450 North Cityfront Plaza Drive in Chicago. All shareholders are cordially invited to attend. A formal notice of meeting, proxy statement and proxy have been sent to shareholders, or made available over the Internet. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Sears Tower 233 South Wacker Drive Chicago, Illinois 60606 CORPORATE COMMUNICATIONS CME Group Inc. 20 South Wacker Drive Chicago, Illinois 60606-7499 312.930.3434 CUSTOMER SERVICE For customer service assistance, call 800.331.3332. Outside the United States, please call 312.930.2316. To provide feedback on customer service at CME Group, please call 866.652.1132 or e-mail customerfeedback@cmegroup.com. CORPORATE GOVERNANCE On the corporate governance Web page at www.cmegroup.com, shareholders can view the company’s corporate governance principles, charters of all board level committees, the categorical independence standards, board of directors code of ethics, employee code of conduct and the director conflict of interest policy. Copies of these documents are available to shareholders without charge upon written request to Shareholder Relations at the address listed above. ADDITIONAL INFORMATION Further information about CME Group and its products is available on our Web site at www.cmegroup.com. The Globe logo, CME®, CME Group®, Chicago Mercantile Exchange®, E-mini® and Globex® are trademarks of Chicago Mercantile Exchange, Inc. CBOT® and Chicago Board of Trade® are trademarks of the Board of Trade of the City of Chicago. NYMEX®, New York Mercantile Exchange® and ClearPort® are trade- marks of New York Mercantile Exchange. Inc. All other trademarks are the property of their respective owners. Further information about CME Group and its products can be found at www.cmegroup.com. Information made available on our Web site does not constitute a part of this report. Brazilian Mercantile & Futures Exchange S.A. and BM&F are trademarks of the Brazilian Mercantile & Futures Exchange S.A. CMDX SM is a service mark of CMDX, LLC. FIX Protocol and FAST Protocol are service marks of Fix Protocol Limited. KOSPI® is a trademark of the Korea Exchange Company Republic of Korea. NASDAQ® is a trademark of The NASDAQ OMX Group and NASDAQ OMXSM is a service mark of The NASDAQ OMX Group, Inc. Scotia Capital USA is a wholly owned subsidiary of Scotia Capital. ScotiaMocatta is a trademark of the Bank of Nova Scotia in the United Kingdom. S&P® and S&P 500® are trademarks of the McGraw-Hill Companies, Inc. Copyright © 2009 CME Group Inc. C This report is printed on recycled paper. 42 The value of confidence Inspiring confidence for the future, today. CME Group believes that it is both a responsibility and a privilege to give back to the communities in which our members and employees live and do business. Through our charitable programs and foundations, CME Group is able to lend a hand to those who need it most and inspire confidence in their futures. During 2008, our members and employees provided more than 1,000 hours of volunteer service to local non-profit organizations through Amicus, our community outreach program. Partner agencies in our headquarters’ city included House of the Good Shepherd, Inspira- tion Café, Labouré House, Salvation Army Emergency Lodge, Illinois Fatherhood Initiative and Special Spectators. Fundraising drives were organized to benefit causes such as the Greater Chicago Food Deposi- tory, Operation Support Our Troops Illinois, USA Cares and Toys for Tots. CME Group also entered its fourth year of partnership with Wash- ington Irving Elementary School as part of the Chicago Public School’s Futures Exchange Program. CME Group volunteers participated in a number of service projects in 2008 designed to enrich the educational experiences of the Irving students, thus helping assure the success of tomorrow’s leaders. In 2008, the CME Group Foundation (cmegroupfoundation.org) was created and endowed with a gift of $16 million from the Chicago Mercantile Exchange Trust (CME Trust). CME Trust expects to make an annual contribution to the CME Group Foundation. The foundation’s mission is to support academic initiatives and activities, primarily in the Chicago region, that promote research, teaching and learning in finan- cial markets; promote the education of disadvantaged children and youth; and promote the health and education of young children. The CME Foundation (cmegroup.com/company/foundations) was established to provide charitable giving that includes disaster relief as well as meeting the needs of the Chicagoland community. The CME Foundation seeks to provide particular support to three areas of concern: children in need, education, and health and human services. Through a matching gift program, the CME Foundation also funds many worthwhile charitable organizations that are important to the exchange community. The CBOT Foundation (cmegroup.com/company/foundations) continues to provide a number of non-profit agencies in the Chicago- land area with the funds needed to effect positive change in the lives of those in need. The CBOT Foundation supports projects that help strengthen educational opportunities, promote and protect children and seniors, and support animal wildlife and cultural opportunities. The NYMEX Foundation (nymexfoundation.org) brings together our New York-based members, shareholders, customers and employees who generously contribute their resources to serve children in need, the elderly and local environmental causes. s e l e g n A s o L , h p a r g o h t i L n o s r e d n A : G N I t N I R P s i t i a k o m S e i i l r a h C , n e b o D n a i r B : y h P A R G O t O h P t I A R t R O P o g a c h C i , s r e n t r a P A S V : N G I s E D hEADqUARtERs CME Group Inc. 20 South Wacker Drive Chicago, Illinois 60606-7499 312.930.1000 TEl 312.466.4410 fax www.cmegroup.com info@cmegroup.com NEW yORk NyMEx World Headquarters World Financial Center One North End Avenue New york, New york 10282 212.299.2000 TEl 212.301.4711 fax hOUstON 1000 Louisiana Street Suite 1095 Houston, Texas 77002 713.658.9292 TEl 713.658.9393 fax WAshINGtON, D.C. 701 Pennsylvania Avenue, N.W. Plaza Suite #01 Washington, D.C. 20004 202.638.3838 TEl 202.638.5799 fax hONG kONG Level 39, One Exchange Square 8 Connaught Place Central Hong Kong 852.3101.7696 TEl 852.3101.7698 fax asiateam@cmegroup.com LONDON Watling House 33 Cannon Street London EC4M 5SB United Kingdom 44.20.7796.7100 TEl 44.20.7796.7110 fax europe@cmegroup.com sINGAPORE Level 30 Six Battery Road Singapore 049909 65.6550.9612 TEl 65.6550.9898 fax asiateam@cmegroup.com syDNEy Level 17, BNP Paribas Centre 60 Castlereagh Street Sydney NSW 2000 Australia 61.2.9231.7475 TEl 61.2.9231.7476 fax asiateam@cmegroup.com tOkyO Level 16 Shiroyama JT Trust Tower 4-3-1, Toranomon, Minato-ku Tokyo 105-6016 Japan 81.3.5403.4828 TEl 81.3.5403.4646 fax asiateam@cmegroup.com 

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