ESPD Espeed (MM)

eSpeed, Inc. (NASDAQ: ESPD), a leading developer of electronic marketplaces and related trading technology for the global capital markets, today reported results for the first quarter ended March 31, 2007. First Quarter Results Summary GAAP revenues were 3% lower than in the year-ago period. GAAP net income was $0.02 per diluted share in the first quarter of 2007 vs. $0.04 per diluted share in the first quarter of 2006. eSpeed�s non-GAAP operating revenue increased 6% and the Company's non-GAAP net operating income per diluted share increased to $0.04 in the first quarter of 2007 from $0.03 in the prior year�s first quarter. 1Q2007 Actual 1Q2007 Outlook 1Q2006 Actual GAAP Revenues $41.4 MM� NA $42.6 MM� Non-GAAP Operating Revenues $41.1 MM� > $40 MM $38.7 MM� GAAP Net Income Per Diluted Share $0.02� NA $0.04� Non-GAAP Net Operating Income Per Diluted Share $0.04� $0.03-$0.04� $0.03� �eSpeed�s fundamental strength was underscored by the year-over-year gains in our U.S. treasury business and by increased screen-assisted revenue as additional BGC desks entered our hybrid pipeline,� said Howard W. Lutnick, eSpeed�s Chairman, Chief Executive Officer, and President. �In addition, eSpeed�s futures products made solid gains. We remain optimistic about our growth prospects for 2008 and beyond based on strong expected returns on the investments the Company has made in our portfolio of new products.� First Quarter Earnings eSpeed reported net income of $0.9 million, or $0.02 per diluted share, for the first quarter of 2007 based on Generally Accepted Accounting Principles (�GAAP�). To reflect earnings generated from the Company's operations, eSpeed also reported non-GAAP net operating income of $2.0 million, or $0.04 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the quarter occurred primarily due to $0.8 million in patent litigation costs and $0.4 million in losses from eSpeed�s Equities Direct Access business, which is set to become a separate company called Aqua in the second quarter and in which eSpeed will have an equity stake. Both of these differences were net of tax. For the first quarter of 2006, eSpeed reported GAAP net income of $2.0 million, or $0.04 per diluted share and non-GAAP net operating income of $1.4 million, or $0.03 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the quarter was primarily due to a gain from insurance proceeds of $2.1 million and a settlement of a tax-related matter of $0.1 million, partially offset by $0.7 million in accelerated amortization of capitalized software, $0.4 million in patent litigation costs, and $0.4 million in expenses relating to the relocation of the Company�s London office, all net of tax. First Quarter Revenues eSpeed reported GAAP revenues of $41.4 million and non-GAAP operating revenues of $41.1 million for the first quarter of 2007. The difference between GAAP and non-GAAP revenues for the first quarter of 2007 reflected eSpeed Equities Direct Access revenues of $0.3 million. In comparison, eSpeed reported GAAP revenues of $42.6 million and non-GAAP operating revenues of $38.7 million for the first quarter of 2006. The difference between GAAP and non-GAAP revenues for the first quarter of 2006 was due to a $3.5 million gain from insurance proceeds and $0.4 million in interest income related to the settlement of a tax-related matter. Fully electronic revenues were $17.9 million in the first quarter of 2007 compared with $16.7 million for the first quarter of 2006. Revenues from Software Solutions in the first quarter of 2007 were $12.3 million versus $11.3 million in the year ago period. Voice- assisted and screen-assisted revenues totaled $8.7 million in the first quarter of 2007 compared with $8.7 million in the first quarter of 2006. Non-GAAP pre-tax operating margin was 7.8 percent in the first quarter of 2007. The year over year decrease in quarterly GAAP revenues and net income were due primarily to the aforementioned gain from insurance proceeds in the year-ago quarter partially offset by a year-over-year increase in total transaction revenues and from Software Solutions. See "Non-GAAP Financial Measures" below for a detailed description of the Company�s non-GAAP financial measures. Cash Flow & Cash The Company generated cash flow from operations of $13.7 million during the first quarter of 2007, compared with $5.1 million during the first quarter of 2006. The Company also reports free cash flow, which it defines as cash from operations less net cash used in investing activities, including capital expenditures. eSpeed�s free cash flow was $5.0 million for the first quarter of 2007, compared with ($1.5) million in the prior year period. Excluding related party receivables and payables, free cash flow was $2.6 million for the first quarter of 2007, compared with $4.9 million for the first quarter of 2006. Year-over-year improvements in cash flow from operations were due primarily to higher receivables from related parties and other assets, partially offset by an increase in payables to related parties and decreased depreciation and amortization. As of March 31, 2007, eSpeed's cash and cash equivalents were approximately $192.6 million. First Quarter Volume and Transactions on the eSpeed System Fully electronic volume on the eSpeed system, excluding new products, was $11.8 trillion for the first quarter of 2007, up 31.8 percent from $9.0 trillion in the first quarter of 2006. eSpeed's combined voice-assisted and screen-assisted volume for the first quarter of 2007 was $16.4 trillion, an increase of 22.3 percent from $13.4 trillion in the first quarter of 2006. Fully electronic volume on the eSpeed system for new products, which the Company defines as foreign exchange, interest rate swaps, futures, credit default swaps, and repurchase agreements, was $1.4 trillion for the first quarter of 2007, up 169.9 percent from the $524 billion reported in the first quarter of 2006. Outlook For the second quarter of 2007, eSpeed expects to generate non-GAAP operating revenues in excess of $36 million and expects non-GAAP net operating income to be approximately $0.00 per diluted share. For the full year 2007, eSpeed now expects to generate non-GAAP operating revenues of approximately $153 million, compared with the Company�s previous outlook of $152 million. eSpeed expects non-GAAP operating expenses to be in the range of $148 million to $149 million, versus the previously expected range of $146 million to $148 million. eSpeed expects full year 2007 non-GAAP net operating income to be in the range of $0.05 to $0.06 compared to the prior outlook of $0.05 to $0.07 per diluted share. eSpeed expects lower revenue and non-GAAP net operating income for the remainder of 2007 primarily due to the expiration of the Wagner patent on February 20, 2007. eSpeed recognized $3.1 million in revenue and $1.5 million in non-GAAP net operating income related to the patent in the first quarter of 2007. The Company will host a conference call on Thursday, May 3, 2007 at 8:30 a.m. EDT, to discuss the above results. To listen to the call via audio webcast, please visit www.espeed.com. Please note: listeners must have a Real Media or Windows Media plug in and headphones or speakers to listen to the webcast. Non-GAAP Financial Measures To supplement eSpeed's consolidated financial statements presented in accordance with GAAP and to better reflect the Company's quarter-over-quarter and comparative year-over-year operating performance, eSpeed uses non-GAAP financial measures of revenues, net income and earnings per share, which are adjusted to exclude certain expenses and gains. In addition, the Company provides a computation of free cash flow. These non-GAAP financial measurements do not replace the presentation of eSpeed's GAAP financial results but are provided to improve overall understanding of the Company's current financial performance and its prospects for the future. Specifically, eSpeed believes the non-GAAP financial results provide useful information to both management and investors regarding certain additional financial and business trends relating to the Company's financial condition and results from operations. In addition, eSpeed's management uses these measures for reviewing the Company's financial results and evaluating eSpeed's financial performance. For the first quarter of 2007, the difference between GAAP net income and non-GAAP net operating income was approximately $1.2 million, net of tax, while the difference between GAAP revenues and non-GAAP operating revenues was $0.3 million. eSpeed considers "non-GAAP net operating income" to be after-tax income generated from the Company's continuing operations excluding certain non-recurring or non-core items such as, but not limited to, asset impairments, litigation judgments, costs or settlements, restructuring charges, costs related to potential acquisitions, charitable contributions, insurance proceeds, business partner securities, gains or losses on investments and similar events. eSpeed considers �non-GAAP operating revenues� to be net revenue excluding these same items. The amortization of patent costs and associated licensing fees (including those made in settlement of litigation) from such patents are generally treated as operating items. Material judgments or settlement amounts paid or received and impairments to all or a portion of such assets are generally treated as non-operating items. Management does not provide guidance of GAAP net income because certain items identified as excluded from non-GAAP net operating income are difficult to forecast. About eSpeed, Inc. eSpeed, Inc. (NASDAQ: ESPD) is a leader in developing and deploying electronic marketplaces and related trading technology that offers traders access to the most liquid, efficient and neutral financial markets in the world. eSpeed operates multiple buyer, multiple seller real-time electronic marketplaces for the global capital markets, including the world's largest government bond markets and other fixed income and foreign exchange marketplaces. eSpeed's suite of marketplace tools provides end-to-end transaction solutions for the purchase and sale of financial products over eSpeed's global private network or via the Internet. eSpeed's neutral platform, reliable network, straight-through processing and superior products make it a trusted source for electronic trading at the world's largest fixed income and foreign exchange trading firms and major exchanges. For more information, please visit www.espeed.com. Discussion of Forward-Looking Statements by eSpeed, Inc. The information in this release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the �Exchange Act�). Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as �may,� �will,� �should,� �estimates,� �predicts,� �potential,� �continue,� �strategy,� �believes,� �anticipates,� �plans,� �expects,� �intends� and similar expressions are intended to identify forward-looking statements. Our actual results and the outcome and timing of certain events may differ significantly from the expectations discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, our relationship with Cantor and its affiliates, the costs and expenses of developing, maintaining and protecting our intellectual property, including judgments or settlements paid or received and their related costs, the possibility of future losses and negative cash flow from operations, the effect of overall market conditions, including trading volume and volatility, our pricing strategy and that of our competitors, our ability to develop new products and services, to enter new markets, to secure and maintain market share, to enter into marketing and strategic alliances, and other transactions, including acquisitions, reorganizations, partnering opportunities, and joint ventures, to hire new personnel, to expand the use of our technology, for both integrated hybrid voice-assisted and fully electronic trading, to induce clients to use our marketplaces and services and to effectively manage any growth we achieve, and other factors that are discussed under �Risk Factors� in eSpeed�s Annual Report on Form 10-K filed with the Securities and Exchange Commission. We believe that all forward-looking statements are based upon reasonable assumptions when made. However, we caution that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that accordingly you should not place undue reliance on these statements. Forward-looking statements speak only as of the date when made and we undertake no obligation to update these statements in light of subsequent events or developments. eSpeed, Inc and SubsidiariesCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(in thousands, except per share data) � March 31, 2007 December 31, 2006 (Unaudited) � Assets Cash and cash equivalents $ 5,333� $ 21,838� Reverse repurchase agreements with related parties � 187,231� � 166,009� Total cash and cash equivalents 192,564� 187,847� Marketable securities 2,209� -� Fixed assets, net 57,483� 57,207� Investments 7,802� 7,780� Goodwill 12,184� 12,184� Other intangible assets, net 6,203� 6,949� Receivable from related parties 7,087� 7,145� Other assets � 12,286� � 13,725� Total assets $ 297,818� $ 292,837� � Liabilities and Stockholders' Equity Current liabilities: Payable to related parties 10,105� 7,751� Accounts payable and accrued liabilities � 26,890� � 25,836� Total current liabilities 36,995� 33,587� � Deferred income � 3,971� � 4,075� Total liabilities � 40,966� � 37,662� � Stockholders' equity: � Preferred stock, par value $0.01 per share; 50,000 shares authorized, none outstanding at March 31, 2007 and December 31, 2006 -� -� Class A common stock, par value $.01 per share; 200,000 shares authorized; 36,441 and 36,407 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively 364� 364� Class B common stock, par value $.01 per share; 100,000 shares authorized; 20,498 shares outstanding at March 31, 2007 and December 31, 2006, convertible to Class A common stock 205� 205� Additional paid-in capital 300,732� 299,683� Treasury stock, at cost; 6,502 shares of Class A common stock at March 31, 2007 and December 31, 2006 (62,597) (62,597) Retained earnings 18,168� 17,520� Accumulated other comprehensive loss (20) -� � � Total stockholders' equity � 256,852� � 255,175� � Total liabilities and stockholders' equity $ 297,818� $ 292,837� eSpeed, Inc. and SubsidiariesCONSOLIDATED STATEMENTS OF INCOME IN ACCORDANCE WITH GAAP (unaudited)(in thousands, except per share data) � Three Months Ended March 31, March 31, 2007� 2006� Revenues: Transaction revenues Fully electronic transactions with related parties $ 16,440� $ 15,681� Fully electronic transactions with unrelated parties � 1,506� � 1,038� Total fully electronic transactions 17,946� 16,719� Voice-assisted brokerage transactions with related parties 6,974� 7,255� Screen-assisted open outcry transactions with related parties � 1,732� � 1,426� Total transaction revenues � 26,652� � 25,400� Software Solutions fees from related parties 8,725� 7,491� Software Solutions and licensing fees from unrelated parties 3,564� 3,799� Insurance recovery from related parties -� 3,500� Interest income � 2,473� � 2,362� Total revenues � 41,414� � 42,552� � Expenses: Compensation and employee benefits 14,166� 13,858� Amortization of software development costs and other intangible assets 5,334� 6,890� Other occupancy and equipment 9,377� 8,633� Administrative fees to related parties 3,521� 3,427� Professional and consulting fees 2,895� 1,910� Communications and client networks 2,103� 2,027� Marketing 226� 332� Amortization of non-employee securities -� 19� Other expenses � 2,439� � 2,045� Total operating expenses � 40,061� � 39,141� � � Income before income taxes � 1,353� � 3,411� � Provision for income taxes 496� 1,391� � � Net income $ 857� $ 2,020� � Per share data: � Basic earnings per share $ 0.02� $ 0.04� � Diluted earnings per share $ 0.02� $ 0.04� � Basic weighted average shares of common stock outstanding � 50,423� � 50,077� � Diluted weighted average shares of common stock outstanding � 51,441� � 51,137� eSpeed, Inc. and SubsidiariesNON-GAAP CONSOLIDATED STATEMENTS OF INCOME (unaudited)(in thousands, except per share data) � � Three Months Ended March 31, March 31, 2007� 2006� Revenues: Transaction revenues Fully electronic transactions with related parties $ 16,440� $ 15,681� Fully electronic transactions with unrelated parties � 1,506� � 1,038� Total fully electronic transactions 17,946� 16,719� Voice-assisted brokerage transactions with related parties 6,974� 7,255� Screen-assisted open outcry transactions with related parties � 1,732� � 1,426� Total transaction revenues � 26,652� � 25,400� Software Solutions fees from related parties 8,725� 7,491� Software Solutions and licensing fees from unrelated parties 3,283� 3,799� Interest income � 2,473� � 1,963� Total non-GAAP revenues � 41,133� � 38,653� � Expenses: Compensation and employee benefits 13,964� 13,634� Amortization of software development costs and other intangible assets 5,227� 5,727� Other occupancy and equipment 9,009� 7,989� Administrative fees to related parties 3,383� 3,427� Professional and consulting fees 1,617� 1,163� Communications and client networks 2,081� 2,027� Marketing 226� 332� Other expenses � 2,408� � 2,046� Total non-GAAP operating expenses � 37,915� � 36,345� � � Non-GAAP income before income taxes � 3,218� � 2,308� � Non-GAAP provision for income taxes 1,181� 941� � � Non-GAAP net operating income � 2,037� � 1,367� � Non-operating (loss) income: Amortization of non-employee securities, net of tax -� (11) Litigation costs, net of tax (808) (442) Loss from eSpeed Equities, net of tax (372) -� Accelerated depreciation, net of tax -� (689) Office relocation cost, net of tax -� (382) Tax settlement, net of tax -� 104� Insurance recovery from related parties, net of tax � -� � 2,073� Total non-operating (loss) income � (1,180) � 653� � Net income $ 857� $ 2,020� � � Per share data: � Basic non-GAAP income before income taxes per share $ 0.06� $ 0.05� � Basic non-GAAP provision for income taxes per share $ 0.02� $ 0.02� � Basic non-GAAP net operating income per share $ 0.04� $ 0.03� � Basic non-operating (loss) income per share $ (0.02) $ 0.01� � Basic GAAP earnings per share $ 0.02� $ 0.04� � � Diluted non-GAAP income before income taxes per share $ 0.06� $ 0.05� � Diluted non-GAAP provision for income taxes per share $ 0.02� $ 0.02� � Diluted non-GAAP net operating income per share $ 0.04� $ 0.03� � Diluted non-operating (loss) income per share $ (0.02) $ 0.01� � Diluted GAAP earnings per share $ 0.02� $ 0.04� � � Basic weighted average shares of common stock outstanding � 50,423� � 50,077� � Diluted weighted average shares of common stock outstanding � 51,441� � 51,137� � Additional data: � Non-GAAP pre-tax operating margin � 7.8% � 6.0% eSpeed, Inc. & SubsidiariesCONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(in thousands) � Three Months Ended Three Months Ended March 31, March 31, 2007� 2006� Cash flows from operating activities: Net income $ 857� $ 2,020� Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,232� 9,845� Gain on insurance recovery from related parties -� (3,500) Equity in net income of unconsolidated investments (22) (22) Deferred income tax expense 352� 1,105� Stock-based compensation 794� 573� Tax benefit from stock-based compensation 22� 69� Excess tax benefit from stock-based compensation (14) (47) � Changes in operating assets and liabilities: Receivable from related parties 58� (608) Other assets 193� (3,111) Payable to related parties 2,355� (2,264) Accounts payable and accrued expenses 1,002� 1,099� Deferred income � (104) � (104) Net cash provided by operating activities � 13,725� � 5,055� � Cash flows used in investing activities: Purchase of fixed assets (1,205) (2,105) Purchase of marketable securities (2,229) -� Capitalization of software development costs (6,197) (4,185) Capitalization of patent defense and registration costs (435) (241) Decrease in restricted cash � 1,322� � -� Net cash used in investing activities � (8,744) � (6,531) � Cash flows (used in) provided by financing activities: Repurchase of Class A common stock (373) -� Proceeds from exercises of stock options 95� 241� Excess tax benefit from stock-based compensation � 14� � 47� Net cash (used in) provided by financing activities � (264) � 288� � Net increase (decrease) in cash and cash equivalents � 4,717� � (1,188) � Cash and cash equivalents at beginning of period 21,838� 37,070� Reverse repurchase agreements with related parties at beginning of period � 166,009� � 141,365� Total cash and cash equivalents at beginning of period � 187,847� � 178,435� � Cash and cash equivalents at end of period 5,333� 12,195� Reverse repurchase agreements with related parties at end of period � 187,231� � 165,052� Total cash and cash equivalents at end of period $ 192,564� $ 177,247� � Supplemental cash information: Cash paid for income taxes $ 35� $ -� Deemed dividend to Cantor -� 1,500� Contribution of license from Cantor -� 1,500� eSpeed, Inc. & SubsidiariesCONSOLIDATED STATEMENTS OF FREE CASH FLOWS (unaudited)(in thousands) � � Three Months Ended March 31, 2007� 2006� � Non-GAAP income before income taxes $ 3,218� $ 2,308� � Depreciation and amortization 8,232� 9,845� Other non-cash and non-operating items � (1,107) � 1,607� Non-GAAP income before income taxes adjusted for depreciation, amortization and other � 10,343� � 13,760� � � Provision for income taxes on non-GAAP operating income (1,181) (941) Income tax benefit (provision) on non-operating (loss) income 685� (450) Deferred income tax expense 352� 1,105� Tax benefit from stock-based compensation 22� 69� Income taxes paid � 35� � -� Increase in current income tax payable (87) (217) � Changes in related party receivable and payable, net 2,413� (6,372) Changes in other operating assets and liabilities, net � 1,056� � (2,116) Net cash provided by operating activities � 13,725� � 5,055� � Purchase of fixed assets (1,205) (2,105) Purchase of investments (2,229) -� Capitalization of software development costs (6,197) (4,185) Capitalization of patent defense and registration costs (435) (241) Decrease in restricted cash � 1,322� � -� Free cash flows � 4,981� � (1,476) � Related party receivable and payable, net � (2,413) � 6,372� Free cash flows, net of related party activity $ 2,568� $ 4,896� eSpeed, Inc. and SubsidiariesRECONCILIATION of NON-GAAP FINANCIAL MEASURES TO GAAP (unaudited)(in thousands) � Three Months Ended March 31, 2007� 2006� � Total non-GAAP revenues $ 41,133� 38,653� Insurance recovery (a) -� 3,500� Tax settlement (b) -� 399� eSpeed Equities revenues (c) � 281� � -� Total GAAP revenues $ 41,414� $ 42,552� � Total non-GAAP operating expenses $ 37,915� $ 36,345� Amortization of business partner and non-employee securities (d) -� 19� Litigation costs (e) 1,278� 747� Legal settlement (f) -� 224� Accelerated amortization (g) -� 1,162� Office relocation costs (h) -� 644� eSpeed Equities expenses (i) � 868� � -� Total GAAP operating expenses $ 40,061� $ 39,141� � Non-GAAP income before income taxes $ 3,218� $ 2,308� Sum of reconciling items = (a) + (b) + (c) - (d) - (e) - (f) - (g) - (h) - (i) � (1,865) � 1,103� GAAP income before income taxes $ 1,353� $ 3,411� � Non-GAAP provision for income taxes $ 1,181� $ 941� Income tax expense on non-operating income (j) � (685) � 450� GAAP provision for income taxes $ 496� $ 1,391� � Non-GAAP net operating income $ 2,037� $ 1,367� Sum of reconciling items = (a) + (b) + (c) - (d) - (e) - (f) - (g) - (h) - (i) - (j) � (1,180) � 653� GAAP net income $ 857� $ 2,020� eSpeed, Inc. and SubsidiariesQuarterly Market Activity Report � The following table provides certain volume and transaction count information on the eSpeed system for the periods indicated. � � � � � % Change� % Change� 1Q06 2Q06 3Q06 4Q06 1Q07 1Q07 vs 4Q06 1Q07 vs 1Q06 Volume (in billions) Fully Electronic Volume - Excluding New Products 8,957� 10,235� 9,381� 9,813� 11,809� 20.3% 31.8% Fully Electronic Volume - New Products* 524� 744� 1,179� 1,335� 1,415� 6.0% 169.9% Total Fully Electronic Volume 9,481� 10,979� 10,560� 11,148� 13,224� 18.6% 39.5% � Voice-Assisted Volume 8,093� 8,618� 8,217� 7,933� 8,884� 12.0% 9.8% Screen-Assisted Volume 5,295� 5,583� 5,898� 6,111� 7,486� 22.5% 41.4% Total Voice/Screen-Assisted Volume 13,388� 14,201� 14,115� 14,044� 16,370� 16.6% 22.3% � � � � � � � Total Volume 22,869� 25,180� 24,675� 25,192� 29,594� 17.5% 29.4% � Transaction Count Fully Electronic Transactions - Excluding New Products 1,971,347� 2,035,458� 1,687,779� 1,764,930� 2,062,341� 16.9% 4.6% Fully Electronic Transactions - New Products* 131,700� 138,421� 140,539� 142,239� 144,378� 1.5% 9.6% Total Fully Electronic Transactions 2,103,047� 2,173,879� 1,828,318� 1,907,169� 2,206,719� 15.7% 4.9% � Voice-Assisted Transactions 228,124� 202,600� 183,646� 177,789� 201,250� 13.2% (11.8%) Screen-Assisted Transactions 70,698� 68,768� 66,451� 62,977� 92,496� 46.9% 30.8% Total Voice/Screen-Assisted Volume 298,822� 271,368� 250,097� 240,766� 293,746� 22.0% (1.7%) � � � � � � � Total Transactions 2,401,869� 2,445,247� 2,078,415� 2,147,935� 2,500,465� 16.4% 4.1% � Trading Days 62� 63� 63� 62� 62� * New Products defined as Foreign Exchange, Interest Rate Swaps, Repos, Futures, and Credit Default Swaps. CBOT Futures volume calculated based on per contract notional value of $200,000 for the two year contract and $100,000 for all others. Global Interest Rate Futures Volume (1) CBOT - US Treasury Contracts 127,606,543� 128,443,758� 126,285,125� 129,828,448� 161,232,523� 24.2% 26.4% CME - Euro $ Contracts 117,284,097� 127,350,219� 127,101,116� 130,341,959� 152,724,717� 17.2% 30.2% EUREX - Bund Contracts 85,217,459� 88,078,646� 72,591,730� 74,001,534� 88,987,126� 20.3% 4.4% � Fed UST Primary Dealer Volume (in billions) (2) UST Volume 34,810� 33,688� 32,171� 30,742� 34,437� 12.0% (1.1%) Average Daily UST Volume 561� 535� 511� 496� 555� 12.0% (1.1%) � NYSE - Volume (shares traded) - in millions (3) 108,447� 121,582� 108,825� 114,434� 123,765� 8.2% 14.1% Transaction Value - in millions 4,072,426� 4,627,787� 3,941,583� 4,316,756� 4,943,056� 14.5% 21.4% � NASDAQ - Volume (shares traded) - in millions (4) 128,566� 134,155� 116,510� 121,477� 131,410� 8.2% 2.2% Transaction Value - in millions 3,070,980� 3,031,230� 2,587,538� 2,945,401� 3,300,788� 12.1% 7.5% � Sources: (1) Futures Industry Association - Monthly Volume Report - (www.cbot.com, www.cme.com, www.eurexchange.com) (2) www.ny.frb.org/pihome/statistics/dealer - Federal Reserve Bank (3) NYSE - www.nyse.com (4) NASDAQ - www.marketdata.nasdaq.com Trading Days 2007� � Q1� Q2� Q3� Q4� 62� 64� 63� 62� � 2006� Q1� Q2� Q3� Q4� 62� 63� 63� 62�