The following discussion is provided as a supplement to, and should be read in conjunction with, the accompanying unaudited consolidated financial statements and notes in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2007.

On July 12, 2007, CBOT Holdings, Inc. (CBOT Holdings) merged with and into Chicago Mercantile Exchange Holdings Inc. (CME Holdings). At the time of the merger, the combined company was renamed CME Group Inc. (CME Group). On March 23, 2008, CME Group acquired Credit Market Analysis Ltd., a private company incorporated in the United Kingdom, and its wholly-owned subsidiaries
(collectively, CMA). On August 22, 2008, NYMEX Holdings, Inc. (NYMEX Holdings)
merged with CME Group. The following Management's Discussion and Analysis of Financial Condition and Results of Operations includes the financial results of CBOT Holdings beginning July 13, 2007, the financial results of CMA beginning on March 24, 2008, and the financial results of NYMEX Holdings beginning August 23, 2008.

References in this discussion and analysis to "we," "us" and "our" are to CME Group and its consolidated subsidiaries, collectively. References to "exchange" are to Chicago Mercantile Exchange Inc. (CME), Board of Trade of the City of Chicago, Inc. (CBOT), and New York Mercantile Exchange, Inc. (NYMEX), collectively.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those policies that we believe present the most complex or subjective measurements and have the most potential to affect our financial position and operating results. While all decisions regarding accounting policies are important, there are certain accounting policies that we consider to be critical. Information regarding critical accounting policies as of December 31, 2007 is contained in Item 7 of our 2007 Annual Report on Form 10-K. The following is additional information regarding critical accounting policies adopted in 2008:

Valuation of Financial Instruments. In January 2008, we adopted Statement of Financial Accounting Standard (SFAS) No. 157, "Fair Value Measurements," which provides guidance for using fair value to measure assets and liabilities by defining fair value and establishing a framework for measuring fair value. SFAS No. 157 applies to all financial instruments that are measured and reported on a fair value basis.

SFAS No. 157 defines "fair value" as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, or an exit price. The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

We have categorized our financial instruments measured at fair value into a three-level classification in accordance with SFAS No. 157. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

• Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Assets and liabilities carried at Level 1 fair value generally include U.S. Treasury and Government agency securities, equity securities listed in active markets, and investments in publicly traded mutual funds with quoted market prices.

• Level 2 - Inputs are either directly or indirectly observable and corroborated by market data or are based on quoted prices in markets that are not active. Assets and liabilities carried at Level 2 fair value generally include municipal bonds, corporate debt and certain derivatives.

• Level 3 - Inputs are unobservable and reflect management's best estimate of what market participants would use in pricing the asset or liability. Generally, assets and liabilities at fair value utilizing Level 3 inputs include certain complex over-the-counter derivative contracts and certain other assets and liabilities with inputs that require management's judgment.

To corroborate the reasonableness of our Level 3 fair value models, we have obtained valuations for Level 3 assets and liabilities from independent third parties where available. For further discussion regarding the fair value of financial assets and liabilities, see Note 13 in the notes to the unaudited consolidated financial statements.

Derivative Investments. We may use derivative financial instruments for the purpose of hedging exposures to fluctuations in interest rates and foreign currency exchange rates. Derivatives are recorded at fair value in the consolidated balance sheets in accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended. SFAS No. 133 also requires that changes in our derivatives' fair values be recognized in earnings, unless the instruments are accounted for as hedges. For a derivative designated as a fair value hedge, any gain or loss on the derivative is recognized in earnings in the period of change, to the extent the hedge is effective, together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. We record the effective portions of our derivative financial instruments that are designated as cash flow hedges in accumulated other comprehensive income in the accompanying consolidated balance sheets. Any ineffective or excluded portion of a hedge is recognized in earnings immediately. Any realized gains and losses from hedges are classified in the consolidated statements of income consistent with the accounting treatment of the items being hedged.

RESULTS OF OPERATIONS

Financial Highlights

The comparability of our operating results for the third quarter and first nine months of 2008 to the same periods in 2007 is significantly impacted by our mergers with CBOT Holdings and NYMEX Holdings. In our discussion and analysis of comparative periods, we have quantified the contribution of additional revenue or expense resulting from these transactions wherever such amounts were material and identifiable. While identified amounts may provide indications of general trends, the analysis cannot completely address the effects attributable to integration efforts.

The following summarizes significant changes in our financial performance in the third quarter and first nine months of 2008 when compared with the same periods in 2007.

• Total revenues grew by 20% and 52% in the third quarter and first nine months of 2008, respectively, when compared with the same periods in 2007. The most significant increases occurred in clearing and transaction fees and quotation data fees while processing services experienced a decrease.

• Total expenses increased by 18% and 44% in the third quarter and first nine months of 2008, respectively, driven mostly by increases in amortization of purchased intangibles, compensation and benefits costs, and depreciation and amortization. During the third quarter of 2008, we recognized goodwill and intangible assets impairment related to our Swapstream operations which also contributed to an increase in operating expenses when compared with 2007.

• Net non-operating expense increased for both the third quarter and year-to-date periods due primarily to increased borrowings, impairments of our equity method investment in FXMS and certain securities lending assets, and a decline in market interest rates which reduced investment and securities lending income. Transaction-related costs incurred to complete our investment in BM&F Bovespa SA (BM&F) during the first quarter of 2008 also contributed to the year-to-date increase in net non-operating expense. The impact of these items was partially offset by a decline in our liability related to the guarantee of CBOE exercise right privileges and dividend income received from BM&F.

• Operating margin, which we define as operating income expressed as a percentage of total revenues, was 62% in the third quarter of 2008 compared with 61% for the same period in 2007.

• The effective tax rate increased to 42.5% year to date compared with 39.7% in the same period of 2007. This increase was primarily driven by an increase in our state and local tax rate due to our merger with NYMEX Holdings, including a charge of $48.3 million in the third quarter to record the impact of our new combined state and local tax rate on our existing net deferred tax liability. Year to date, this increase in our effective tax rate was partially offset by the first quarter benefit from the Illinois tax law change that resulted in a $38.6 million reduction in the net deferred tax liability.

Operating Revenues



                                                   Quarter Ended September 30,                    Nine Months Ended September 30,
(dollars in millions)                               2008                2007         Change           2008                2007         Change
Clearing and transaction fees                  $         558.7     $         477.8       17 %   $        1,542.3    $          988.8       56 %
Quotation data fees                                       75.7                45.8       65                192.3                95.2      102
Processing services                                       17.9                18.0       -                  53.9                90.3      (40 )
Access and communication fees                             10.9                10.5        4                 32.2                25.9       24
Other                                                     17.8                13.1       36                 48.6                26.4       84

Total Revenues                                 $         681.0     $         565.2       20     $        1,869.3    $        1,226.6       52

Clearing and Transaction Fees. Revenues increased primarily due to growth in trading volume and an increase in average rate per contract.

Volume

The following table summarizes average daily trading volume. For comparative purposes, CME, CBOT and NYMEX products have been presented separately. The 2007 average daily trading volume for CBOT products has been calculated for the period July 13 through September 30, 2007. The 2008 average daily volume for NYMEX products has been calculated for the period August 23 through September 30, 2008. All amounts exclude TRAKRS, Swapstream and auction-traded products.

                                                Quarter Ended September 30,                          Nine Months Ended September 30,
(amounts in thousands)                           2008                 2007           Change            2008                  2007            Change
Product Line Average Daily Volume
Interest rate:
CME                                                 3,082                4,496          (31 )%             3,671                 3,898           (6 )%
CBOT                                                2,948                3,652          (19 )              3,224                 3,652          (12 )

Equity:
CME                                                 3,597                3,064           17                3,341                 2,464           36
CBOT                                                  245                  206           19                  210                   206            2

Foreign exchange:
CME                                                   710                  635           12                  672                   572           17

Commodity and alternative investment:
CME                                                   101                   86           17                  100                    85           18
CBOT                                                  722                  622           16                  801                   622           29
NYMEX                                               1,863                   -          n.m.                1,863                    -          n.m.

Aggregate Average Daily Volume:
CME                                                 7,490                8,281          (10 )              7,784                 7,019           11
CBOT                                                3,915                4,480          (13 )              4,235                 4,480           (5 )
NYMEX                                               1,863                   -          n.m.                1,863                    -          n.m.

Electronic Volume:
CME                                                 6,426                6,301            2                6,503                 5,273           23
CBOT                                                3,216                3,579          (10 )              3,409                 3,579           (5 )
NYMEX                                               1,054                   -          n.m.                1,054                    -          n.m.
Electronic Volume as a Percentage of
Total Volume                                           81 %                 77 %                              79 %                  77 %

n.m. not meaningful

The addition of the NYMEX product lines was a major contributor to the overall trading volume increase during the third quarter and first nine months of 2008 when compared with the same periods in 2007. We also believe that a significant surge in overall market volatility caused by uncertainty surrounding the credit crisis contributed to the overall increase in volume, specifically within equity products. In this discussion of volume, NYMEX volume information for periods prior to August 23, 2008 is provided for comparative purposes only and does not correspond to revenue recognized by CME Group prior to that date. CBOT volume information for periods prior to July 13, 2007 is also provided for comparative purposes only.

Interest Rate Products

Overall interest rate product volume has declined during 2008 due primarily to the global credit crisis. We believe the credit crisis has distorted historical relationships between fixed income, money market and interest rate derivative securities.

Quarter to date, a decrease in CME Eurodollar options contributed to an overall decrease in CME interest rate volume. The average daily volume for CME Eurodollar options, which are primarily traded through open outcry, decreased by 54% to 0.8 million contracts per day in 2008 compared with the same period in 2007. CME Eurodollar futures contracts traded electronically decreased by 16% to 2.2 million contracts in 2008 compared with the same period in 2007. Extreme volatility and the decoupling of related markets have reduced certain customers' ability to assume and maintain positions, which has resulted in a decrease in volume. We believe the increase in market volatility was generated from concerns regarding the credit crisis and uncertainty surrounding interest rate expectations.

Year to date, the average daily volume for CME Eurodollar options decreased by 26% to 1.0 million contracts in 2008 compared with the same period in 2007, which primarily contributed to the overall decrease in CME Eurodollar volume. The decrease was partially offset by a 10% increase in electronic CME Eurodollar futures to an average of 2.5 million contracts per day in 2008 compared with the same period in 2007.

Volume for the 10-Year U.S. Treasury Note futures and options averaged 1.3 million and 1.7 million contracts per day during the third quarter of 2008 and 2007, respectively, and 1.5 million and 1.6 million contracts per day during the first nine months of 2008 and 2007. Average daily volume for the 5-Year U.S. Treasury Note futures and options was 0.8 million and 0.6 million contracts for the third quarter of 2008 and 2007, respectively, and 0.9 million and 0.6 million contracts for the first nine months of 2008 and 2007, respectively. We believe the decrease in volume for products on the long end of the yield curve relative to products on the short end of the yield curve is due to the credit crisis, which has resulted in debt holders shifting from holding long-term debt to short-term debt.

Equity Products

The equity markets have experienced significant volatility during the first nine months of 2008, which we believe is attributable primarily to concerns about the credit crisis. Average volatility, as measured by the CBOE Volatility Index, increased by 16% and 50% during the third quarter and first nine months of 2008, respectively, when compared with the same periods in 2007. We believe this increase in volatility is the primary reason for the growth in our equity trading volume during the third quarter and year to date periods of 2008 when compared with the same periods in 2007.

During the third quarter of 2008, average daily volume for our E-mini equity products increased by 19% to 3.4 million contracts when compared with the same period in 2007. Included in this growth was an increase in E-mini S&P 500 futures and options, which grew by 28% to an average of 2.7 million contracts per day when compared with the same period in 2007.

During the first nine months of 2008, volume for our E-mini equity products increased by 39% to an average of 3.2 million contracts per day when compared with the same period in 2007. This increase was primarily caused by an increase in average daily volume for E-mini S&P 500 futures and options, which rose 49% to 2.4 million contracts when compared with the same period in 2007.

Our license to list Russell-based contracts terminated in September 2008 when the last contracts expired. Average daily volume for the Russell-based contracts was 199,000 and 252,000 contracts per day in the third quarter and first nine months of 2008, respectively. Volume averaged 303,000 and 248,000 contracts per day in the third quarter and first nine months of 2007, respectively.

Foreign Exchange Products

Growth in trading volume of foreign exchange products during the third quarter and year to date, when compared with the same periods in 2007, was largely attributable to increased volatility of the U.S. dollar relative to other major currencies, particularly the euro and Japanese yen. The average daily volume for euro products increased by 45% to 261,000 contracts and 32% to 234,000 contracts during the third quarter and year to date periods of 2008, respectively. The Japanese yen products increased 13% to an average of 141,000 contracts per day during the first nine months of 2008. In contrast, the average daily volume for Japanese yen products decreased by 13% to 140,000 contracts in the third quarter of 2008 when compared with the same period in 2007. We believe the decline in the third quarter trading volume was due to a wider spread between the cash and futures markets for Japanese yen products as a result of increased volatility. In the third quarter and year to date 2008, electronically-traded contracts accounted for 96% and 95% compared with 94% and 92% in the same periods in 2007, respectively.

Commodity and Alternative Investment Products

The addition of NYMEX products to our existing product lines was the primary driver for the increase in overall commodities trading volume during the third quarter and first nine months of 2008 when compared with the same periods in 2007. NYMEX products consist mostly of energy futures and options as well as futures and options on precious and base metals. Average trading volume for NYMEX products increased 24% to 1.8 million contracts per day for the first nine months of 2008 when compared with the same period in 2007. In the third quarter, average trading volume for NYMEX products increased 23% to 1.8 million contracts per day when compared with the same period in 2007. Electronic trading of NYMEX products increased by 21% and 36% to an average of 831,000 and 837,000 contracts per day during the third quarter and year-to-date periods of 2008, respectively. The average daily volume for over-the-counter cleared products increased by 40% and 35% to 492,000 and 461,000 in the third quarter and first nine months of 2008, respectively.

In addition, average daily trading volume for CBOT corn and soybean products increased during the third quarter and year to date periods of 2008 when compared with the same periods in 2007. During the third quarter and year to date periods of 2008, volume for corn products increased by 33% and 16% to an average of 309,000 contracts and 338,000 contracts per day, respectively, when compared with the same periods in 2007. Average daily volume for soybean products grew by 6% and 27% to 166,000 contracts and 191,000 contracts per day during the third quarter and first nine months of 2008, respectively. We believe that the increases in volume are due primarily to changes in global supply and demand resulting in increased volatility as well as increased use of commodities as an asset class.

Increases in commodities volumes were partially offset by the impact of the sale of the CBOT metals trading products to NYSE Euronext. The sale of the CBOT metals trading products, including open interest, was completed on September 5, 2008. Year-to-date average volume for these metals products was 31,000 contracts per day through the date of the sale.

Average Rate Per Contract

An increase in the average rate per contract during the third quarter and year
to date also contributed to the overall increase in revenue. All amounts in the
following table exclude TRAKRS, Swapstream and auction-traded products.



                                                  Quarter Ended September 30,                    Nine Months Ended September 30,
                                                   2008                2007         Change           2008                2007         Change
Total volume (in millions)                              778.3               768.1        1 %            2,320.0             1,573.0       47 %
Clearing and transaction fees (in millions)   $         558.6     $         478.0       17     $        1,541.9    $          988.3       56
Average rate per contract                     $         0.718     $         0.622       15     $          0.665    $          0.628        6

During the third quarter of 2008, the average rate per contract increased when compared with the same period in 2007 due to the following:

• Measured as a percentage of total volume, trading shifted from CME interest rate products to CME equity products, which have a higher rate per contract, resulting in an increase in the overall rate per contract. As a percentage of total volume, CME equity products trading volume increased by 11% in the third quarter, while CME interest rate products trading volume decreased by 13% when compared with the same period in 2007.

• The addition of the NYMEX products to our existing product lines resulted in an increase in the overall rate per contract as the NYMEX average rate per contract was $1.596 for the period August 23 through September 30, 2008.

• Trading by members and special programs participants decreased to 85% compared with 86% in the same period of 2007, which contributed to an increase in the overall average rate per contract for the third quarter of 2008.

The increase in average rate per contract during the third quarter was partially offset by a decrease in the average rate per contract for the E-mini S&P 500 futures and options due to incremental volume reaching the CME Globex fee cap.

The increase in the average rate per contract during the first nine months of 2008 when compared with the same period in 2007 was attributable to the following:

• CME equity products volume as a percentage of total volume increase by 8% while CME interest rate volume decreased by 8% when compared with the same period of 2007.

• The impact of the average rate per contract for the CBOT products subsequent to the merger in July 2007 resulted in an increase in the overall average rate per contract. The average rate per contract for the CBOT products for the first nine months of 2008 was $0.697.

• The increase was partially attributable to the impact of the average rate per contract for the NYMEX products subsequent to the merger.

During the first nine months of 2008, the increase in the average rate per contract was partially offset by a decrease in the average rate per contract for the E-mini S&P 500 futures and options because incremental volume met the CME Globex fee cap. Additionally, trades executed by members and special program customers, as a percentage of total trading volume, increased to 86% compared with 85% in the same period of 2007, which also contributed to a decrease the overall average rate per contract.

Concentration of Revenue

We bill a substantial portion of our clearing and transaction fees to our clearing firms. The majority of clearing and transaction fees received from clearing firms represent charges for trades executed on behalf of their customers. We currently have approximately 130 clearing firms. No single firm represented more than 10% of our clearing and transaction fees revenue for the first nine months of 2008. Should a clearing firm discontinue operations, we believe the customer portion of the firm's trading activity would likely transfer to another clearing firm of the exchange. Therefore, we do not believe a concentration would expose us to significant risk from the loss of revenue earned from a particular firm.

Quotation Data Fees. The increase in quotation data fees is attributable primarily to the addition of fees generated by CBOT and NYMEX existing customers for basic services as well as an increase in the monthly fee for basic services. The monthly fee for CME and CBOT basic services increased to $55 for each market data screen, or device, in 2008 from $50 per device in 2007. For 2008, the monthly fee for NYMEX basic services is $55 for each market data screen, or device.

                                         Quarter Ended September 30,                     Nine Months Ended September 30,
                                           2008               2007          Change           2008                2007           Change
CME and CBOT:
Average estimated monthly basic
device screen count                           293,000            284,000      9,000             297,000             193,000      104,000
Basic device monthly fee per
device                                $            55    $            50    $     5    $             55    $             50    $       5
Estimated increase in revenue (in
millions):
Due to an increase in screen
counts                                                                      $   1.4                                            $    46.9
Due to an increase in the monthly
fee per device                                                                  4.4                                                 13.4
Data feed surcharges                                                            3.4                                                  9.0
. . .