SEC Comment Letter for CME GROUP INC. (CME) (CIK 0001156375) (CME) — Aug 3, 2006
CME GROUP INC. (CME) (CIK 0001156375)
Date: Aug. 3, 2006 · CIK: 0001156375 · Accession: 0000000000-06-036545
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-33379
Letter
August 3, 2006 Mail Stop 4561 Mr. Craig S. Donohue Chief Executive Officer and Director Chicago Mercantile Exchange Holdings Inc. 20 South Wacker Drive Chicago, Illinois 60606
Re: Chicago Mercantile Exchange Holdings Inc. Form 10-K for Fiscal Year Ended December 31, 2005 Filed March 6, 2006 File Number: 000-33379
Dear Mr. Donohue:
We have reviewed filing and have the following comments. Where indicated, we think you should revise your document in resp onse to these comments. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessa ry in your explanation. In our comments, we may ask you to provide us with suppl emental information so we may better understand your disclosure. After reviewing th is information, we may or may not raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Craig S. Donohue Chicago Mercantile Exchange Holdings Inc. August 3, 2006 Page 2
Form 10-K, filed March 6, 2006
Exhibit 13.1
Liquidity and Cash Management, page 49 1. We note your disclosure that cash pe rformance bonds and security deposits are included in your consolidated balance sheet s and also that wi th the exception of the portion of securities deposited that are utilized in your securities lending program, clearing firm deposits other than t hose retained in the form of cash are not included in your consolidated ba lance sheets. Please tell us how you differentiate between including or excl uding cash performance bonds, security deposits, and non-cash deposits (primarily s hort-term U.S. Treasury securities as disclosed in footnote 2 on page 61) in your balance sheet and provide the authoritative guidance to support your accounting.
Consolidated Statements of Income, page 57 2. We note that you do not present oper ating and non-operating income and expenses separately, nor do you present cost of revenues as addressed in Article 5-03(2) of Regulation S-X. Please tell us:
• how your statement of income presentation complies with Article 5-03 of Regulation S-X; and • why you have netted secu rities lending interest expense against revenues instead of treating it as a cost of revenues. 3. Please tell us how you determined indivi dually that investment income and each element of other revenues:
• were the result of central or core opera tions and not peripheral as addressed in paragraphs 78-89 of FASB Concept Statement 6; and • were not non-operating income or expens e to be classified separately and addressed in Article 5-03(7 )-(9) of Regulation S-X. 4. Please tell us how you determined that each element of “other expense,” as well as other expense line items, should not be classified as selling, general, and administrative expenses as addressed in Article 5-03(4) of Regulation S-X.
Mr. Craig S. Donohue Chicago Mercantile Exchange Holdings Inc. August 3, 2006 Page 3
* * * * *
As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Pl ease furnish a cover letter that keys your responses to our comments and provides any requested supplemental information. Detailed cover letters greatly facilitate our review. Please understa nd that we may have additional comments after reviewin g your response to our comments.
We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing review ed by the staff to be certain that they have provided all information investors require for an inform ed decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
You may contact John Spitz, Staff Accountant at (202) 551-3484, or me at (202) 551-3490, if you have questions re garding these comments.
Sincerely,
Don Walker
Senior Assistant Chief Accountant
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August 3, 2006 Mail Stop 4561 Mr. Craig S. Donohue Chief Executive Officer and Director Chicago Mercantile Exchange Holdings Inc. 20 South Wacker Drive Chicago, Illinois 60606 Re: Chicago Mercantile Exchange Holdings Inc. Form 10-K for Fiscal Year Ended December 31, 2005 Filed March 6, 2006 File Number: 000-33379 Dear Mr. Donohue: We have reviewed filing and have the following comments. Where indicated, we think you should revise your document in resp onse to these comments. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessa ry in your explanation. In our comments, we may ask you to provide us with suppl emental information so we may better understand your disclosure. After reviewing th is information, we may or may not raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter. Mr. Craig S. Donohue Chicago Mercantile Exchange Holdings Inc. August 3, 2006 Page 2 Form 10-K, filed March 6, 2006 Exhibit 13.1 Liquidity and Cash Management, page 49 1. We note your disclosure that cash pe rformance bonds and security deposits are included in your consolidated balance sheet s and also that wi th the exception of the portion of securities deposited that are utilized in your securities lending program, clearing firm deposits other than t hose retained in the form of cash are not included in your consolidated ba lance sheets. Please tell us how you differentiate between including or excl uding cash performance bonds, security deposits, and non-cash deposits (primarily s hort-term U.S. Treasury securities as disclosed in footnote 2 on page 61) in your balance sheet and provide the authoritative guidance to support your accounting. Consolidated Statements of Income, page 57 2. We note that you do not present oper ating and non-operating income and expenses separately, nor do you present cost of revenues as addressed in Article 5-03(2) of Regulation S-X. Please tell us: • how your statement of income presentation complies with Article 5-03 of Regulation S-X; and • why you have netted secu rities lending interest expense against revenues instead of treating it as a cost of revenues. 3. Please tell us how you determined indivi dually that investment income and each element of other revenues: • were the result of central or core opera tions and not peripheral as addressed in paragraphs 78-89 of FASB Concept Statement 6; and • were not non-operating income or expens e to be classified separately and addressed in Article 5-03(7 )-(9) of Regulation S-X. 4. Please tell us how you determined that each element of “other expense,” as well as other expense line items, should not be classified as selling, general, and administrative expenses as addressed in Article 5-03(4) of Regulation S-X. Mr. Craig S. Donohue Chicago Mercantile Exchange Holdings Inc. August 3, 2006 Page 3 * * * * * As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Pl ease furnish a cover letter that keys your responses to our comments and provides any requested supplemental information. Detailed cover letters greatly facilitate our review. Please understa nd that we may have additional comments after reviewin g your response to our comments. We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing review ed by the staff to be certain that they have provided all information investors require for an inform ed decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States. In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. You may contact John Spitz, Staff Accountant at (202) 551-3484, or me at (202) 551-3490, if you have questions re garding these comments. Sincerely, Don Walker Senior Assistant Chief Accountant