Transcript Presentation title goes here

Credit Suisse
14th Annual Financial
Services Forum
February 14, 2013
Edward Tilly,
President and Chief Operating Officer
Forward Looking Statements
This presentation may contain forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are those statements that
reflect our expectations, assumptions or projections about the future and involve a number of risks
and uncertainties. These statements are only predictions based on our current expectations and
projections about future events. There are important factors that could cause actual results to differ
materially from that expressed or implied by the forward-looking statements, including: the loss of our
exclusive licenses to list certain index options; decreases in the amount of trading volumes or a shift
in the mix of products traded on our exchanges; legislative or regulatory changes affecting the
options markets; increasing competition by foreign and domestic entities, including increased
competition from new entrants into our markets and consolidation of existing entities; increasing price
competition; our ability to maintain access fee revenues; economic, political and market conditions;
our ability to operate our business without violating the intellectual property rights of others and the
costs associated with protecting our intellectual property rights; our ability to accommodate increases
in trading volume and order transaction traffic without failure or degradation of performance of our
systems; our ability to protect our systems and communication networks from security risks, including
cyber attacks; our ability to attract and retain skilled management and other personnel; our ability to
maintain our growth effectively; our dependence on third party service providers; and the ability of our
compliance and risk management methods to effectively monitor and manage our risks.
More detailed information about factors that may affect our performance may be found in our filings
with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2011
and other filings made from time to time with the SEC.
CBOE HOLDINGS
2
At a Glance
Leading Brand and Market Position
Leading U.S. options exchange
CBOE and VIX are industry’s leading brands
Well positioned to benefit from secular growth
Leading Product Innovator
Exclusive index franchise differentiates CBOE
Volatility suite provides strong growth potential
High Performance Trading Technology
CBOE Command™ - proprietary, state of the
art electronic platform; built and maintained
in-house
Powers CBOE, C2, CFE, CBSX and
OneChicago
CBOE HOLDINGS
3
Well Positioned for Growth
Record Financial Results for 2012
Leveraged proprietary products
Higher growth rate in proprietary products
drove increase in RPC
Effectively managed resources
Invested in future growth initiatives
Returned increased value to
stockholders
Well positioned to continue to grow
and shape options and volatility space
CBOE HOLDINGS
4
Large and Growing U.S. Options Market
(ADV in thousands)
Source: OCC and CBOE
CBOE HOLDINGS
5
Demand for Options Use Increasing
Studies and research point to increasing demand for options across
a variety of customer segments
Macro drivers of growth
Evolutionary
Return of greater retail
participation
Increased standardization of the
OTC market
Buy-side
Options
Growth
“Futurization” of swaps
Increased globalization
OTC
International
CBOE HOLDINGS
6
Translating Our Mission into Value
Leading and defining the options
industry for 40 years
Product Development
Trading Technology
Investor Education
CBOE HOLDINGS
7
Undisputed Leader in Innovation
for 40 Years
Industry Leader in Product Innovation
1970s
• First
marketplace
for trading
options
1980s
• Introduced
Index Options
• Established
Options
Institute
1990s
2000s
• Introduced
• Began Hybrid • Launched C2
LEAPS
trading model
• Devised
• Began trading
methodology
for VIX
VIX options
• Opened CBOE
Futures
Exchange
2010s
and SPXpm
• Introduced
CFLEX 2.0
• Launched
CBOE
Command
• Opened
London Hub
1.1 million in 1973
>1.1 billion in 2012
Total Annual Options Contract Volume
CBOE HOLDINGS
8
Strong Contribution from
S&P 500 Index Product Line
S&P 500 Index product line:
SPX, SPXpm & SPX Weeklys
S&P 500 Index product line has
highest options RPC
Volume down 7% in 2012 versus 2011
Strong growth in SPX Weeklys
Volume up 69% in 2012 versus 2011
Exposes SPXpm to a broader user base,
providing ease of access -- both open
outcry and electronic trading
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
25.0%
20.0%
15.0%
10.0%
5.0%
% of all SPX
Unites all SPX products on a single
platform
Chart Title
TotalAM
SPX
Weeklys
ADV
Settled
SPX Weeklys ADV
Moving SPXpm to CBOE from C2
0.0%
2008 2009 2010 2011 2012 2013
YTD¹
SPX Weeklys ADV
Weeklys % of All SPX
¹YTD through January 2013
CBOE HOLDINGS
9
Record Growth in Volatility Trading
Strong Growth Amid Low Volatility
VIX options ADV up 14% in 2012
Sixth consecutive annual record
VIX futures ADV up 99% in 2012
Third consecutive annual record
Momentum carried over into 2013
VIX futures ADV up 241% in January YOY
VIX options ADV up 85% in January YOY
Growth increasingly driven by a
broader user base
¹Through January 2013
CBOE HOLDINGS
10
Broadening Customer Base
Growth in VIX products now being driven by a broader user base
Increase in number and types of participants using VIX products
Proprietary trading firms
Hedge funds
CTAs
Pension funds
Endowments
Registered investment advisors
CBOE HOLDINGS
11
Fueling Growth Through Education
CBOE is world’s go-to source for options education
CBOE HOLDINGS
12
Institutional Buy-Side Opportunity
Number of funds using CBOE index
options strategies increasing
CBOE S&P 500 BuyWrite Index (BXM)
Introduced 10 years ago
First major benchmark index for options
investment performance
CBOE HOLDINGS
13
OTC Opportunity
OTC participants poised to drive increased options and
volatility trading
Traditional OTC participants seeking exchange-traded
alternatives
Introduced new CFLEX 2.0, customized trading technology
Enables more convenient access to FLEX options, using same CBOE
computer interface
Introduced new products aimed at OTC users
S&P 500 Variance Futures launched on CFE
CBOE HOLDINGS
14
OTC Opportunity
Focus for 2013: Establishing Traction in Variance Products
CFE introduced S&P 500 variance futures in December 2012
Customized to meet the needs of the OTC variance swaps market
Expertise in volatility puts CBOE in a unique position to attract
OTC variance swap business
Working with customers to ensure specifications are aligned
with the OTC variance market
CBOE HOLDINGS
15
International Opportunity
Expect continued demand for U.S. options from European institutional
investors
Tabb study estimates 10% of U.S.
listed options volume from Europe
CBOE estimates 15-20% of its volume
comes from outside U.S.
SPX enables overseas investors to take a
position in or to hedge the broader U.S.
equity market with a single transaction
VIX index serves as proxy for worldwide
equity market volatility
Growing interest in VIX options and
futures globally
CBOE HOLDINGS
16
International Opportunity
Intensifying our international marketing
focus
Opened CFE London Hub
February 1, 2013
Expanding VIX futures trading
to virtually 24 hours a day, five
days a week in May 2013
Pending regulatory approval
RMC continues to showcase
VIX options and futures trading
Second annual European RMC to
be held in Sept. 2013
CBOE HOLDINGS
17
Strong Financial Performance
Focused on driving revenue growth and controlling expenses
Operating revenues up 1%
Adjusted operating margin of 48.7%, up
30 bps
Adjusted diluted EPS of $1.69, up 6%
¹Adjusted to reflect the impact of certain items. See Appendix for “Non-GAAP Information.”
CBOE HOLDINGS
18
Enhancing Stockholder Value
Strong cash flow generation, improving stockholder returns
Returned nearly $700 million to
stockholders since IPO
Deploy capital opportunistically
Fund growth in business
Steady growth in dividend payout
Share repurchases
CBOE HOLDINGS
19
Confident in Long-Term Growth Prospects
Successfully
Compete in
Commoditized
Products
Leverage
Proprietary
Products
Prudently
Manage
Expenses
Reward
Stockholders
and
Invest in
Growth
CBOE HOLDINGS
20
Questions & Answers
Appendix Materials
2012 Financial Overview
Adjusted Basis¹
(in millions, except EPS and RPC)
Operating Revenues
2012
2011
$ Change % Change
$512.3
$508.1
$ 4.2
1%
262.9
262.4
0.5
-
$249.4
$245.7
$ 3.6
2%
Adjusted Operating Margin %
48.7%
48.4%
Adjusted Net Income Allocated to
Common Stockholders
$147.5
$143.1
$ 4.4
3%
Adjusted Diluted EPS
$ 1.69
$ 1.59
$0.10
6%
4.54
4.83
$0.315
$0.307
Adjusted Operating Expenses
Adjusted Operating Income
Total ADV
Rate per Contract
30 bps
-6%
$0.008
3%
¹Adjusted to reflect the impact of certain items. See Appendix for “Non-GAAP Information.”
CBOE HOLDINGS
23
Well Positioned to Gain Additional Leverage
Quarterly Adjusted Operating Income and Margin¹
($ in millions)
$80.0
55.0%
$70.0
50.0%
$60.0
$50.0
45.0%
$40.0
40.0%
$30.0
$20.0
35.0%
$10.0
$0.0
30.0%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Operating Income
Margin
¹Adjusted to reflect the impact of certain items. See Appendix for “Non-GAAP Information.”
CBOE HOLDINGS
24
Increasing Market Share – 2012
Total Industry Volume
CBOE
Excl. Dividend Trades¹
CBOE C2
ISE
NASDAQ PHLX
NASDAQ NOM
27.8%
29.0%
NAASDAQ NOBO
NYSE AMEX
NYSE ARCA
BOX
BATS
Equity Options¹
Options on ETPs¹
Index Options¹
Source: Options Clearing Corporation and CBOE
¹Full-Year 2012. Excludes Dividend Trades
May not add to 100 percent due to rounding
CBOE HOLDINGS
25
Quarterly Options ADV
CBOE Holdings Quarterly Options ADV
(contracts in millions)
CBOE HOLDINGS
26
Trading Volume Mix 2012 vs 2011
RPC Increase Reflects Shift in Mix of Trading Volume
CBOE HOLDINGS
27
Trading Volume Mix 4Q12 vs 4Q11
RPC Increase Reflects Shift in Mix of Trading Volume
CBOE HOLDINGS
28
Proprietary Products Account for Growing
Percentage of Transaction Fee Revenue
Index options and futures contracts increased to 71.3% of
transaction fee revenue in 4Q12 versus 58.5% in 4Q11
CBOE HOLDINGS
29
CBOE Holdings Rolling 3-Month RPC
2012
Equities
Indexes
Exchange-traded products
Total options average
Futures
Total average transaction fee per contract
Jan
$0.151
0.640
0.206
0.297
1.474
$0.308
Feb
$0.128
0.651
0.188
0.275
1.610
$0.289
Mar
$0.110
0.658
0.171
0.261
1.697
$0.280
Apr
$0.112
0.667
0.172
0.267
1.655
$0.290
May
$0.117
0.673
0.176
0.279
1.650
$0.304
Jun
$0.123
0.677
0.180
0.288
1.607
$0.314
Jul
$0.124
0.680
0.177
0.289
1.598
$0.316
Aug
$0.122
0.684
0.177
0.286
1.626
$0.315
Sep
$0.118
0.682
0.177
0.287
1.606
$0.317
Oct
$0.121
0.675
0.180
0.294
1.573
$0.326
Nov
$0.124
0.670
0.183
0.309
1.473
$0.342
Dec
$0.134
0.670
0.186
0.322
1.442
$0.355
2011
Equities
Indexes
Exchange-traded products
Total options average
Futures
Total average transaction fee per contract
Jan
$0.170
0.592
0.223
0.276
1.657
$0.286
Feb
$0.164
0.601
0.215
0.272
1.591
$0.282
Mar
$0.160
0.604
0.207
0.275
1.507
$0.285
Apr
$0.163
0.615
0.207
0.282
1.493
$0.293
May
$0.168
0.618
0.208
0.289
1.514
$0.301
Jun
$0.169
0.627
0.202
0.295
1.477
$0.308
Jul
$0.171
0.624
0.197
0.303
1.437
$0.316
Aug
$0.159
0.606
0.187
0.300
1.376
$0.313
Sep
$0.159
0.605
0.192
0.301
1.371
$0.313
Oct
$0.155
0.605
0.194
0.300
1.348
$0.311
Nov
$0.163
0.621
0.205
0.308
1.328
$0.317
Dec
$0.167
0.631
0.212
0.312
1.329
$0.321
2010
Equities
Indexes
Exchange-traded products
Total options average
Futures
Total average transaction fee per contract
Jan
$0.177
0.576
0.234
0.282
2.092
$0.286
Feb
$0.180
0.590
0.237
0.290
2.004
$0.294
Mar
$0.184
0.597
0.236
0.297
1.952
$0.300
Apr
$0.172
0.584
0.225
0.282
1.879
$0.286
May
$0.163
0.578
0.215
0.274
1.832
$0.279
Jun
$0.162
0.580
0.217
0.277
1.717
$0.281
Jul
$0.170
0.590
0.222
0.288
1.694
$0.293
Aug
$0.180
0.597
0.233
0.296
1.600
$0.301
Sep
$0.182
0.598
0.236
0.300
1.661
$0.306
Oct
$0.180
0.592
0.228
0.296
1.669
$0.302
Nov
$0.179
0.592
0.228
0.292
1.674
$0.300
Dec
$0.177
0.590
0.224
0.284
1.679
$0.293
2009
Equities
Indexes
Exchange-traded products
Total options average
Futures
Total average transaction fee per contract
Jan
$0.179
0.583
0.259
0.287
1.728
$0.288
Feb
$0.188
0.573
0.267
0.287
1.696
$0.288
Mar
$0.195
0.569
0.285
0.292
1.689
$0.292
Apr
$0.188
0.563
0.285
0.282
1.657
$0.283
May
$0.183
0.565
0.272
0.273
1.670
$0.274
Jun
$0.188
0.565
0.263
0.272
1.738
$0.273
Jul
$0.187
0.570
0.247
0.272
1.819
$0.273
Aug
$0.181
0.567
0.245
0.270
1.927
$0.272
Sep
$0.171
0.574
0.237
0.264
1.938
$0.266
Oct
$0.168
0.578
0.235
0.266
2.077
$0.268
Nov
$0.172
0.574
0.234
0.273
2.106
$0.277
Dec
$0.172
0.563
0.233
0.274
2.186
$0.278
CBOE HOLDINGS
30
Quarterly Core Operating Expenses¹
Total Operating Expenses
Less:
Depreciation and amortization
Accelerated stock-based compensation
Severance expense pursuant to executive employment
agreement
Estimated liability related to SEC investigation
Volume-based expense:
Royalty fees
Trading volume incentives
Core Operating Expenses (non-GAAP)¹:
Less: Continuing stock-based compensation
Core Operating Expenses excluding continuing stockbased compensation (non-GAAP)¹:
Core Operating Expense Detail:
Employee costs
Data processing
Outside services
Travel and promotional expenses
Facilities costs
Other expenses
Total
4Q 2012 % rev
$70,325
54%
6,210
149
5%
-
5,000
4%
11,639
1,027
$46,300
(3,151)
9%
1%
36%
-2%
$43,149
$26,291
4,707
10,790
1,988
1,269
1,255
$46,300
Number of full-time employees at quarter end
605
3Q 2012 % rev
$67,458
53%
8,634
-
33%
20%
4%
8%
2%
1%
1%
11,304
1,423
$46,097
(3,082)
$43,015
$27,166
5,070
9,075
2,548
1,268
970
$46,097
596
7%
-
9%
1%
36%
-2%
34%
21%
4%
7%
2%
1%
1%
2Q 2012 % rev
$66,480
50%
8,320
-
12,001
1,176
$44,983
(3,027)
$41,956
$25,300
4,927
9,265
3,303
1,226
962
$44,983
618
6%
-
9%
1%
34%
-2%
32%
19%
4%
7%
2%
1%
1%
1Q 2012 % rev
$63,977
53%
8,320
194
-
11,191
2,649
$41,623
(2,745)
$38,878
$25,096
4,899
7,170
2,167
1,303
988
$41,623
601
4Q 2011 % rev
$67,529
56%
7%
-
7,506
-
6%
-
-
3,709
3%
12,346
2,440
$41,528
(3,010)
10%
2%
35%
-3%
9%
2%
34%
-2%
32%
21%
4%
6%
2%
1%
1%
$38,518
$24,560
4,263
6,657
3,345
1,426
1,277
$41,528
32%
20%
4%
6%
3%
1%
1%
596
¹Please see our disclaimer regarding Non-GAAP financial measures.
May not foot due to rounding
CBOE HOLDINGS
31
Annual Core Operating Expenses¹
($ in thousands)
Total Operating Expenses
Less:
Depreciation and Amortization
Accelerated stock-based compensation
Severance
Estimated liability related to SEC investigation
Exercise Right Appeal Settlement
Volume-based Expense:
Royalty Fees
Trading Volume Incentives
Core Operating Expenses (non-GAAP)¹:
Less: Continuing stock-based compensation
Core Operating Expenses excluding continuing stockbased compensation (non-GAAP)¹:
2012
% rev
$268,241
52%
2011
% rev
$266,512
52%
2010
% rev
$269,763
62%
2009
$248,497
% rev
62%
2008
$229,473
% rev
55%
31,485
343
5,000
-
6%
1%
-
34,094
453
3,709
-
7%
1%
-
29,891
12,968
-
7%
3%
-
27,512
2,086
7%
1%
25,633
-
6%
-
46,135
6,275
$179,003
(12,005)
9%
1%
35%
-2%
47,822
14,239
$166,195
(12,166)
9%
3%
33%
-2%
41,353
21,294
$164,257
(7,833)
10%
5%
38%
-2%
33,079
28,631
$157,189
-
8%
7%
39%
-
35,243
15,437
$153,160
-
8%
4%
37%
-
$166,998
33%
$154,029
30%
$156,424
36%
$157,189
39%
$153,160
37%
Core Operating Expense Detail (excluding stock-based
compensation):
Employee Costs
Data Processing
Outside Services
Travel and Promotion Expenses
Facilities Costs
Other Expenses
Number of Full Time Employees
$91,848
19,603
36,300
10,006
5,066
4,175
605
18%
4%
7%
2%
1%
1%
$88,126
17,933
27,310
9,812
5,400
5,448
596
17%
4%
5%
2%
1%
1%
$85,442
19,501
31,245
9,569
5,801
4,866
581
20%
5%
7%
2%
1%
1%
$84,481
20,475
30,726
10,249
5,624
5,634
597
21%
5%
8%
3%
1%
1%
$83,140
20,556
27,370
10,483
4,730
6,881
20%
5%
7%
3%
1%
2%
576
¹Please see our disclaimer regarding Non-GAAP financial measures.
May not foot due to rounding
CBOE HOLDINGS
32
2013 Full-Year Guidance
As of February 8, 2013 ($ in millions)
2013 Guidance
Core operating expenses
$ 179
Continuing stock-based compensation¹
$
12
$18
Core operating expenses excluding
stock-based compensation
$ 167
$171 to $176
Adjusted tax rate
39.7%
39.5% to 40.0%
Depreciation and amortization
$
31
$37 to $39
Capital expenditures
$
30
$35 to $40
1Stock-based
CBOE HOLDINGS
2012 Actual
$189 to $194
compensation expense is included in employee costs.
33
Estimated 2013 Stock-Based
Compensation by Quarter
Quarterly breakout of estimated continuing stock-based
compensation for 2013
1Q13
2Q13
3Q13
4Q13
Total
Continuing stock-based
compensation¹
$3.7
$5.5
$4.4
$4.4
$18.0
Accelerated stock-based
compensation¹,²
$3.2
$ 3.2
¹All stock-based compensation is reported in employee costs
²Excluded from core expenses; included in non-GAAP reconciliation
CBOE HOLDINGS
34
Weighted Average Shares Calculation
Shares
Unrestricted common stock
Vesting of participating securities (restricted stock) on various dates
Treasury share purchases (various dates)
88,768,885
374,189
(1,871,424)
Total weighted average shares - basic and diluted
Participating securities for the period
Weighted average shares including participating securities
Percentage of net income allocated to participating securities
Days
Outstanding
92
various
various
4Q 2012
Total
Days
Weighted Avg
92
92
92
88,768,885
374,189
(1,871,424)
Shares
88,768,885
374,189
(1,871,424)
Days
Outstanding
366
various
various
87,271,650
991,424
991,424
YTD 2012
Total
Days
Weighted Avg
366
366
366
88,768,885
204,544
(1,513,906)
87,459,523
1,204,241
88,263,074
1.12%
1,204,241
88,663,764
1.36%
Net income allocated to common stockholders equals net income less the percentage of net income allocated to participating securities.
GAAP EPS is calculated by dividing net income allocated to common stockholders by the total weighted average shares outstanding during the period for basic and diluted.
CBOE HOLDINGS
35
GAAP to Non-GAAP Reconciliation For 2012
GAAP to Non-GAAP Reconciliation
(in thousands, except per share amounts)
1Q12
2Q12
3Q12
4Q12
FY2012
Reconciliation of GAAP Net Income Allocated to Common Stockholder to Non-GAAP
GAAP net income allocated to common stockholders
$
Add: Accelerated stock-based compensation
32,863
$
37,903
$
45,243
$
194
Add: Estimated liability related to SEC investigation
Income tax benefit/(expense) related to the items above
(80)
Add: Income tax provision adjustment
Net income allocated to participating securities - effect on reconciling
items
Adjusted net income allocated to common stockholders
(7,654)
(2)
39,246
32,975
$
37,903
$
$
0.37
$
0.36
$
155,255
343
5,000
5,000
(63)
(143)
(5,415)
(13,054)
86
$
$
149
4
109
37,675
$
38,921
$
0.52
$
0.45
$
147,510
Reconciliation of GAAP Diluted EPS to Non-GAAP
GAAP diluted earnings per common share
Per share impact of items above
Non-GAAP diluted earnings per common share
$
0.37
$
(0.09)
0.36
$
-
1.78
(0.09)
0.43
$
0.45
$
1.69
Reconciliation of GAAP Operating Margin to Non-GAAP
GAAP operating revenue
$ 121,392
$ 132,549
$ 128,319
$
130,077
$
512,338
Adjusted operating revenue
$ 121,392
$ 132,549
$ 128,319
$
130,077
$
512,338
GAAP operating income
$
$
$
$
59,752
$
244,097
$
249,440
Non-GAAP adjustments noted above
Non-GAAP adjustments noted above
Adjusted operating income
Adjusted operating margin
57,415
194
$
57,609
47.5%
66,069
-
$
66,069
49.8%
60,861
-
$
60,861
47.4%
5,149
$
64,901
49.9%
5,343
48.7%
For further information go to cboe.com/Investor Relations
May not add due to rounding and/or change in shares outstanding
NOTE: May not foot due to rounding
CBOE HOLDINGS
36
GAAP to Non-GAAP Reconciliation
For Years 2009, 2010 and 2011
GAAP to Non-GAAP Reconciliation
(in thousands, except per share amounts)
FY2011
FY2010
FY 2009
4Q11
3Q11
2Q11
1Q11
4Q10
3Q10
Reconciliation of GAAP Net Income Allocated to Common Stockholder to Non-GAAP
GAAP net income allocated to common stockholders
$
20,020
$
30,687
$
32,089
$
32,609
$
40,597
$
31,287
$ 106,451
Less: Recognition of deferred access fee revenue
Less: Recognition of prior-period revenue
98,166
$
136,582
(4,406)
(4,406)
Add: Exercise right appeal settlement
2,086
Add: Accelerated stock-based compensation
453
12,968
113
340
2,004
10,965
Add: Severance expense pursuant to an executive employment agreement
3,709
3,709
Add: Impairment change
Add: Income tax provision adjustment
(109)
(76)
(32)
(75)
(2)
(11)
11
(144)
3,901
(322)
4,223
Net income allocated to participating securities - effect on reconciling items
460
(1,861)
(4,034)
8,786
(1,478)
(46)
(337)
291
(4,461)
1,620
460
1,620
Income tax benefit/(expense) related to the items above
Adjusted net income allocated to common stockholders
$
(24,086)
$
26,380
$
30,207
$
32,540
$
32,674
$
44,745
$
33,164
$
$
0.20
$
0.31
$
0.36
$
0.36
$
0.45
$
0.35
$
93,237
$
104,238
$
143,134
1.17
$
1.03
$
1.52
Reconciliation of GAAP Diluted EPS to Non-GAAP
GAAP diluted earnings per common share
Per share impact of items above
Non-GAAP diluted earnings per common share
$
Reconciliation of GAAP Operating Margin to Non-GAAP
GAAP operating revenue
$ 106,015
0.26
$
$ 117,391
Non-GAAP adjustments noted above
$ 106,015
GAAP operating income
$
Non-GAAP adjustments noted above
Adjusted operating margin
$
0.36
$ 124,042
$
0.36
$ 120,290
$
0.50
$ 143,604
$
0.37
$ 120,208
34,933
$ 112,985
$
45,898
43.3%
$ 124,042
$
$
49,452
43.8%
57,535
$ 120,290
$
$
57,875
46.7%
56,452
$ 143,604
$
$
56,565
47.0%
74,966
$
1.09
$
1.59
$ 426,082
$
437,104
$
508,144
(4,406)
$ 120,208
$ 401,996
$
432,698
$
508,144
52,679
$ 177,584
$
167,341
$
241,632
$
245,794
$
3,709
-
113
340
(2,402)
10,965
$
51,854
$
74,966
52.2%
0.07
1.03
$
(24,086)
(4,406)
Adjusted operating revenue
Adjusted operating income
0.31
0.06
(0.14)
0.02
0.05
-
-
-
0.06
$
56,388
46.9%
$ 155,584
38.7%
4,162
8,562
(22,000)
$
175,903
40.7%
48.4%
For further information go to cboe.com/Investor Relations
NOTE: May not foot due to rounding
CBOE HOLDINGS
37
Non-GAAP Information
In addition to disclosing results determined in accordance with GAAP, CBOE
Holdings has disclosed certain non-GAAP measures of operating
performance. The non-GAAP measures provided in this presentation include
core operating expenses, adjusted operating revenue, adjusted operating
expenses, adjusted operating income, adjusted operating margin, adjusted
effective tax rate, adjusted net income, adjusted net income allocated to
common stockholders and adjusted diluted earnings per share.
Management believes that the non-GAAP financial measures presented in
this presentation, including adjusted net income and core operating
expenses, provide useful and comparative information to assess trends in our
core operations and a means to evaluate period-to-period comparisons.
Non-GAAP financial measures disclosed by management, including adjusted
diluted EPS, are provided as additional information to investors in order to
provide them with an alternative method for assessing our financial condition
and operating results. These measures are not in accordance with, or a
substitute for, GAAP, and may be different from or inconsistent with nonGAAP financial measures used by other companies.
Core operating expenses is the company’s operating expenses after
excluding (i) volume-based expenses, (ii) depreciation and amortization
expense, (iii) accelerated stock-based compensation expense and (iv) other
unusual or one-time expenses.
CBOE HOLDINGS
38
CBOE
400 South LaSalle Street
Chicago, Illinois 60605
www.cboe.com