CME will recognize the entire Euronext-Paris settlement of $7.5 million in the fourth quarter of 2002, which will result in a positive contribution to net income of approximately 14 cents per diluted share. Half the payment will be made to CME immediately, and the remainder will be paid by year-end 2003.
CME also announced that it signed agreements with Euronext-Paris expanding CME's license rights to the electronic trading software owned by Euronext-Paris and incorporated into CME's GLOBEX® electronic trading platform. The agreements facilitate CME's ability to offer trade matching services on GLOBEX to third parties.
"Our settlement with Euronext brings final closure to all of the issues relating to the Wagner patent litigation and allows us to reduce substantially the costs of our settlement in that matter," said CME Chairman Terry Duffy. "We will continue with our plans for CME and for investing in improvements to the speed, reliability and functionality of our GLOBEX electronic trading platform."
"In addition to reducing our costs of settlement, these agreements will enhance our growth opportunities," said Craig Donohue, CME Executive Vice President and Chief Administrative Officer. "One of our core strategies is to leverage our existing capacity and scalable technology and business processes by offering a broad range of services to other exchanges, clearing organizations and e-marketplaces. We believe that our proven ability to process high volumes of transactions will attract third parties."
Chicago Mercantile Exchange Holdings Inc. is the parent company of Chicago Mercantile Exchange Inc. (www.cme.com), the largest futures exchange in the United States based on notional value, trading volume and open interest. On Dec. 6, 2002, CME Holdings and its subsidiary became the first publicly traded U.S. financial exchange. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX around-the-clock electronic trading platform. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moves about $1.7 billion per day in settlement payments and manages $27.7 billion in collateral deposits.
Euronext N.V. was formed by the merger of the Amsterdam, Brussels and Paris cash and derivatives exchanges in September 2000. The Euronext Group has since grown further, adding BVLP (the Portuguese cash and derivatives exchange) and LIFFE (the London International Financial Futures and Options Exchange). The derivatives businesses of Euronext and LIFFE are being combined under the Euronext.liffe umbrella.
