<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
- OR -
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 333-95561
CHICAGO MERCANTILE EXCHANGE INC.
(Exact name of registrant as specified in its charter)
Delaware 36-4340266
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
30 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 930-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES (X ) NO ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
100 shares of Common Stock were outstanding as of October 31, 2000.
<PAGE>
CHICAGO MERCANTILE EXCHANGE INC.
FORM 10-Q
INDEX
Page
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets as of September 30, 2000
and December 31, 1999 3
Statements of Income for the Three Months and Nine
Months Ended September 30, 2000 4
Statements of Cash Flows for the Nine Months Ended
September 30, 2000 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk 7
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 8
Index of Exhibits Filed with this Report 9
Page 2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Chicago Mercantile Exchange Inc.
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
<S> <C> <C>
------------- ------------
ASSETS
Cash $100 $100
------------- ------------
Total Assets $100 $100
============= ============
LIABILITIES AND STOCKHOLDER'S EQUITY
Total Liabilities $ -- $ --
Stockholder's equity:
Common stock, $.01 par value,
1,000 shares authorized, 100 shares
issues and outstanding 1 1
Paid-in capital 99 99
------------- ------------
Total stockholder's equity 100 100
------------- ------------
Total liabilities and stockholder's equity $100 $100
============= ============
</TABLE>
See accompanying notes to condensed financial statements.
Page 3
<PAGE>
Chicago Mercantile Exchange Inc.
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, September 30,
2000 2000
------------- ------------
<S> <C> <C>
Revenue $-- $--
Expenses $-- $--
Net income $-- $--
============= ============
</TABLE>
See accompanying notes to condensed financial statements.
Page 4
<PAGE>
Chicago Mercantile Exchange Inc.
Statements of Cash Flow
(Unaudited)
<TABLE>
<S> <C>
Nine Months
Ended
September 30,
2000
-------------
Cash flows from operating activities $ --
-------------
Net increase in cash --
Cash, beginning of period 100
-------------
Cash, end of period $100
=============
</TABLE>
See accompanying notes to condensed financial statements.
Page 5
<PAGE>
Chicago Mercantile Exchange Inc.
Notes to Condensed Financial Statements
1. Basis of Presentation
The accompanying interim financial statements have been prepared by
Chicago Mercantile Exchange Inc. ("New CME"), without audit. Certain
notes and other information normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. In the opinion of management, the accompanying
consolidated financial statements include all adjustments necessary to
present fairly the financial position of New CME as of September 30, 2000
and December 31, 1999, and the results of its operations and cash flows
for the periods indicated. The accompanying financial statements should
be read in connection with the financial statements and notes thereto of
the Chicago Mercantile Exchange included in New CME's proxy statement and
prospectus dated April 25, 2000.
2. Organization
Chicago Mercantile Exchange Inc. was incorporated in the state of
Delaware on December 30, 1999. Its initial capitalization consisted of
100 shares of Common Stock, $.01 par value, issued to CME Transitory Co.,
a Delaware nonstock corporation whose sole member is the Chicago
Mercantile Exchange ("Existing CME"), an Illinois not-for-profit
corporation.
New CME and CME Transitory Co. were formed by Existing CME for the
purpose of effecting the demutualization transaction described in Note 3.
Neither corporation has any present business operations other than
activities associated with preparing for the demutualization transaction.
All costs of the demutualization will be borne by Existing CME.
3. Pending Transaction
On October 27, 1999, the board of directors of Existing CME approved a
plan to demutualize wherein the existing Illinois membership corporation
will be converted into a Delaware stock corporation. Under this plan,
membership interests in Existing CME will be converted into shares of
Class B common stock, and in the cases of the CME, IMM and IOM membership
interests, shares of Class A common stock of New CME. Class B shares will
be issued in several series, each of which will contain the traditional
features of common stock and will confer the trading privileges
associated with the membership interest that is converted into those
shares. Class A shares will have the features of traditional common
stock.
On June 6, 2000, the members of Existing CME approved an agreement and
plan of merger under which the demutualization will be accomplished. The
merger is conditioned on a confirmation from the Internal Revenue Service
that the demutualization transaction will not cause members to recognize
a gain or loss upon the conversion of their membership interests into
Class A and Class B shares. A ruling request was filed on December 30,
1999, and the definitive ruling had not been received as of October 31,
2000. Shortly after receipt of the definitive ruling, which is expected
soon, the demutualization will be completed and membership interests in
Existing CME will be converted into shares of New CME as previously
described.
Page 6
<PAGE>
The demutualization transaction will be treated for accounting
purposes in a manner similar to "pooling-of-interests" accounting.
Under this method of accounting, no gain or loss will be recognized,
and the assets and liabilities of Existing CME will appear on the
books of New CME at their same recorded amounts.
For additional information regarding the demutualization, see the
proxy statement/prospectus of New CME contained in its registration
statement (File No. 333-95561) that was declared effective on April
25, 2000.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
As discussed in the Notes to Condensed Financial Statements above, New CME was
formed for the purpose of effecting the demutualization of the Chicago
Mercantile Exchange, an Illinois not-for-profit corporation. That transaction
has not yet been completed and will not be completed until a definitive ruling
is received from the Internal Revenue Service regarding the tax consequences of
the transaction. New CME has no business operations of its own and is not
expected to have any business operations until the completion of the
demutualization.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company has not commenced operations and has not entered into any contracts
or commitments that would expose it to market risk.
Page 7
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit
Number Description of Exhibit
------ ----------------------
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended
September 30, 2000.
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.
CHICAGO MERCANTILE EXCHANGE INC.
(Registrant)
November 1, 2000 By /s/ DAVID G. GOMACH
(Date) David G. Gomach
Chief Financial Officer
Page 8
<PAGE>
EXHIBIT INDEX
Number Description
27.1 Financial Data Schedule
Page 9
