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.1.















2011 Financial
Statements




BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
The Brazilian Securities, Commodities and Futures Exchange
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.2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - 2011

Dear Shareholders,
A BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA, Exchange or
Company) is pleased to present you with the Management's Discussion and Analysis of
Financial Condition and Results of Operations for 2011.
MACROECONOMIC CONDITIONS
After two years of feeble and uneven recovery from the financial crisis, the global economic
and financial landscape in 2011 unveiled persistent weaknesses in developed economies.
Events as the Eurozone sovereign debt crisis and market mistrust that European policy
makers would successfully implement necessary fiscal adjustment programs in countries as
Italy, Spain and Portugal, but particularly in Greece; the downgrading of the U.S. credit
rating; the problem of deteriorating output growth; and the fears about China's economic
slowdown, whose uncertainties lie in its size, all made up for an uneasy economic landscape.
Meanwhile, in the domestic front, the economy experienced contrasting half-year periods as
Brazil's government made sensitive trade-offs between objectives and implemented measures
shifting policy directions. Over the first half of the year, signaling concern about existing
inflationary pressures, the government repeatedly raised the benchmark interest rate (Selic),
adopting macroprudential measures to curb credit growth and consumer demand, and to
arrest the persistent currency appreciation, in the latter case by expanding the taxation of
financial transactions (IOF) and increasing the rates of existing IOF levies, among other things.
In the second half of the year, as the U.S. debt-ceiling crisis threatened global markets, and
the Eurozone sovereign debt crisis deepened, putting the global economies, including
Brazil, in further peril; and as expectations for domestic GDP growth in 2011 and
2012 pointedly declined (see the chart below), while industrial production weakened, the
Brazilian government responded with fresh urgency in reducing the benchmark rate, shifting
policies to incentivize consumer spending on durables, cutting taxes and loosening credit
restrictions in an effort to stave off economic slowdown.
Evolution of expectations for GDP growth in Brazil (median, in %)
Source: Central Bank of Brazil
Some of the government's macroprudential measures had a direct impact on the domestic
capital markets, including markets BM&FBOVESPA operates. Such was the case, for example,
when in July 2011, seeking to stem hot money inflows to halt the currency appreciation, as the
real rate had fallen to nearly R$1.50 to the U.S. dollar, the government broadened its financial
transactions tax (IOF tax) to charge increases in short dollar exposures at a 1% rate. Then, in
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
2011
2012
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.3.
December, a welcomed switch when the government removed the 2% IOF tax charged on hot
money inflows for investments in equity securities and equity-based derivatives for non-
residents.
STRATEGIC POSITIONING; OPERATING HIGHLIGHTS
In recent years the world has undoubtedly undergone transformative changes in global
economic dynamics. Along the way, some emerging market countries have risen to
prominence on the world stage primarily for their high potential for economic growth. This is
particularly true for the original BRIC emerging economies, meaning Brazil, Russia, India and
China.
The potential for high economic growth has elevated this country's profile enhancing its
attractiveness as an investment destination. BM&FBOVESPA believes and invests in this
potential, which is why we adopted and continue to implement a billion-dollar investment
plan for the 2010-2013 period.
Thus, in 2011, we proceeded to implemented strategies aimed at capturing and multiplying
opportunities the Brazilian markets offer, including opportunities to broaden the retail investor
base; to widen the issuer base by promoting equity financing as one of the main sources of
finance and a critical element in the sustainable development of the economy; to bolster the
derivatives markets in the wake of further growth in foreign trade and credit availability
(particularly through fixed-rate loan facilities) and because of the increased sophistication of
market participants; and, not least important, opportunities to meet or anticipate investor
demand for new products and markets as trading strategies become more elaborate and the
capital markets more complex.
Consistent with these objectives, our capital expenditures largely aim at advancing and
deepening the markets' technology infrastructure, as well as boosting our competitiveness
through delivering technological efficiency. Highlights of our capital expenditure plan include
(i) development and implementation of our new multi-asset class electronic trading platform,
known as Puma Trading SystemTM, whose derivatives and `spot dollar' module was
implemented in 2011, whereas the module for the trading of equity securities and equity-
based derivatives is set to be launched in 2012; (ii) the project to integrate our existing clearing
houses (for equities, derivatives, forex and bonds) into a single central clearing facility over the
course of 2012, which includes the development and implementation of a multimarket
clearing system in collaboration with a global provider of advanced financial technology; (iii)
the project for a new, state-of-art OTC platform for fixed-income and other derivatives set to
be launched late in 2012, for which we have engaged the services of a global application
software provider; and (iv) the construction of a new Data Center designed to support our
future growth and that of the markets we operate.
As part of our efforts towards expanding product offerings and strengthening markets we
operate, we have put in place an options market-maker program designed to spur the options
market liquidity, while assuring successful price formation and market stability; developed new
stock market indices and authorized new exchange-traded funds; adopted initiatives to bolster
the fixed-income market and further develop the Treasury Direct; announced new
international initiatives and partnerships, including a cross-listing arrangement for futures
contracts with the Chicago Mercantile Exchange (CME Group) and a cross-listing agreement
with exchanges of Russia, India, Hong Kong and South Africa.
Additionally, we completed and unveiled the results of a comprehensive review of our pricing
policies for the Bovespa and BM&F segments, which was designed to rebalance the fee
structure across our trading and post-trade business lines so as to eliminate cross subsidies
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.4.
embedded in fee rates and align our rates with those that are practiced by major international
markets.
With regard to market surveillance and regulation, as part of our efforts to strengthen and
consolidate BSM (BM&FBOVESPA Supervisão de Mercados) as an autonomous and financially
independent self-regulatory organization, enforcer and overseer of the markets, we
transferred on its behalf control over R$92.3 million in restricted funds reserved and designed
as a guarantee fund for use within the scope of BSM. By doing that, BSM will start to receive
additional revenue from the management of this fund.
Operating performance highlights for 2011 within the BM&F segment include a 7.8% year-on-
year rise in average daily traded volume in derivatives and a new record for the segment. This
climb is attributable primarily to the volume of trading in Brazilian-interest rate futures
contracts, the most actively traded contracts, followed by index-based futures and mini-sized
contracts, whose year-on volumes soared 37.9% and 51.4%, respectively, and U.S. dollar-
denominated interest rate futures contracts, with a 61.9% year-on surge in trading volume.
Trading volume for the stock market (Bovespa segment) was virtually unchanged from the
earlier year, which is explained by a number of reasons but primarily ­ and more so towards
the latter half of the year ­ by dwindling expectations that market forecasts could still be
beaten. This prompted a decline of the market capitalization of listed companies
1
as the year
drew to a close, with total average market capitalization of the stock market in the second half
of 2011 giving back 10.0% first semester.
Nonetheless, outstanding segment highlights include (i) the volume of business registered at
our securities lending facility (BTC), which shot up nearly 50.0% from one year ago; and (ii) the
volume of trading on our Treasury Direct platform, which spawned over 50.0% new registered
traders and an equally high jump in the volume of government bonds under custody.
However, as with the Bovespa Index (Ibovespa, the main indicator of the Brazilian stock
market average performance), which tossed 18.1% on a year-over-year basis, the performance
of BM&FBOVESPA shares (BVMF3) over 2011 was negatively influenced by the macroeconomic
landscape, the unexciting performance of average volumes, the introduction of government
measures to curb currency appreciation, and by news about possible competitor. As a result,
while BVMF3 stocks remained the 8
th
most actively traded in the market, with average
financial value traded at R$146.0 million and daily average volume of 13 thousand trades, the
market price of our shares took a 25.4% year-on-year dive.
Our commitment towards controlling costs and expenses remains unwavering. It drove us to
successfully bring them down the 2011 budget, such as announced in November 2011, and
prepare our 2012 opex budget to match the improved results we achieved by setting the
expense target at a lower range than originally proposed for the 2011 budget.
We also reaffirm our steadfast commitment towards returning for shareholders by
consistently distributing dividends and interest on shareholders' equity at least in the
equivalent of 80% of the net income, and by establishing share buyback programs, such as the
one now ongoing, based on which we repurchased over 57 million shares in 2011 at a total of
approximately R$606.0 million.
We should also say we have a firm belief in Brazil's potential for economic growth and in the
strength and potential for future growth of the domestic capital markets. Moreover, we
strongly believe our investments in technology, in market development and in an ever wider
range of products and services strengthen the strategic position of BM&FBOVESPA.
1
Market capitalization is a measurement of the size of a public company equal to the share price times the number of shares
outstanding by listed company. Despite a fall in the latter part of the year, the average market capitalization of the stock market in
2011 had climbed 1.3% from 2010.
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.5.

DISCUSSION AND ANALYSIS OF OPERATING PERFORMANCE
Bovespa segment
The average daily trading value of R$6.5 billion for 2011 picked up just a thread from the
earlier year, but still enough to hit an all-time record. This virtually unchanged performance is
a result of a 1.3% year-on-year climb in average capitalization of the stock market and a slight
increase in turnover velocity
2
(to 64.2% from 63.8%), driving a 1.1% rise in volume traded in
cash equities. This climb, however, was quashed by a slump in combined average daily trading
value in the forward and options markets
3
.
The analysis of average daily trading value for the last five-year (2007-2011) and three-year
(2009-2011) periods shows compound annual growth rates (CAGR) of 7.3%, and 10.8%,
respectively. A year-over-year analysis of the fourth quarter, however, shows the market
capitalization of listed companies declined towards the year end, which was an important
driver of low-key market impetus to pursue profits in cash equities prompting a 5.5% tumble in
average daily volume. On the other hand, turnover velocity for the quarter to December
surged to 69.3% from 66.6% in the quarter to September softening the impact on volume from
the dive in average market capitalization.
In the options market the average daily trading value plunged 10.3% from the prior year due
primarily to significant concentration of trading in options on Petrobras and Vale stocks, whose
the average value traded plunged 18.8% on a year-over-year basis. Options on Petrobras and
Vale stocks accounted for 79.5% of the overall average value traded for that market in 2011.
Moreover, retail traders, who typically account for substantially most of the volume (54.1% of
the overall value traded on the options market in 2011), showed lukewarm disposition to
trading in equity options. The forward market saw a similar trend, with average daily volume
retreating 19.9% year-on-year, as retail traders and institutional investors showed less trading
activity.
An analysis of 2011 volumes by sector stocks
4
shows the average daily trading value in basic
materials stocks (such as Vale, CSN, Gerdau and Braskem and other raw materials companies)
dropped 8.8% year-on-year. Basic materials stocks accounted for approximately 21.0% of the
overall average daily traded value in cash equities. Another highlight, the average daily traded
value in oil, gas & biofuel sector stocks (covering exploration and development of oil or gas
reserves, oil and gas drilling, and biofuel companies, including top-traded Petrobras stocks)
tumbled 11.6% year-on-year. Oil, gas & biofuel sector stocks accounted for 16.5% of the
overall ADTV in cash equities. On the other hand, the ADTV in financial sector stocks (a
2
Turnover velocity for the year is defined as the ratio of annualized turnover (value) of stocks traded on the cash market
over a twelve-month period to average market capitalization for the same period .
3
As with other options, an option on a stock is an (equity-based) derivative instrument that specifies a contract sold by one party
(option writer) to another party (option holder), which offers the buyer the right, but not the obligation, to buy (call) or sell (put)
an underlying stock at a specified reference price (strike price) in the future or on a specified future date (exercise date). In return
for assuming the obligation to fulfill the transaction, the option originator (writer) collects a payment (premium) from the buyer.
BM&FBOVESPA defines value traded in options on stocks as the aggregate financial value of premiums (taken with the meaning
of current price of any specific option contract) paid on every option transacted on a particular date. A
stock forward contract, or
forward on stocks, is a binding contract between two parties to buy or sell a given stock or notional amount thereof (underlier) at a
specified future time (the settlement date, on which the underlier and payment will be exchanged) at a currently agreed-upon
price (delivery price). The delivery price is equal to the forward price at the time the contract is due. The forward price of such a
contract is contrasted with the cash price of the underlying stocks, i.e., the price at which the individual stocks would change
hands on the stock market. The difference between cash price and the forward price is the forward premium or forward discount,
generally considered in the form of a profit or loss, by the purchasing party. BM&FBOVESPA defines value traded in forwards on
stocks as the aggregate financial value of the forward price (cash price plus premium) paid on every forward contract transacted
in a given date.
4
For the analysis of sector stocks, we compiled data on volumes traded in the top 50 most actively traded stocks in 2011, which
accounted for 77.0% of the overall volume traded in cash equities (Bovespa segment).
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.6.
financial services category which includes stocks of banks, insurance companies, credit card
issuers, real estate developers and exchanges) went up 12.6% from the earlier year. Financial
sector stocks accounted for roughly 19.0% of the overall volumes.
Bovespa segment ­ Average daily traded value evolution
(in R$ billions)
(In R$ millions)
Source: BM&FBOVESPA.
Bovespa segment ­ Exchange average market capitalization and turnover velocity
Source: BM&FBOVESPA.
The average number of daily trades increased on both a year-on-year and quarter-on quarter
basis primarily as a result of increased high frequency trading activity, which are characterized
as being quantitative users small orders, driving down the average ticket size per trade.
In any event, we should note that our trading and clearing systems offer much greater
throughput capacity than the current volume of business, and are ready to support the future
growth of our markets.
Bovespa segment ­ Evolution in number of trades
(In thousands)
Source: BM&FBOVESPA.
The equity offering market slowed down over the year, with just 11 IPOs and 11 follow-on
offerings, which in the aggregate raised gross proceeds of R$18.0 billion, far below the results
for previous years. The slump was sharper in the second half of the year, as 14 of these 22
4.9
5.5
5.3
6.5
6.5
6.8
6.7
6.2
6.6
6.4
2007
2008
2009
2010
2011
4Q10
1Q11
2Q11
3Q11
4Q11
CAGR: 7.3%
: 0.0%
: -5.5%
: -2.7%
Markets
2007
2008
2009
2010
2011
CAGR
(2006-10)
Var.
2011/2010
4Q10
1Q11
2Q11
3Q11
4Q11
Var.
4Q11/4Q10
Var.
4Q11/3Q11
Cash
4,555.5
5,162.3
4,943.7
6,031.6
6,096.3
7.6%
1.1%
6,366.5
6,290.7
5,857.3
6,216.8
6,016.3
-5.5%
-3.2%
Forward
156.1
177.8
96.5
147.4
118.0
-6.8%
-19.9%
165.9
161.6
121.3
93.4
97.4
-41.3%
4.3%
Options
179.7
180.2
245.0
307.9
276.3
11.4%
-10.3%
260.0
282.6
227.2
287.8
307.6
18.3%
6.9%
Total
4,895.1
5,525.5
5,286.8
6,488.6
6,491.6
7.3%
0.0%
6,793.9
6,735.4
6,205.8
6,599.7
6,422.0
-5.5%
-2.7%
2.0
2.0
1.8
2.3
2.4
2.5
2.5
2.5
2.2
2.2
56.4%
63.2%
66.6%
63.8%
64.2%
61.8%
61.8%
59.5%
69.3%
66.6%
0,0%
20,0%
40,0%
60,0%
80,0%
-
1,0
2,0
3,0
4,0
2007
2008
2009
2010
2011
4Q10
1Q11
2Q11
3Q11
4Q11
Average Market Capitalization (BRL trillions)
Turnover Velocity (%)
Markets
2007
2008
2009
2010
2011
CAGR
(2007-11)
Var.
2011/2010
4Q10
1Q11
2Q11
3Q11
4Q11
Var.
4Q11/4Q10
Var.
4Q11/3Q11
Cash
113.6
195.1
270.6
349.8
476.5
43.1%
36.2%
385.9
409.2
422.1
540.6
530.6
37.5%
-1.8%
Forward
1.8
2.2
1.3
1.6
1.1
-10.3%
-26.7%
1.5
1.4
1.3
1.0
0.9
-38.1%
-5.2%
Options
37.5
47.8
60.4
79.3
89.6
24.3%
13.0%
81.0
89.8
80.2
86.2
102.5
26.6%
19.0%
Total
152.9
245.1
332.3
430.6
567.2
38.8%
31.7%
468.4
500.4
503.6
627.7
634.0
35.4%
1.0%
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.7.
offerings were completed in the first two quarters to amass 77.4% of the overall gross
proceeds from offerings carried out over 2011.
Bovespa segment ­ Equity offerings
(In R$ billions)
* In 2010, If we were to include the oil reserves assignment the Brazilian government and Petrobras have agreed, the total gross
proceeds from offering would rise to R$149.2 billion.
Source: BM&FBOVESPA.
The number of active custody accounts at end of 2011 fell to 611.2 thousand from 640.2
thousand one year earlier, being retail investors the bulk of this retreat. The retail average
daily traded value plunged 18.6% year-on-year to R$1.4 billion.
In turn, the average daily traded value by foreign investors soared to R$2.3 billion from R$1.9
billion one year earlier, much of it explained by growth in high frequency trading since foreign
investors account for most of the high frequency volume.
Bovespa segment ­ ADTV evolution by investor category
(In R$ billions)
Source: BM&FBOVESPA.
In addition, the net flow of foreign investments hit R$7.4 billion, with a substantial chunk
directed to the equity offering market, as foreign investments leaving the secondary market
outstripped foreign inflows to close the year with negative net balance of R$1.4 billion.
Bovespa segment ­ Net flow of foreign investments
(In R$ billions)
Source: BM&FBOVESPA.
4,5
5.4
15.4
55.6
7.5
23.8
11.2
7.2
4.3
8.5
15.1
14.5
26.8
22.2
63.2
10.8
2004
2005
2006
2007
2008
2009
2010*
2011
IPOs
Follow on
8.8
13.9
30.4
70.1
34.3
45.9
74.4
18.0
1.1
1.5
1.6
1.7
1.4
1.5
1.5
1.3
1.5
1.3
1.5
1.5
1.4
2.2
2.2
2.2
2.3
2.1
2.2
2.1
1.7
2.0
1.8
1.9
2.3
2.3
2.3
2.1
2.3
2.4
0.5
0.4
0.4
0.5
0.6
0.6
0,6
0.6
0.6
0.6
0.1
0.2
0.1
0.1
0.1
0.2
0.1
0.1
0.1
0.1
2007
2008
2009
2010
2011
4Q10
1Q11
2Q11
3Q12
4Q11
Individuals
Institutional Investors
Foreign Investors
Financial Insitutions
Companies
Others
4.9
5.5
5.3
6.5
6.8
6.7
6.2
6.6
6.4
6.5
(24.6)
20.5
6.0
(1.4)
2.9
(2.6)
1.4
0.8
(1.0)
9.1
22.7
22.4
8.7
4.4
3.7
4.3
0.8
0.0
(15.5)
43.2
28.3
7.4
7.3
1.1
5.7
1.5
(1.0)
2008
2009
2010
2011
4Q10
1Q11
2Q11
3Q11
4Q11
Secondary Market
Public Offers
Total
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.8.
We should note that some of our recently developed investment offerings have been
remarkably successful. This translated into outstanding performance, for example, in the case
of the ETFs. The average daily traded value in ETFs (there are ten currently trading, three of
which started in 2011) soared 70.7% year-on-year, and in a comparison of the quarters to
December jumped 107.1% year-over-year.
Bovespa segment ­ Average daily traded value in ETFs
(In R$ millions)
Source: BM&FBOVESPA.
In addition, we have been yielding positive results from the initiatives we took to boost
technology and facilitate access to our markets, particularly through co-location arrangements,
and from the discount pricing policy introduced in late 2010. For example, high frequency
value traded increased significantly, shooting the daily average up by 10.3% year-on-year and
the average for the quarter to December by 146.2% from the year-ago fourth quarter.
Bovespa segment ­ HFT average daily trading volume (buy + sell sides)
(In R$ billions)
Source: BM&FBOVESPA.
Finally, in December 2011 the Brazilian government removed the 2% IOF tax charged on
inflows for investments in equity securities and equity-based derivatives, which it first
introduced in October 2009 in an attempt at curbing currency appreciation. While the true
effects of this rather recent regulatory movement have yet to be properly assessed, it surely
removes a competitive barrier which had given an edge to ADRs traded on U.S. markets and
OTC investment alternatives offered abroad by global banks, such as TRSs (total return swaps),
and may well boost foreign investment inflows driving an upsurge in trading volumes.
BM&F segment
The 2011 average daily trading volume climbed 7.8% year on year to hit 2.7 million trades in
futures contracts and other derivatives, the highest on record for the derivatives markets
(BM&F Segment). An analysis of average daily trading volume for the most recent five-year
(2007-2011) and three-year (2009-2011) periods shows CAGRs of 11.6% and 33.2%,
respectively.
18.6
28.5
48.7
32.1
39.5
34.8
53.8
66.4
2009
2010
2011
4Q10
1Q11
2Q11
3Q11
4Q11
CAGR: 61.7%
: 70.7%
: 23.5%
: 107.1%
0.16
0.32
0.45
0.84
0.92
0.19
0.29
0.27
0.32
0.25
0.18
0.21
0.18
0.17
0.15
4.3%
6.1%
7.4%
10.3%
10.3%
-
0,20
0,40
0,60
0,80
1,00
1,20
1,40
4Q10
1Q11
2Q11
3Q11
4Q11
ADTV (Foreigners)
ADTV (Individuals)
ADTV (Institutionals)
% of overall market
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.9.
BM&F segment ­ ADTV and average rate per contract (RPC)
Source: BM&FBOVESPA.
Brazilian-interest rate contracts make up the most actively traded contract group in the
derivatives segment. The average daily volume for these contracts went up 6.7% year-on-year,
which is explained primarily by two important factors, one being structural growth, the other
market uncertainties about the direction of the Brazilian Government's monetary policy.
The structural growth factor correlates with economic growth in Brazil and the demand for
hedge instruments it engenders. Heightened exposure to fixed interest rate risk incurred in
transactions entered in the private lending market or the government bonds market increases
the demand of lenders and debt security holders for hedge instruments capable of eliminating
or mitigating risk that interest rates or a fixed rate's implied volatility will change. According to
data compiled by the Central Bank, at December 31, 2011, the overall volume of fixed-rate
lending had climbed 20.1% year-over-year, to R$747.2 billion from R$622.4 billion one year
ago, whereas the portion of national debt paying fixed rates had grown 12.2% to R$682.6
billion from R$608.4 billion the year before.
Market uncertainties about the direction of the Brazilian government's monetary policy are a
second factor to explain the heightened volume of trading in Brazilian-interest rate contracts.
The government's trade-offs between objectives and shifts in policy direction translate into
volatility triggered by uncertainty and differing expectations by market participants about the
direction of the benchmark rate and, thus, other interest rates as well. Early in the year
Brazil's government adopted a restrictive monetary policy and the Central Bank raised the
benchmark rate by 175 bps (to 12.5%) by July 2011. In August, in response to a deteriorating
global economic outlook and slowdown in Brazil, the Central Bank caught the market
unawares in a turnabout move that started a rate cut cycle with a 50 bps reduction in the
interest rate. Policy shifts and uncertainties about the direction and pace of the changes in
benchmark rate explain the record volumes traded in Brazilian-interest rate contracts,
particularly over the quarters to March and September 2011.
BM&F segment ­ ADTV
(In thousands of contracts)
1.7
1.6
1.5
2.5
2.7
2.6
2.9
2.7
2.8
2.5
1.223
1.524
1.365
1.134 1.106
1.099 1.040 1.127 1.106
1.157
-
0,200
0,400
0,600
0,800
1,000
1,200
1,400
1,600
-
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
2007
2008
2009
2010
2011
4Q10
1Q11
2Q11
3Q11
4Q11
ADTV (millions)
RPC (BRL)
2007
2008
2009
2010
2011
CAGR
2007-2011
Var.
2010-2011
Interest Rates in BRL
FX Rates
Stock Indices
Interest Rates in USD
Commodities
Mini Contracts
OTC
Total
988.1
788.7
843.5
1,683.6
1,797.2
16.1%
6.7%
473.0
534.9
447.1
540.6
495.5
1.2%
-8.3%
112.0
87.6
80.0
89.4
123.3
2.4%
37.9%
90.0
96.2
78.3
89.7
145.2
12.7%
61.9%
10.1
14.9
10.2
12.9
13.2
7.1%
2.6%
57.8
40.5
52.6
75.6
114.4
18.6%
51.4%
11.5
12.4
9.3
12.9
11.7
0.5%
-8.9%
1,742.4
1,577.2
1,521.0
2,504.7
2,700.6
11.6%
7.8%
background image
.10.
Source: BM&FBOVESPA.
However, in the quarter to December 2011 market expectations had converged and there was
little doubt about the government's moves to bring the reference rate down over time. As a
result, the average daily volume traded in Brazilian-interest rate contracts tumbled 16.4%
when compared to the same quarter one year earlier.
Additionally, in July 2011, in an attempt at stemming hot money inflows to curb the
appreciation of the Brazilian real to the U.S. dollar, the government broadened its financial
transactions tax (IOF tax) to charge increases in short dollar exposures at 1%.
5
Operating and
financial data available thus far show this move had a rather negative impact on volumes
traded in FX derivatives. A comparison of similarly volatile periods both before and after the
government's move suggest this new tax prompted a 20% tumble in average daily trading
volume, to 544.1 thousand contracts from 670.2thousand contracts previously.
BM&F segment ­ exchange rate volatility (R$
:
US$)
Source: BM&FBOVESPA.
Moreover, the average daily volume traded in Index-based derivatives contracts soared 37.9%
year-on-year primarily due to increased volatility over the year, in particular the second half of
the year, and due also to heightened activity by high frequency traders.
The average RPC has dropped 2.5% year-on-year across derivatives markets due mainly to:
Year-over-year changes in the mix of derivatives contracts more actively traded, where
volumes traded in U.S. dollar-denominated interest rate contracts and mini-sized
contracts (the rates for which are lower than the average for other contract groups)
built up to account for 5.4% and 4.2% of the overall volume for 2011 versus 3.6% and
3.0%, for 2010, respectively, whereas volumes traded in forex contracts accounted for a
share of 18.3% of overall volume for the year versus 21.6% previously; and
Year-on falls of 17.6% and 1.8% in average RPC charged for trades in U.S. dollar-
denominated interest rate contracts and forex contracts, respectively, are explained by
a 5.8% year-over-year average appreciation of the Brazilian real against the U.S. dollar,
since our rates for these contracts are denominated in U.S. dollars.
5
This new levy was introduced by Provisional Measure No. 539 dated July 26, 2011, and further regulation conveyed by Decree
No. 7,536.
4Q10
1Q11
2Q11
3Q11
4Q11
Var.
4Q11/4Q10
Var.
4Q11/3Q11
Interest Rates in BRL
1,832.6
2,127.0
1,719.8
1,810.3
1,532.2
-16.4%
-15.4%
FX Rates
490.6
422.0
543.4
525.1
489.0
-0.3%
-6.9%
Stock Indices
88.8
87.7
101.4
143.4
159.6
79.8%
11.4%
Interest Rates in USD
100.3
127.5
186.8
142.7
123.3
22.9%
-13.6%
Commodities
14.9
10.3
15.2
17.0
10.2
-31.9%
-40.2%
Mini Contracts
78.0
76.7
91.2
155.7
131.7
69.0%
-15.4%
OTC
11.3
14.5
12.3
10.6
9.6
-15.2%
-9.4%
Total
2,616.5
2,865.8
2,670.2
2,804.7
2,455.6
-6.1%
-12.4%
0%
5%
10%
15%
20%
25%
30%
35%
J
u
l
-
09
A
u
g
-
09
S
e
p
-
09
O
c
t
-
09
N
o
v
-
09
D
e
c
-
09
J
a
n
-
10
F
e
b
-
10
M
a
r
-
10
A
p
r
-
10
M
a
y
-
10
J
u
n
-
10
J
u
l
-
10
A
u
g
-
10
S
e
p
-
10
O
c
t
-
10
N
o
v
-
10
D
e
c
-
10
J
a
n
-
11
F
e
b
-
11
M
a
r
-
11
A
p
r
-
11
M
a
y
-
11
J
u
n
-
11
J
u
l
-
11
A
u
g
-
11
S
e
p
-
11
O
c
t
-
11
N
o
v
-
11
D
e
c
-
11
Vol- DOL (R$/US$) Var. Margin
background image
.11.
BM&F segment ­ average rate per contract (RPC)
(In Brazilian reais)
Source: BM&FBOVESPA.
BM&F markets saw contrasting changes in the level of activity by investor category. While the
volume of trading by financial institutions gave back 3.6% year-on-year and their share of the
overall volume fell to 38.1% over the year from 42.4% in 2010, they remain as the most active
group of traders in derivatives. In turn, institutional investors accounted for 32.5% of the
overall volume (up from 29.6% one year ago), whereas foreign investors accounted for 23.0%
of the overall volume (virtually a flat line from 22.4% in the prior year).
BM&F segment ­ ADTV by investor category (buy + sell sides)
(In millions of contracts)
Source: BM&FBOVESPA.
Moreover, high frequency traders accounted for 6.0% of the overall volume for the year after
hitting the unprecedented daily average of 306.3 thousand contracts (buy and sell sides).
Additionally, we have yielded positive results from growth-driven initiatives started in 2009
(when we introduced direct market access - DMA alternatives as co-location arrangements,
and reshaped our pricing policy for these investors), as expressed in CAGR of 112.8% for the
high frequency average daily trading volume in the period from 2009 to 2011.


2007
2008
2009
2010
2011
Var.
2011/2010
Interest Rates in BRL
0.950
1.140
0.979
0.889
0.918
3.3%
FX Rates
1.859
2.062
2.161
1.928
1.894
-1.8%
Stock Indices
1.501
2.142
1.619
1.564
1.614
3.2%
Interest Rates in USD
0.942
1.257
1.357
1.142
0.941
-17.6%
Commodities
3.194
3.585
2.307
2.168
2.029
-6.4%
Mini Contracts
0.054
0.162
0.176
0.128
0.129
0.8%
OTC
2.111
2.355
1.655
1.610
1.635
1.6%
Total
1.223
1.524
1.365
1.134
1.106
-2.5%
4Q10
1Q11
2Q11
3Q11
4Q11
Var.
4Q11/4Q10
Var.
4Q11/3Q11
Interest Rates in BRL
0.860
0.843
0.930
0.975
0.939
9.1%
-3.8%
FX Rates
1.978
2.016
1.847
1.773
1.979
0.1%
11.6%
Stock Indices
1.719
1.639
1.753
1.493
1.626
-5.4%
8.9%
Interest Rates in USD
1.134
1.102
0.893
0.868
0.940
-17.1%
8.3%
Commodities
2.416
2.013
1.948
1.886
2.420
0.2%
28.3%
Mini Contracts
0.126
0.142
0.137
0.121
0.127
0.7%
4.7%
OTC
1.462
1.393
1.682
1.658
1.911
30.7%
15.2%
Total
1.099
1.040
1.127
1.106
1.157
5.3%
4.6%
1.7
1.4
1.3
2.0
2.0
2.1
2.4
2.0
1.8
1.7
0.8
0.7
0.7
1.4
1.7
1.6
1.7
1.6
1.8
1.6
0,6
0.6
0.6
1.1
1.2
1.0
1.1
1.1
1.4
1.2
0.3
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.2
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
2007
2008
2009
2010
2011
4Q10
1Q11
2Q11
3Q11
4Q11
Financial Institutions
Institutional Investors
Foreign Investors
Individuals
Companies
Central Bank
background image
.12.
BM&F segment ­ HFT average daily volumes (buy + sell)
(In thousands of contracts)
Source: BM&FBOVESPA.
Securities lending (BTC, the securities lending facility)
Securities lending has sustained the growth trend seen one year ago. The average daily value
of open interest positions climbed 47.1% year-on-year, whereas the average daily number of
lending and borrowing transactions registered at our securities lending facility jumped 45.4%
year-on-year. Securities lending serves demand from trading or arbitrage strategies, is
important to short selling and serves borrowing demand to avoid settlement fails. This growth
in securities lending and borrowing unveils the increasing sophistication of participants in the
domestic capital markets.
BTC ­ Open interest positions and number of transactions
Source: BM&FBOVESPA.
Treasury Direct
Treasury Direct (Tesouro Direto) is a program we established in cooperation with the Brazilian
Treasury and a platform we operate through our central securities depository for retail
investors to trade in government bonds through the Internet and directly with the National
Treasury. The number of retail traders actively doing business through this platform soared
56.7% year-on-year, to 77.0 thousand from 49.0 thousand previously, whereas the volume of
Brazilian Treasury securities under custody at our depository jumped 61.1%, to R$7.5 billion
from R$4.7 billion one year earlier. This growth reflects our successful strategies to further
develop this investment alternative, including through incentives granted to brokerage firms
that operate as part of the distribution network.
Evolution of the Treasury Direct activity
28.6
93.9
109.7
77.3
67.0
101.1
148.3
119.9
16.9
42.9
52.2
37.7
43.5
45.3
68.2
50.9
21.2
88.4
124.9
93.4
83.6
94.8
178.7
139.6
12.8
19.1
42.5
17.1
9.8
24.4
24.8
2.2%
4.8%
6.0%
5.0%
3.9%
5.0%
7.2%
7.8%
67.6
238.3
306.3
250.9
211.2
251.0
419.5
335.2
-
50,0
100,0
150,0
200,0
250,0
300,0
350,0
400,0
450,0
2009
2010
2011
4Q10
1Q10
2Q10
3Q10
4Q10
FX
Equities
Mini contracts
Interest Rates
% in Overall Volume
CAGR: 112.8%
18.5
16.9
12.7
20.5
30.2
22.4
25.8
28.3
31.6
35.1
47.4
52.3
59.3
81.0
117.8
84.9
108.9
112.8
127.3
122.0
2007
2008
2009
2010
2011
4Q10
1Q11
2Q11
3Q12
4Q11
Average Open Interest (BRL billions)
Monthly Average Number of Trades (thousands)
4.7
5.2
5.8
6.7
7.5
49
56
64
71
77
-
2,0
4,0
6,0
8,0
10,0
-
20
40
60
80
100
4Q10
1Q11
2Q11
3Q11
4Q11
Assets under custody (Billions)
Investors (thousands)
Source: BM&FBOVESPA.
background image
.13.
DISCUSSION AND ANALYSIS OF FINANCIAL PERFORMANCE
Revenues
Gross revenues for 2011 of R$2,116.0 million were up 0.2% year-on-year primarily due to a
5.3% rise in revenues from trading and settlement fees earned in our BM&F segment and a
15.0% climb in other revenues unrelated to trading and settlement, which however were
quashed by an 8.1% year-on decline in revenues from trading and settlement fees earned in
our Bovespa segment.
Revenues from trading and settlement fees earned in the Bovespa segment. Revenues under
this line item accounted for 45.6% of total gross revenues and amounted to R$964.7 million,
an 8.1% tumble from the prior year which reflects the 5.6% drop in revenues from trading in
equity securities and equity-based derivatives and from post-trade services for these markets
(combined revenues from Trading and Settlement fees
6
). This drop is explained primarily by
virtually unchanged average volumes coupled with a slump in basis point margins (5.79 bps
versus 6.19 bps one year ago). This margin decline is due mainly to (i) the larger share of
overall volume attributable to high frequency and day trading, from which we derive fees at
lower than average margins; and (ii) a stumble in average volumes traded in equity-based
derivatives on options and forward markets, as we charge higher than average fees for these
trades. In addition, revenues unrelated to secondary market trading plummeted 50.7% year-
on-year explained mainly by a lower amount of equity offerings but with the caveat that in the
comparative year to December 31, 2010, the same line item ballooned on a whopping R$39.7
million revenue derived from fees related to the very large Petrobras and Banco do Brasil
seasoned offerings.
Revenues from trading and settlement fees derived in the BM&F segment. Revenues under
this line item accounted for 35.9% of total gross revenues and amounted to R$760.2 million, a
5.3% year-on-year climb explained by a 7.8% rise in average volumes traded, which, however,
was not fully captured in the form of revenue on account of a 2.5% fall in average RPC.
Other operating revenues. Revenues unrelated to trading and settlement activities accounted
for 18.5% of total gross revenues and amounted to R$391.0 million, a 15.0% year-on-year
surge explained primarily to changes in revenue line items unrelated to trading and settlement
activities, as follows:
Depository, custody services. Revenues of R$91.4 million (4.3% of total revenues) went up
3.5% year-on-year. Specifically, the revenues from fees collected by our central securities
depository rose 2.7% year-on-year due to a 2.3% rise in average number of custody
accounts and a 0.7% lift in average financial value of assets under custody, not including
custody of ADRs and custody services provided to foreign investors. Revenues from fees
related to custody of Brazilian treasury bills (Treasury Direct) went up 8.1% year-on-year.
Securities lending. Revenues of R$74.0 million (3.5% of gross revenues) soared 49.7% from
R$49.4 million one year ago due mainly to a 47.1% upsurge in the average financial value of
open interest positions (to R$30.2 billion from R$20.5 billion one year earlier).
Market data sales. Revenues of R$65.0 million (3.1% of gross revenues) gave back 3.8%
year-on-year due mainly to the August 2010 change in pricing policies, which slashed the
fees we charge from retail traders doing business through our Home Broker platform, and
impacted this line item for most of 2011.
Settlement Bank. Revenues of R$20.5 million (1.0% of total gross revenues) surged 20.2%
year-on-year on the increased volume of investor representation and other services the
settlement bank provides.
6
In August 2011 we revised our pricing policies and pricing structure for trading and post-trade services, which included a
rebalancing review, thus affecting the comparability of line-by-line information on trading and settlement fees for 2011 and 2010.
background image
.14.
Other revenues. Revenues under this line item (1.9% of total) amounted to R$40.2 million,
surging 105.9% year-on-year due primarily to R$22.6 million worth of reversed provision for
contingencies and legal obligations and collection of credits owned by bankrupt company.
Expenses
Expenses totaled R$816.7 million soaring 28.9% year-on-year. The comparability of this line
item, however, has been hampered by the transfer of R$92.3 million in restricted funds
(Guarantee Fund) to BSM, which we recognized as an expense, and because of an increase in
expenses with our stock options plan, after we recognized the effects of the amended program
and additional option grants approved in January 2011, which is contrasted with absence of
stock option grants in 2010. These extraordinary events are discussed below in further detail.
The adjusted expenses
7
totaled R$584.5 million, a 7.5% increase from the year before. Main
changes in expense line items were the following:
Personnel. Expenses of R$351.6 million went up 21.2% year-on-year is due to collective
bargaining agreements, growth in the average headcount and the increased recognition of
stock option expenses and each of these factors explains about one third of that growth, as
follows:
the effects (on payroll) of around 7.0% salary increase required under our collective
bargaining agreements of August 2011 and 6.0% under the August 2010 bargaining
agreement;
the average headcount climbed 17.8% year-on-year, to 1,426 employees from 1,211
employees the year before, which is in line with our growth strategy such that most new
hirings occurred in technology and businnes development areas. We should note, for
comparability purposes, that most 2010 new hirings (including the internalization of 143
outsourced IT personnel) were concentrated in the second half of the year thus affecting
the average headcount only partially, whereas this headcount increase impacted fully in
2011; and
the expenses with stock options plan increased by 73.4% year-on-year, to R$53.6 million
from R$30.9 million earlier, as we recognized the effects of the amended program and
additional option grants approved in January 2011, which is contrasted with absence of
stock option grants in 2010.
After eliminating expenses with the stock options plan, adjusted personnel expenses
amounted to R$298.0 million, up 15.0% from R$259.2 million one year ago.
Data processing
8
. Expenses totaling R$104.4 million went up just 2.7% year-on-year. The
abovementioned internalization of IT personnel in 2010 was a factor in curbing a further
increase in data processing expenses given our massive expenditures in modernizing and
reshaping the technology infrastructure.
Depreciation and amortization. Expenses in this line item totaled R$75.2 million surging 37.2%
year-on-year due primarily to the depreciation of property and equipment items, most of
which we purchased in the second half of 2010.
Outsourced services. Expenses with outsourced services went up 7.7% year-on-year, to R$51.8
million from R$48.1 million in the prior year, due mainly to the hiring of consultants for various
projects, including the auditing of market participants (brokers) for the Operational
Qualification Program (PQO).
7
The expenses have been adjusted to eliminate expenses with depreciation, provisions, the stock options plan and taxes related
to dividends received from CME Group, in addition to a transfer of restricted funds to BM&FBOVESPA Market Surveillance (BSM),
such as discussed elsewhere herein. The purpose of these adjustments is to measure expenses after eliminating expenses with no
impact on cash and non-recurring expenses.
8
The expenses with outsourced IT services are registered in under the `data processing' line item.
background image
.15.
Marketing and promotion. Marketing expenses of R$38.6 million retreated 8.9% from the year
before due mainly to a reallocation of resources to lower-cost marketing and promotion
alternatives.
Contribution to MRP (Guarantee fund transferred to BSM). This expense results from a
extraordinary and non-recurring transfer related to R$92.3 million in restricted funds passed to
BSM. These restricted funds had been segregated from our assets and reserved as a Guarantee
Fund within the scope of an investor compensation scheme in the case of claims against the
MRP (Investor Compensation Mechanism Fund) managed by BSM. We had control of the
Guarantee Fund. In line with our policy to strengthen and consolidate BSM as an autonomous
and financially independent self-regulatory organization, enforcer and overseer of the
markets, we transferred control and management of the Guarantee Fund and passed the
funds to BSM, unifying the management of resources related to MRP. In doing so, we also
passed on behalf of BSM any interest income earning on future financial investments of these
funds.
Other expenses. This operating expense line item amounted to R$47.5 million and went up
13.7%.
Equity-method investment
Our net share of gain from the investment in CME Group (which we account for under the
equity-method) totaled R$219.5 million, soaring 473.9% year-on-year, due to (i) an
incremental gain in the CME Group results from an extraordinary reversal of the provision for
taxes; but also (ii) because our investment in CME shares began to be accounted for as an
equity-method investment only in the third quarter of 2010, thereby affecting the year-on-
year comparability of this line item.
It is worth noting that this line item includes the recognition of R$62.9 million in taxes to be
offset related to taxes paid abroad. Of this amount, R$44.9 million have been offset against
current income tax and social contribution payable, such as discussed below.
Interest income, net
Net interest income for the year hit R$280.7 million, down 2.9% year-on-year. Interest revenue
climbed 8.7% from the year before influenced by an increase in average interest rate earned
on financial investments and higher average cash invested in short- and long-term
investments. Net interest income was negatively influenced by an increase in interest
expenses which were up to R$77.0 million from R$40.0 million one year ago due to the global
senior notes we issued in a July 2010 cross-border offering.
Income tax and social contribution
Income before taxes totaled R$1,588.2 million, as compared to R$1,592.5 million one year ago,
a 0.3% year-on-year decline.
The `income tax and social contribution' line item totaled R$539.7 million for 2011 and
comprises income tax and social contribution plus deferred income tax and social contribution.
The line item breaks down into current income tax and social contribution amounting to
R$49.4 million, R$44.9 million offset against income tax paid abroad (such as discussed
previously under profit on equity-method investment) where just the difference of R$4.5
million impacted our cash generation.
Additionally, this line item includes R$490.3 million in income tax and social contribution
deferred as follows:
background image
.16.
Recognition of deferred tax liabilities of R$498.3 million related to temporary
differences attributable mainly to amortization of goodwill for tax purposes, with no
impact on cash; and
Recognition of deferred tax assets amounting to R$8.0 million and related to tax losses,
negative tax base and tax credits related to other temporary provisions.
EBITDA
9
and net income
EBITDA for 2011 amounted to R$1,173.1 million, an 11.4% fall from the year before, reflecting
mainly the changes in revenues and expenses we discussed. EBITDA Margin was 61.6% versus
69.7% in the earlier year.
Net income for the year ended December 31, 2011, amounted to R$1,048.0 million, 8.4%
lower than R$1,144.6 million one year ago. This decline in net income is attributable to the
effects from a relatively unchanged revenues and the upturn in operating expenses
(particularly from the Guarantee Fund we passed to BSM).
The table below sets forth our calculation of EBITDA and EBITDA Margin.
EBITDA Reconciliation
2011
2010
Variation
2011/2010
(In R$ millions) (In R$ millions)
(%)
Net income
1,048.0
1,144.6
-8.4%
Minority interest
0.5
(0.1)
-806.7%
Income tax and social contribution
476.7
448.0
6.4%
Financial income
(280.7)
(289.0)
-2.9%
Depreciation and amortization
75.2
54.8
37.2%
Equity-method investment
(156.5)
(38.2)
309.2%
Tax related to the equity-method investment (dividends)
9.9
4.0
148.5%
EBITDA
1,173.1
1,324.0
-11.4%
EBITDA Margin
61.6%
69.7%
-814 bps
Consolidated balance sheet statement as of December 31, 2011
Main line items under Assets
As determined in our consolidated audited balance sheet statement as of December 31, 2010,
total assets increased 4.2% year-on-year to R$23,589.9 million. Cash and cash equivalents,
including short- and long-term financial investments totaled R$3,782.4 million and accounted
for 16.0% of total assets. Non-current assets totaled R$21,188.8 million, where long-term
receivables (including long-term financial investments) amount to R$1,767.4 million, the
equity-method investment amounts to R$2,710.1 million, property and equipment amount to
R$357.2 million and intangible assets amount to R$16,354.1 million.
Intangible assets consist primarily of goodwill correlated with expectations of future
profitability related to the acquisition of Bovespa Holding. Goodwill has been tested for
impairment in December 2011 and, pursuant to the valuation report prepared by an
independent specialist firm, has required no adjustments to carrying value.
Main lines items under Liabilities and Shareholders' Equity
Current liabilities accounted for 8.2% of total liabilities at R$1,929.9 million, surging 36.3%
year-on-year. This increase is due primarily to a climb in cash collateral pledged by market
participants (to R$1,501.0 million versus R$954.6 million in the prior year). Noncurrent
liabilities closed the year at R$2,402.5 million and consist primarily of debt issued abroad (global
senior notes issued in a July 2010 US$612 million bond offering) at the amount of R$1,138.7
million and deferred income tax and social contribution amounting to R$1,204.6 million.
9
EBITDA is earnings before interest, taxes, depreciation and amortization.
background image
.17.
Shareholders' equity of R$19,257.5 million fell 0.8% year-on-year and consists mainly of capital
stock of R$2,540.2 million and capital reserves of R$16,033.9 million.
Other financial information
Capital expenditures
We capitalized investments on the order of R$204.0 million in 2011, including R$183.4 million
related to investments in technology infrastructure and resources and while R$20.6 million
were related to other projects, especially on the Company's infrastructure improvements and
modernization.
2012 Opex and Capex Budgets
In December 2011 we announced the 2012 opex and capex budgets, as follows: (i) the budget
for adjusted operating expenses has been set within an interval between R$580 million and
R$590 million, which is the same revised interval we announced in November in connection
with our 2011 opex budget; and (ii) the capex budget has been set within an interval between
R$230 million and R$260 million.
Payouts
Our board of directors declared over the year dividends and interest on shareholders' equity
for the nine-month period to September 30, 2011, an aggregate of R$685.5 million. Moreover,
at the coming annual shareholders' meeting we are set to submit to shareholders an additional
dividends proposal of R$226.7 million relative to 2011 earnings, totalizing 87% of the GAAP net
income attributed to the shareholders.
Share Buyback Program; cancellation of treasury stock
Over 2011, we had repurchased a total of 57.6 million shares at an average price per share of
R$10.52 and aggregate price of R$606.1 million. Repurchases implemented within the scope
of the buyback program approved on August 12, 2010 totaled 28.05 million shares, whereas
the remainder, or a total of 29.55 million shares, we repurchased within the scope of the
buyback program we adopted on June 16, 2011. Our ongoing share buyback program, which
was first approved on June 16, 2011, has since been extended through to June 30, 2012, and
expanded to authorize repurchases of no more than 60 million shares, twofold the originally
approved number of shares.
Additionally, on December 13, 2011, our board of directors approved the cancellation of
64,014,295 shares held as treasury stock, such that our capital stock is now represented by
1,980,000,000 common shares.

OTHER HIGHLIGHTS
Pricing policy
Set forth the below are some of the main changes in pricing policy over the course of 2011.
New pricing policy. In August and October 2011 we implemented changes in our fees for
the Bovespa and BM&F segments, respectively, designed to eliminate cross subsidies
embedded in fee rates across our trading and post-trade business lines. In reviewing the
policy by segment we were concerned to ensure it would have `neutral effect' relative to
overall cost-by-trade for market participants and investors (per then existing fee structure),
while adequately rebalancing the fee structure to correct price distortions. As a result of
this review and rebalancing effort, the trading fees we now charge account for average 30%
of the overall cost-by-trade within the Bovespa segment and 40% within the BM&F
segment.
Order entry and other fees charged within Bovespa segment. Aimed at boosting trading
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.18.
volumes, we reviewed our pricing policies and revised the market access price schedule to
cut fees charged for unexecuted orders in excess of the order-per-trade cap (implemented
in March and December 2011), and the price schedule for technology services we provide
to brokerage firms, which included cuts in fees for use of the Sinacor system (our integrated
system for broker's management of back, middle and front-office activities) and for
connection to the BM&FBOVESPA Communications Network, or RCB (March 2011). We
should also note these changes, which had no significant impact on our revenues, are in
line with our brokerage development strategy.
Products and Market Development
Set forth below is a discussion of the 2011 highlights from our special focus on developing new
products that meet or anticipate investor demand.
Cross-listings of exchange-traded derivatives; agreements with the CME Group and
exchanges from other emerging markets
. As part of our growth plan and
internationalization initiatives geared towards expanding the investor base by attracting
foreign investors to our markets, we have agreed and are developing cross-listing
arrangements for mutual introduction of derivatives, as follows:
o
With the CME Group, cross listing of futures contracts, starting with listing of futures on
Bovespa index (Ibovespa) in Chicago, and cash-settled soybean futures and e-mini S&P-
500 futures contracts in Brazil; and
o
With exchanges of other emerging countries, meaning Russia's MICEX (Moscow
Interbank Currency Exchange), the National Stock Exchange of India (NSE), BSE India
(formerly, the Bombay Stock Exchange), the Hong Kong Exchange (HKEx) initially
representing China, and the Johannesburg Stock Exchange of South Africa, in connection
with cross-listings of benchmark stock index derivatives denominated in the exchanges'
local currencies.
Options market makers. In line with our strategic plan to widen and deepen the stock
option market, we have implemented the first phase of our market making program, and
announced market makers for options on stocks of seven issuers (shares of common stock
issued by BM&FBOVESPA, OGX Petróleo and Banco do Brasil; shares of preferred stock
issued by Itaú Unibanco, Usiminas (PNA), Bradesco and Gerdau) and for options on Bovespa
Index (Ibovespa). Their services are now fully operational. We completed more recently
another competitive process to select market makers for options on common stocks of Sid
Nacional, PDG Realty and Cyrela.
New ETFs authorized to trade; new stock market indices. Adding to seven previously listed
ETFs, in 2011 we created and authorized the following new ETFs, which have since launched
and began to trade in 2011
:
"IT Now IFCN Index Fund" (tracks Financial Index ­ IFCN);
"IT Now ISE Index Fund" (tracks Corporate Sustainability Index ­ ISE);
"IT Now IGCT Index Fund" (tracks Corporate Governance Trade Index ­ IGCT);
o
Additionally, five new indices were created in 2011: "Dividend Index ­ IDIV; Basic
Materials Index ­ IMAT; IGCT; Brazil Broad-Based Index (IBrA); and Public Utilities Index
(UTIL). The ETFs for the first three were launched in 2012.
o
In addition, we plan to create ETFs that will seek to replicate the latter two indices and
are set to develop Brazil's first fixed-income ETF.
Organized OTC markets for derivatives and fixed-income securities. As part of our growth
strategy for 2012 and efforts to strengthen our position as market operators, we intend to
implement actions oriented towards widening and deepening the OTC markets for fixed-
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.19.
income securities and derivatives. For this purpose, we are developing a new state-of-the-
art OTC platform, such as discussed elsewhere herein.
Technology developments
Some of our key strategic drivers include providing market participants and investors with
prime information technology resources and services. Thus, in line with our growth plan, we
discuss below our principal ongoing technology initiatives.
Puma Trading SystemTM. We have now completed and implemented the first stage of our
project for development and implementation of a multi-asset class electronic trading
platform, a joint collaboration with the CME Group. The first stage, which we started in
2010, consisted of development, testing and implementation of the derivatives and `spot
dollar' module for the BM&F segment. This module is now fully operational. According to
the existing work schedule, the development of the module for the trading of stocks is set
to be concluded in the second half of 2012.
Integrated clearing facility. Our project to combine the four clearing houses we operate
into a single, fully-integrated, central clearing facility made headway in the fourth quarter
of 2011, when we announced a partnership with Cinnober, a Sweden-based global provider
of advanced financial technology, which will include a perpetual license for use of RealTime
Clearing (RTC), their high performance, multi-asset, clearing and real-time risk
management system. The RTC will be the backbone for our future multi-asset, multi-
market, integrated clearing facility and for its technologically innovative, high performing
capabilities, capacity, stability and security features. In addition, in the second quarter of
2011 we announced to domestic and international markets the development of CORE, or
CloseOut Risk Evaluation, our new central counterparty multi-asset, multi-market risk
management framework, and the lynchpin of a solid risk management system architecture.
Our new central clearing facility has been planned to give us highly efficient, multi-asset,
multi-market integrated risk management capabilities and the ability to offer highly
efficient clearing and settlement services to market participants and investors, keeping the
robustness of the current models.
New Data Center. We have been making substantial investments in our technology
infrastructure since 2010. This is part of our efforts towards reorganizing and streamlining
our data centers to benefit from a truly modern, efficient, safe and high-performing
technology platform, which will be better prepared to support our future growth. We
centered our strategy on two primary data centers, one designed for our trading systems
and applications, the other planned to house our post-trade systems and applications. One
of our new data centers has been operational since June 2010, after relocating to a leased
high-capacity hosting facility our team manages and operates. The other data center will be
a brand new, especially planned and designed facility, tailor-made to meet our specific
needs and demands. The construction of our new data center is set to begin soon (in 2012)
and should complete in 2013.
New OTC trading platform. In November 2011, in the context of our project for a new,
streamlined, state-of-art OTC platform for fixed-income and other derivatives, we
announced a partnership with Calypso Technology, Inc., a global application software
provider of an integrated suite of trading and risk applications to financial and capital
market institutions. The Calypso system will give us a new operating model for registration
and treatment of OTC transactions and risk calculation, while offering nimble, flexible and
cost efficient features and capabilities. The new OTC platform is set to be operational late in
2012.
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.20.
CORPORATE GOVERNANCE
We believe having an efficient corporate governance structure is a key factor of
BM&FBOVESPA's success and perpetuity as a market operator. Given that control is
widespread and the ownership structure comprises over 70 thousand local and foreign
shareholders, we believe it is critical for us to have a corporate governance structure befitting
this diversified shareholder base, and capable of providing high standards of transparency and
accountability.
In addition, given our role as self-regulatory organization, enforcer and overseer of the
markets, we believe it is pivotal we ensure fairness is the lynchpin on which we build our
relationship with all stakeholders.
The board is composed of eleven members, most of them independent directors, whose term
is set to end at the time we hold our 2013 annual shareholders' meeting. Our directors are
well-recognized, experienced professionals, highly knowledgeable of the markets in which we
operate and the industry as a whole. Additionally, four standing advisory committees (namely,
audit committee, nominations and corporate governance committee, compensation
committee, and risk committee) assist and advise the board.
The Company has five executive officers led by a chief executive officer. The management also
has the support of advisory committees and market advisory committees for cooperation
between management and market participants regarding issues of keen interest to the capital
markets, and may establish special committees and working groups, as necessary or
convenient.
Furthermore, BM&FBOVESPA shares (BVMF3) trade on the Novo Mercado segment, a listing
segment that requires issuers to observe higher corporate governance standards, to give all
shareholders full tag-along rights and bans issuances of preferred shares (which under
Brazilian Corporate Law are typically non-voting or restricted voting shares) .
In 2011, we gained recognition for the higher standards of corporate governance and
transparency we practice when for the second time in a row, BM&FBOVESPA topped the
"Corporate Governance" rank of "Best Companies for Shareholders" published by the Capital
Aberto
magazine, .
Internal Audit
Our internal audit team has the mission of providing our board, the audit committee and
management with independent, objective, impartial and timely assessment of the
effectiveness of our risk management practices, suitability of our internal controls and level of
compliance with rules and regulations applicable to our operations and those of our
subsidiaries, for this purpose adopting a systematic, disciplined approach. In addition, as part
of their responsibilities, the internal audit team monitors the development and
implementation of action plans across our Company, regards of the side of business, with the
aim of continually improving processes and controls.
The internal audit department also monitors employee activities to ensure compliance with
our securities trading policy and Code of Conduct, and reports its findings to the Code of
Conduct Committee.

OPERATIONAL RISK MANAGEMENT AND INTERNAL CONTROLS
Information security policy
Given the significance and confidentiality of most of the information that flows and is
processed and stored in our systems, we are particularly concerned to ensure our information
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.21.
security processes and internal controls are improved and strengthened on an ongoing basis.
Thus, consistent with the information security management model implemented in 2009,
pursuant to which we adopted multiple layers of controls, over 2011 the IT security team
consolidated and improved on special workflow and automation tools designed to manage and
control access privileges, and perform security monitoring within computer environments.
In addition, we consolidated our information security awareness program and implemented
special training sessions for new employees.
Improvements to internal controls
Improvements to internal controls processes within our financial department consolidated
over the course of 2011 giving management efficient and reliable tools to better control
expenses and prioritize projects.
Over the year we also implemented initiatives that give us more efficient opex and capex
budget management and control mechanisms, and that ensure we improve payments policies
and costing by activity on an ongoing basis.
In addition, consistent with our commitment to pursue sustained improvements in internal
controls effectiveness, in the process of preparing our 2012 budget proposal we adopted
heightened management and mid-management accountability standards and detailed
reporting guidelines, in addition to improving costing by activity methods.
Central counterparty risk ­ risk management
BM&FBOVESPA manages the following central counterparty clearing facilities absorbed during
the exchange integration process of BM&F and Bovespa: (i) equities clearing house (formerly
known as CBLC), (ii) derivatives clearing house, (iii) FX clearing house; and (iv) clearing house
for government bonds and debt securities. The Central Bank considers these clearing facilities
perform systemically material roles and they act as central counterparty (CPP) for these
markets.
The central counterparty clearing facilities are responsible for providing efficiency and
stability to the market by ensuring trades are properly cleared and settled. A CCP
interposes itself between counterparties to financial transactions, becoming the buyer to
the sellers and the seller to the buyers. Acting in the capacity of central counterparty, our
clearing houses absorb the risks of the counterparties in-between a trade transaction and
its clearing and settlement, carrying out multilateral activities for financial settlement and
clearing of securities and financial assets, in the event of default resorting to certain
safeguard mechanisms, or in extreme situations resorting to our own net assets. In
modeling and managing CCP risks, we focus on calculation, controls and mitigation of
credit risk intrinsic to clearing participants.
For proper risk mitigation, each clearing house has its own risk management system and
safeguard structure. These structures comprise the universe of mechanisms and remedies a
clearing house may resort to in order to cover losses from a participant's failed settlement. The
key components of these safeguard structures include collaterals deposited by market
participants, often in the form of margin, plus special funds intended to cover possible losses
due to default and, in addition, co-liability undertaken by broker and clearing members
regarding transactions they intermediate or clear.
Models adopted for margin calculation are stress-test based, meaning they are designed to
assess market risk taking into account not only recent historical volatility in market prices, but
also the possibility that unexpected events would imply behavioral change in price movements
or lead to atypical market moves.
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.22.
The primary parameters we use in calculating margin are stress scenarios the Market Risk
Committee defines for risk factors that affect the prices of securities, futures contracts and
financial instruments traded on BM&FBOVESPA markets. Key risk factors for stress testing
include, among other things, the Brazilian real exchange rate, the forward structure of the
Brazilian fixed rate yield curve; the forward structure of the Dollar-denominated Brazilian yield
curve ("cupom cambial"), the Bovespa index and the cash market prices of stocks.
As of December 31, 2011, pledged collaterals amounted to aggregate R$178.6 billion, a 24.8%
year-on-year increase from R$143.1 billion registered one year ago, due mainly to a 37.6%
surge in collaterals pledged for transactions in equities, equity securities and corporate debt
securities, in line with the open interest positions registered at our securities lending facility.
The rise in collaterals pledged to our derivatives clearing house is likewise explained by a bulky
trading volume but primarily by a jump in the year-end balance of open interest positions.
Pledged Collaterals
Clearing Houses
Dec/11
Dec/10
Variation
(R$ millions)
(R$ millions)
(%)
Securities and Fixed Income
69,770.1
50,702.5
37.6%
Government Bonds
34,422.2
22,749.9
51.3%
Stocks
31,417.6
25,809.8
21.7%
Other*
3,930.3
2,142.7
83.4%
Derivatives
104,195.5
87,534.7
19.0%
Government Bonds
95,413.9
76,979.3
23.9%
Credit letters
3,090.1
3,538.5
-12.7%
Other*
5,691.5
7,016.9
-18.9%
FX
3,448.6
3,921.7
-12.1%
Assets
1,142.3
928.8
23.0%
Total
178,556.5
143,087.7
24.8%
* Pledged collaterals in the form of stocks, bank bonds and debt securities, international securities, bank
credit letters, fund shares, gold and cash
.
HUMAN RESOURCES
We are very proud of our commitment to strengthening our human resources practices. For
this purpose we adopt a multi-dimensional human resources management model designed to
assist us in creating an integrated process for contracting new roles, developing new
competencies and improving value-adding practices and processes across our company. Key
initiatives developed over 2011 in support of this model include action plans and programs as
(i) performance management, in line with our commitment to meritocracy and personal
development across company departments. The performance management process sets the
foundation for rewarding excellence; and (ii) wellness and quality of life, as we believe these
issues impact on employee turnover. Our program aims to raise awareness to the benefits of
fitness, wellness and healthy work/life options, and to promote better quality of life practices
in all its dimensions, including leisure and entertainment, helping employees manage the
challenges of a career, achieve emotional balance and a balanced way of life. A 2011 highlight
within the scope of our wellness in the workplace initiative was the employee satisfaction and
engagement survey for which we hired the services of the local branch of the global research,
consulting and training firm Great Place to Work Institute®. The survey polled employees to
measure the internal climate, identify engagement issues and provide us with feedback on the
emotional attachment and connection of employees to their work and the Company, and
insight as to their expectations and aspirations. We used part of the results of this survey
within the scope of our Leadership Journey program. Having been implemented in 2010 as part
of our training initiative, this program focuses on developing and strengthening job mastery,
professional development and leadership skills. At Leadership Journey training sessions geared
to strengthen exercise of specific competencies targeting routine activities, managers and
prospective managers were coached on `evaluating' information compiled in the engagement
survey. At end-2011, we had 1,455 employees and 88 interns.
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.23.
SUSTAINABILITY ­ Socially and Environmentally Responsible Investments
Sustainability
In 2011, the main highlight was the program "Em Boa Companhia" (In Good Company), a
corporate sustainability program, which we announced along with a publication designed as a
`first steps guide' to socially and environmentally responsible investments entitled "Novo Valor
­ Corporate Sustainability: How to begin; who to involve; what to prioritize". Moreover, we
have developed the exchange-traded fund `IT Now ISE Index Fund', which tracks
BM&FBOVESPA Corporate Sustainability Index (ISE). And as an additional driver of
sustainability, we are now urging listed issuers to state in their annual Reference Form
whether they release a regular sustainability report (and where it can be found), or explain
why not. For additional information, see our "Novo Valor" website, at
(
www.bmfbovespa.com.br/novo-valor
).
Private social investing
The BM&FBOVESPA Institute is our community investing arm which operates with the vision of
"being an incremental agent of Brazilian social capital" in a form or word play with the local
meaning of `capital social'.
Social actions implemented over the course of 2011 through the BM&FBOVESPA Institute
included an opportunity to build on our experience as traditional sponsors of a professional
athletics team. Through the Institute's BM&FBOVESPA Athletics Club, we organized and will
sponsor a young track & field team composed of young people from underprivileged
backgrounds aged 6 to 18. Pole vaulter Fabiana Murer, an IAAF 2011 world champion (Daegu,
South Korea) is a member of the professional track & field team we sponsor. Additionally, in
2011 we celebrated the 15
th
anniversary of our Job Training Association (Associação
Profissionalizante BM&FBOVESPA), which promotes social inclusion by investing in education
actions targeting lower income communities in São Paulo and Rio de Janeiro, and a milestone
of its Building Employability Skills (Capacitação para Empregabilidade) program, which has
achieved a 75% employability rate. Furthermore, the BM&FBOVESPA Institute has
restructured and is set to relaunch in 2012 the BVS&A Social Investment Exchange (Bolsa de
Valores Sociais e Ambientais)
, a program inspired in the operating model of a stock exchange,
which works as a hub for investors interested in making and advancing socially and
environmentally responsible investments. The Institute also engages in philanthropic actions
and operates the BM&FBOVESPA Sports and Cultural Space (Espaço Esportivo e Cultural), a
center for young people to practice sports and engage in cultural and artistic activities, located
in the overpopulated lower income district of Paraisópolis, in the state of São Paulo. For
additional information, see the Institute's website at www.institutobmfbovespa.org.br.
SELF-REGULATION AND MARKET SURVEILLANCE ACTIVITIES
BM&FBOVESPA Market Surveillance (BSM)
BSM is a not-for-profit and financially autonomous functional entity responsible for performing
market surveillance, oversight and enforcement activities relative to the markets operated by
BM&FBOVESPA and, thus, to ensure market integrity and protect the investing public. The
discussion below highlights some of these initiatives.
Over 2011 BSM continued to pursue and implement plans to enhance market surveillance and
stop market abuse and analysis on transactions through DMA, as well as to strengthen and
streamline detection and surveillance processes. Specifically, BSM implemented the SMARTS
Integrity platform, which will give us a highly efficient technology infrastructure to carry out
real-time cross-market surveillance and ensure broker-dealer compliance. In addition, BSM has
adopted a new method to monitor high frequency trading, which among other things uses
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.24.
statistical surveillance and early detection tools.
Moreover, we have amended the bylaws of BSM to broaden its Oversight Board (now
composed of 12 members, nine of whom are independent members), to expand broker
auditing activities so as to cover also the operations of independent investment agents and,
among other things, to establish a Board Strategy Committee.
The Board Strategy Committee will be responsible for the institutional representation of BSM,
for interacting with local and international regulators and multilateral organizations of
securities regulators, and for reviewing BSM's strategies and operating practices from time to
time, bringing in line with market requirements and the better recommended international
standards. It is an obligation of this committee the periodical revision of BSM´s strategy e the
proposition of new actions in order to strengthen its activities.
Oversight of issuers
BM&FBOVEPA exerts unrelenting efforts to strengthen and enforce market integrity and to
improve regulatory instruments, for which purpose it acts in close cooperation with the
market regulator. Accordingly, in December 2011, BM&FBOVESPA agreed a cooperation
convention with the Brazilian Securities Commission (Comissão de Valores Mobiliários), or
CVM, regarding compliance monitoring and enforcement of reporting regulation and
requirements applicable to issuers of listed securities.
This convention strengthens our relationship with CVM and our regulatory capacity, widening
the scope of our oversight function. From January 2012, BM&FBOVESPA will hold delegated
prerogatives to question and probe into improper reporting by listed companies.
Furthermore, in order to avoid a duplication of oversight efforts, the Brazilian Securities
Commission (CVM) will only intervene in the event of recalcitrant behavior or sustained
noncompliance with the enforcement demands of BM&FBOVESPA.

INDEPENDENT AUDITORS
Our Company and subsidiaries have retained PricewaterhouseCoopers to audit the financial
statements.
The policy that governs the engagement of external audit services by us and our subsidiaries is
based on internationally accepted accounting principles, which preserve service independence
and include the following practices: (i) the auditors cannot hold executive or managerial
positions in the Company or its subsidiaries; (ii) the auditors cannot perform operating
activities in the Company or its subsidiaries which could compromise the auditing function;
and (iii) the auditors must be impartial in order to avoid conflicts of interest and loss of
independence, and must be objective in their opinions and reports about the financial
statements.
In the year to December 2011, the independent auditors and their related parties have
provided no audit-unrelated services to us.
MANAGEMENT'S REPRESENTATION
As required under CVM Instruction 480, Management represents to have discussed, reviewed
and agreed with the financial statements as of and for the year ended December 31, 2011 and
the opinion expressed in the independent auditors' report.

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.25.
ADDITIONAL INFORMATION
This report contains a discussion and analysis of our 2011 operating and financial performance,
as well as the principal developments and highlights of the year. For additional information
about our Company and the markets we operate, see our Reference Form, a CVM filing
accessible in our website and that of the Brazilian Securities Commission (CVM).

ACKNOWLEDGEMENTS
Finally, we wish to express our gratitude to employees for their commitment and dedication
throughout the year, and to providers, shareholders, financial institutions and other
stakeholders for their support over 2011.
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BM&FBOVESPA S.A. ­
Bolsa de Valores, Mercadorias
e Futuros
Financial Statements as of December 31, 2011 and
Independent Auditor's Report
(A free translation of the original in Portuguese)


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2
Independent auditor´s report


To the Board of Directors and Shareholders
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros




We have audited the accompanying unconsolidated financial statements of BM&FBOVESPA S.A. ­ Bolsa
de Valores, Mercadorias e Futuros ("Company"), comprising the unconsolidated balance sheet at
December 31, 2011 and the unconsolidated statements of income, of comprehensive income, of changes in
shareholders' equity and of cash flows for the year then ended and a summary of significant accounting
policies and other explanatory notes.

We have also audited the accompanying consolidated financial statements of BM&FBOVESPA S.A. ­ Bolsa
de Valores, Mercadorias e Futuros and its subsidaries ("Consolidated") comprising the consolidated
balance sheet at December 31, 2011 and the consolidated statements of income, of comprehensive income,
of changes in shareholders' equity and of cash flows for the year then ended and a summary of significant
accounting policies and other explanatory notes.

Management´s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of the unconsolidated financial
statements in accordance with the accounting practices adopted in Brazil and of the consolidated financial
statements in accordance with International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) and in accordance with the accounting practices
adopted in Brazil, as also such internal controls as management determines are necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.

Auditor´s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with Brazilian and International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
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BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros

3
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error.

In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.


Opinion on the unconsolidated financial statements

In our opinion, the accompanying unconsolidated financial statements refered to above present fairly, in
all material respects, the financial position of the BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e
Futuros as of December 31, 2011, and its financial performance and cash flows for the year then ended in
accordance with the accounting practices adopted in Brazil.

Opinion on the consolidated financial statements

In our opinion, the accompanying consolidated financial statements refered to above present fairly, in all
material respects, the financial position of the BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e
Futuros and its subsidiaries as of December 31, 2011, and its financial performance and cash flows for the
year then ended in accordance with International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) and with the accounting practices adopted in Brazil.

Emphasis

As described in Note 2, the unconsolidated financial statements were prepared in accordance with the
accounting practices adopted in Brazil. In the case of BM&FBOVESPA S.A. ­ Bolsa de Valores,
Mercadorias e Futuros, those practices differ from IFRS applicable to separate financial statements, only
in reference to the accounting for the investments in subsidiaries and affiliates on the equity method, since
IFRS would require them to be carried at cost or fair value. Our opinion is not qualified with respect to this
matter.
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BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros

4
Other matters
Statements of value added

We have also audited the unconsolidated and consolidated statements of value added (DVA) for the year
ended December 31, 2011, prepared under the responsibility of management, which are required to be
presented by Brazilian corporate law for public companies, and are supplementary information under
IFRS, which do not require the presentation of the DVA. These statements were submitted to the same
auditing procedures described above and, in our opinion, are fairly stated, in all material respects, in
relation to the financial statements taken as a whole.

São Paulo, February 14, 2012


PricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/O-5



Luiz Antonio Fossa
Contador CRC 1SP196161/O-8
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Balance Sheet
at December 31
(In thousands of reais)
(A free translation of the original in Portuguese)
Assets
Notes
2011
2010
2011
2010
Current
3.348.607
3.010.770
2.401.134
2.547.589
Cash and cash equivalents
4 (a)
63.716
103.148
64.648
104.017
Financial investments
4 (b)
3.080.853
2.731.324
2.128.705
2.264.408
Accounts receivable
5
45.061
50.052
46.514
51.399
Other receivables
6
11.491
12.253
11.767
12.917
Taxes recoverable and prepaid
130.093
104.997
132.058
105.843
Prepaid expenses
17.393
8.996
17.442
9.005
Non-current
20.035.052
19.410.211
21.188.788
20.086.386
Long-term receivables
542.883
478.878
1.767.411
1.216.812
Financial investments
4 (b)
367.600
331.676
1.589.058
1.066.920
Deferred income tax and social contribution
19
80.550
54.687
80.550
54.687
Judicial deposits
14 (g)
94.178
91.889
95.048
92.378
Other receivables
6
555
626
2.755
2.827
Investments
2.785.455
2.353.046
2.710.086
2.286.537
Interest in associate
7 (a)
2.673.386
2.248.325
2.673.386
2.248.325
Interest in subsidiaries
7 (a)
112.069
104.721
-
-
Investment property
7 (b)
-
-
36.700
38.212
Property and equipment
8
352.590
362.400
357.164
367.134
Intangible assets
9
16.354.124
16.215.887
16.354.127
16.215.903
Goodwill
16.064.309
16.064.309
16.064.309
16.064.309
Software and projects
289.815
151.578
289.818
151.594
Total assets
23.383.659
22.420.981
23.589.922
22.633.975
BM&FBOVESPA
Consolidated
The accompanying notes are an integral part of these Financial Statements.
4
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Balance Sheet
at December 31
(In thousands of reais)
(continued)
Liabilities and equity
Notes
2011
2010
2011
2010
Current
1.745.088
1.220.283
1.929.946
1.416.204
Collateral for transactions
17
1.501.022
954.605
1.501.022
954.605
Earnings and rights on securities in custody
10
39.038
34.791
39.038
34.791
Suppliers
56.038
80.775
56.409
80.828
Salaries and social charges
59.310
63.177
59.995
64.351
Provision for taxes and contributions payable
11
31.008
23.683
31.814
23.981
Income tax and social contribution
-
2.586
4.486
5.576
Interest payable on debt issued abroad and loans
12
33.566
33.154
33.566
33.154
Dividends and interest on own capital payable
4.177
2.773
4.177
2.773
Other liabilities
13
20.929
24.739
199.439
216.145
Non-current
2.397.571
1.797.933
2.402.485
1.798.723
Debt issued abroad and loans
12
1.138.659
1.010.059
1.138.659
1.010.059
Deferred income tax and social contribution
19
1.204.582
732.074
1.204.582
732.074
Provision for contingencies and legal obligations
14
54.330
55.800
59.244
56.590
Equity
15
19.241.000
19.402.765
19.257.491
19.419.048
Capital and reserves attributable to shareholders of BM&FBOVESPA
Capital
2.540.239
2.540.239
2.540.239
2.540.239
Capital reserve
16.033.895
16.662.480
16.033.895
16.662.480
Revaluation reserves
22.532
22.971
22.532
22.971
Revenue reserves
804.025
847.658
804.025
847.658
Treasury shares
(521.553)
(613.903)
(521.553)
(613.903)
Carrying value adjustments - accumulated other comprehensive income
128.257
(88.680)
128.257
(88.680)
Additional dividend proposed
233.605
32.000
233.605
32.000
19.241.000
19.402.765
19.241.000
19.402.765
Non-controlling interest
-
-
16.491
16.283
Total liabilities and equity
23.383.659
22.420.981
23.589.922
22.633.975
Consolidated
BM&FBOVESPA
The accompanying notes are an integral part of these Financial Statements.
5
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Income
Years ended December 31
(In thousands of reais, unless otherwise stated)
(continued)
Notes
2011
2010
2011
2010
Revenue
20
1.872.767
1.871.223
1.904.684
1.898.742
Expenses
(792.821)
(608.526)
(816.664)
(633.504)
Administrative and general
Personnel and related charges
(339.728)
(279.060)
(351.608)
(290.107)
Data processing
(100.619)
(98.074)
(104.422)
(101.690)
Depreciation and amortization
(73.428)
(53.010)
(75.208)
(54.818)
Outsourced services
(49.330)
(45.533)
(51.803)
(48.102)
Maintenance in general
(9.895)
(9.619)
(10.588)
(10.219)
Communications
(22.731)
(25.588)
(22.959)
(25.819)
Promotion and publicity
(38.100)
(41.756)
(38.609)
(42.376)
Taxes
(15.083)
(12.413)
(15.385)
(12.784)
Board and committee members' compensation
(6.262)
(5.841)
(6.262)
(5.841)
17
(92.342)
-
(92.342)
-
Sundry
21
(45.303)
(37.632)
(47.478)
(41.748)
Equity in results of investees
7
225.710
39.665
219.461
38.238
Finance results
22
277.538
287.406
280.729
289.039
Finance income
352.957
326.057
357.720
329.084
Finance expenses
(75.419)
(38.651)
(76.991)
(40.045)
Income before taxation of profit
1.583.194
1.589.768
1.588.210
1.592.515
Income tax and social contribution
19 (c)
(535.195)
(445.207)
(539.681)
(448.029)
Current
(44.936)
(2.586)
(49.422)
(5.408)
Deferred
(490.259)
(442.621)
(490.259)
(442.621)
Net income
1.047.999
1.144.561
1.048.529
1.144.486
Attributable to:
Shareholders of BM&FBOVESPA
1.047.999
1.144.561
1.047.999
1.144.561
Non-controlling interest
530
(75)
15 (h)
Basic
0,537789
0,572058
Diluted
0,536588
0,568172
BM&FBOVESPA
Consolidated
Net income per share attributable to shareholders of
BM&FBOVESPA (R$ per share)
Contribution to the Mecanismo de Ressarcimento de Prejuízos
The accompanying notes are an integral part of these Financial Statements.
6
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Years ended December 31
(In thousands of reais)
(continued)
2011
2010
2011
2010
Profit for the year
1.047.999
1.144.561
1.048.529
1.144.486
Valuation adjustments
216.937
(166.076)
216.937
(166.076)
Mark-to-market of financial assets available for sale
-
(117.266)
-
(117.266)
Tax effects on mark to market of financial assets available for sale
-
39.870
-
39.870
Exchange variation on investment in foreign associate
297.278
(133.238)
297.278
(133.238)
Hedge of net investment in foreign operation
(128.275)
59.547
(128.275)
59.547
Tax effects on hedge of net investment in a foreign operation
43.613
(20.246)
43.613
(20.246)
Other comprehensive income of foreign associate
4.321
5.257
4.321
5.257
Total comprehensive income for the year
1.264.936
978.485
1.265.466
978.410
Attributable to:
1.264.936
978.485
1.265.466
978.410
Shareholders of BM&FBOVESPA
1.264.936
978.485
1.264.936
978.485
Non-controlling interest
-
-
530
(75)
Statement of Comprehensive Income
BM&FBOVESPA
Consolidated
The accompanying notes are an integral part of these Financial Statements.
7
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Years ended December 31
(In thousands of reais)
Revaluation
Statutory
Treasury
Aditional
Capital
reserve
Legal
reserve
shares
Valuation
dividends
Retained
Non-controlling
Total
Nota
Capital
reserve
(Note 15(c))
reserve
(Note 15(d))
(Note 15(b))
Adjustments
proposed
earnings
Total
interests
equity
At December 31, 2009
2.540.239
16.492.260
23.551
-
403.191
(230.102)
77.396
20.000
-
19.326.535
16.358
19.342.893
Mark-to-market adjustment of financial assets available for sale
-
-
-
-
-
-
(77.396)
-
-
(77.396)
-
(77.396)
Exchange variation on foreign investment
-
-
-
-
-
-
(133.238)
-
-
(133.238)
-
(133.238)
Hedge of net investment, net of taxes
-
-
-
-
-
-
39.301
-
-
39.301
-
39.301
Other comprehensive income of foreign associate
-
-
-
-
-
-
5.257
-
-
5.257
-
5.257
Total comprehensive income
-
-
-
-
-
-
(166.076)
-
-
(166.076)
-
(166.076)
Realization of revaluation reserve - subsidiaries
-
-
(580)
-
-
-
-
-
-
(580)
-
(580)
Repurchase of shares
15(b)
-
-
-
-
-
(435.115)
-
-
-
(435.115)
-
(435.115)
Disposal of treasury shares - exercised options
18
-
(34.930)
-
-
-
51.314
-
-
-
16.384
-
16.384
Recognition of stock option plan
18
-
30.921
-
-
-
-
-
-
-
30.921
-
30.921
Approval/payment of additional dividends proposed
15(g)
-
-
-
-
-
-
-
(20.000)
-
(20.000)
-
(20.000)
Reversal of fair value adjustments
-
-
-
-
-
-
-
-
460.610
460.610
-
460.610
Transfer to reserves
-
174.229
-
3.453
282.928
-
-
-
(460.610)
-
-
-
Net income
-
-
-
-
-
-
-
-
1.144.561
1.144.561
(75)
1.144.486
Appropriation of net income
Dividends
15(g)
-
-
-
-
(248.000)
-
-
-
(434.475)
(682.475)
-
(682.475)
Interest on own capital
15(g)
-
-
-
-
-
-
-
32.000
(304.000)
(272.000)
-
(272.000)
Constitution of statutory reserve
-
-
-
-
406.086
-
-
-
(406.086)
-
-
-
At December 31, 2010
2.540.239
16.662.480
22.971
3.453
844.205
(613.903)
(88.680)
32.000
-
19.402.765
16.283
19.419.048
Exchange variation on foreign investment
-
-
-
-
-
-
297.278
-
-
297.278
-
297.278
Hedge of net investment, net of taxes
-
-
-
-
-
-
(84.662)
-
-
(84.662)
-
(84.662)
Other comprehensive income of foreign associate
-
-
-
-
-
-
4.321
-
-
4.321
-
4.321
Total comprehensive income
-
-
-
-
-
-
216.937
-
-
216.937
-
216.937
Effect of ownership increase
-
-
-
-
-
-
-
-
-
-
(322)
(322)
Realization of revaluation reserve - subsidiaries
-
-
(439)
-
-
-
-
-
-
(439)
-
(439)
Repurchase of shares
15(b)
-
-
-
-
-
(606.889)
-
-
-
(606.889)
-
(606.889)
Disposal of treasury shares - exercised options
18
-
(40.260)
-
-
-
57.284
-
-
-
17.024
-
17.024
Cancellation of treasury shares
15(b)
-
(641.955)
-
-
-
641.955
-
-
-
-
-
-
Recognition of stock option plan
18
-
53.630
-
-
-
-
-
-
-
53.630
-
53.630
Approval/payment of additional dividends proposed
15(g)
-
-
-
-
(406.086)
-
-
(32.000)
-
(438.086)
-
(438.086)
Net income
-
-
-
-
-
-
-
-
1.047.999
1.047.999
530
1.048.529
Appropriation of net income
Dividends
15(g)
-
-
-
-
-
-
-
233.605
(535.546)
(301.941)
-
(301.941)
Interest on own capital
15(g)
-
-
-
-
-
-
-
-
(150.000)
(150.000)
-
(150.000)
Constitution of statutory reserve
-
-
-
-
362.453
-
-
-
(362.453)
-
-
-
At December 31, 2011
2.540.239
16.033.895
22.532
3.453
800.572
(521.553)
128.257
233.605
-
19.241.000
16.491
19.257.491
Attributable to the shareholders of BM&FBOVESPA
Revenue reserves
Statement of Changes in Shareholders' Equity
The accompanying notes are an integral part of these Financial Statements.
8
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Years ended December 31
(In thousands of reais)
(continued)
BM&FBOVESPA
Consolidated
2011
2010
2011
2010
Cash flows from operating activities
Net income for the year
1.047.999
1.144.561
1.048.529
1.144.486
Adjustments for:
Depreciation and amortization
73.428
53.010
75.208
54.818
Profit on sale of property and equipment
(1.102)
(183)
(1.116)
(183)
Software and projects write-off
7.795
4.802
7.795
4.802
Deferred income tax and social contribution
490.259
442.621
490.259
442.621
Equity in results of associates
(225.710)
(39.665)
(219.461)
(38.238)
Expenses related to the stock option plan
53.630
30.921
53.630
30.921
Interest expense
69.412
30.641
69.412
30.641
Provision for losses in accounts receivable
1.086
(92)
1.086
(92)
Financial investments and collateral for transactions
160.964
21.617
159.982
(1.609)
Taxes recoverable and prepaid
37.891
(53.854)
36.772
(54.699)
Accounts receivable
3.905
(10.918)
3.799
(11.102)
Other receivables
1.191
3.959
1.362
5.594
Prepaid expenses
(8.397)
(283)
(8.437)
(293)
Judicial deposits
(2.289)
(8.400)
(2.670)
(7.484)
Earnings and rights on securities in custody
4.247
2.894
4.247
2.894
Suppliers
(24.737)
59.457
(24.419)
59.386
Provision for taxes and contributions payable
7.325
(721)
7.833
(635)
Provisions for income tax and social contribution
(2.586)
1.700
(1.090)
1.879
Variation in salaries and social charges
(3.867)
20.652
(4.356)
21.114
Other liabilities
(3.810)
7.324
(16.706)
19.461
Provision for contingencies
(1.470)
7.590
2.654
7.143
Net cash provided by operating activities
1.685.164
1.717.633
1.684.313
1.711.425
Cash flows from investing activities
Proceeds from sale of property and equipment
4.983
965
5.030
966
Payment for purchase of property and equipment
(45.504)
(164.508)
(46.070)
(164.548)
Payment for purchase of investment - CME
-
(1.075.119)
-
(1.075.119)
Dividends received
32.907
18.636
32.907
18.636
Proceeds from sale of assets not held for use
195
-
195
-
Capital increase in subsidiaries
(1.433)
(3.083)
-
-
Acquisition of softwares and projects
(168.582)
(107.180)
(168.582)
(107.180)
Net cash used in investing activities
(177.434)
(1.330.289)
(176.520)
(1.327.245)
Cash flows from financing activities
Disposal of treasury shares - stock options exercised
17.024
16.384
17.024
16.384
Repurchase of shares
(606.888)
(435.115)
(606.888)
(435.115)
Changes in borrowings
(857)
(9.076)
(857)
(9.076)
New borrowings
-
1.069.406
-
1.069.406
Interest payed
(67.819)
-
(67.819)
-
Payment of dividends and interest on own capital
(888.622)
(972.541)
(888.622)
(972.541)
Net cash used in financing activities
(1.547.162)
(330.942)
(1.547.162)
(330.942)
Net increase (decrease) in cash and cash equivalents
(39.432)
56.402
(39.369)
53.238
Cash and cash equivalents at the beginning of the year
103.148
46.746
104.017
50.779
Cash and cash equivalents at the end of the year
63.716
103.148
64.648
104.017
-
-
-
-
Statement of Cash Flows
The accompanying notes are an integral part of these Financial Statements.
9
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Value Added - Supplementary Information
Years ended December 31
(In thousands of reais)
(continued)
BM&FBOVESPA
Consolidated
2011
2010
2011
2010
1 - Revenues
2.082.106
2.082.349
2.115.983
2.111.539
Trading and/or settlement system
1.724.947
1.771.365
1.724.947
1.771.365
Other operating revenues
357.159
310.984
391.036
340.174
2 ­ Goods and services acquired from third parties
358.320
258.202
368.201
269.954
Operating expenses (a)
358.320
258.202
368.201
269.954
3 ­ Gross value added (1-2)
1.723.786
1.824.147
1.747.782
1.841.585
4 - Retentions
73.428
53.010
75.208
54.818
Depreciation and amortization
73.428
53.010
75.208
54.818
5 ­ Net value added produced by the company (3-4)
1.650.358
1.771.137
1.672.574
1.786.767
6 ­ Value added transferred from others
578.667
365.722
577.181
367.322
Equity in results of investees
225.710
39.665
219.461
38.238
Finance income
352.957
326.057
357.720
329.084
7 ­ Total value added to be distributed (5+6)
2.229.025
2.136.859
2.249.755
2.154.089
8 - Distribution of value added
2.229.025
2.136.859
2.249.755
2.154.089
Personnel and payroll charges
339.728
279.060
351.608
290.107
Board and committee members' compensation
6.262
5.841
6.262
5.841
Income tax,rates and contributions (b)
Federal
736.463
644.947
742.622
649.378
Municipal
23.154
23.799
23.743
24.232
Finance costs
75.419
38.651
76.991
40.045
Interest on own capital and dividends
685.546
738.475
685.546
738.475
Constitution of reserves
362.453
406.086
362.983
406.011
(b) Including: taxes and rates, PIS, COFINS, ISS and income tax and social contribution (current and deferred).
-
-
(a) Operating expenses (excluding personnel, Board members' compensation, depreciation, taxes and rates).
The accompanying notes are an integral part of these Financial Statements.
10
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13

(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)

1
Operations

BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) is a publicly-
traded corporation whose objective is to carry out or invest in companies engaged in, the following
activities:
Management of organized securities markets, promoting for the organization, operation and
development of free and open markets for the trading of any types of securities or contracts, that
have as reference or objective financial assets, indices, indicators, rates, goods, currencies, energy,
transportation, commodities and other assets or rights directly or indirectly related to thereto, for
spot or future settlement;
Maintenance of appropriate environments or systems for carrying out purchases, sales, auctions
and special operations involving securities, notes, rights and assets, in the stock exchange market
and in the organized over-the-counter market;
Rendering services of registration, clearing and settlement, both physical and financial, internally
or through a company especially incorporated for this purpose, assuming or not the position of
central counterparty and guarantor of the definite settlement, under the terms of applicable
legislation and its own regulations;
Rendering services of central depository and custody of fungible and non-fungible goods,
marketable securities and any other physical and financial assets;
Providing services of standardization, classification, analysis, quotations, statistics, professional
education, preparation of studies, publications, information, libraries and software on matters of
interest to BM&FBOVESPA and the participants in the markets directly or indirectly managed by
it;
Providing technical, administrative and managerial support for market development, as well as
carrying out educational, promotional and publishing activities related to its objective and to the
markets managed by it;
Performance of other similar or related activities authorized by the Brazilian Securities
Commission (CVM); and
Investment in the capital of other companies or associations, headquartered in Brazil or abroad, as
a partner, shareholder or member pursuant to the pertinent regulations.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
14
BM&FBOVESPA organizes, develops and provides for the operation of free and open securities
markets, for spot and future settlement. Its activities are carried out through its trading systems and
clearinghouses and include transactions with securities, interbank foreign exchange and securities
under custody in the Special System for Settlement and Custody (Selic).

BM&FBOVESPA develops technology solutions and maintains high performance systems, providing
its customers with security, agility, innovation and cost effectiveness. The success of its activities
depends on the ongoing improvement, enhancement and integration of its trading and settlement
platforms and its ability to develop and license leading-edge technologies required for the good
performance of its operations.

The subsidiary Bolsa Brasileira de Mercadorias is engaged in the registration and settlement of spot,
forward and options transactions involving commodities, assets and services for physical delivery, as
well as securities representing these products, in the primary and secondary markets.

With the objective of responding to the needs of customers and the specific requirements of the
market, its wholly-owned subsidiary Banco BM&F de Serviços de Liquidação e Custódia S.A.
provides its members and its clearinghouses with a centralized custody service for the assets pledged
as margin for transactions.

The subsidiaries BM&FBOVESPA UK Ltd. located in London and BM&F USA Inc., located in the
city of New York (USA), and a representative office in Shanghai (China) represent
BM&FBOVESPA abroad through relationships with other exchanges and regulators, as well as
assisting in the procurement of new clients for the market.

2
Preparation and Presentation of the financial statements

This financial statements were approved by the Board of Directors of BM&FBOVESPA on February
14, 2012.

The financial statements were prepared and are presented in accordance with accounting practices
adopted in Brazil, in compliance with the provisions contained in the Brazilian Corporate Law, and
embody the changes introduced through the Laws 11,638/07 and 11,941/09, complemented by the
pronouncements, interpretations and guidelines of Accounting Pronouncements Committee ­ CPC,
approved by resolutions of the Federal Accounting Council ­ CFC and rules of Brazilian Securities
Commission ­ CVM.

The preparation of financial statements requires the use of critical accounting estimates and also the
exercise of judgment by management in the process of applying the accounting policies of
BM&FBOVESPA. Those areas that require higher degrees of judgment and have greater complexity,
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
15
as well as areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 3 (x).

(a) Consolidated financial statements
The consolidated financial statements are prepared and presented in accordance with accounting
practices adopted in Brazil, including the pronouncements, interpretations and guidelines of the
Accounting Pronouncements Committee (CPCs) and in accordance with International Financial
Reporting Standards ­ IFRS, issued by the International Accounting Standards Board - IASB
The consolidated financial statements include the balances of BM&FBOVESPA and its subsidiaries,
as well as special purpose entities comprising investment funds, as follows:
Ownership %
Subsidiaries and controlled entities
Banco BM&F de Liquidação e Custódia S.A. ("Banco BM&F")
100.00
Bolsa Brasileira de Mercadorias
50.12
Bolsa de Valores do Rio de Janeiro ­ BVRJ ("BVRJ")
86.95
BM&F USA Inc.
100.00
BM&F UK Ltd.
100.00

Investment funds:

Bradesco Fundo de Investimento Multimercado Letters
BB Pau Brasil Fundo de Investimento Renda Fixa
HSBC Fundo de Investimento Renda Fixa Longo Prazo Eucalipto
Araucária Renda Fixa Fundo de Investimento
Supremo Renda Fixa ­ Fundo de Investimento em Cotas de Fundos de Investimento
Megainvest Fundo de Investimento em Cotas de Fundos de Investimento Renda Fixa
(1)
(1)
Proportionally consolidated based on the number of quotas held

The financial intermediation results from the operations of Banco BM&F, in the amount of R$8,985,
previously disclosed as financial income in 2010, were reclassified to other operating revenues, with
no effect on net income and shareholders equity.




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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
16
(b) Unconsolidated financial statements

The unconsolidated financial statements of the BM&FBOVESPA are prepared in accordance with
accounting practices adopted in Brazil, as issued by the Accounting Pronouncements Committee
(CPC) and are published together with the consolidated financial statements.

In the unconsolidated financial statements (BM&FBOVESPA), subsidiaries using recorded on the
equity method. The same adjustments are made both in the individual and consolidated financial
statements to achieve the same result and net assets attributable to controlling shareholders.

3
Significant Accounting Practices
a.
Consolidation
The following accounting policies are applied in preparing the consolidated financial statements.

Subsidiaries

Subsidiaries are all entities over which BM&FBOVESPA has the power to govern the financial
and operating policies, generally accompanied by a participation of more than half of the voting
rights (voting capital). The existence and effect of potential voting rights currently exercisable or
convertible are considered when assessing whether BM&FBOVESPA controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to
BM&FBOVESPA. Consolidation is discontinued from the date on which control ends.

Intercompany transactions, balances and unrealized gains on transactions between group
companies are eliminated. Unrealized losses are also eliminated unless the transaction provides
evidence of impairment of the assets transferred. The accounting policies of subsidiaries are
altered where necessary to ensure consistency with the practices adopted by BM&FBOVESPA.

Associates
Associates are all entities over which BM&FBOVESPA has significant influence but not control.
Investments in associates are recorded on the equity method and are initially recognized at the cost
of each purchase. BM&FBOVESPA's investment in associates includes goodwill identified on
acquisition, net of any accumulated impairment.

The share of BM&FBOVESPA in the post-acquisition profits or losses of associates is recognized
in the statement of income and its share in post-acquisition changes in other comprehensive
income recognized in other comprehensive income. The cumulative post-acquisition changes are
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
17
adjusted against the carrying value of the investment. When the share of BM&FBOVESPA in the
losses of an associate equals or exceeds its investment in the associate, including any other
receivables, BM&FBOVESPA does not recognize further losses, unless it has incurred obligations
or made payments on behalf of the associate.

Unrealized gains arising from transactions between BM&FBOVESPA and its associates are
eliminated to the extent of the participation of BM&FBOVESPA in the associates. Unrealized
losses are also eliminated unless the transaction provides evidence of impairment of the assets
transferred. The accounting policies of associates have been altered where necessary to ensure
consistency with the practices adopted by BM&FBOVESPA.

b.
Revenue recognition
Revenues from the trading and settlement systems are recognized upon the completion of the
transactions or the provision of the service, under the accrual method of accounting. The amounts
received as annual fees, as in the cases of listing of securities and certain contracts for sale of
market information, are recognized pro rata monthly over the contractual term.
c.
Cash and cash equivalents

The balances of cash and cash equivalents for cash flow statement purposes comprise cash and
bank deposits.

d.
Financial instruments
(i) Classification and measurement

BM&FBOVESPA classifies its financial assets in the following categories: at fair value through
profit or loss, loans and receivables and available for sale. The classification depends on the
purpose for which the financial assets were acquired. Management determines the classification of
the financial assets when they are first recorded.

Considering the nature and objective of BM&FBOVESPA and its financial investment portfolio,
these are classified as financial assets at fair value through profit or loss, designated at inception.
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss are financial assets held for active
and frequent trading (derivative financial instruments classified as current assets) or assets
designated by the entity, at inception as measured at fair value through profit or loss at inception
(other financial instruments (Note 4)). Gains or losses arising from the changes in fair value of
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
18
financial instruments are recorded in the statement of income in "financial results" for the period
in which they occur.

Loans and receivables
These comprise loans granted and receivables which are non-derivative financial assets with fixed
or determinable payments, not quoted in an active market. Loans and receivables are included in
current assets, except for those with maturity of more than 12 months after the balance sheet date
(which are classified as non-current assets). The loans and receivables of BM&FBOVESPA
comprise customer receivables and other accounts receivables. Loans and receivables are recorded
at amortized cost, based on the effective interest rate method, reduced by any impairment losses.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives which are classified in this category or not
classified in any other. Available-for-sale financial assets are recorded at fair value. Interest on
available-for-sale securities, calculated based on the effective interest rate method, is recognized
in the statement of income as finance income. The amount relating to the changes in fair value is
recorded in comprehensive income and is transferred to the statement of income when the asset is
sold or becomes impaired.

Management periodically monitors its outstanding positions and possible risks of impairment of
financial assets. Therefore, based on the nature of these assets (mostly highly liquid government
securities), BM&FBOVESPA has no significant impairment history.

The carrying amount of financial assets is reduced directly for impairment. Subsequent recoveries
of amounts previously written off are recognized in results.
Fair value
Fair values of investments with public quotations are based on current market prices. For financial
assets without an active market or public quotation, BM&FBOVESPA determines fair value
through valuation techniques, such as option pricing models.
(ii) Derivative instruments
Initially, derivatives are recognized at fair value on the date the derivative agreement is signed
and, subsequently, they are measured at fair value, with the changes in fair value recognized in the
statement of income, except when the derivative is recorded as a net investment hedge.


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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
19
(iii) Hedge of net investments

Any gain or loss on the hedging instrument related to the effective portion of the hedge is
recognized in other comprehensive income. The gain or loss related to the ineffective portion is
recognized immediately in the statement of income.

Gains and losses accumulated in other comprehensive income are transferred to the income
statement when the hedged foreign operation is partially disposed of or sold.
(iv) Hedge effectiveness analysis
BM&FBOVESPA adopts the Dollar offset method as the methodology for retrospective
effectiveness test on a cumulative and spot basis. For prospective analysis, BM&FBOVESPA uses
stress scenarios applied to the range of 80% to 125%.
e.
Accounts receivable, other receivables and allowance for doubtful accounts
Accounts receivable are amounts receivable for fees and services in the normal course of activities
of BM&FBOVESPA. If the collection is expected in one year or less (or another period that meets
the normal cycle of BM&FBOVESPA), the accounts receivable are classified as current assets.
Otherwise, they are presented as noncurrent assets.

Customer receivables are initially recognized at fair value less provision for impairment. In
practice they are usually recognized at the invoice amount, adjusted by a provision if necessary.
f.
Prepaid expenses
Prepaid expenses mainly relate to software maintenance contracts and insurance premiums, and
are amortized over the life of the contracts.
g.
Non-current available for sale assets
Non-current assets are classified as available for sale when their carrying amount is recoverable,
mainly through a sale, and when this sale is practically certain. These assets are measured at the
lower of the carrying amount and the fair value less costs to sell.





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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
20
h.
Intangible assets

Goodwill
Goodwill represents the positive difference between the amount paid and / or payable for the
acquisition of a business and the net fair value of assets and liabilities of the acquiree. Goodwill
on acquisitions is recorded in "intangible assets". If the difference is negative, representing a
negative goodwill, it is recognized as a gain in income at the date of acquisition. Goodwill is
tested annually for impairment. Goodwill is stated cost less accumulated impairment losses.
Recognized impairment losses on goodwill are not subsequently reversed.

Goodwill is allocated to Cash Generating Units (CGUs) for purposes of impairment testing. The
allocation is made to the CGUs that should benefit from the business combination in which the
goodwill arose, and are identified according to the operating segment.

Software and projects

Software licenses acquired are capitalized and amortized over their estimated useful life, at the
rates mentioned in Note 9.

Costs of software development or maintenance are expensed as incurred. Expenditures directly
associated with the development of identifiable and unique software, controlled by
BM&FBOVESPA and which will probably generate economic benefits greater than the costs for
more than one year, are recognized as intangible assets.

Amortization expense is recognized in the statement of income unless it is included in the
carrying amount of another asset. In such cases, amortization of intangible assets used for
development activities is included as part of the cost of the other intangible asset.
Expenditures for development of software recognized as assets are amortized using the straight-
line method over their useful lives, at the rates described in Note 9.
i.
Step acquisition of associate
The cost of an associate acquired in steps is measured as the total of the amounts paid in each
transaction.

The gains or losses previously recognized in comprehensive income, while the investment was
classified as available for sale, are reversed against the investment account, which is restated to
cost.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
21
Goodwill is calculated at each step of acquisition as the difference between the acquisition cost
and the fair value of net assets in proportion to the interest acquired
.
The total book value of the investment is tested for impairment, by comparing the carrying value
with its recoverable amount (proceeds from sale, net of selling cost or value in use, whichever is
greater) when the requirements of the CPC 38/IAS 39 indicate a potential impairment.

j.
Property and equipment
Recorded at cost of acquisition or construction, less accumulated depreciation. Depreciation is
calculated on the straight-line method and takes into consideration the estimated useful lives of the
assets, and their residual value. At the end of each year, the residual values and useful lives of
assets are reviewed and adjusted if necessary.

Subsequent costs are included in the carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits will be obtained and the cost of
the item can be measured reliably. All other repairs and maintenance are recorded in the statement
of income, as incurred.

Depreciation expense is recognized in the statement of income unless it is included in the carrying
amount of another asset. Depreciation of fixed assets used for development activities is included
as part of the cost of the related intangible asset.
k.
Contingent assets and liabilities and legal obligations
The recognition, measurement, and disclosure of contingent assets and liabilities and legal
obligations comply with the criteria defined in CPC 25/IAS 37.
Contingent assets - These are not recognized in the financial statements, except when
management has full control over their realization or when there are secured guarantees or
favorable court decisions to which no further appeals are applicable, such that the gain is
virtually certain. Contingent assets with realization considered probable, where applicable,
are only disclosed in the financial statements.
Contingent liabilities - These are recognized taking into account: the opinion of legal
advisors; the nature of the lawsuits; similarity with previous cases; the complexity of the
proceedings; and prior court decisions. They are recognized whenever the loss is evaluated as
probable, an outflow of resources for the settlement of the obligations, and the amounts
involved are measurable with sufficient reliability. The contingent liabilities classified as
possible losses are not recorded and are only disclosed in the notes to the financial
statements, and those classified as remote are neither recognized nor disclosed.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
22
Legal obligations ­ These result from tax lawsuits in which BM&FBOVESPA is
challenging the validity or constitutionality of certain taxes and charges, recognized at full
amount under discussion.
Other provisions - Provisions are recognized when BM&FBOVESPA has a present
obligation, legal or constructive, as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate of the amount can
be made.
l.
Judicial deposits
Judicial deposits are related to tax, civil or labor contingencies and are adjusted by inflation rate
and presented in non-current assets.
m.
Collateral for transactions
Comprises amounts received from market participants as collateral for default or insolvency.
These amounts are initially recognized at fair value and subsequently at amortized cost. Amounts
received (i) in cash are recorded as a liability and (ii) in other than cash are maintained in off-
balance control accounts. Both types of collateral received are not subject to interest or any other
charges.
n.
Other assets and liabilities
These are stated at their known and realizable/settlement amounts plus, where applicable, related
earnings and charges and monetary and/or exchange rate variations up to the balance sheet date.
o.
Impairment of assets

Assets that have an indefinite life, such as goodwill, are not subject to amortization and are tested
annually for impairment. The assets subject to amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying value may not be
recoverable. An impairment loss is recognized at the amount by which the asset's carrying
amount exceeds its recoverable amount. This latter amount is the higher of the fair value of an
asset less selling costs and the value in use.

For purposes of evaluation of impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (Cash Generating Units (CGU). The non-financial assets,
except goodwill, which have suffered impairment are reviewed subsequently to analyze a
possible reversal of the impairment at the balance sheet date.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
23
p.
Leases

Leases of property and equipment in which BM&FBOVESPA substantially assumes all
ownership risks and benefits are classified as finance leases. These finance leases are recorded as
a financed purchase, recognizing at the beginning of the lease a property and equipment item and
a financing liability (lease). Property and equipment acquired in finance leases are depreciated
over the shorter of the lease or their useful lives.
A lease in which a significant portion of the ownership risks and benefits remains with the lessor
is classified as an operating lease. Operating lease payments (net of all incentives received from
the lessor) are charged directly to profit or loss.
q.
Employee benefits
(i) Pension obligations
BM&FBOVESPA maintains a defined contribution plan of retirement plan, with voluntary
participation open to all employees. The participant's monthly contribution is 3.60% of salary.
The sponsor's monthly contribution is also 3.60%, calculated on the total wages of the
participants and allocated to participants through apportionment. The company has no obligations
to make additional payments as a sponsor. The regular contributions are included in personnel
costs.
In the event of termination of employment prior to the date of retirement, the participant
may keep the plan within the rules established by the regulation or request cancellation of the
registration, and in this case, may choose for: (i) the transfer 100% of the reserve constituted by
the participant´s contributions and according to the time of participation in the plan, up to 100%
of the balance of the reserves constituted by the contributions of the sponsor, or (ii) the
redemption of 100% of the reserve constituted of the participant's contributions, without any
portion of the reserve balance constituted by the contributions of the sponsor. In any of the above
options there is no additional cost to the BM&FBOVESPA.
(ii) Share-based remuneration (stock options)
BM&FBOVESPA maintains a long-term remuneration plan, structured by options granted to
purchase the Company´s shares under the Stock Option Plan. The objective is to give to the
employees of BM&FBOVESPA and its subsidiaries the opportunity to become shareholders of
BM&FBOVESPA, obtaining a greater alignment between their interests and the shareholders'
interests as well as allow BM&FBOVESPA and its subsidiaries to attract and keep their
management and employees. The fair value of options granted is recognized as an expense
during the vesting period (the period during which the specific vesting conditions must be met),
which typically is the period in which the service is provided. At the balance sheet date,
BM&FBOVESPA reviews its estimates of the number of options that will vest based on the
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
24
established conditions. BM&FBOVESPA recognizes the impact of any changes to the original
estimates, if any, in the income statement, with a counter-entry to a capital reserve in
shareholders' equity.
(iii) Profit sharing

BM&FBOVESPA has semi-annual variable remuneration, organized and paid in cash through
the Profit Sharing Program (PLR). The program defines the potential multiple of monthly salary,
based on individual performance indicators, which consider factors specific to each function (job
level), and indicators of the overall performance of BM&FBOVESPA, aiming to align the
remuneration of employees with the short and medium-term results of the Company. The
provision for the related expense is recognized in income on an accrual basis.
r.
Borrowings
Borrowings are initially recognized at fair value, upon receipt of the funds, net of transaction
costs. Subsequently, they are presented at amortized cost. Any difference between the funds
raised (net of transaction costs) and the amount repayable is recognized in the income statement
over the period of the loans, using the effective interest rate method.
s.
Foreign currency translation

The items included in financial statements for each of the consolidated companies of
BM&FBOVESPA are measured using the currency of the primary economic environment in
which the entity operates ("functional currency"). The financial statements are presented in
Brazilian reais, which is the functional currency of BM&FBOVESPA.

Transactions in foreign currencies are translated into Brazilian Reais using the exchange rates
prevailing on the transaction dates. The foreign exchange gains and losses arising from the
settlement of these transactions and of the translation, at the exchange rates at the end of period,
of assets and liabilities in foreign currencies, are recognized in the income statement, except
when deferred in equity relating to a hedge of a net foreign investment.

Exchange differences on the net investments in foreign operations, which have a functional
currency different from that of BM&FBOVESPA are recorded under "Valuation Adjustments"
in other comprehensive income of BM&FBOVESPA, and are only taken to the statement of
income when the investment is sold or written off.

Exchange gains and losses on to the investment in the shares of CME Group, classified as
available for sale until July 2010, were included in other comprehensive income. After July
2010, the investment in the CME Group has been recorded on the equity method (Note 7) and
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
25
the currency translation effects are recognized in the valuation adjustment in the comprehensive
income.
t.
Taxes
BM&FBOVESPA is a for-profit business corporation and accordingly its results are subject to
certain taxes and contributions.
(i) Current and deferred income tax and social contribution
Current and deferred income tax and social contribution are calculated at 15% with an
additional 10% on taxable income (surtax) which exceeds R$240 for income tax and 9% for
social contribution and recognizes that compensation for tax losses is limited to 30% of net
income. These rates have been substantively enacted at the year end.

Income tax and social contribution expense of the period comprise current and deferred taxes.
Taxes on profit are recognized in the income statement, except to the extent that they relate to
items recognized directly in equity or other comprehensive income. In this case, the tax is also
recognized in equity or other comprehensive income.

Income tax and social contribution deferred taxes are calculated on tax losses for income tax, the
negative basis of social contribution and the r temporary differences between the bases of
calculation of tax assets and liabilities and the carrying amounts in the financial statements.

Deferred tax assets are recognized to the extent that it is probable sufficient future taxable profit
will be available to offset temporary differences and/or tax losses, considering projections of
future income prepared based on internal assumptions and future economic scenarios which
may, accordingly, not materialize as expected.

Deferred tax liabilities are recognized in relation to all temporary differences that will result in
amounts to be added in the calculation of taxable income for future years, when the value of the
asset or liability is recovered or settled.

The deferred income tax and social contribution are determined using tax rates (and tax laws)
enacted, or substantively enacted, at the balance sheet date, and should be applied when the
deferred tax asset is realized or when the deferred tax liability is settled.
(ii) Other Taxes
The other taxes charged over trading, clearing and settlement fees and other services were
calculated at the rates of 1.65% for PIS and 7.60% for Cofins, and are recorded as an adjustment
to revenue in the income statement.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
26

Banco BM&F de Serviços de Liquidação e Custódia S.A. calculates the contributions to PIS and
to COFINS at the rates of 0.65% and 4%, respectively, and CSLL at 15%.

The subsidiaries Bolsa Brasileira de Mercadorias and BVRJ are not-for-profit entities and pay
contribution to PIS at the rate of 1% on payroll.

BM&FBOVESPA and its subsidiaries pay ISS over the services rendered at rates ranging from
2% to 5% depending on the nature of the service.
u.
Earnings per share
For purposes of disclosure of earnings per share, basic earnings per share is calculated by
dividing the profit attributable to shareholders of BM&FBOVESPA by the average number of
outstanding during the period. Diluted earnings per share is calculated similarly, except that the
quantity of outstanding shares is adjusted to reflect the outstanding shares with potentially
dilutive effects, under the stock option plan (Note 15(h)).
v.
Distribution of dividends and interest on capital

The distribution of dividends and interest on capital to shareholders of BM&FBOVESPA is
recognized as a liability in the financial statements at year end, based on the bylaws. Any
amount above the minimum is accrued only on the date it is approved by the shareholders at a
General Meeting. The tax benefit over the interest on own capital is recorded in the income
statement.
w.
Segment information presentation

Operating segments are presented in a manner consistent with the internal reports provided to the
Executive Board, which is responsible for the main operational and strategic decisions of
BM&FBOVESPA.
x.
Critical accounting estimates and judgments
i.
Equity method of accounting

BM&FBOVESPA applies the equity method for its investments when it has the ability to
exercise significant influence. The judgment of BM&FBOVESPA regarding the level of
influence over the investment takes into account key factors such as the percentage of interest,
representation on the Board of Directors, participation in defining policies and business
strategies and material transactions between the companies.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
27
ii.
Impairment

BM&FBOVESPA performs, annually or when required, tests of impairment, specifically related
to goodwill and other non-financial/non-current assets, according to the accounting policy
described in Note 3(o). See Notes 7 and 9 for sensitivity analysis.
iii.
Classification of financial instruments
BM&FBOVESPA classifies in financial assets in the categories of (i) measured at fair value
through profit or loss and (ii) available for sale. The classification depends on the purpose for
which the financial assets were acquired. Management determines the classification of financial
assets at initial recognition. The basis for the original classification of financial instruments is
described in Note 3(d).
iv.
Stock option plan

BM&FBOVESPA offers a stock option plan to its management and employees and service
providers. The fair value of these options is recognized as an expense over the period in which
the right is acquired. Management reviews the estimated amount of options that will achieve the
conditions for vesting and subsequently recognizes the impact of changes in initial estimates, if
any, in the statement of income, and in equity, as shown in Note 3(q).

4
Cash and Cash Equivalents and Financial Investments
a.
Cash and cash equivalents
BM&FBOVESPA
Details
2011
2010
Banks - deposits in domestic currency
113
3,277
Banks - deposits in foreign currency
63,603
99,871
Total
63,716
103,148



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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
28
Consolidated
Details
2011
2010
Banks - deposits in domestic currency
363
3,622
Banks - deposits in foreign currency
64,285
100,395
Total
64,648
104,017

Cash and cash equivalents are held with top tier financial institutions in Brazil or abroad. Deposits in
foreign currency are primarily in U.S. dollars.

b.
Financial Investments
The breakdown of financial investments by category, nature and time to maturity is as follows:
BM&FBOVESPA
Without maturity
Up to 3
months
More than 3
and up to 12
months
More than
12 months
and up to 5
years
More than 5
years
2011
2010
Details
Financial assets measured at fair value trough profit or loss
Financial investment funds
(1)
3,025,217
- - - -
3,025,217
1,676,725
Securities purchased under agreements to resell
(2)
-
-
2,423 - -
2,423
935,617
Federal government securities
Financial Treasury Bills
-
41,585 -
366,923 -
408,508
425,568
National Treasury Bills
9,525
2,060
43
677 -
12,305
25,090
Total financial investments
3,034,742
43,645
2,466
367,600 -
3,448,453
3,063,000
Short term
3,080,853
2,731,324
Long term
367,600
331,676
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
29
CONSOLIDATED
Details
Without maturity
Up to 3
months
More than 3
and up to 12
months
More than
12 months
and up to 5
years
More than 5
years
2011
2010
Financial assets measured at fair value trough profit or loss
Financial investment funds
(3)
207,890
- - - -
207,890
204,740
Securities purchased under agreements to resell
(2)
-
1,786,525
24,435 - -
1,810,960
1,852,090
Federal government securities
Financial Treasury Bills
-
69,339
4,157
1,361,846
103,217
1,538,559 1,187,388
National Treasury Bills
-
-
2,381
83,431
-
85,812
4,138
Other investments
9,538
3,540
43
677
-
13,798
34,831
217,428
1,859,404
31,016
1,445,954 103,217
3,657,019 3,283,187
Financial assets available for sale
Federal government securities
Financial Treasury Bills
-
4,574
14,705
39,091
-
58,370
48,141
National Treasury Bills
-
-
1,578
796
-
2,374
-
-
4,574
16,283
39,887
-
60,744
48,141
Total financial investments
217,428
1,863,978
47,299
1,485,841
103,217
3,717,763 3,331,328
Short term
2,128,705
2,264,408
Long term
1,589,058
1,066,920
(1)
Investments in funds that invest in units of other financial investment funds (fund of funds), the portfolios of
which mainly comprise investments in federal government bonds, securities purchased under agreements to
resell and have the CDI as their profitability benchmark. The balances presented in the tabl also include the
investment funds which are proportionately consolidated in the consolidated financial statements according to
the nature of the portfolio and in the proportion of the net assets.

The net assets of the investment funds included in the consolidation are: (i) Bradesco FI Multimercado Letters -
R$2,245,045 (R$723,402 at December 31, 2010); (ii) Megainvest FIC FI Renda Fixa - R$256,145 (R$629,049
at December 31, 2010) ; (iii) BB Pau Brasil FI Renda Fixa ­ R$176,081; (iv) HSBC FI Renda Fixa Longo
Prazo Eucalipto ­ R$100,284; (v) Araucária Renda Fixa FI ­ R$215,312; (vi) Supremo Renda Fixa ­ FICFI ­
R$258,625 at December 31, 2010.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
30
(2)
Issued by first-tier banks and backed by Brazilian government bonds.
(3)
The non-exclusive investment fund (not consolidated is Bradesco Empresas FICFI Referenciado DI Federal, in
the amount of R$207,890 (R$204,669 at December 31, 2010).
The government bonds are held in custody at the Special System for Settlement and Custody
(SELIC), the units of investment funds are held in custody with their respective managers and the
shares are in the custody of BM&FBOVESPA's Equity and Corporate Debt Clearinghouse.

There was no reclassification of financial instruments between categories during the year.

Fair value

BM&FBOVESPA applies CPC40/IFRS7 for financial instruments measured at fair value, which
requires disclosure of fair value measurements by level for the following hierarchy:

· Quoted prices (unadjusted) in active markets for similar assets or liabilities (level 1);

· Derived from quoted prices included in Level 1, either directly (as prices) or indirectly (Level 2);

· Valuations that are not based on market data (unobservable) (level 3).

The fair value of the main financial instruments is calculated as follows:

Investment funds ­ based on the value of the unit determined on the last business day prior to the
balance sheet date, as disclosed by the corresponding fund Manager.

Federal government securities ­ based on the amounts and prices disclosed by the Brazilian
Association of Financial and Capital Market Institutions (ANBIMA) or, when these are unavailable,
on the price defined by management which best reflects the sales value, determined based on
information obtained from other institutions.

Securities purchased under agreements to resell ­ are recorded daily in accordance with the market
price of the security.

Financial assets at fair value through profit and loss and derivative financial instruments are classified
as level 1, ie, have quoted prices (unadjusted) in active markets.

During 2011 there was no impairment recorded on the financial assets available for sale.

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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
31
Derivative financial instruments

Derivative financial instruments comprise future interest rate contracts (DI1) and are stated at their
market values. These contracts are included in the fund portfolios which were consolidated (Note
2(a)) and are used to cover fixed interest rate exposures, swapping fixed interest rate for floating
(CDI). Even though these derivatives are designed to provide protection, management has opted not
to apply hedge accounting in respect to them.

The net result between the derivative transactions and the related financial instrument refers to the
short position in future interest rate contracts, with market value of R$394 (R$686 at December
31,2010), and are presented as part of the finance result ­ Finance income/(expenses). The amounts
related to the positive/negative daily adjustments are presented in Other receivables/liabilities,
respectively.

The DI1 contracts have the same maturity dates as the fixed interest rate contracts to which they
relate.

Financial risk management policy
BM&FBOVESPA´s
policy
for cash investments favors alternatives with very low risk, resulting in a
significant proportion of federal government securities in its portfolio, purchased directly, via
repurchase agreements backed by government bonds and also through exclusive and non-exclusive
funds. Thus, in general, BM&FBOVESPA chooses to make most of its applications in conservative
financial assets, highly liquid and with sovereign risk, whose overall performance is tied to the Selic
rate / CDI.
Sensitivity analysis
The table below presents the net exposure of all financial instruments (assets and liabilities) by
market risk factors, classified in accordance with its rates:
Exposure to Risk Factors (Consolidated)
2011
2010
Risk factor
Risk
Percentual
Percentual
Floating Interest Rate
Lower CDI
99.29%
99.35%
Fixed interest rate
Higher fixed rate
0.07%
0.35%
Foreign exchange
Lower dollar
0.38%
0.05%
Gold price
Lower gold price
0.26%
0.25%
100.00%
100.00%

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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
32
Interest rate risk

This risk arises from the possibility that fluctuations in future interest rates for the corresponding
maturities could affect the fair value of BM&FBOVESPA's transactions.
Floating-rate position
As a financial investment policy and considering the need for immediate liquidity with the least
possible impact from interest rate fluctuations, BM&FBOVESPA maintains its financial assets and
liabilities indexed to floating interest rates.

We present in the table below the possible impacts in the profit or loss of a change of 25% and 50%
from the probable scenario for the CDI rate, for the next three months.
Effect on profit or loss
Scenario
Scenario
Probable
Scenario
Scenario
Risk factor
-50%
-25%
Scenario
25%
50%
Financial
Investments
CDI/Selic
44,840
66,669
88,126
109,224
129,977
Index rates
CDI/Selic
4.93%
7.40%
9.86%
12.33%
14.80%
Fixed-rate position

Part of BM&FBOVESPA´s financial investments earn fixed interest rates and this results in a net
exposure to such rates. However, in terms of percentage, in view of the amounts involved, the effects
on the portfolio are not considered material.

Exchange rate risk

This arises from the possibility that fluctuations in exchange rates in connection with the acquisition
of services, product sales and financial instruments could have an impact on the related domestic
currency amounts.

In addition to the amounts payable and receivable in foreign currencies, including interest payments
on the senior unsecured notes in the next six month period, BM&FBOVESPA has third-party
deposits in foreign currency to guarantee the settlement of transactions by foreign investors and also
own funds in foreign currency abroad. At December 31, 2011 the net foreign currency exposure
amounted to R$4,938 negative (R$1,820 negative at December 31, 2010). The effects on the portfolio
are not considered material.

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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
33
Liquidity risk
The following table shows the main financial liabilities of BM&FBOVESPA by maturity, represented
in its entirety by non-derivative financial liabilities, on an undiscounted cash flows basis:
Without
maturity
Less than
1 year
From 1
to 2
years
From 2
to 5
years
More
than 5
years
1,501,022
-
-
-
-
Collateral for transactions
Issuance of debt abroad (1)
-
63,139
63,139
189,418 1,400,547

(1)
Values converted into R$ using closing the rate of R$/USD
Credit Risk and capital management
BM&FBOVESPA prefers very low risk investments, where more than 99% of the allocation of assets
is linked to government securities with rating's set by Standard & Poor's and Moody's of "a-" and
"Baa2", respectively, for long-term issues in local currency and characterized as investment grade, in
order to obtain high liquidity and sovereign risk, with overall performance linked to the Brazilian
prime rate (interbank interest rate).
The issue of Senior Notes (Note 12) was linked to increasing our participation in CME and the
creation of a strategic partnership between the companies. In addition, it serves as a natural hedge for
the USD exposure generated by the increased investment in CME Group.

5
Accounts Receivable

The breakdown of accounts receivable is as follows:
BM&FBOVESPA
Details
2011
2010
Fees
11,068
16,312
Annuities
4,732
4,477
Vendors ­ Signal broadcast
9,385
10,599
Depositary and custody fees
16,010
17,585
Other accounts receivable
10,181
6,971
Provision for impairment
(6,315)
(5,892)
Total
45,061
50,052
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
34
Consolidated
Details
2011
2010
Fees
11,850
17,069
Annuities
4,732
4,477
Vendors ­ Signal broadcast
9,385
10,599
Depositary and custody fees
16,010
17,585
Other accounts receivable
10,852
7,561
Provision for impairment
(6,315)
(5,892)
Total
46,514
51,399

The amounts presented above are primarily denominated in Brazilian reais. Approximately 90% is of
the receivables fall due within 60 days.
On December 31, 2011, the amounts overdue for more than
90 days totaled R$6,838 (2010 ­ R$5.709).

The provisioning methodology, as approved by the management, is based on the analysis of the
historical behavior of incurred losses.

Therefore, on the overdue amount for defined ranges of days past due, according to the historical
behavior, an estimated loss percentage has been assigned, which is intended to reflect incurred losses.

Changes in the provision for impairment are as follows:
BM&FBOVESPA
and Consolidated
At December 31, 2009
5,984
Additions
2,701
Reversals
(2,793)
At December 31, 2010
5,892
Additions
2,807
Reversals
(1,721)
Disposal
(663)
At December 31, 2011
6,315
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
35
6
Other Receivables

Other receivables comprise the following:
BM&FBOVESPA
2011
2010
Current
Advances to employees
1,572
1,457
Amounts receivable - related parties (note 16)
7,794
8,134
Supplies
1,378
1,527
Other
747
1,135
Total
11,491
12,253
Non-current
Other
555
626
Total
555
626
Consolidated
2011
2010
Current
Advances to employees
1,672
1,523
Amounts receivable - related parties (note 16)
7,169
7,448
Supplies
1,378
1,527
Other
1,548
2,419
Total
11,767
12,917
Non-current
Brokers in judicial liquidation
(1)
2,200
2,200
Other
555
627
Total
2,755
2,827

(1)
Balance of accounts receivable from brokers in judicial liquidation, which considers the guarantee
represented by the equity certificates pledged by the debtor.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
36
7
Investments
a.
Investments in subsidiaries and associates

Investments in subsidiaries and associates comprise the following:
Investees
Adjusted
equity
Total
shares
Adjusted
net
income
%
Ownership
Investment
2011
Investment
2010
Accumulated
2011
Accumulated
2010
Subsidiaries
Banco BM&F de Liquidação e
Custódia S.A.
49,628
24,000
4,693
100
49,628
44,935
4,693
4,980
Bolsa Brasileira de Mercadorias
17,397
405
1,415
50.12
8,720
8,011
709
(2)
Bolsa de Valores do Rio de
Janeiro - BVRJ
59,873
115
1,232
86.95
52,059
51,427
1,071
132
BM&F USA Inc.
646
1,000
(527)
100
646
348
(527)
(3,683)
BM&FBOVESPA UK Ltd.
1,016
1,000
303
100
1,016
-
303
-
112,069
104,721
6,249
1,427
Associate
CME Group, Inc. (1)
40,427,242
66,131
3,060,685
5.13
2,673,386
2,248,325
156,474
38,238
Income tax recoverable (3)
-
-
62,987
-
2,673,386
2,248,325
219,461
38,238
Total
2,785,455
2,353,046
225,710
39,665

Summary of key financial information of subsidiaries and associates:
Details
Banco BM&F
Bolsa
Brasileira de
Mercadorias
Bolsa de Valores
do Rio de
Janeiro - BVRJ
BM&F
USA Inc.
BM&FBOVESPA
UK Ltd.
CME
Group,
Inc.
Assets
232,609
18,878
65,332
795
1,124
76,455,169
Liabilities
182,981
1,480
5,458
148
108
35,896,059
Revenue
20,465
7,736
6,888
1,200
1,982
6,153,749
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
37
Changes in Investments:
Subsidiaries
Associate
Investiments
Banco
BM&F
Bolsa
Brasileira
de
Mercadorias
Bolsa de
Valores do
Rio de
Janeiro -
BVRJ
BM&F
USA Inc.
BM&FBOVESPA
UK Ltd.
CME
Group, Inc.
Total
At December 31, 2009
39,955
8,013
51,875
948
-
-
100,791
Aquisition of shares (1)
-
-
-
-
-
2,351,319
2,351,319
Equity in results
4,980
(2)
132
(3,683)
-
38,238
39,665
Exchange rate changes (2)
-
-
-
-
-
(133,238)
(133,238)
Other comprehensive income of
foreign associate
-
-
-
-
-
5,257
5,257
Realization of the revaluation
reserve
-
-
(580)
-
-
-
(580)
Capital increase
-
-
-
3,083
-
-
3,083
Dividends received
-
-
-
-
-
(13,251)
(13,251)
At December 31, 2010
44,935
8,011
51,427
348
-
2,248,325
2,353,046
Equity in results
4,693
709
1,071
(527)
303
156,474
162,723
Exchange rate changes (2)
-
-
-
74
31
297,173
297,278
Other comprehensive income of
foreign associate
-
-
-
-
-
4,321
4,321
Realization of the revaluation
reserve
-
-
(439)
-
-
-
(439)
Capital increase
-
-
-
751
682
-
1,433
Dividends received
-
-
-
-
-
(32,907)
(32,907)
At December 31, 2011
49,628
8,720
52,059
646
1,016
2,673,386
2,785,455
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
38
(1)
As from July 2010, with the acquisition of a 3.2% interest in CME Group for the amount of
R$1,075,119, increasing the ownership interest from 1.8% to 5%, BM&FBOVESPA began to
recognize the investment on the equity method in accordance with CPC 18/IAS 28, because
management understands that the qualitative aspects of the relationship between the two
companies indicate the existence of significant influence of BM&FBOVESPA over CME Group.

The fair value of the investment at December 31, 2011, based on the market price of shares, is
R$1,552,022. Due to the decrease in the value of the shares of CME Group, the management of
BM&FBOVESPA performed an impairment test. The result of the test did not reveal the need for
recognition of impairment on the investment in CME Group at December 31, 2011.

For the impairment analysis, management used the discounted cash flow method. Based on
expectations for growth in markets where CME operates, the projected cash flow considers
revenues and expenses related to its activities in nominal dollars.

The operational flows were projected for the next five years, from January 2012 to December
2016. The cash flows were projected into perpetuity using the growth rate expected for nominal
GDP in U.S. long-term, of 4.81% a year. The pre-tax discount rate utilized to calculate the present
value of projected flows was 14.78% per year.

The two main variables that affect the value in use calculated for the investment are the discount
rates and growth in perpetuity. Sensitivity analyzes show that an increase of 0.25 percentage
points (25bps) in the discount rate before tax (from 14.78% to 15.03% per year) reduces the value
in use by 2.65%, while a reduction of 0.25 percentage points (25bps) in the perpetuity growth rate
(from 4.81% to 4.56% per year) reduces the value in use by 3.60%. The value in use has a lower
sensitivity to variations in projected net income. Considering a reduction in average annual
revenue growth by 1 percentage point (100bps) in the period from 2012 to 2016, the recoverable
amount is reduced by 4.90%. In none of these three scenarios has there been the need for
impairment of the asset.
(2)
In July 2010, BM&FBOVESPA issued debt abroad to protect part of the translation risk on the
investment in CME (hedge of net investment) through the designation of a non-derivative
financial instrument (debt issuance abroad) as a hedge, as presented in Note 12. We present below
the sensitivity analysis to exchange rate variations for the non hedged portion of the investment
in CME Group:









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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
39
Impact on other comprehensive income
Falling dollar
Higher dollar
-50%
-25%
12/31/2011
25%
50%
Exchange rate
0.9379
1.4069
1.8758
2.3448
2.8137
Exchange variation on foreign investment
in foreign associate
(1,012,370)
(360,508)
297,278
943,215 1,595,077
Exchange variation on hedge of foreign net
investment
445,720
158,722
(128,275) (415,273) (702,270)
Tax effect of exchange variation on hedge
of foreign net investment
(151,545)
(53,966)
43,613
141,193
238,772
Net effect
(718,195)
(255,752)
212,616
669,135 1,131,579
(3)
Refers to recoverble tax paid by the foreign affiliate, according to the Law 9.249/95 and
Normative Instruction 213/02 of the Federal Revenue Secretariat of Brazil.
b.
Investment property

This category comprises properties owned by the subsidiary BVRJ - Bolsa de Valores do Rio de
Janeiro rented, which are depreciated according to the estimated useful life of the asset of 25 years.
Consolidated
At December 31, 2009
39,723
Depreciation
(1,511)
At December 31, 2010
38,212
Depreciation
(1,512)
At December 31, 2011
36,700




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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
40
8
Property and Equipment
BM&FBOVESPA
Buildings
Furniture
and
fixtures
Computer-
related
equipment
Facilities
Telephone
system
Other
Construction
in progress
Total
December 31, 2009
107,534
12,500
69,118
19,023
1,906
26,860
-
236,941
Aditions
13,046
4,111
107,036
25,007
187
4,073
12,737
166,197
Disposal
(965)
-
-
-
-
-
-
(965)
Depreciation
422
(1,992)
(32,246)
(2,882)
(526)
(2,549)
-
(39,773)
Total
120,037
14,619
143,908
41,148
1,567
28,384
12,737
362,400
December 31, 2010
Cost
219,151
40,641
312,509
54,083
4,119
68,655
12,737
711,895
Accumulated Depreciation
(99,114)
(26,022)
(168,601)
(12,935)
(2,552)
(40,271)
-
(349,495)
Total
120,037
14,619
143,908
41,148
1,567
28,384
12,737
362,400
Aditions
115
2,371
18,103
5,402
182
5,287
13,985
45,445
Disposal
(597)
(67)
(282)
4
(6)
(809)
-
(1,757)
Reclassification (Note 9)
183
1,224
6,373
5,191
67
692
(4,918)
8,812
Transfer to investment property
available for sale
(553)
-
-
-
-
-
-
(553)
Depreciation
(2,210)
(2,137)
(50,514)
(4,709)
(332)
(1,855)
-
(61,757)
Total
116,975
16,010
117,588
47,036
1,478
31,699
21,804
352,590
December 31, 2011
Custo
217,367
43,714
334,027
64,676
4,344
72,826
21,804
758,758
Depreciação acumulada
(100,392)
(27,704)
(216,439)
(17,640)
(2,866)
(41,127)
-
(406,168)
Total
116,975
16,010
117,588
47,036
1,478
31,699
21,804
352,590












background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
41
Consolidated
Buildings
Furniture
and fixtures
Computer-
related
equipment
Facilities
Telephone
system
Other
Construction
in progress
Total
December 31, 2009
109,232
12,684
69,276
19,618
1,906
29,223
- 241,939
Aditions
13,046
4,112
107,043
25,007
187
4,084
12,737 166,216
Disposal
(965)
(5)
9
(1)
-
(4)
-
(966)
Depreciation
336
(2,031)
(32,301)
(2,984)
(526)
(2,549)
-
(40,055)
Total
121,649
14,760
144,027
41,640
1,567
30,754
12,737
367,134
December 31, 2010
Cost
221,488
41,159
313,412
55,113
4,119
71,087
12,737 719,115
Accumulated Depreciation
(99,839)
(26,399)
(169,385)
(13,473)
(2,552)
(40,333)
- (351,981)
Total
121,649
14,760
144,027
41,640
1,567
30,754
12,737
367,134
Additions
115
2,388
18,137
5,412
182
5,378
13,985 45,597
Disposal
(598)
(92)
(312)
4
(6)
(811)
-
(1,815)
Reclassification (Note 9)
182
1,224
6,373
5,192
67
692
(4,918) 8,812
Transfer to assets available for sale
(553)
-
-
-
-
-
-
(553)
Depreciation
(2,296)
(2,179)
(50,553)
(4,785)
(332)
(1,866)
- (62,011)
Total
118,499
16,101
117,672
47,463
1,478
34,147
21,804
357,164
December 31, 2011
Custo
219,703
44,236
334,930
65,717
4,344
75,351
21,804 766,085
Depreciação acumulada
(101,204)
(28,135)
(217,258)
(18,254)
(2,866)
(41,204)
- (408,921)
Total
118,499
16,101
117,672
47,463
1,478
34,147
21,804
357,164
During 2011, BM&FBOVESPA incorporated, as part of the cost of development projects, the amount
of R$10,475 related to the depreciation of equipment used in developing these projects.
Properties with a carrying value of approximately R$39,534 were pledged as collateral in lawsuits.
BM&FBOVESPA is not allowed to assign these assets as collateral for other lawsuits or sell them.

Annual rates of depreciation of fixed assets at December 31, 2011 and 2010
:
Buildings
2.5%
Furniture and fixtures
10%
Computer devices and equipment
10 to 25%
Facilities
10%
Telephone system
20%
Other
11% to 33%
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
42
9
Intangible Assets

Goodwill

The goodwill of R$16,064,309 is attributed to expected future profitability, supported by an
economic and financial appraisal of the investment
.
According to the guidelines of CPC 01/IAS 36,
the goodwill must be tested annually for impairment, or more frequently when there are indicators
that impairment may have occurred. Goodwill is stated at cost less accumulated impairment losses.
Impairment losses recognized on goodwill are not reversed.

BM&FBOVESPA uses external and independent experts to assist in measuring the recoverable
amount of the asset (ie, its value in use). The report submitted by the experts did not reveal the need
for adjustments to the value of goodwill at December 31, 2011.

Based on expectations of growth of the Bovespa segment, the projected cash flow considers revenues
and expenses related to activities of the segment (CGU ­ Bovespa). The period of projection of these
flows extends from December 2011 to December 2020. The perpetuity is obtained by extrapolating
the last year's cash flow by an equivalent expected long-term growth rate for nominal GDP of 8.7%
per year.

The management uses a projection period of ten years based on the perception that the Brazilian
capital market, in the equity segment, should experience sustained growth until reaching maturity in
the long-term.

To determine the present value of the projected flow, the experts used an average pre-tax discount
rate of 18.84% per year from December 2011 until December 2014. Afterwards, the discount rate
stabilizes at 18,1% a year, capturing the inflationary expectations of the period.

The two main variables that affect the value in use calculated are the estimated discount rates and
growth in perpetuity. The management of BM&FBOVESPA conducted sensitivity analysis to
determine the impacts of changes in these variables on the calculated value in use. The discount rate
equivalent before taxes for the entire period is 18.50% per annum, and an increase of 0.5 percentage
points (50bps) in this rate (from 18.50% to 19% per annum) reduces the value in use by 3.8%.
Regarding the growth rate in perpetuity, a reduction of half percentage point (50bps) in the rate (from
8.7% to 8.2% per annum) reduces the value in use by 4.48%. The value in use has a lower sensitivity
to changes in net revenue. Considering a reduction in average annual revenue growth by 2 percentage
points (200bps) in the period between December 2011 and December 2020, the value in use is
reduced by 11.62%. In none of these three scenarios has there been the need for impairment of the
asset.


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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
43
Software and projects

The balance comprises costs for the acquisition of licenses and development of software and systems,
with amortization rates of 20% to 33% per year, and expenditures for the implementation and
development in progress of new systems and software.
BM&FBOVESPA
Consolidated
Goodwill
Cost of software
development
Concluded software
development
Software
Total
Total
At December 31, 2009
16,064,309
43,631
-
20,361
16,128,301
16,128,332
Aditions
-
38,721
-
68,459
107,180
107,180
Disposal
-
(4,802)
-
-
(4,802)
(4,802)
Amortization
-
-
(617)
(12,620)
(13,237)
(13,252)
Other
-
(13,619)
10,199
1,865
(1,555)
(1,555)
Total
16,064,309
63,931
9,582
78,065
16,215,887
16,215,903
At December 31, 2010
Cost
16,388,730
63,931
10,199
178,994
16,641,854
16,641,928
Accumulated Amortization
(324,421)
-
(617)
(100,929)
(425,967)
(426,025)
Total
16,064,309
63,931
9,582
78,065
16,215,887
16,215,903
Aditions (1)
-
126,894
43
66,791
193,728
193,728
Disposal
-
(7,997)
(107)
(2,069)
(10,173)
(10,172)
Reclassification (Note 8)
-
(55,496)
46,992
(308)
(8,812)
(8,812)
Amortization
-
-
(3,360)
(33,146)
(36,506)
(36,520)
Total
16,064,309
127,332
53,150
109,333
16,354,124
16,354,127
At December 31, 2011
Cost
16,388,730
127,332
57,082
242,796
16,815,940
16,817,154
Accumulated Amortization
(324,421)
-
(3,932)
(133,463)
(461,816)
(463,027)
Total
16,064,309
127,332
53,150
109,333
16,354,124
16,354,127
(1)
Projects in progress refer mainly to the development of a new electronic trading platform for different
types and classes of assets, and the development of a new business and IT architecture to support the
integration of post-trade infrastructure.
In fiscal 2011, the BM&FBOVESPA incorporated, as part of the cost of development projects, the
amount of R$14,360 related to the depreciation of equipment used in developing these projects.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
44
10
Earnings and Rights on Securities in Custody

These comprise dividends and interest on capital received from listed companies, which will be
transferred to the custody agents and subsequently to their clients, who are the owners of the shares.
11
Provision for Taxes and Contributions Payable
BM&FBOVESPA
Details
2011
2010
Taxes and contributions withheld at source
14,175
6,066
PIS/Cofins
14,973
15,490
ISS (Municipal service tax)
1,860
2,127
Total
31,008
23,683
Consolidated
Details
2011
2010
Taxes and contributions withheld at source
14,816
6,209
PIS/Cofins
15,100
15,607
ISS (Municipal service tax)
1,898
2,165
Total
31,814
23,981
12
Issuance of debt abroad and loans

On July 16, 2010 BM&FBOVESPA concluded the issuance of senior unsecured notes, with face
value of US$612 million, priced at 99.635% of nominal value, resulting in a net inflow of US$609
million (equivalent at the time to R$1,075,323). The interest rate is 5.50% p.a., payable half-yearly in
January and July, and the principal amount is due on July 16, 2020. The effective rate was 5.64% p.a.,
which includes the discount and other costs related to issuance.

The updated balance of the borrowing on December 31, 2011 is R$1,172,225 (R$1,040,238 at
December 31, 2010), which includes the amount of R$33,566 (R$30,179 at December 31,2010) of
accrued interest. The proceeds from the offering were used to purchase shares of the CME Group at
that same date.

The notes have an early partial or total redemption clause, at the option of BM&FBOVESPA, for the
greater of: (i) principal plus interest accrued to date and (ii) interest accrued to date plus the present
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
45
value of the remaining cash flows, discounted at the rate applicable to U.S. Treasuries for the
remaining term plus 0.40% per annum. (40 basis points).

These notes have been designated as a hedging instrument for the part equivalent of US$612 million
(notional) of the investment in CME Group Inc. (Note 7), in order to hedge the foreign exchange risk.
Thus, the BM&FBOVESPA has adopted hedge accounting for net investment in accordance with the
provisions of CPC 38/IAS 39.

Accordingly, BM&FBOVESPA prepared the formal designation of the hedges by documenting: (i)
the objective of the hedge, (ii) type of hedge, (iii) the nature of the risk being hedged, (iv) the hedged
item, (v) the hedging instrument, (vi) the correlation of the hedge and the hedged item (retrospective
effectiveness test) and (vii) the prospective test.

The application of the effectiveness tests described in Note 3 (d) (iv) did not reveal ineffectiveness
during the year December 31, 2011.

The fair value of the debt, calculated using market data, is R$1,190,534 at December 31, 2011 (2010
­ 1,037,774) (Source: Bloomberg).

Additionally, BM&FBOVESPA has finance leases for computer equipment. The total amount
outstanding at December 31, 2010 was R$2,975.

13
Other liabilities
BM&FBOVESPA
Details
2011
2010
Custody agents
4,848
4,413
Liability for purchase of treasury shares
-
6,470
Amounts payable - related parties (Note 16)
358
2,652
Outsourced services
7,931
2,081
Payable for redemption of preferred shares
1,839
1,839
Electricity, water and telephone
717
705
Other
5,236 6,579
Total
20,929
24,739




background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
46

Consolidated
Details
2011
2010
Custody agents
4,848 4,413
Liability for purchase of treasury shares
- 6,470
Demand deposits (1)
59,165 50,373
Liabilities for securities purchased under resell
agreements (2)
118,350
141,988
Outsourced services
8,138 2,239
Payable for redemption preferred shares
1,839 1,839
Electricity, water and telephone
717 705
Other
6,382 8,118
Total
199,439
216,145
(2)
Refer to deposits held by corporations at Banco BM&F with the sole purpose for settlement of clearing
operations held within the BM&FBOVESPA and Selic - Special System for Settlement and Custody
pursuant to Central Bank Circular Letter No. 3196 of July 21, 2005
(3)
Refers to repurchase agreements of Banco BM&F, maturing at January 2, 2012 and backed by Financial
Treasury Bills (LFT) and National Treasury Bills (LTN) (2010 - consisting of repurchase agreements
maturing at January 3, 2011, backed by LFT and LTN)
14
Provisions and contingent liabilities and assets
a.
Contingent assets

BM&FBOVESPA has no contingent assets recognized in its balance sheet, and at present no
lawsuits which are expected to give rise to future gains.
b.
Contingent liabilities

BM&FBOVESPA and its subsidiaries are defendants
in a number of labor, tax and civil lawsuits
in the course of their normal operating activities.

The lawsuits are classified by their probability of loss (probable, possible or remote), based on an
evaluation by BM&FBOVESPA and its legal advisors, using parameters such as previous
judgments and the history of loss in similar litigation.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
47
The lawsuits in which the loss is evaluated as probable mainly comprise the following:
Labor claims mostly related to filed by ex-employees of BM&FBOVESPA and employees of
outsourced service providers, on account of alleged noncompliance with labor legislation.
There are also claims filed by former BVRJ employees, specifically as regards to
noncompliance with rules related to collective bargaining agreements;
Civil proceedings, mainly relate to aspects of civil liability for losses and damages.
Tax cases are mainly relate to the incidence of PIS and Cofins on (i) BM&FBOVESPA
revenues and (ii) receipt of interest on equity own Capital.
c.
Legal obligations

These are almost entirely proceedings in which BM&FBOVESPA seeks exemption from social
security additional contributions on payroll and payments to self-employed professionals, as well
as discussions about the legality of Labor Accident Insurance (SAT).
d.
Changes in balances

The activity in provisions for contingencies and legal obligations may be summarized as follows:
BM&FBOVESPA
Civil
Labor
Legal
obligations
Tax
Total
At December 31, 2009 (2)
3,671
4,108
28,608
11,823
48,210
Provisions charged
64
1,428
3,163
-
4,655
Reversals
(25)
(463)
-
-
(488)
Reassessment of contingent risks
51
160
-
-
211
Interest
441
562
1,252
957
3,212
At December 31, 2010 (2)
4,202
5,795
33,023
12,780
55,800
Provisions charged
31
1,224
5,522
-
6,777
Reversals (1)
(61)
(91)
(11,276)
-
(11,428)
Reassessment of contingent risks
(100)
(497)
-
-
(597)
Interest
420
690
1,310
1,358
3,778
At December 31, 2011 (2)
4,492
7,121
28,579
14,138
54,330


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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
48

Consolidated
Civil
Labor
Legal
obligations
Tax
Total
At December 31, 2009 (2)
4,227
4,458
28,608
12,154
49,447
Provisions charged
105
1,538
3,163
-
4,806
Reversals
(36)
(490)
-
-
(526)
Reassessment of contingent risks
(500)
80
-
-
(420)
Interest
449
610
1,252
972
3,283
At Decmeber 31, 2010 (2)
4,245
6,196
33,023
13,126
56,590
Provisions charged
3,624
1,717
5,522
-
10,863
Reversals (1)
(107)
(568)
(11,276)
-
(11,951)
Reassessment of contingent risks
(100)
(193)
-
-
(293)
Interest
586
763
1,310
1,376
4,035
At December 31, 2011 (2)
8,248
7,915
28,579
14,502
59,244
(1)
Included in the reversals is the conclusion of a lawsuit that confirmed that additional social security
contributions are not due on (i) payroll and (ii) payments to self-employed individuals, amounting to
a reversal of R$11,276 in October 2011, and respective release of judicial deposits (Note 14 (g)).
(2)
Due to the nature of the provisions, the timing of cash disbursement is not currently known.
e.
Possible losses
The proceedings classified as a "possible loss" are so classified as a result of uncertainties
surrounding their outcome. They are lawsuits for which jurisprudence has not yet been defined or
which still depend on verification and analysis of the facts, or even involve specific aspects that
reduce the chances of loss.

BM&FBOVESPA and its subsidiaries have tax, civil and labor lawsuits involving risks of loss
classified by management as possible, based on the evaluation of their legal advisors, for which
no provision has been recorded. These proceedings comprise mainly the following:
Labor proceedings, mostly related to claims filed by ex-employees of BM&FBOVESPA and
employees of outsourced service providers, on account of alleged noncompliance with labor
legislation. The lawsuits classified as possible losses at December 31, 2011 total R$58,841 in
BM&FBOVESPA (R$32,749 at December 31, 2010) and R$60,849 on a consolidated basis
(R$34,609 at December 31, 2010);
Civil proceedings mainly relate to aspects of civil liability for losses and damages. The total
amount involved in the lawsuits classified as possible losses at December 31, 2011 total
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
49
R$70,102 in BM&FBOVESPA and on a consolidated basis (R$74,386 at December 31,
2010).
This amount is almost entirely related to the possibility of being required to deliver shares of
BM&FBOVESPA (surviving company of the merger with BM&F S.A.), corresponding to the
shares resulting from the conversion of the membership certificate of a commodities broker in
the former BM&F, or indemnify the corresponding amount, if the cancellation of the
certificates in the former BM&F is found to be illegal, as alleged by a commodities broker in
bankruptcy;
The tax cases of BM&FBOVESPA and its subsidiaries mainly involve a dispute over the
classification of exchanges as subject to the payment of social contributions. Most of these
amounts are related to two lawsuits filed by BM&FBOVESPA against the Federal
Government arguing that it should not be subject to the payment of social contributions prior
to the 1999 fiscal year. The amount involved in the aforementioned proceedings as of
December 31, 2011 is R$48,332 (R$45,085 at December 31, 2010). The total amount
involved in tax proceedings classified as possible losses is R$76,697 in BM&FBOVESPA
and on a consolidated basis (R$70,141 at December 31, 2010).
f.
Remote losses
BM&FBOVESPA, as successor of the former BOVESPA, and the subsidiary BVRJ are
defendants in an action for tangible damages and pain and suffering filed by Mr. Naji Robert
Nahas, Selecta Participações e Serviços SC Ltda. and Cobrasol - Companhia Brasileira de Óleos
e Derivados, on the grounds of alleged losses in the stock market sustained in June 1989. The
amount attributed to the cause by the plaintiffs is R$10 billion. In relation to the tangible damages
and pain and suffering claimed, the plaintiffs ask that BVRJ and BM&FBOVESPA be sentenced
in proportion to their responsibilities. On December 18, 2009, a sentence was published in which
the claims made by the plaintiffs were considered completely unfounded. BM&FBOVESPA and
its legal advisors consider that the chances of loss in this lawsuit are remote.
BM&FBOVESPA received on November 29, 2010, an assessment notice from the Internal
Revenue Service of Brazil ("RFB"), demanding the payment of income tax (R$301,686 of
principal, plus fines and interest) and social contribution (R$108,525 of principal, plus fines and
interest) representing the amount of those taxes that, in the view of the RFB, BM&FBOVESPA
underpaid in the years 2008 and 2009 with respect to the amortization for tax purposes of the
goodwill generated upon the merger Bovespa Holding SA, approved at the General Assembly of
May 8, 2008. During October 2011, the RFB Judgement Office in São Paulo issued a decision on
the challenge presented by BM&FBOVESPA, maintaining, in substance, the assessment notice.
BM&FBOVESPA appealed to the Board of Tax Appeals on November 21, 2011, which will
render a final administrative decision on the legality of amortization of goodwill for tax purposes.
Based on the advice of its lawyers, BM&FBOVESPA considers that the risk of loss associated
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
50
with this tax matter is remote and will continue to amortize the goodwill for tax purposes, as
provided for by law.
g.
Judicial deposits
BM&FBOVESPA
Consolidated
Details
2011
2010
2011
2010
Legal obligations
28,838
33,023
29,202 33,370
Tax
58,819
54,103
58,819 54,103
Civil
4,459
2,096
4,459 2,095
Labor
2,062
2,667
2,568 2,810
Total
94,178
91,889
95,048
92,378
Of the total judicial deposits, (i) R$41,704 (R$38,139 at December 31, 2010) relates to the processes
involving the dispute over the classification of exchanges as subject to the payment of social
contributions, assessed as possible by management, as described in "e" above and (ii) R$10,201
(R$9,366 at December 31, 2010) refers to cases regarding PIS and Cofins on interest on own capital
received. Of the total deposits relating to legal obligations R$29,201(R$32,594 at December 31,
2010) relates to processes in which BM&FBOVESPA claims the non-incidence of additional social
security on payroll contributions and payments to self-employed professionals, and to questions about
the legality of charging Occupational Accident Insurance.
Due to the existence of judicial deposits related to tax processes classified as possible losses, the total
tax contingencies and legal obligations are less than the total deposits related to tax claims.
h.
Law 11,941/09

In November 2009, BM&FBOVESPA enrolled in the Tax Recovery Program, instituted by Law
11,941/09 and Provisional Measure (MP) 470/09, with a view to settling the amount of R$2,365,
related to a portion of the amount disputed in the COFINS case, deposited in court and
constituted as probable loss contingency. The amount of R$2,151 will be released to the
government and R$214 to BM&FBOVESPA, representing a discount of 45% in arrears interest,
as permitted by the legislation. The provision remains in effect until the approval of the request to
partially withdraw the lawsuit, because this is a condition for the settlement of the debt pursuant
to the Tax Recovery Program.


background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
51
15
Equity
a.
Capital
At Meeting in December 13, 2011, the Board approved the cancellation of 64,014,295 shares of
BM&FBOVESPA's held in treasury (Note 15 (b)) which were acquired under the share
repurchase programs. As a result of such cancellation, the capital of BM&FBOVESPA at the
amount of R$2,540,239, is now presented by 1,980,000,000 nominative common shares with
voting rights and no par value, of which 1,927,991,988 outstanding at December 31, 2011
(1,979,921,193 at December 31, 2010.)

BM&FBOVESPA is authorized to increase its capital up to the limit of 2,500,000,000 (two
billion, five hundred million) common shares, through a resolution of the Board, without any
amendment of the bylaws.
b.
Treasury shares
Share buyback program

In a meeting held on August 12, 2010, the Board of Directors approved a Share Buyback
Program.
On December 16, 2010, the Board approved the extension of the Repurchase Program,
with the final date of June 30, 2011.

BM&FBOVESPA repurchased the expected number of 60,000,000 common shares during the
period from August 18, 2010 to June 30 2011, comprising 31,950,000 in 2010 and 28,050,000 in
the first half of 2011.

At a meeting held on June 16, 2011, the Board of Directors approved a new Share Buyback
Program, starting July 1, 2011 and matured at December 31, 2011. At December 13, 2011, it
was approved by the Board the extension of for this program for 6 months, ending on June 30,
2012. The limit of shares to be acquired by the Company is 60,000,000 common shares,
representing 3.11% of total outstanding shares.

Until December 31, 2011 BM&FBOVESPA repurchased 29,552,500 shares, which represented
1.53% of total outstanding shares.
The shares acquired under the Share Buyback Program may be canceled or used to in connection
with the exercise of the stock options by the beneficiaries of the Stock Option Plan of the
BM&FBOVESPA.
We present below the activity of treasury shares during the year:
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
52
Quantity
Amount
At December 31, 2009
39,247,983
230,102
Acquisition of shares - Share Buyback
Program
31,950,000
435,115
Shares sold - stock options (Note 18)
(7,104,881)
(51,314)
At December 31, 2010
64,093,102
613,903
Acquisition of Shares - Share Buyback
Program
57,602,500
606,889
Shares sold - stock option (Note 18)
(5,673,295)
(57,284)
Cancellation of shares (Note 15 (a))
(64,014,295)
(641,955)
At December 31, 2011
52,008,012
521,553
Average cost of treasury shares (R$)
10.028
Market value of treasury shares
509,679
c.
Revaluation reserves
Revaluation reserves were established as a result of the revaluation of works of art in
BM&FBOVESPA and of the properties of the subsidiary BVRJ on August 31, 2007, based on
independent experts' appraisal reports.

d.
Capital Reserve
Refers substantially to amounts created from the merger of Bovespa Holding shares in 2008, and
other corporate events permitted by the Corporation Law, such as (i) capital increase through
merger, (ii) redemption, repayment or purchase of shares, and (iii) events associated with the
stock option plan.

e.
Revenue reserves
i.
Legal Reserve
The legal reserve is established annually by allocation of 5% of net income and cannot exceed
20% of the capital. The legal reserve is intended to ensure the integrity of the capital and can only
be used to offset losses and increase capital.
ii.
Statutory reserve
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
53

These reserves represent funds and safeguard mechanisms required for the activities of
BM&FBOVESPA, in order to ensure the proper settlement and reimbursement of losses arising
from the intermediation of transactions carried out in its trading sessions and/or registered in any
of its trading, registration, clearing and settlement systems, and from custody services.
Pursuant to the bylaws, the Board of Directors may, when the amount of statutory reserves is
sufficient to meet its objectives, propose that parts of the reserve be reversed for distribution to
the shareholders of the Company.
f.
Valuation adjustments
The purpose of the valuation adjustments is to record the effects of (i) currency translation
adjustments of the investment in the CME Group, (ii) hedge accounting for net foreign
investment, (iii) share of other comprehensive income of an associate and (iv) up to July 30,
2010, effects of mark-to-market adjustments of the shares of the CME Group (Note 7).

g.
Dividends and interest on own capital
Pursuant to the bylaws, the shareholders are guaranteed interest on own capital or dividends,
based on the net profit, adjusted in accordance with the corporate law, at a minimum percentage
of 25%.
2011
2010
Net income
1,047,999
1,144,561
Legal reserve constitution (1)
-
-
Basis of calculation of dividends
1,047,999
1,144,561
Dividends
535,546
840,561
Interest on own capital
150,000
304,000
Total declared in the year
685,546
1,144,561

(3)
Legal reserve constitution not required on the basis of its value added to the value of other
capital reserves exceeds 30% of the capital
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at December 31, 2011
(All amounts in thousands of reais, unless otherwise stated)
54
Interest on own capital and dividends declared in respect to the results of the current period are
detailed below:
Details
Declaration
Payment
Per share
(gross) (R$)
Total
amount
(gross)
Interest on own capital
2/23/2010
3/11/2010
0.014951
30,000
Interest on own capital
3/25/2010
4/13/2010
0.029890
60,000
Interest on own capital
5/11/2010
5/27/2010
0.068231
137,000
Interest on own capital
8/12/2010
9/10/2010
0.022422
45,000
Dividends
8/12/2010
9/10/2010
0.098957
198,600
Dividends
11/9/2010
11/25/2010
0.119101
235,875
Interest on own capital
12/16/2010
1/19/2011
0.016156
32,000
Dividends
02/17/2011
5/16/2011
0.207025
406,086
Total proposed/ declared in 2010
1,144,561
Interest on own capital
2/17/2011
3/10/2011
0.025461
50,000
Interest on own capital
5/12/2011
7/5/2011
0.051128
100,000
Dividends
5/12/2011