International Securities Exchange Reports Record Earnings; Net Income up 40.1%, Average Daily Volume up 37.6%

The International Securities Exchange (NYSE:ISE)

   First Quarter Financial Highlights

   --  GAAP Diluted Earnings Per Share of $0.32

   --  Non-GAAP Diluted Earnings Per Share of $0.33 which excludes
        expenses related to the ISE Stock Exchange

   --  Net income increases 40.1% to $12.4 million

   --  Average daily trading volume up 37.6% to 2.4 million equity
        and index options contracts

   --  Revenues up 28.9% to $47.5 million

   --  Pre-tax margin of 53.3%

   The International Securities Exchange (NYSE:ISE) today reported
that net income for the quarter ended March 31, 2006 increased 40.1%
to a record $12.4 million, or $0.32 per share on a fully diluted
basis. This compares to $8.9 million, or $0.25 per share on a fully
diluted basis, in the same period in 2005.
   Non-GAAP net income, which excludes incremental costs related to
the development of our recently announced equities exchange business,
the ISE Stock Exchange, was $12.9 million, or $0.33 per share on a
fully diluted basis. A full reconciliation of GAAP to non-GAAP results
is included in this release.
   Total revenues for the quarter increased 28.9% to $47.5 million
versus $36.9 million in the prior year. Gross margin, or total
revenues less cost of revenues, increased 25.0% to $41.6 million as
compared to $33.3 million in the first quarter of 2005. The average
daily volume of equity and index options contracts traded increased
37.6% to 2.4 million contracts as compared to 1.7 million contracts in
the year-ago quarter.
   "We delivered another strong performance in the first three months
of 2006 as our average daily volume exceeded two million contracts for
the second consecutive quarter," said David Krell, ISE's President and
Chief Executive Officer. "The double digit growth in our core options
business fueled a 40% increase in net income once again reflecting the
operating leverage that is inherent in our business. We also continued
to post strong cash flow which we now share with our stockholders by
virtue of the implementation of the dividend policy that we announced
last year."
   "During the quarter, we made further progress in executing our
strategy to grow our Information and Market Data products. In January,
we announced the launch of a new market data product which provides
historical market data to traders and investors to improve the
effectiveness of their respective trading strategies. This product is
the latest offering in our suite of market data products which will
soon expand to include depth-of-book and enhanced sentiment market
data offerings. Additional introductions of new products in this area
will enable us to monetize the significant amount of proprietary data
that we store in the normal course of our operations," added Krell.

   First Quarter Results

   Revenues

   Total revenues for the first quarter of 2006 increased 28.9% to
$47.5 million principally due to increased trading volumes. This
compares to revenues of $36.9 million in the same period last year.

   --  Transaction fee revenues increased 38.0% to $36.9 million in
        the first quarter from $26.7 million last year due to
        increased trading volumes. Our net transaction fee revenues,
        which exclude activity remittance fees and ETF and license
        fees, increased 33.9% to $30.9 million from $23.1 million in
        the same period last year.

   --  Other member fees increased 1.4% to $5.6 million from $5.5
        million in the same period last year primarily due to the sale
        of four additional Class B-2 memberships since the first
        quarter of last year.

   --  Market data revenues increased 9.3% to $5.1 million as
        compared to $4.6 million last year due to increased profit
        generated by OPRA. Our revenue is based on our pro rata share
        of total industry trades.

   Cost of Revenues

   --  Cost of revenues for the first quarter of 2006 increased 64.3%
        to $6.0 million compared to $3.6 million in the first quarter
        of 2005 primarily due to a $1.6 million increase in activity
        remittance fees that we pay to the SEC and a $0.7 million
        increase in license fees associated with the increased volumes
        of certain ETFs and our equity index products.

   Expenses

   Total expenses for the first quarter of 2006 increased 22.6% to
$21.0 million as compared to $17.2 million in the first quarter of
2005. Included in our expenses are incremental costs related to the
development of the ISE Stock Exchange of $0.9 million for the first
quarter of 2006 and $0.1 million for the first quarter of 2005.
Excluding these costs, our expenses increased 18.1% year over year.

   --  Compensation and benefits expenses increased 38.2% to $11.4
        million from $8.2 million primarily due to a full quarter's
        effect of our stock-based compensation program and increased
        headcount to support our overall growth and new initiatives
        including the ISE Stock Exchange. In total, headcount
        increased to 189 from 164 last year.

   --  Technology and communications expenses increased 4.0% to $3.5
        million compared to $3.4 million in the first quarter of 2005
        primarily due to fees paid to OMX for additional enhancements
        and maintenance and other costs related to our core trading
        system.

   --  Occupancy expenses increased 19.3% to $1.3 million primarily
        due to additional office space leased to support the growth of
        our core options business as well as the ISE Stock Exchange.

   --  Professional fees increased 9.5% to $1.6 million primarily due
        to higher accounting fees related to public company matters
        and higher technology consulting fees related to the ISE Stock
        Exchange.

   --  Marketing and business development expenses increased 6.1% to
        $0.6 million.

   --  Depreciation and amortization expenses increased 1.3% to $1.5
        million.

   --  Other expenses increased 34.3% to $1.0 million primarily due
        to increased insurance expenses subsequent to our initial
        public offering and other general and administrative expenses.

   --  Reorganization costs decreased 76.5% to $24.0 thousand as
        compared to $102.0 thousand last year that resulted from our
        decision to reorganize into a holding company structure.

   Income, Margins and Taxes

   Pre-tax income increased 35.0% to $22.2 million versus $16.4
million last year. Included in pre-tax income is interest and
investment income which increased to $1.6 million compared to $0.3
million primarily due to higher cash balances. Our pre-tax margin for
the first quarter increased to 53.3% from 49.4% last year. Excluding
incremental costs related to the ISE Stock Exchange, our pre-tax
margins increased to 55.5% from 49.7% last year.
   Our tax rate decreased to 44.0% for the first quarter as compared
to 46.0% last year primarily due to a lower tax rate on returns from
our invested cash.
   Net income for the first quarter increased 40.1% to $12.4 million
from $8.9 million in the prior year quarter. Excluding incremental
costs related to the ISE Stock Exchange, net income increased 44.9% to
$12.9 million from $8.9 million in the prior quarter.

   Balance Sheet

   As of March 31, 2006, ISE had cash and cash equivalents of $179.3
million, total assets of $289.1 million, and stockholders' equity of
$199.2 million. There were approximately 39.3 million shares of common
stock outstanding on a fully diluted basis.
   The Company recorded minority interest of $2.9 million as of March
31, 2006, representing interest of a minority shareholder in the
Company's subsidiary Longitude LLC.

   First Quarter Business Highlights

   --  ISE was the largest equity options exchange for the first
        quarter of 2006 based on total equity options trading.

   --  ISE set a new monthly average daily volume record of 2.7
        million equity and index options contracts traded for the
        month of January and a new average daily volume record of 2.4
        million equity and index options contracts traded for the
        quarter.

   --  ISE set a new daily trading volume record of 4.6 million
        equity and index options contracts on January 20, 2006.

   --  In March 2006, ISE declared and paid a quarterly dividend of
        $0.05 per outstanding share of its Class A Common Stock.

   --  On January 24, 2006, ISE announced the launch of a new market
        data offering that provides comprehensive historical market
        data.

   --  On March 24, 2006, the Company acquired the intellectual
        property and other related assets of Longitude, Inc., inventor
        of a proprietary and patented technology that uses parimutuel
        principles to run derivatives auctions that aggregate
        liquidity and produce fair and efficient market-driven prices.
        The new entity, Longitude LLC, became an operating unit of
        ISE, which retains majority-ownership in partnership with
        Goldman Sachs. Goldman Sachs had a pre-existing interest in
        the entity which it is increasing as a result of the
        transaction.
-0-
*T
                INTERNATIONAL SECURITIES EXCHANGE, INC.
                   CONSOLIDATED STATEMENTS OF INCOME
               (in thousands, except per share amounts)
                              (unaudited)

                                                   Three Months Ended
                                                   March 31, March 31,
                                                     2006      2005
                                                   --------- ---------

Revenues:
Transaction fees                                    $36,867   $26,714
Other member fees                                     5,622     5,546
Market data                                           5,055     4,625
                                                   --------- ---------
 Total revenues                                      47,544    36,885

Cost of revenues:
Activity remittance fees                              4,345     2,702
License fees                                          1,625       931
                                                   --------- ---------
 Total cost of revenues                               5,970     3,633

 Gross margin                                        41,574    33,252

Expenses:
Compensation and benefits                            11,368     8,227
Technology and communications                         3,518     3,383
Occupancy                                             1,318     1,105
Professional fees                                     1,628     1,487
Marketing and business development                      622       586
Depreciation and amortization                         1,517     1,498
Other                                                 1,033       769
                                                   --------- ---------
 Total direct expense                                21,004    17,055

Reorganization                                           24       102
Offering cost                                             -         -
                                                   --------- ---------
 Total expenses                                      21,028    17,157
                                                   --------- ---------

Operating income                                     20,546    16,095

Interest and investment income                        1,611       322
                                                   --------- ---------

Income before provision for income taxes             22,157    16,417
Provision for income taxes                            9,739     7,556
                                                   --------- ---------
Net income                                          $12,418    $8,861
                                                   ========= =========

Earnings per share:
 Basic                                                $0.33     $0.27
 Diluted                                              $0.32     $0.25

Weighted average number of shares outstanding:
 Basic                                               37,102    33,059
 Diluted                                             39,254    34,946

                INTERNATIONAL SECURITIES EXCHANGE, INC.
            CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                            (in thousands)

                                              March 31,   December 31,
                                                 2006         2005
                                             ------------ ------------
                                             (unaudited)
ASSETS
Current assets:
 Cash and cash equivalents                      $179,289     $170,927
 Accounts receivable, net                         39,364       35,048
 Income tax receivable                             2,944            -
 Securities owned                                  4,934        9,890
 Other current assets                              2,164        2,745
                                             ------------ ------------
   Total current assets                          228,695      218,610

Securities owned                                   5,507        7,244
Accounts receivable                                  600          587
Fixed assets, net                                 28,557       29,205
Deferred tax asset, net                           21,197       22,333
Other assets                                       4,503        2,517
                                             ------------ ------------
   Total assets                                  289,059      280,496
                                             ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
 Accounts payable, accrued expenses and other
  liabilities                                     13,944       15,406
 Compensation and benefits payable                 3,373        8,371
 Deferred revenue                                  5,161        4,687
 Income taxes payable                                  -          372
 Payment for order flow payable                   10,044       12,233
                                             ------------ ------------
   Total current liabilities                      32,522       41,069

Deferred revenue                                  50,441       50,238
Other liabilities                                  4,034        4,211
                                             ------------ ------------
   Total liabilities                              86,997       95,518
                                             ------------ ------------

Minority interest                                  2,882            -

STOCKHOLDERS' EQUITY                             199,180      184,978
                                             ------------ ------------

   Total liabilities & stockholders' equity     $289,059     $280,496
                                             ============ ============

                INTERNATIONAL SECURITIES EXCHANGE, INC.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands)
                              (unaudited)

                                                   Three Months Ended
                                                        March 31,
                                                     2006      2005
                                                   --------- ---------

Cash flows from operating activities:
Net income                                          $12,418    $8,861
Adjustments to reconcile net income to cash
 provided by/(used in) operating activities:
   Depreciation and amortization                      1,517     1,498
   Minority interest                                  2,882         -
   Stock based compensation                           2,024       379
   Deferred taxes                                     1,136    (1,513)
   Unrealized (gain)/loss on securities owned and
    available for sale securities, net                 (296)       58
   Excess tax benefits from share-based payment
    arrangements                                     (3,314)        -

(Increase)/decrease in operating assets:
   Accounts receivable, net                          (4,329)   (3,498)
   Income tax receivable                                370     8,195
   Securities owned                                   2,033     3,895
   Other assets                                         578     3,216
Increase/(decrease) in operating liabilities:
   Accounts payable and accrued expenses             (1,462)    5,917
   Compensation and benefits payable                 (4,998)  (10,250)
   Income tax payable                                  (372)        -
   Deferred revenue                                     677      (768)
   Payment for order flow payable                    (2,189)    8,602
   Other liabilities                                   (177)     (183)
                                                   --------- ---------
Net cash provided by operating activities             6,498    24,409
                                                   --------- ---------

Cash flows from investing activities:
Purchase of fixed assets                               (852)     (274)
Purchase of intangible assets                        (2,000)
Maturities of available for sale securities           4,973         -
                                                   --------- ---------
 Net cash provided by/(used in) investing
  activities                                          2,121      (274)
                                                   --------- ---------

Cash flows from financing activities:
Dividend                                             (1,894)  (11,784)
Net proceeds from initial public offering                 -    70,673
Proceeds from options exercised                         294         -
Share repurchases                                    (1,971)        -
Excess tax benefits from share-based payment
 arrangements                                         3,314         -
                                                   --------- ---------
     Net cash provided by/(used in) financing
      activities                                       (257)   58,889
                                                   --------- ---------

Increase in cash and cash equivalents                 8,362    83,024
Cash and cash equivalents, beginning of period      170,927    44,847
                                                   --------- ---------
Cash and cash equivalents, end of period           $179,289  $127,871
                                                   ========= =========

                INTERNATIONAL SECURITIES EXCHANGE, INC.
                      KEY STATISTICAL INFORMATION

                                                   Three Months Ended
                                                   March 31, March 31,
                                                     2006      2005
                                                   --------- ---------
Trading Days                                             62        61
----------------------------------------------------------------------
Average daily trading volume: (1) (2)
Equity and Index Options
------------------------
Total U.S. industry equity and index options traded
 (in thousands)                                       7,828     5,700
Our equity and index options traded (in thousands)    2,384     1,733
Our market share of equity and index options traded    30.5%     30.4%
Equity Options
--------------
Total U.S. industry equity options traded (in
 thousands)                                           7,202     5,223
Our equity options traded (in thousands)              2,356     1,727
Our market share of equity options traded              32.7%     33.1%
Index Options
-------------
Total U.S. industry index options traded (in
 thousands)                                             626       477
Our index options traded (in thousands)                  28         5
Our market share of index options traded                4.5%      1.1%
----------------------------------------------------------------------
Our member total trading volume (sides, in 
 thousands): (3)
Customer                                            127,302    87,507
Firm proprietary                                     32,232    18,219
Market maker                                        136,097   105,649
                                                   --------- ---------
Total sides                                         295,631   211,375
----------------------------------------------------------------------
Our market share of total industry trading: (4)
Customer                                               32.1%     30.7%
Firm proprietary                                       24.9%     21.2%
Market maker                                           30.6%     32.6%
----------------------------------------------------------------------
Revenue:
Average transaction fee per side (5)                 $0.125    $0.126
Average cost of transaction fee per side (6)        ($0.020)  ($0.017)
                                                   --------- ---------
Average net transaction fee per side (6)             $0.105    $0.109

Average transaction fee per revenue side (7)         $0.176    $0.180
----------------------------------------------------------------------
Our trades: (8)
Average contracts per trade                            16.2      17.1
Average trades per day (in thousands)                 147.2       101
Total trades (in thousands)                           9,126     6,163
Our market share of industry trades                    33.8%     35.6%
----------------------------------------------------------------------
Our listed issues: (9)
Average number of issues traded during the period       854       705
----------------------------------------------------------------------
Our members (average number trading during period)
PMMs                                                     10        10
CMMs                                                    142       139
EAMs                                                    102        94
                                                   --------- ---------
Total                                                   254       243
----------------------------------------------------------------------
Employees at end of period                              189       164
----------------------------------------------------------------------

(1) Represents single counted contract volume. For example, a
    transaction of 500 contracts on our exchange is counted as a
    single 500 contract transaction for purposes of calculating our
    volumes, even though we may receive transaction fees from parties
    on both sides of the transaction, one side of a transaction, or in
    some cases, neither side of a transaction.

(2) Our market share is calculated based on the number of contracts
    executed on our exchange as a percentage of total industry
    contract volume.

(3) Represents each side of a buy or sell transaction. For example, a
    transaction of 500 contracts on our exchange is counted as two
    sides of 500 contracts, representing a buy and a sell transaction.
    We do not currently receive transaction fees from
    non-broker-dealer customer sides, except for options on our
    premium products.

(4) Represents our market share of total U.S. industry equity and
    index trading for members trading on our exchange based on
    contract trading volume.

(5) Average transaction fee per side is calculated by dividing our
    transaction fees by the total number of sides executed on our
    exchange. We have charged our members for executing
    non-broker-dealer customer orders on our exchange except for
    options on our premium products. Comparing our average transaction
    fee per side to our average transaction fee per revenue side
    reflects the negative effect of our fee waivers or reductions on
    our revenues, on a per side basis. For the three months ended
    March 31, 2006 and March 31, 2005, we have waived and discounted
    $9,541 and $6,511 of our fees, respectively.

(6) Average net transaction fee per side is calculated by subtracting
    cost of sales from transaction fees and dividing the result by the
    total number of sided executed on our exchange.

(7) Our average transaction fee per revenue side reflects the
    transaction fee we charge to our market participants per our
    publicly available pricing schedules. These schedules were part of
    rule proposals that became effective upon filing pursuant to
    Section 19(b)(3)(A) of the Securities Exchange Act of 1934, as
    amended (the "Exchange Act"). The Securities and Exchange
    Commission may abrogate such rule proposals within 60 days of
    filing if it determines that such action is necessary or
    appropriate in the public interest, for the protection of
    investors or otherwise in furtherance of the purposes of the
    Exchange Act.

(8) Members can have several contracts per trade. Trades represent the
    number of trades cleared through The Option Clearing Corporation,
    or the OCC. Market data revenue is generated on a per trade basis,
    not on a contract basis.

(9) By "issues" we mean the number of securities underlying our
    options. We trade multiple options series on each underlying
    security.
*T
   GAAP to Non-GAAP Reconciliation

   In an effort to provide investors with additional information
regarding the Company's results as determined by U.S. generally
accepted accounting principles, or GAAP, the Company also discloses
certain non-GAAP information which management believes provides useful
information to investors. Management reviews this non-GAAP financial
measurement when evaluating the Company's financial performance and
results of operations; therefore, we believe it is useful to provide
information with respect to these non-GAAP measurements so as to share
this perspective of management. Non-GAAP measurements do not have any
standardized meaning and are therefore unlikely to be comparable to
similar measures presented by other companies. These non-GAAP
financial measures should be considered in the context with our GAAP
results.
   We have disclosed financial measures that reference our net
transaction fees which we define as our transaction fees less activity
remittance fees and ETF and index license fees. Under GAAP, activity
remittance fees and ETF and index license fees are required to be
recorded on a gross basis. Since activity remittance fees and ETF and
index license fees are entirely offset by corresponding amounts in
transaction fees, management believes that presenting net transaction
fees provides a clearer measure of our transaction related
performance.
   We have also disclosed financial measures that exclude incremental
costs related to the development of our new equities exchange
business, the ISE Stock Exchange. These costs do not relate to our
core business of operating an equities and index options exchange.
Management believes that presenting our results excluding these costs
provides a clearer measure of our results and performance.
-0-
*T
                INTERNATIONAL SECURITIES EXCHANGE, INC.
                    GAAP TO NON GAAP RECONCILIATION
               (in thousands, except per share amounts)
                              (unaudited)

                                                   Three Months Ended
                                                   March 31, March 31,
                                                     2006      2005
                                                   --------- ---------

GAAP Transaction fees, as reported                  $36,867   $26,714
Less activity remittance fees                         4,345     2,702
Less license fees                                     1,625       931
                                                   --------- ---------
Net transaction fees, as adjusted                    30,897    23,081
                                                   --------- ---------

GAAP Total expenses, as reported                    $21,028   $17,157
Less ISE Stock Exchange direct expenses                 900       117
                                                   --------- ---------
Total expenses excluding ISE Stock Exchange
 expenses                                            20,128    17,040
                                                   --------- ---------

GAAP Income before provision for income taxes, as
 reported                                            22,157    16,417
Less ISE Stock Exchange direct expenses                 900       117
                                                   --------- ---------
Income before provision for income taxes excluding
 ISE Stock Exchange expenses                         23,057    16,534
                                                   --------- ---------

GAAP Net income, as reported                        $12,418    $8,861
Less ISE Stock Exchange direct expenses, net of tax     495        64
                                                   --------- ---------
Net income excluding ISE Stock Exchange expenses     12,913     8,925
                                                   --------- ---------

GAAP Diluted earnings per share, as reported          $0.32     $0.25
Less ISE Stock Exchange direct expenses, net of tax    0.01      0.01
                                                   --------- ---------
Diluted earnings per share excluding ISE Stock
 Exchange expenses                                    $0.33     $0.26
                                                   --------- ---------

Gross Margin                                         41,574    33,252

GAAP pre-tax margins, as reported                      53.3%     49.4%
Pre-tax margins excluding ISE Stock Exchange
 expenses                                              55.5%     49.7%
*T

   Earnings Conference Call

   ISE will host a conference call to discuss its first quarter 2006
results at 8:30 a.m. Eastern Time today. The conference call will be
web cast and can be accessed on the Investor Relations section of
ISE's web site at www.iseoptions.com. An investor presentation that
will be referenced during the call will be posted to the web site.
Investors can also listen to the conference call by calling (800)
659-1966 and dialing the participant passcode 35471845. An archived
recording of the call will be available from 10:30 a.m. on April 27,
2006 until midnight on April 28, 2006 and can be accessed by calling
[phone] and dialing the participant passcode 23592545. An
archived replay of the call will be available on the Investor
Relations section of the Company's web site at www.iseoptions.com.

   ISE Background

   The International Securities Exchange (ISE) is one of the leading
marketplaces for trading derivatives and equities, founded on the
principle that technology fosters and infuses new efficiencies and
operational innovations into securities trading. ISE developed an
innovative market structure that integrated auction market principles
into an advanced screen-based trading system launching the first fully
electronic US options exchange in May 2000. It is now the world's
largest equity options exchange.
   ISE continually enhances its trading systems and develops new
products, including indexes and market data, to provide investors with
the best marketplace and investment tools to trade smarter. For more
information about ISE, its options products and its technology, visit
www.iseoptions.com and for more information about the ISE Stock
Exchange LLC, visit www.isestock.com.

   Certain matters discussed in this press release are "forward
looking statements" intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act
of 1995. These statements relate to future events or our future
financial performance, and involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements, to be materially
different from those contemplated by the forward looking statements.
We undertake no ongoing obligation, other than that imposed by law, to
update these statements. Factors that could affect our results, levels
of activity, performance or achievements and cause them to materially
differ from those contained in the forward looking statements can be
found in our filings with the Securities and Exchange Commission,
including our annual report on Form 10-K, current reports on Form 8-K
and quarterly reports on Form 10-Q.