Filed by CBOT Holdings, Inc. Subject Company -- CBOT Holdings, Inc. Pursuant to Rule 425 under the Securities Act of 1933 File No. 333-72184 The following communication was distributed by the CBOT on October 27, 2003. FOR IMMEDIATE RELEASE Maria Gemskie 312-435-3620 news@cbot.com CBOT Continues Strong Financial Performance During Third Quarter of 2003 CHICAGO, October 27, 2003 - The Chicago Board of Trade (CBOT(R)) announced third-quarter operating income rose 97 percent over the same period the prior year, in performance fueled by record trading volume. In the July to September 2003 period, operating income climbed to $39.3 million from $20.0 million in the third quarter of 2002. Revenues also increased in the third quarter, rising 20 percent to $104.4 million, compared with $86.9 million during the same period the prior year. Net income after income taxes and limited partners' interest in the Ceres Limited Partnership was $6.3 million in the third quarter of 2003. No limited partners' interest was recorded in the similar 2002 period. Ceres Limited Partnership was formed in 1992 by the CBOT for the purpose of developing and maintaining an electronic trading system. The CBOT holds a 10 percent interest in Ceres, and members of the CBOT hold the remaining interest in the partnership. Growth in revenues was primarily driven by a 29 percent increase in trading volume in the third quarter, when CBOT reached a quarterly volume record of 128.5 million contracts, versus turnover of 99.9 million contracts during the third quarter of 2002. CBOT Chairman Charles P. Carey said, "Our strong financial results are a testimony to the strength of the CBOT. We provide the world with unparalleled trading opportunities, and market participants are increasingly taking advantage of our highly liquid, transparent markets. CBOT's earnings, and record volume, well position the exchange for future growth." CBOT President/CEO Bernard W. Dan said, "We are extremely pleased with our third-quarter results. Our success is directly linked to our business model, which focuses on providing customers with the technology, trading capabilities and open markets that they require. The CBOT has a 155-year track record of driving change in the derivatives industry, and our earnings speak to the continuation of our rich history." For the nine months ended September 30, 2003, operating income, rose 71 percent to $94.1 million, compared with operating income of $55.1 million in the same period the prior year. After recording income taxes and the limited partners' interest in Ceres, net income was $30.9 million in the first nine months of 2003. There was no limited partners' interest recorded in 2002. Revenues also rose in the first three quarters of 2003, increasing 20 percent to $282.1, from $235.7 million during the same period the prior year. Volume jumped 34 percent in the first nine months of the year to 339.3 million contracts, compared with 253.0 million contracts for the same period in 2002. On October 6, the CBOT broke its all-time annual volume record and continues to build on that record. As of September 30, 2003, the CBOT had an unrestricted cash balance of $113.1 million, compared to $83.5 million as of December 31, 2002. Net current assets as of September 30, 2003 were $96.3 million compared to $53.4 million on December 31, 2002. For more information about the CBOT's products and markets, log onto the exchange Web site at www.cbot.com. The following communication was distributed by the CBOT to CBOT members on October 27, 2003. October 27, 2003 Dear Member: Attached is a summary of the financial results for the nine months ended June 30, 2003 and a related press release. Our volume continues to be strong and, coupled with prudent financial management, continues to favorably impact our overall financial health. We are on track to start migrating to our new electronic platform and new CME Clearing Link in late November. This implementation will be completed by January 1, 2004. While we face many challenges, our business strategy is still focused on offering our customers and members the best open auction, order delivery and electronic platforms to enable our business to continue to grow. We intend to offer unequaled liquidity, integrity and innovation in the products we offer. As I have previously stated, my door is open to meet with you. I appreciate your comments and ideas. If you have any specific questions on the financial results you may contact Senior Vice President and CFO Glen Johnson (312-435-3457) or Vice President and Treasurer Jill Harley (312-341-3413). Sincerely, /s/ Charles P. Carey Charles P. Carey CHICAGO BOARD OF TRADE CONSOLIDATED STATEMENTS OF INCOME For the nine months ended September 30, 2003 (unaudited; in thousands) BALANCE SHEET HIGHLIGHTS (unaudited; in thousands)
- ---------------------------------------------------------------------------------------------------------------------------------- Quarter Ended Quarter Ended Nine Months Ended September 30, June 30, September 30, ------------------------------ ------------- ------------------------------ 2003 2002 2003 2003 2002 ------------- ------------- ------------- ------------- ------------- REVENUES Exchange Fees $82,295 $61,962 $71,038 $211,789 $155,767 Quotations 13,726 14,443 13,872 42,023 44,255 Building 4,853 6,187 5,077 14,870 19,882 Services 3,676 3,417 5,581 12,638 13,130 Other Operating Revenue (134) 882 378 784 2,617 - ---------------------------------------------------------------------------------------------------------------------------------- Total Revenues 104,416 86,891 95,946 282,104 235,651 - ---------------------------------------------------------------------------------------------------------------------------------- EXPENSES Salaries and Benefits 15,145 14,586 17,328 47,517 44,001 Depreciation and Amortization 7,596 8,071 7,669 22,473 30,107 Professional Services 9,945 8,985 6,839 21,791 19,992 General and Administrative Expenses 3,601 3,041 4,156 10,849 7,999 Building Operating Costs 6,468 5,297 6,336 18,998 17,365 Information Technology Services 11,729 9,886 15,236 38,725 29,455 Contracted License Fees 7,852 4,445 6,697 20,179 9,121 Programs 1,401 847 1,291 3,090 1,576 Loss on Impairment of Long-lived Assets - - - - 6,244 Interest 857 1,056 1,024 2,972 3,705 Litigation - 10,735 - - 10,735 Equity in Loss of One Chicago 247 - 240 786 - Severance and Related Costs 292 (40) 2 640 299 - ---------------------------------------------------------------------------------------------------------------------------------- Operating Expenses 65,133 66,909 66,818 188,020 180,599 - ---------------------------------------------------------------------------------------------------------------------------------- INCOME FROM OPERATIONS 39,283 19,982 29,128 94,084 55,052 PROVISION FOR INCOME TAXES 4,670 8,315 6,530 22,041 22,637 - ---------------------------------------------------------------------------------------------------------------------------------- INCOME BEFORE LIMITED PARTNERS INTEREST IN CERES PARTNERSHIP 34,613 11,667 22,598 72,043 32,415 LIMITED PARTNERS INTEREST IN INCOME OF CERES PARTNERSHIP (28,360) - (12,802) (41,162) - - ---------------------------------------------------------------------------------------------------------------------------------- NET INCOME $6,253 $11,667 $9,796 $30,881 $32,415 ================================================================================================================================== While CBOT Holdings, Inc. (CBOT Holdings) has filed with the SEC a Registration Statement on Form S-4, including a preliminary proxy statement and prospectus, relating to the restructuring of the Board of Trade of the City of Chicago, Inc. (CBOT), it has not yet become effective, which means it is not yet final. CBOT members are urged to read the final Registration Statement on Form S-4, including the final proxy statement and prospectus, relating to the restructuring of the CBOT referred to above, when it is finalized and distributed to CBOT members, as well as other documents which CBOT Holdings or the CBOT has filed or will file with the SEC, because they contain or will contain important information for making an informed investment decision. CBOT members may obtain a free copy of the final prospectus, when it becomes available, and other documents filed by CBOT Holdings or the CBOT at the SEC's web site at www.sec.gov. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any state in which offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------- September 30, December 31, 2003 2002 ------------- ------------- Unrestricted Cash $113,073 $83,505 Current Assets $167,050 $115,392 Total Assets $437,777 $354,197 Current Liabilities $70,703 $61,986 Long Term Debt $48,473 $42,857 Total Liabilities $146,335 $135,161 Members' Equity $250,280 $219,036