Summary
CME Group Inc. (CME) filed an 8-K on September 23, 2002, announcing a significant change in its accounting policy for a portion of its stock options. This change, recommended by new independent auditors Ernst & Young LLP and retroactive to December 31, 2000, will result in an increase in reported net income and earnings per share for the year-to-date 2002 period. Specifically, the company expects an increase of approximately $2.9 million in net income, boosting the reported figure to about $41.7 million, or $1.40 per diluted share, up from $38.8 million, or $1.31 per diluted share. The company emphasizes that this change is a non-cash accounting adjustment and will therefore have no impact on its cash flow. While full-year results for 2000 and 2001 remain unaffected, quarterly results for 2001 will be revised and announced in amended SEC filings.
Key Highlights
- 1CME Group Inc. is changing its accounting policy for a portion of its stock options, effective retroactively to December 31, 2000.
- 2The accounting change is based on a recommendation from its new independent auditors, Ernst & Young LLP.
- 3The change is expected to increase reported net income for the first half of 2002 by approximately $2.9 million.
- 4Reported diluted earnings per share for the first half of 2002 are expected to increase from $1.31 to $1.40.
- 5The stock option accounting change is a non-cash item and will not affect the company's cash flow.
- 6Full-year financial results for 2000 and 2001 will not be impacted.
- 7Amended quarterly results for 2001 will be filed with the SEC.