SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2006
CBOT HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
| Delaware | 001-32650 | 36-4468986 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
141 West Jackson Blvd.
Chicago, Illinois 60604
(Address, including zip code, of principal executive offices)
Registrant’s telephone number, including area code: (312) 435-3500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On February 9, 2006, the Registrant issued a press release announcing its results for its fourth quarter ended December 31, 2005. A copy of the press release is attached hereto as Exhibit 99.1.
This information is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into filings under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
| (c) | Exhibits: |
| 99.1 | Press Release dated February 9, 2006 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CBOT HOLDINGS, INC. | ||||
| Date: February 9, 2006 | By: | /s/ Bernard W. Dan | ||
| Name: | Bernard W. Dan | |||
| Title: | President and Chief Executive Officer | |||
EXHIBIT INDEX
| Exhibit No. |
Description of Exhibit | |
| 99.1 | Press Release dated February 9, 2006 |
Exhibit 99.1
| For Immediate Release: | ||||
| Media Contact: | ||||
| Melissa Jarmel | ||||
| 312.435.7137 | ||||
| news@cbot.com | ||||
| Investor Contact: | ||||
| Tami Kamarauskas | ||||
| 312.789.8532 | ||||
| InvestorRelations@ cbot.com | ||||
CBOT HOLDINGS FOURTH QUARTER 2005 EXCHANGE AND
CLEARING FEE REVENUE UP 33 PERCENT
CHICAGO, February 9, 2006 – CBOT Holdings, Inc., holding company for the Chicago Board of Trade (CBOT®), announced today that exchange and clearing fee revenue in the fourth quarter of 2005 rose 33 percent to $86.4 million compared with $65.1 million in the 2004 fourth quarter. Net income in the fourth quarter increased $20.4 million to $17.7 million, compared with a $2.7 million loss in the fourth quarter of 2004.
Fourth quarter total revenue was $117.4 million, up from $83.6 million in the fourth quarter of 2004. Fourth quarter operating income was $30.0 million, up $31.0 million from a $1.0 million loss in the same period during the prior year. The 2004 fourth quarter included a $9.3 million member dues reversal which reduced total revenue, and included $3.5 million of litigation costs which further reduced 2004 fourth quarter operating income.
Revenue for 2005 was a record $466.6 million, up 23 percent from $380.2 million in 2004. Exchange and clearing fee revenue grew 26 percent to $349.1 million from $276.4 million in 2004. Operating income for the year was a record $132.6 million, rising 79 percent from $74.2 million in the prior year. Net income for the year was a record $76.5 million, rising 82 percent from $42.0 million in the prior year.
CBOT Holdings President and CEO Bernard W. Dan said, “In 2005, the CBOT achieved substantial success – both operationally and financially. During the 2005 fourth quarter, we successfully implemented a major upgrade to our electronic trading platform, we completed our initial public offering and posted 33 percent exchange and clearing fee revenue growth. During the past year we created additional opportunities to capture global liquidity by extending trading hours to 22 hours per day, by adding global e-cbot® connections, and by forging new relationships with exchanges in Sydney, Dubai and Singapore. While adding future growth capabilities, the CBOT team also achieved new annual volume, revenue, earnings and cash flow from operations records.”
Revenue and earnings in 2005 benefited from an increase in the average rate per contract, which compared to the same period a year ago rose 34 percent in the fourth quarter and rose 12 percent in the 2005 year. The fourth quarter rate per contract of $0.570 includes $0.011 of benefit related to lower customer refund requests. The average rate per contract represents total exchange and clearing fee revenue divided by total reported trading volume.
Fourth quarter trading volume was 151.4 million contracts, similar to 153.4 million contracts traded during the prior year’s fourth quarter. Average daily volume (ADV) in the 2005 fourth quarter was 2.4 million contracts, equivalent to the 2004 fourth quarter ADV. In addition, ADV on the CBOT’s electronic trading platform, e-cbot powered by LIFFE CONNECT®, during the fourth quarter rose to 68 percent of total exchange volume, up from 63 percent in the fourth quarter of 2004.
Trading volume for the 2005 year was 674.7 million contracts, up 12 percent compared with 2004. Average daily volume for the 2005 year was 2.7 million contracts, up 13 percent compared with the 2004 ADV.
Fourth quarter operating expense of $87.3 million includes $16.0 million of volume-based expenses, $68.3 million of non-volume based or baseline costs and $3.0 million of other costs. Approximately $4.0 million of the baseline and other costs were not included in the outlook provided October 28, 2005. Those expenses relate to December 2005 events, including $1.0 million for the final payment related to the non-qualified defined benefit pension plan termination and employee separation costs of $3.0 million related to the realignment of technology resources and related workforce reduction, which affected approximately 40 people – or about 5 percent of the company’s total workforce, and the departure of the company’s former general counsel.
Key Financial Metrics (in millions, except rate per contract)
| Dec 31 2005 |
Dec 31 2004 |
Sept 30 2005 |
||||||||||
| Quarter Ended |
||||||||||||
| Average Daily Volume |
2.4 | 2.4 | 2.6 | |||||||||
| Reported Trading Volume |
151.4 | 153.4 | 165.2 | |||||||||
| Average Rate per Contract |
$ | 0.570 | $ | 0.424 | $ | 0.501 | ||||||
| Revenue |
$ | 117.4 | $ | 83.6 | $ | 112.2 | ||||||
| Operating Income (Loss) |
$ | 30.0 | $ | (1.0 | ) | $ | 32.9 | |||||
| Operating Margin |
26 | % | na | 29 | % | |||||||
| Net Income (Loss) |
$ | 17.7 | $ | (2.7 | ) | $ | 19.8 | |||||
| Depreciation & Amortization |
$ | 13.7 | $ | 12.3 | $ | 13.1 | ||||||
| Non-Cash Stock Compensation |
$ | 1.8 | $ | -0- | $ | -0- | ||||||
| Capital Expenditures |
$ | 12.8 | $ | 22.6 | $ | 7.8 | ||||||
CBOT Fourth Quarter Operational Highlights
CBOT announced upgrades to e-cbot, along with increases in exchange fee rates for certain transactions on e-cbot, effective October 1, 2005
Initial Public Offering of CBOT Holdings Class A common stock completed
CBOT successfully moved trading host to Chicago
CBOT announced strategic realignment of technology resources
CBOT and SGX announced plans to launch an Asian based electronic commodity derivatives exchange
Outlook
Given current market conditions and what is known today, CBOT Holdings currently expects the following for:
| 2006 Full Year |
2006 March Quarter | |||
| (in millions, except per contract data) | ||||
| Baseline and other expenses, which equal total |
$265- $275 |
$68- $71 | ||
| Non-cash stock compensation expense |
$ 2.5 - $3.0 |
$0.4-$0.5 | ||
| 2006 Full Year and March Quarter | ||
| Volume-based expenses, which include clearing costs and contracted license fees, per reported contract |
$0.106 - $0.109 | |
| An overall rate per contract of about |
$0.559 | |
The company does not provide an outlook for trading volume or revenue but does report the trading volume daily on its web site at http://www.cbot.com/cbot/pub/page/0,3181,541,00.html.
| 4Q 2005 |
3Q 2005 |
2Q 2005 |
1Q 2005 |
4Q 2004 | |||||||||||
| Trading Days |
63 | 64 | 64 | 61 | 64 | ||||||||||
| AVERAGE RATE PER CONTRACT | |||||||||||||||
| 4Q 2005 |
3Q 2005 |
2Q 2005 |
1Q 2005 |
4Q 2004 | |||||||||||
| PRODUCT: |
|||||||||||||||
| Interest Rate |
0.537 | 0.469 | 0.467 | 0.482 | 0.386 | ||||||||||
| Agriculture |
0.666 | 0.631 | 0.643 | 0.641 | 0.640 | ||||||||||
| Equity Index |
0.789 | 0.672 | 0.630 | 0.578 | 0.560 | ||||||||||
| Metals, Energy & Other |
1.559 | 1.360 | 1.312 | 0.855 | 0.654 | ||||||||||
| Overall average rate per contract |
0.570 | 0.501 | 0.499 | 0.507 | 0.424 | ||||||||||
| VENUE: |
|||||||||||||||
| Open-Auction |
0.507 | 0.485 | 0.483 | 0.491 | 0.441 | ||||||||||
| Electronic |
0.506 | 0.411 | 0.397 | 0.400 | 0.315 | ||||||||||
| Off-Exchange |
2.299 | 2.117 | 2.404 | 2.131 | 1.786 | ||||||||||
| Overall average rate per contract |
0.570 | 0.501 | 0.499 | 0.507 | 0.424 | ||||||||||
| AVERAGE DAILY VOLUME (Round Turns, in thousands) | |||||||||||||||
| 4Q 2005 |
3Q 2005 |
2Q 2005 |
1Q 2005 |
4Q 2004 | |||||||||||
| PRODUCT: |
|||||||||||||||
| Interest Rate |
1,951 | 2,123 | 2,368 | 2,356 | 2,006 | ||||||||||
| Agriculture |
331 | 350 | 404 | 373 | 287 | ||||||||||
| Equity Index |
112 | 103 | 115 | 105 | 99 | ||||||||||
| Metals, Energy & Other |
9 | 5 | 3 | 4 | 5 | ||||||||||
| Total |
2,404 | 2,582 | 2,889 | 2,838 | 2,398 | ||||||||||
| VENUE: |
|||||||||||||||
| Open-Auction |
685 | 773 | 940 | 940 | 780 | ||||||||||
| Electronic |
1,633 | 1,707 | 1,843 | 1,772 | 1,507 | ||||||||||
| Off-Exchange |
86 | 102 | 106 | 126 | 110 | ||||||||||
| Total |
2,404 | 2,582 | 2,889 | 2,838 | 2,398 | ||||||||||
| TRANSACTION FEES (in thousands) | |||||||||||||||
| 4Q 2005 |
3Q 2005 |
2Q 2005 |
1Q 2005 |
4Q 2004 | |||||||||||
| PRODUCT: |
|||||||||||||||
| Interest Rate |
$ | 65,994 | $ | 63,741 | $ | 70,733 | $ | 69,327 | $ | 49,524 | |||||
| Agriculture |
13,869 | 14,150 | 16,604 | 14,598 | 11,761 | ||||||||||
| Equity Index |
5,588 | 4,439 | 4,627 | 3,687 | 3,562 | ||||||||||
| Metals, Energy & Other |
908 | 393 | 252 | 184 | 202 | ||||||||||
| Total |
$ | 86,360 | $ | 82,722 | $ | 92,216 | $ | 87,796 | $ | 65,050 | |||||
| VENUE: |
|||||||||||||||
| Open-Auction |
$ | 21,885 | $ | 23,979 | $ | 29,085 | $ | 28,185 | $ | 22,038 | |||||
| Electronic |
52,013 | 44,872 | 46,883 | 43,285 | 30,413 | ||||||||||
| Off-Exchange |
12,462 | 13,871 | 16,247 | 16,325 | 12,598 | ||||||||||
| Total |
$ | 86,360 | $ | 82,722 | $ | 92,216 | $ | 87,796 | $ | 65,050 | |||||
Quarterly Conference Call
Executives of CBOT Holdings Inc. will host a conference call to review its fourth quarter results today, February 9, at 8:00 am ET / 7:00 am CT. The conference call and any accompanying slides will be publicly available via live web cast from the investor relations section of the CBOT Holdings web site at http://www.cbot.com. The web cast will be available for replay at the same address approximately two hours following its conclusion. Those wishing to listen to the live conference via telephone should dial 800.599.9795 (U.S. callers) and 617.786.2905 (International callers) at least 10 minutes before the call begins. To listen to an archived recording after the call, please dial 888.286.8010 (U.S. callers) and 617.801.6888 (International callers).
About the CBOT
As one of the leading global derivative exchanges, the Chicago Board of Trade provides a diverse mix of financial, equity, and commodity futures and options-on-futures products. Building on its 157-year history, the CBOT continues to advance into the future using the strength of deep liquidity, market integrity and member-trader expertise. Using superior trading technology in both electronic and open-auction trading platforms, the CBOT provides premier customer service to risk managers and investors worldwide. For more information visit our web site at www.cbot.com.
Forward Looking Statements
In this release, our use of the words “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or other comparable terminology is intended to identify 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. More detailed information about factors that may affect our performance may be found in filings made by CBOT Holdings, Inc. with the Securities and Exchange Commission, which can be obtained at its web site at www.sec.gov. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
# # #
CBOT Holdings, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(unaudited, in thousands)
| 12/31/04 |
03/31/05 |
06/30/05 |
09/30/05 |
12/31/05 | |||||||||||
| ASSETS | |||||||||||||||
| Current assets: |
|||||||||||||||
| Cash and cash equivalents: |
|||||||||||||||
| Unrestricted |
$ | 76,329 | $ | 86,619 | $ | 101,868 | $ | 73,436 | $ | 99,575 | |||||
| Held under deposit and membership transfers |
14,262 | 16,439 | 2,050 | 862 | 1,746 | ||||||||||
| Total cash and cash equivalents |
90,591 | 103,058 | 103,918 | 74,298 | 101,321 | ||||||||||
| Restricted cash |
7,661 | 4,025 | 22,102 | 17,254 | 14,031 | ||||||||||
| Short term investments |
14,836 | 14,836 | 24,700 | 64,199 | 239,888 | ||||||||||
| Accounts receivable - net of allowance |
34,556 | 47,775 | 40,761 | 38,310 | 33,671 | ||||||||||
| Income tax receivable |
1,557 | — | — | — | — | ||||||||||
| Deferred income taxes |
2,219 | 2,591 | 2,573 | 2,974 | 1,962 | ||||||||||
| Prepaid expenses |
20,542 | 24,388 | 21,065 | 21,114 | 18,410 | ||||||||||
| Total current assets |
171,962 | 196,673 | 215,119 | 218,149 | 409,283 | ||||||||||
| Property and equipment: |
|||||||||||||||
| Land |
34,234 | 34,234 | 34,234 | 34,234 | 34,234 | ||||||||||
| Buildings and equipment |
320,295 | 322,363 | 325,161 | 328,992 | 333,014 | ||||||||||
| Furnishings and fixtures |
188,316 | 189,825 | 196,344 | 197,054 | 198,083 | ||||||||||
| Computer software and systems |
72,662 | 81,492 | 84,091 | 84,112 | 93,636 | ||||||||||
| Construction in progress |
13,702 | 6,196 | 8,287 | 11,440 | 5,577 | ||||||||||
| Total property and equipment |
629,209 | 634,110 | 648,117 | 655,832 | 664,544 | ||||||||||
| Less accumulated depreciation and amortization |
360,038 | 373,708 | 387,137 | 400,110 | 409,789 | ||||||||||
| Property and equipment - net |
269,171 | 260,402 | 260,980 | 255,722 | 254,755 | ||||||||||
| Other assets - net |
19,283 | 19,162 | 19,387 | 19,252 | 21,829 | ||||||||||
| Total assets |
$ | 460,416 | $ | 476,237 | $ | 495,486 | $ | 493,123 | $ | 685,867 | |||||
| LIABILITIES AND MEMBERS’ / STOCKHOLDERS’ EQUITY | |||||||||||||||
| Current liabilities: |
|||||||||||||||
| Accounts payable |
$ | 20,545 | $ | 12,837 | $ | 14,098 | $ | 14,960 | $ | 20,455 | |||||
| Accrued clearing services |
11,591 | 13,516 | 15,003 | 12,630 | 11,286 | ||||||||||
| Accrued real estate taxes |
7,623 | 5,994 | 7,995 | 9,595 | 7,730 | ||||||||||
| Accrued payroll costs |
6,031 | 2,882 | 3,986 | 5,568 | 5,946 | ||||||||||
| Accrued exchange fee rebates |
2,241 | 1,527 | 1,770 | 2,278 | 1,200 | ||||||||||
| Accrued employee termination |
403 | 322 | 273 | 302 | 3,784 | ||||||||||
| Accrued liabilities |
9,584 | 9,116 | 8,566 | 7,625 | 7,111 | ||||||||||
| Funds held for deposit and membership transfers |
14,262 | 16,439 | 24,123 | 17,230 | 14,821 | ||||||||||
| Current portion of long-term debt |
20,359 | 20,229 | 19,726 | 19,588 | 19,366 | ||||||||||
| Income tax payable |
— | 12,012 | 2,135 | 1,764 | 5,751 | ||||||||||
| Other current liabilities |
249 | 4,733 | 4,700 | 322 | 5,183 | ||||||||||
| Total current liabilities |
92,888 | 99,607 | 102,375 | 91,862 | 102,633 | ||||||||||
| Long-term liabilities: |
|||||||||||||||
| Deferred income tax liabilities |
28,484 | 27,225 | 25,588 | 23,468 | 17,204 | ||||||||||
| Long-term debt |
31,074 | 20,231 | 19,728 | 11,810 | 10,716 | ||||||||||
| Other liabilities |
14,379 | 14,671 | 15,048 | 13,412 | 13,552 | ||||||||||
| Total long-term liabilities |
73,937 | 62,127 | 60,364 | 48,690 | 41,472 | ||||||||||
| Total liabilities |
166,825 | 161,734 | 162,739 | 140,552 | 144,105 | ||||||||||
| Members’ / Stockholders’ equity: |
|||||||||||||||
| Common stock, $0.001 par value, 52,787 shares issued and outstanding |
— | — | 49 | 49 | 53 | ||||||||||
| Additional paid-in capital |
— | — | 315,500 | 315,500 | 486,990 | ||||||||||
| Retained earnings |
— | — | 17,198 | 37,022 | 54,719 | ||||||||||
| Members’ equity |
293,591 | 314,503 | — | — | — | ||||||||||
| Total members’ / stockholders’ equity |
293,591 | 314,503 | 332,747 | 352,571 | 541,762 | ||||||||||
| Total liabilities and members’ / stockholders’ equity |
$ | 460,416 | $ | 476,237 | $ | 495,486 | $ | 493,123 | $ | 685,867 | |||||
CBOT Holdings, Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, in thousands, except per share data)
| QUARTER ENDED |
YTD |
|||||||||||||||||||||||||||
| 03/31/05 |
06/30/05 |
09/30/05 |
12/31/05 |
12/31/04 |
12/31/05 |
12/31/04 |
||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||
| Exchange fees |
$ | 66,518 | $ | 69,657 | $ | 62,696 | $ | 68,086 | $ | 46,326 | $ | 266,957 | $ | 202,881 | ||||||||||||||
| Clearing fees |
21,277 | 22,559 | 20,027 | 18,274 | 18,724 | 82,137 | 73,556 | |||||||||||||||||||||
| Market data |
18,522 | 18,306 | 18,289 | 18,765 | 16,116 | 73,882 | 64,234 | |||||||||||||||||||||
| Building |
5,608 | 5,479 | 5,595 | 5,479 | 6,339 | 22,161 | 22,428 | |||||||||||||||||||||
| Services |
3,591 | 3,623 | 4,230 | 3,852 | 4,255 | 15,296 | 13,720 | |||||||||||||||||||||
| Dues |
— | — | — | — | (9,315 | ) | — | — | ||||||||||||||||||||
| Other |
941 | 963 | 1,331 | 2,905 | 1,192 | 6,140 | 3,374 | |||||||||||||||||||||
| Total revenues |
116,457 | 120,587 | 112,168 | 117,361 | 83,637 | 466,573 | 380,193 | |||||||||||||||||||||
| Expenses: |
||||||||||||||||||||||||||||
| Clearing services |
16,516 | 17,378 | 15,630 | 14,286 | 14,593 | 63,810 | 54,755 | |||||||||||||||||||||
| Contracted license fees |
1,625 | 1,780 | 1,718 | 1,733 | 1,593 | 6,856 | 6,179 | |||||||||||||||||||||
| Salaries and benefits |
18,633 | 17,902 | 18,127 | 20,488 | 17,226 | 75,150 | 70,046 | |||||||||||||||||||||
| Depreciation and amortization |
13,814 | 14,231 | 13,144 | 13,732 | 12,254 | 54,921 | 46,011 | |||||||||||||||||||||
| Professional services |
4,592 | 4,558 | 4,979 | 6,424 | 8,795 | 20,553 | 27,910 | |||||||||||||||||||||
| General and administrative expenses |
4,922 | 5,167 | 5,427 | 6,059 | 5,664 | 21,575 | 20,302 | |||||||||||||||||||||
| Building operating costs |
6,638 | 6,514 | 6,542 | 6,006 | 6,502 | 25,700 | 24,315 | |||||||||||||||||||||
| Information technology services |
10,677 | 11,392 | 10,660 | 11,870 | 10,575 | 44,599 | 36,953 | |||||||||||||||||||||
| Programs |
2,016 | 3,089 | 2,306 | 3,104 | 2,671 | 10,515 | 10,724 | |||||||||||||||||||||
| Interest |
922 | 796 | 633 | 607 | 1,049 | 2,958 | 4,703 | |||||||||||||||||||||
| Litigation |
— | 4,000 | — | — | 3,500 | 4,000 | 3,500 | |||||||||||||||||||||
| Severance and related costs |
114 | 50 | 113 | 3,032 | 185 | 3,309 | 572 | |||||||||||||||||||||
| Operating expenses |
80,469 | 86,857 | 79,279 | 87,341 | 84,607 | 333,946 | 305,970 | |||||||||||||||||||||
| Income from operations |
35,988 | 33,730 | 32,889 | 30,020 | (970 | ) | 132,627 | 74,223 | ||||||||||||||||||||
| Income taxes |
||||||||||||||||||||||||||||
| Current |
16,577 | 17,002 | 15,586 | 17,481 | (2,858 | ) | 66,646 | 23,935 | ||||||||||||||||||||
| Deferred |
(1,632 | ) | (1,618 | ) | (2,521 | ) | (5,252 | ) | 4,453 | (11,023 | ) | 8,874 | ||||||||||||||||
| Total income taxes |
14,945 | 15,384 | 13,065 | 12,229 | 1,595 | 55,623 | 32,809 | |||||||||||||||||||||
| Income before equity in unconsolidated subsidiary and minority interest in consolidated subsidiary |
21,043 | 18,346 | 19,824 | 17,791 | (2,565 | ) | 77,004 | 41,414 | ||||||||||||||||||||
| Equity in loss of unconsolidated subsidiary - net of tax |
(255 | ) | (112 | ) | — | (94 | ) | (106 | ) | (461 | ) | (479 | ) | |||||||||||||||
| Minority interest in loss of consolidated subsidiary |
— | — | — | — | (50 | ) | — | 1,050 | ||||||||||||||||||||
| Net income |
$ | 20,788 | $ | 18,234 | $ | 19,824 | $ | 17,697 | $ | (2,721 | ) | $ | 76,543 | $ | 41,985 | |||||||||||||
| Earnings per share: (1) |
||||||||||||||||||||||||||||
| Basic |
$ | 0.35 | $ | 0.40 | $ | 0.34 | $ | 1.09 | ||||||||||||||||||||
| Diluted |
$ | 0.35 | $ | 0.40 | $ | 0.34 | $ | 1.09 | ||||||||||||||||||||
| Weighted average number of common stock shares: (2)(3) |
||||||||||||||||||||||||||||
| Basic |
49,360 | 49,360 | 52,079 | 50,045 | ||||||||||||||||||||||||
| Diluted |
49,360 | 49,360 | 52,116 | 50,055 | ||||||||||||||||||||||||
(1) Income used in the calculation of earnings per share, only includes earnings allocated to each reported period after April 22, 2005, the date the CBOT demutualized and became a stock, for-profit company. The amount of income allocated to the period before April 22, 2005 and not included in the calculation of earnings per share was $1,036 for the quarter ended June 30, 2005 and $21,824 for the year ended December 31, 2005. (2) CBOT members received an aggregate of 49,360 shares of Class A common stock of CBOT Holdings as a result of the demutualization. Weighted average number of shares used in the calculation is based on the average number of shares outstanding after April 22, 2005 rather than the entire reporting period. (3) On October 24, 2005, CBOT Holdings closed an initial public offering of its Class A common stock. The number of shares of Class A common stock outstanding immediately after this offering was 52,787 shares. |
| |||||||||||||||||||||||||||
| Operating expense makeup: |
||||||||||||||||||||||||||||
| Volume-based |
18,141 | 19,158 | 17,348 | 16,019 | 16,186 | 70,666 | 60,934 | |||||||||||||||||||||
| Baseline |
62,214 | 63,649 | 61,818 | 68,290 | 64,736 | 255,971 | 240,964 | |||||||||||||||||||||
| Other |
114 | 4,050 | 113 | 3,032 | 3,685 | 7,309 | 4,072 | |||||||||||||||||||||
| Total |
80,469 | 86,857 | 79,279 | 87,341 | 84,607 | 333,946 | 305,970 | |||||||||||||||||||||
CBOT Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited, in thousands)
| QUARTER ENDED |
YTD |
|||||||||||||||||||||||||||
| 03/31/05 |
06/30/05 |
09/30/05 |
12/31/05 |
12/31/04 |
12/31/05 |
12/31/04 |
||||||||||||||||||||||
| Cash flows from operating activities: |
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| Net income |
$ | 20,788 | $ | 18,234 | $ | 19,824 | $ | 17,697 | $ | (2,721 | ) | $ | 76,543 | $ | 41,985 | |||||||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: |
||||||||||||||||||||||||||||
| Depreciation and amortization |
13,814 | 14,231 | 13,144 | 13,732 | 12,254 | 54,921 | 46,011 | |||||||||||||||||||||
| Deferred income taxes (benefit) |
(1,632 | ) | (1,618 | ) | (2,521 | ) | (5,252 | ) | 4,454 | (11,023 | ) | 8,874 | ||||||||||||||||
| Stock-based compensation |
— | — | — | 1,774 | — | 1,774 | — | |||||||||||||||||||||
| Change in allowance for doubtful accounts |
230 | 61 | 78 | (118 | ) | 6 | 251 | (228 | ) | |||||||||||||||||||
| Gain / loss on foreign currency transaction |
(149 | ) | (172 | ) | (46 | ) | (23 | ) | (172 | ) | (390 | ) | 605 | |||||||||||||||
| Gain / loss on sale or retirement of fixed assets |
— | (4 | ) | 8 | 185 | 142 | 189 | 155 | ||||||||||||||||||||
| Minority interest in loss of subsidiary |
— | — | — | — | 50 | — | (1,050 | ) | ||||||||||||||||||||
| Equity in loss of unconsolidated subsidiary |
425 | 188 | — | 155 | 178 | 768 | 799 | |||||||||||||||||||||
| Amortization of short term investment discounts |
— | (26 | ) | (111 | ) | (1,074 | ) | — | (1,211 | ) | — | |||||||||||||||||
| Changes in assets and liabilities: |
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| Accounts receivable |
(13,993 | ) | 4,136 | 1,596 | 3,546 | 2,801 | (4,715 | ) | 3,923 | |||||||||||||||||||
| Income tax receivable / payable |
13,569 | (9,877 | ) | (371 | ) | 3,987 | (3,704 | ) | 7,308 | 9,222 | ||||||||||||||||||
| Prepaid expenses |
(3,846 | ) | 3,323 | (49 | ) | 2,704 | (2,303 | ) | 2,132 | (10,155 | ) | |||||||||||||||||
| Other assets |
(410 | ) | (335 | ) | 19 | 149 | (1,270 | ) | (577 | ) | (563 | ) | ||||||||||||||||
| Accounts payable |
(7,708 | ) | 1,261 | 862 | 5,495 | 5,246 | (90 | ) | (8,825 | ) | ||||||||||||||||||
| Accrued clearing services |
1,925 | 1,487 | (2,373 | ) | (1,344 | ) | 511 | (305 | ) | 10,768 | ||||||||||||||||||
| Accrued real estate taxes |
(1,629 | ) | 2,001 | 1,600 | (1,865 | ) | (1,553 | ) | 107 | (683 | ) | |||||||||||||||||
| Accrued payroll costs |
(3,149 | ) | 1,104 | 1,582 | 378 | 934 | (85 | ) | 903 | |||||||||||||||||||
| Accrued exchange fee rebates |
(714 | ) | 243 | 508 | (1,078 | ) | 1,695 | (1,041 | ) | (2,110 | ) | |||||||||||||||||
| Accrued employee termination |
(81 | ) | (49 | ) | 29 | 3,482 | (202 | ) | 3,381 | (2,172 | ) | |||||||||||||||||
| Accrued liabilities |
(35 | ) | 1,433 | (434 | ) | 485 | (1,048 | ) | 1,449 | (3,270 | ) | |||||||||||||||||
| Funds held for deposit and membership transfers |
2,177 | 7,684 | (6,893 | ) | (2,409 | ) | 7,730 | 559 | 8,723 | |||||||||||||||||||
| Other current liabilities |
4,484 | (33 | ) | (4,378 | ) | 4,861 | (3,578 | ) | 4,934 | 117 | ||||||||||||||||||
| Other long-term liabilities |
292 | 377 | (1,636 | ) | 140 | 437 | (827 | ) | (569 | ) | ||||||||||||||||||
| Net cash flows from operating activities |
24,358 | 43,649 | 20,438 | 45,607 | 19,887 | 134,052 | 102,460 | |||||||||||||||||||||
| Cash flows from investing activities: |
||||||||||||||||||||||||||||
| Acquisition of property and equipment |
(4,932 | ) | (14,702 | ) | (7,777 | ) | (12,825 | ) | (22,646 | ) | (40,236 | ) | (51,254 | ) | ||||||||||||||
| Purchase of short term investments |
— | (24,674 | ) | (49,285 | ) | (221,038 | ) | (14,836 | ) | (294,997 | ) | (14,836 | ) | |||||||||||||||
| Proceeds from short term investments |
— | 14,836 | 9,897 | 46,423 | — | 71,156 | — | |||||||||||||||||||||
| Restricted cash |
3,636 | (18,077 | ) | 4,848 | 3,223 | (558 | ) | (6,370 | ) | (7,361 | ) | |||||||||||||||||
| Proceeds from sale of property and equipment |
— | 9 | — | 1 | 491 | 10 | 720 | |||||||||||||||||||||
| Investment in joint ventures |
(6 | ) | (191 | ) | (1 | ) | (3,006 | ) | (175 | ) | (3,204 | ) | (498 | ) | ||||||||||||||
| Net cash flows used in investing activities |
(1,302 | ) | (42,799 | ) | (42,318 | ) | (187,222 | ) | (37,724 | ) | (273,641 | ) | (73,229 | ) | ||||||||||||||
| Cash flows from financing activities: |
||||||||||||||||||||||||||||
| Repayments of borrowings |
(10,713 | ) | — | (7,740 | ) | (1,082 | ) | (1,138 | ) | (19,535 | ) | (19,790 | ) | |||||||||||||||
| Net proceeds from initial public offering |
— | — | — | 169,498 | — | 169,498 | — | |||||||||||||||||||||
| Excess tax benefit of stock compensation |
— | — | — | 222 | — | 222 | — | |||||||||||||||||||||
| Capital contributions from members |
124 | 10 | — | — | 99 | 134 | 374 | |||||||||||||||||||||
| Distribution to partners |
— | — | — | — | (1,590 | ) | — | (61,890 | ) | |||||||||||||||||||
| Net cash flows used in financing activities |
(10,589 | ) | 10 | (7,740 | ) | 168,638 | (2,629 | ) | 150,319 | (81,306 | ) | |||||||||||||||||
| Net increase (decrease) in cash and cash equivalents |
12,467 | 860 | (29,620 | ) | 27,023 | (20,466 | ) | 10,730 | (52,075 | ) | ||||||||||||||||||
| Cash and cash equivalents - beginning of period |
90,591 | 103,058 | 103,918 | 74,298 | 111,057 | 90,591 | 142,666 | |||||||||||||||||||||
| Cash and cash equivalents - end of period |
$ | 103,058 | $ | 103,918 | $ | 74,298 | $ | 101,321 | $ | 90,591 | $ | 101,321 | $ | 90,591 | ||||||||||||||
| Cash paid for: |
||||||||||||||||||||||||||||
| Interest |
$ | 1,089 | $ | 297 | $ | 1,000 | $ | 41 | $ | 396 | $ | 2,427 | $ | 3,742 | ||||||||||||||
| Income taxes (net of refunds) |
$ | 2,837 | $ | 26,841 | $ | 15,959 | $ | 13,394 | $ | 323 | $ | 59,031 | $ | 13,942 | ||||||||||||||