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Delaware
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20-5446972
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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400 South LaSalle Street
Chicago, Illinois |
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60605
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
£
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Accelerated filer
£
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Non-accelerated filer
S
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Smaller reporting company
£
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(Do not check if a smaller reporting company)
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Class
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Outstanding at September 30, 2011
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Unrestricted Common Stock, par value $0.01
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89,920,627 shares
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Page
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•
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“CBOE Holdings” or the “Company” refers to CBOE Holdings, Inc. and its subsidiaries after the completion of the restructuring transaction, which occurred on June 18, 2010. For periods prior to the restructuring transaction, the “Company” refers to CBOE and its subsidiaries.
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•
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“CBOE” or the “Exchange” refers to (1) prior to the completion of the restructuring transaction, Chicago Board Options Exchange, Incorporated, a Delaware non-stock corporation, and (2) after the completion of the restructuring transaction, Chicago Board Options Exchange, Incorporated, a Delaware stock corporation. CBOE became a wholly-owned subsidiary of CBOE Holdings on June 18, 2010.
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•
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“C2” refers to C2 Options Exchange, Incorporated, which became a wholly-owned subsidiary of CBOE Holdings on June 18, 2010.
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•
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“CFE” refers to CBOE Futures Exchange, LLC, which became a wholly-owned subsidiary of CBOE Holdings on June 18, 2010.
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•
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The “restructuring transaction” refers to the transaction on June 18, 2010 in which CBOE converted from a Delaware non-stock corporation owned by its Members to a Delaware stock corporation and a wholly-owned subsidiary of CBOE Holdings, a Delaware stock corporation.
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•
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“Settlement Agreement” means the Stipulation of Settlement, as amended, approved by the Court of Chancery of the State of Delaware in the Delaware Action. The Delaware Action referred to the lawsuit, which was entitled CME Group Inc. et al. v. Chicago Board Options Exchange, Incorporated et al.
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•
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“Member” or “Members” refers to, prior to the completion of the restructuring transaction, any person or organization (or any designee of any organization) that held a membership in CBOE.
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•
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“Our exchanges” refers to CBOE, C2 and CFE and "our options exchanges" refers to CBOE and C2.
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•
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“We,” “us” or “our” refers to (1) prior to the completion of the restructuring transaction, CBOE, and, as the context may require, CBOE Holdings, and (2) after the completion of the restructuring transaction, CBOE Holdings.
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•
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legislative or regulatory changes affecting the options markets, including a possible cap of transaction fees;
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•
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changes in law or government policy, including changes relating to enacted or proposed legislation, and the rules promulgated thereunder, relating to the economic crisis;
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•
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increasing competition by foreign and domestic entities, including increased competition from new entrants into our markets and consolidation of existing entities;
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•
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loss of our exclusive licenses to list certain index options;
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•
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decreases in the amount of trading volumes on our exchanges;
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•
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our ability to continue introducing competitive new products and services on a timely, cost-effective basis, including through our electronic trading capabilities, and our ability to maintain the competitiveness of our existing products and services;
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•
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our ability to generate incremental operating revenue by making trading access available in exchange for a fee;
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•
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changes in price levels and volatility in the derivatives markets and in the equity markets in general;
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•
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economic, political and market conditions;
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•
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our ability to adjust our fixed costs and expenses if our revenues decline;
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•
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our ability to maintain existing customers, develop strategic relationships and attract new customers;
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•
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our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights;
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•
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our ability to keep pace with rapid technological developments, including our ability to complete the development and implementation of the enhanced functionality required by our customers;
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•
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our ability to accommodate increases in trading volume and order transaction traffic without failure or degradation of performance of our systems;
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•
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our ability to maintain our growth effectively;
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•
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our ability to manage our reputation and brand name;
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•
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our ability to generate revenue from our market data, which may be reduced or eliminated by the growth of electronic trading or declines in subscriptions;
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•
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our ability to generate cash flow and revenue from the launch of C2;
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•
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our ability to successfully implement changes to our fee structure;
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•
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changes in our rate per contract due to shifts in the mix of the products traded, the trading venue and the mix of customers;
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•
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the ability of our compliance and risk management methods to effectively monitor and manage our risks;
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•
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our ability to maintain adequate liquidity to allow us to continue to invest in our business;
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•
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customer consolidation; and
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•
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changes to the tax treatment for options trading, including the possible imposition of a transaction tax on options transactions.
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
(in thousands, except per share amounts)
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2011
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2010
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2011
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2010
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||||||||
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(unaudited)
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||||||||||||||
Operating Revenues:
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||||||||
Transaction fees
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$
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109,840
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$
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72,885
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$
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286,018
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|
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$
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250,378
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Access fees
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16,918
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18,484
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|
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51,564
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|
|
22,985
|
|
||||
Exchange services and other fees
|
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4,531
|
|
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3,974
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13,497
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12,817
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|
||||
Market data fees
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4,909
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4,881
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14,847
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16,256
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|
||||
Regulatory fees
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5,266
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|
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3,388
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14,994
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11,409
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|
||||
Other revenue
|
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2,140
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|
|
2,403
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|
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7,015
|
|
|
5,868
|
|
||||
Total Operating Revenues
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143,604
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106,015
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|
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387,935
|
|
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319,713
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||||
Operating Expenses:
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||||||||
Employee costs
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25,945
|
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34,643
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76,186
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80,420
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Depreciation and amortization
|
|
8,897
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|
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7,099
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|
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26,588
|
|
|
21,701
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Data processing
|
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4,337
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|
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4,304
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13,671
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|
|
14,541
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|
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Outside services
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|
6,881
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|
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6,293
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|
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20,650
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|
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24,457
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|
||||
Royalty fees
|
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13,956
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|
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9,226
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35,475
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31,643
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Trading volume incentives
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3,525
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4,594
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11,799
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15,629
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||||
Travel and promotional expenses
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2,416
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2,702
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6,470
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|
7,897
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||||
Facilities costs
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|
1,081
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1,440
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|
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3,974
|
|
|
4,139
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|
||||
Other expenses
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1,600
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|
781
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4,171
|
|
|
3,799
|
|
||||
Total Operating Expenses
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68,638
|
|
|
71,082
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|
|
198,984
|
|
|
204,226
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||||
Operating Income
|
|
74,966
|
|
|
34,933
|
|
|
188,951
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|
|
115,487
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|
||||
Other Income/(Expense):
|
|
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|
|
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Investment income
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15
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|
158
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|
|
119
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|
|
393
|
|
||||
Net loss from investment in affiliates
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(190
|
)
|
|
(168
|
)
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(650
|
)
|
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(542
|
)
|
||||
Interest and other borrowing costs
|
|
(226
|
)
|
|
(225
|
)
|
|
(673
|
)
|
|
(671
|
)
|
||||
Total Other Income/(Expense)
|
|
(401
|
)
|
|
(235
|
)
|
|
(1,204
|
)
|
|
(820
|
)
|
||||
Income Before Income Taxes
|
|
74,565
|
|
|
34,698
|
|
|
187,747
|
|
|
114,667
|
|
||||
Income tax provision
|
|
33,238
|
|
|
14,244
|
|
|
80,148
|
|
|
46,648
|
|
||||
Net Income
|
|
41,327
|
|
|
20,454
|
|
|
107,599
|
|
|
68,019
|
|
||||
Net income allocated to participating securities
|
|
(730
|
)
|
|
(434
|
)
|
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(2,294
|
)
|
|
(615
|
)
|
||||
Net Income Allocated to Common Stockholders
|
|
$
|
40,597
|
|
|
$
|
20,020
|
|
|
$
|
105,305
|
|
|
$
|
67,404
|
|
Net Income Per Share Allocated to Common Stockholders(Note 4):
|
|
|
|
|
|
|
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||||||||
Basic
|
|
$
|
0.45
|
|
|
$
|
0.20
|
|
|
$
|
1.17
|
|
|
$
|
0.71
|
|
Diluted
|
|
0.45
|
|
|
0.20
|
|
|
1.17
|
|
|
0.71
|
|
||||
Weighted average shares used in computing income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
90,334
|
|
|
102,103
|
|
|
90,195
|
|
|
95,065
|
|
||||
Diluted
|
|
90,334
|
|
|
102,103
|
|
|
90,195
|
|
|
95,065
|
|
(in thousands, except share amounts)
|
|
September 30,
2011 |
|
December 31,
2010 |
||||
|
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
147,220
|
|
|
$
|
53,789
|
|
Accounts receivable—net allowances of $142 and $108
|
|
46,013
|
|
|
37,746
|
|
||
Marketing fee receivable
|
|
6,999
|
|
|
7,815
|
|
||
Income taxes receivable
|
|
362
|
|
|
5,537
|
|
||
Other prepaid expenses
|
|
6,031
|
|
|
4,510
|
|
||
Other current assets
|
|
694
|
|
|
537
|
|
||
Total Current Assets
|
|
207,319
|
|
|
109,934
|
|
||
Investments in Affiliates
|
|
11,965
|
|
|
12,615
|
|
||
Land
|
|
4,914
|
|
|
4,914
|
|
||
Property and Equipment:
|
|
|
|
|
|
|||
Construction in progress
|
|
18
|
|
|
1,729
|
|
||
Building
|
|
60,917
|
|
|
60,917
|
|
||
Furniture and equipment
|
|
250,946
|
|
|
240,711
|
|
||
Less accumulated depreciation and amortization
|
|
(234,295
|
)
|
|
(221,273
|
)
|
||
Total Property and Equipment—Net
|
|
77,586
|
|
|
82,084
|
|
||
Other Assets:
|
|
|
|
|
|
|
||
Software development work in progress
|
|
7,727
|
|
|
1,131
|
|
||
Data processing software and other assets (less accumulated amortization of $117,959 and $107,770)
|
|
35,132
|
|
|
43,434
|
|
||
Total Other Assets—Net
|
|
42,859
|
|
|
44,565
|
|
||
Total
|
|
$
|
344,643
|
|
|
$
|
254,112
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
|
$
|
42,799
|
|
|
$
|
40,084
|
|
Marketing fee payable
|
|
7,540
|
|
|
8,349
|
|
||
Deferred revenue
|
|
11,236
|
|
|
280
|
|
||
Post-retirement medical benefits
|
|
26
|
|
|
103
|
|
||
Income taxes payable
|
|
3,545
|
|
|
—
|
|
||
Total Current Liabilities
|
|
65,146
|
|
|
48,816
|
|
||
Long-term Liabilities:
|
|
|
|
|
|
|
||
Post-retirement medical benefits
|
|
1,856
|
|
|
1,782
|
|
||
Income taxes payable
|
|
8,553
|
|
|
3,165
|
|
||
Other long-term liabilities
|
|
3,806
|
|
|
3,993
|
|
||
Deferred income taxes
|
|
19,581
|
|
|
20,482
|
|
||
Total Long-term Liabilities
|
|
33,796
|
|
|
29,422
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
|
||
Total Liabilities
|
|
98,942
|
|
|
78,238
|
|
||
Stockholders’ Equity:
|
|
|
|
|
|
|
||
Preferred stock, $0.01 par value: 20,000,000 shares authorized, no shares issued and outstanding at September 30, 2011 and December 31, 2010
|
|
—
|
|
|
—
|
|
||
Unrestricted common stock, $0.01 par value: 325,000,000 shares authorized; 90,649,902 issued and 89,920,627 outstanding at September 30, 2011; 51,786,717 issued and outstanding at December 31, 2010
|
|
906
|
|
|
518
|
|
||
Class A-2 common stock, $0.01 par value: 45,366,690 shares authorized; none and 38,297,994 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively
|
|
—
|
|
|
383
|
|
||
Additional paid-in-capital
|
|
52,461
|
|
|
42,858
|
|
||
Retained earnings
|
|
211,210
|
|
|
133,087
|
|
||
Treasury stock at cost – 729,275 shares at September 30, 2011 and no shares at December 31, 2010
|
|
(17,962
|
)
|
|
—
|
|
||
Accumulated other comprehensive loss
|
|
(914
|
)
|
|
(972
|
)
|
||
Total Stockholders’ Equity
|
|
245,701
|
|
|
175,874
|
|
||
Total
|
|
$
|
344,643
|
|
|
$
|
254,112
|
|
(in thousands)
|
|
Preferred
Stock |
|
Unrestricted
Common Stock |
|
Class A-2
Common Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Loss |
|
Total
Stockholders’ Equity |
||||||||||||||||
Balance—December 31, 2010
|
|
$
|
—
|
|
|
$
|
518
|
|
|
$
|
383
|
|
|
$
|
42,858
|
|
|
$
|
133,087
|
|
|
$
|
—
|
|
|
$
|
(972
|
)
|
|
$
|
175,874
|
|
Automatic conversion of Class A-2 common stock into unrestricted common stock
|
|
|
|
383
|
|
|
(383
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Cash dividends on common stock
|
|
|
|
|
|
|
|
|
|
(29,476
|
)
|
|
|
|
|
|
(29,476
|
)
|
||||||||||||||
Stock based compensation
|
|
|
|
|
|
|
|
9,608
|
|
|
|
|
|
|
|
|
9,608
|
|
||||||||||||||
Issuance of vested restricted stock granted to employees
|
|
|
|
5
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Purchase of unrestricted common stock
|
|
|
|
|
|
|
|
|
|
|
|
(17,962
|
)
|
|
|
|
(17,962
|
)
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
107,599
|
|
|
|
|
|
|
107,599
|
|
||||||||||||||
Post-retirement benefit obligation adjustment—net of tax expense of $4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58
|
|
|
58
|
|
||||||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,657
|
|
|||||||||||||||
Balance—September 30, 2011
|
|
$
|
—
|
|
|
$
|
906
|
|
|
$
|
—
|
|
|
$
|
52,461
|
|
|
$
|
211,210
|
|
|
$
|
(17,962
|
)
|
|
$
|
(914
|
)
|
|
$
|
245,701
|
|
|
|
Nine Months Ended
|
||||||
(in thousands)
|
|
September 30, 2011
|
|
September 30, 2010
|
||||
|
|
(unaudited)
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
||||
Net income
|
|
$
|
107,599
|
|
|
$
|
68,019
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
26,588
|
|
|
21,701
|
|
||
Other amortization
|
|
67
|
|
|
52
|
|
||
Provision for deferred income taxes
|
|
(911
|
)
|
|
(3,012
|
)
|
||
Stock-based compensation
|
|
9,608
|
|
|
15,565
|
|
||
Loss on disposition of property
|
|
1,179
|
|
|
139
|
|
||
Loss on investment of affiliate
|
|
190
|
|
|
542
|
|
||
Impairment of investment in affiliate
|
|
460
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(8,267
|
)
|
|
(6,140
|
)
|
||
Marketing fee receivable
|
|
816
|
|
|
1,768
|
|
||
Income taxes receivable
|
|
5,175
|
|
|
(12,965
|
)
|
||
Prepaid expenses
|
|
(1,188
|
)
|
|
533
|
|
||
Other receivable
|
|
—
|
|
|
2,086
|
|
||
Other current assets
|
|
(157
|
)
|
|
(119
|
)
|
||
Accounts payable and accrued expenses
|
|
4,248
|
|
|
(8,049
|
)
|
||
Marketing fee payable
|
|
(809
|
)
|
|
(1,974
|
)
|
||
Deferred revenue and other long-term liabilites
|
|
10,769
|
|
|
11,514
|
|
||
Post-retirement benefit obligations
|
|
(3
|
)
|
|
(7
|
)
|
||
Income taxes payable
|
|
8,933
|
|
|
839
|
|
||
Settlement with appellants
|
|
—
|
|
|
(3,000
|
)
|
||
Access fees subject to fee-based payment
|
|
—
|
|
|
(2,688
|
)
|
||
Net Cash Flows provided by Operating Activities
|
|
164,297
|
|
|
84,804
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
|
||||
Capital and other assets expenditures
|
|
(23,485
|
)
|
|
(15,049
|
)
|
||
Investment in Signal Trading Systems, LLC
|
|
—
|
|
|
(7,990
|
)
|
||
Other
|
|
57
|
|
|
—
|
|
||
Net Cash Flows used in Investing Activities
|
|
(23,428
|
)
|
|
(23,039
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
||||
Payments for debt issuance costs
|
|
—
|
|
|
(3
|
)
|
||
Payment of quarterly dividends
|
|
(29,476
|
)
|
|
(10,432
|
)
|
||
Purchase of unrestricted stock from employees
|
|
(3,075
|
)
|
|
—
|
|
||
Purchase of unrestricted common stock
|
|
(14,887
|
)
|
|
—
|
|
||
Exercise right privilege payable
|
|
—
|
|
|
(300,000
|
)
|
||
Net proceeds from issuance of unrestricted common stock
|
|
—
|
|
|
301,238
|
|
||
Payment of special dividend
|
|
—
|
|
|
(113,362
|
)
|
||
Net Cash Flows used in Financing Activities
|
|
(47,438
|
)
|
|
(122,559
|
)
|
||
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
93,431
|
|
|
(60,794
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
|
53,789
|
|
|
383,730
|
|
||
Cash and Cash Equivalents at End of Period
|
|
$
|
147,220
|
|
|
$
|
322,936
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
||||
Cash paid for income taxes
|
|
$
|
68,119
|
|
|
$
|
63,279
|
|
Non-cash activities:
|
|
|
|
|
||||
Change in post-retirement benefit obligation
|
|
(67
|
)
|
|
—
|
|
||
Unpaid liability to acquire equipment and software
|
|
1,053
|
|
|
2,453
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands, except per share amounts)
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
||||||||
Basic EPS Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net Income
|
|
$
|
41,327
|
|
|
$
|
20,454
|
|
|
$
|
107,599
|
|
|
$
|
68,019
|
|
Less: Earnings allocated to participating securities
|
|
(730
|
)
|
|
(434
|
)
|
|
(2,294
|
)
|
|
(615
|
)
|
||||
Net Income allocated to common stockholders
|
|
$
|
40,597
|
|
|
$
|
20,020
|
|
|
$
|
105,305
|
|
|
$
|
67,404
|
|
Basic EPS Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
90,334
|
|
|
102,103
|
|
|
90,195
|
|
|
95,065
|
|
||||
Basic net income per common share
|
|
$
|
0.45
|
|
|
$
|
0.20
|
|
|
$
|
1.17
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net Income
|
|
$
|
41,327
|
|
|
$
|
20,454
|
|
|
$
|
107,599
|
|
|
$
|
68,019
|
|
Less: Earnings allocated to participating securities
|
|
(730
|
)
|
|
(434
|
)
|
|
(2,294
|
)
|
|
(615
|
)
|
||||
Net Income allocated to common stockholders
|
|
$
|
40,597
|
|
|
$
|
20,020
|
|
|
$
|
105,305
|
|
|
$
|
67,404
|
|
Diluted EPS Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
90,334
|
|
|
102,103
|
|
|
90,195
|
|
|
95,065
|
|
||||
Dilutive common shares issued under restricted stock program
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted net income per common share
|
|
$
|
0.45
|
|
|
$
|
0.20
|
|
|
$
|
1.17
|
|
|
$
|
0.71
|
|
|
|
|
Number of Shares
of Restricted Stock |
|
Weighted Average
Grant-Date Fair Value |
|||
|
Unvested restricted stock at January 1, 2011
|
|
1,712,780
|
|
|
$
|
29.00
|
|
|
Granted
|
|
—
|
|
|
—
|
|
|
|
Vested
|
|
(443,781
|
)
|
|
29.00
|
|
|
|
Forfeited
|
|
(10,137
|
)
|
|
29.00
|
|
|
|
Unvested restricted stock at September 30, 2011
|
|
1,258,862
|
|
|
$
|
29.00
|
|
|
|
|
September 30,
2011 |
|
December 31,
2010 |
||||
|
Investment in OCC
|
|
$
|
333
|
|
|
$
|
333
|
|
|
Investment in Signal Trading
|
|
11,632
|
|
|
11,822
|
|
||
|
Investment in NSX
|
|
—
|
|
|
460
|
|
||
|
Investment in Affiliates
|
|
$
|
11,965
|
|
|
$
|
12,615
|
|
|
|
|
September 30,
2011 |
|
December 31,
2010 |
||||
|
Compensation and benefit-related liabilities
|
|
$
|
16,501
|
|
|
$
|
15,455
|
|
|
Royalties
|
|
13,075
|
|
|
8,198
|
|
||
|
Data processing related liabilities
|
|
671
|
|
|
1,255
|
|
||
|
Facilities
|
|
2,738
|
|
|
2,150
|
|
||
|
Legal
|
|
1,415
|
|
|
1,017
|
|
||
|
Accounts payable
|
|
1,228
|
|
|
5,000
|
|
||
|
Capital and other assets
|
|
595
|
|
|
556
|
|
||
|
Linkage
|
|
2,437
|
|
|
2,310
|
|
||
|
Other
|
|
4,139
|
|
|
4,143
|
|
||
|
Total
|
|
$
|
42,799
|
|
|
$
|
40,084
|
|
|
|
Balance at
December 31, 2010 |
|
Cash
Additions |
|
Revenue
Recognition |
|
Balance at
September 30, 2011 |
||||||||
Other – net
|
|
$
|
280
|
|
|
$
|
2,525
|
|
|
$
|
(2,307
|
)
|
|
$
|
498
|
|
Liquidity provider sliding scale (1)
|
|
—
|
|
|
40,021
|
|
|
(29,283
|
)
|
|
10,738
|
|
||||
Total deferred revenue
|
|
$
|
280
|
|
|
$
|
42,546
|
|
|
$
|
(31,590
|
)
|
|
$
|
11,236
|
|
•
|
Level 1—Unadjusted inputs based on quoted markets for identical assets or liabilities.
|
•
|
Level 2—Observable inputs, either direct or indirect, not including Level 1, corroborated by market data or based upon quoted prices in non-active markets.
|
•
|
Level 3—Unobservable inputs that reflect management’s best assumptions of what market participants would use in valuing the asset or liability.
|
(amounts in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
108
|
|
Total assets at fair value at September 30, 2011
|
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
108
|
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
(in millions, except per share amounts)
|
|
|
|||||||||||
Total operating revenues
|
|
$
|
143.6
|
|
|
$
|
106.0
|
|
|
$
|
37.6
|
|
|
35.5
|
%
|
Total operating expenses
|
|
68.6
|
|
|
71.1
|
|
|
(2.5
|
)
|
|
(3.5
|
)%
|
|||
Operating income
|
|
75.0
|
|
|
34.9
|
|
|
40.1
|
|
|
114.9
|
%
|
|||
Total other income/(expense)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
100.0
|
%
|
|||
Income before income taxes
|
|
74.6
|
|
|
34.7
|
|
|
39.9
|
|
|
115.0
|
%
|
|||
Income tax provision
|
|
33.2
|
|
|
14.2
|
|
|
19.0
|
|
|
133.8
|
%
|
|||
Net income
|
|
$
|
41.4
|
|
|
$
|
20.5
|
|
|
$
|
20.9
|
|
|
102.0
|
%
|
Net income allocated to common stockholders
|
|
$
|
40.6
|
|
|
$
|
20.0
|
|
|
$
|
20.6
|
|
|
103.0
|
%
|
Operating income percentage
|
|
52.2
|
%
|
|
32.9
|
%
|
|
|
|
|
|||||
Net income percentage
|
|
28.8
|
%
|
|
19.3
|
%
|
|
|
|
|
|||||
Diluted net income per share allocated to common stockholders
|
|
$
|
0.45
|
|
|
$
|
0.20
|
|
|
|
|
|
•
|
The Company’s market share of total options contracts was
26.9%
for the three months ended
September 30, 2011
compared with
27.6%
for the same period in 2010.
|
•
|
Total operating revenues
increased
due to higher transaction fees and regulatory fees, partially offset by lower access fees.
|
•
|
Total operating expenses declined primarily due to lower employee costs and trading volume incentives, partially offset by higher depreciation and amortization and royalty fees.
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
|
|
(in millions)
|
|
|
|
|
|||||||
Transaction fees
|
|
$
|
109.8
|
|
|
$
|
72.9
|
|
|
$
|
36.9
|
|
|
50.6
|
%
|
Access fees
|
|
16.9
|
|
|
18.5
|
|
|
(1.6
|
)
|
|
(8.6
|
)%
|
|||
Exchange services and other fees
|
|
4.5
|
|
|
3.9
|
|
|
0.6
|
|
|
15.4
|
%
|
|||
Market data fees
|
|
4.9
|
|
|
4.9
|
|
|
—
|
|
|
—
|
%
|
|||
Regulatory fees
|
|
5.3
|
|
|
3.4
|
|
|
1.9
|
|
|
55.9
|
%
|
|||
Other revenue
|
|
2.2
|
|
|
2.4
|
|
|
(0.2
|
)
|
|
(8.3
|
)%
|
|||
Total operating revenues
|
|
$
|
143.6
|
|
|
$
|
106.0
|
|
|
$
|
37.6
|
|
|
35.5
|
%
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
|
|
(in millions)
|
|
|
|
|
|||||||
Equities
|
|
$
|
20.0
|
|
|
$
|
21.8
|
|
|
$
|
(1.8
|
)
|
|
(8.3
|
)%
|
Indexes
|
|
61.5
|
|
|
35.8
|
|
|
25.7
|
|
|
71.8
|
%
|
|||
Exchange-traded funds
|
|
22.8
|
|
|
13.7
|
|
|
9.1
|
|
|
66.4
|
%
|
|||
Total options transaction fees
|
|
104.3
|
|
|
71.3
|
|
|
33.0
|
|
|
46.3
|
%
|
|||
Futures
|
|
5.5
|
|
|
1.6
|
|
|
3.9
|
|
|
243.8
|
%
|
|||
Total transaction fees
|
|
$
|
109.8
|
|
|
$
|
72.9
|
|
|
$
|
36.9
|
|
|
50.6
|
%
|
|
|
2011
|
|
2010
|
|
Volume
Percent Change |
|
ADV
Percent Change |
|||||||||
|
|
Volume
|
|
ADV
|
|
Volume
|
|
ADV
|
|
|
|||||||
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|||||||
Equities
|
|
125.9
|
|
|
1.97
|
|
|
119.5
|
|
1.87
|
|
|
5.4
|
%
|
|
5.3
|
%
|
Indexes
|
|
101.8
|
|
|
1.59
|
|
|
59.8
|
|
0.93
|
|
|
70.2
|
%
|
|
71.0
|
%
|
Exchange-traded funds
|
|
119.1
|
|
|
1.86
|
|
|
58.1
|
|
0.91
|
|
|
105.0
|
%
|
|
104.4
|
%
|
Total options contracts
|
|
346.8
|
|
|
5.42
|
|
|
237.4
|
|
3.71
|
|
|
46.1
|
%
|
|
46.1
|
%
|
Futures contracts
|
|
4.0
|
|
|
0.06
|
|
|
1.0
|
|
0.02
|
|
|
319.8
|
%
|
|
319.8
|
%
|
Total contracts
|
|
350.8
|
|
|
5.48
|
|
|
238.4
|
|
3.73
|
|
|
47.1
|
%
|
|
46.9
|
%
|
|
|
2011
|
|
2010
|
|
Percent
Change |
|||||
Equities
|
|
$
|
0.159
|
|
|
$
|
0.182
|
|
|
(12.6
|
)%
|
Indexes
|
|
0.605
|
|
|
0.598
|
|
|
1.2
|
%
|
||
Exchange-traded funds
|
|
0.192
|
|
|
0.236
|
|
|
(18.6
|
)%
|
||
Total options average transaction fee per contract
|
|
0.301
|
|
|
0.300
|
|
|
0.3
|
%
|
||
Futures
|
|
1.371
|
|
|
1.661
|
|
|
(17.5
|
)%
|
||
Total average transaction fee per contract
|
|
$
|
0.313
|
|
|
$
|
0.306
|
|
|
2.3
|
%
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
|
|
(in millions)
|
|
|
|
|
|||||||
Employee costs
|
|
$
|
25.9
|
|
|
$
|
34.7
|
|
|
$
|
(8.8
|
)
|
|
(25.4
|
)%
|
Depreciation and amortization
|
|
8.9
|
|
|
7.1
|
|
|
1.8
|
|
|
25.4
|
%
|
|||
Data processing
|
|
4.3
|
|
|
4.3
|
|
|
—
|
|
|
—
|
%
|
|||
Outside services
|
|
6.9
|
|
|
6.3
|
|
|
0.6
|
|
|
9.5
|
%
|
|||
Royalty fees
|
|
14.0
|
|
|
9.2
|
|
|
4.8
|
|
|
52.2
|
%
|
|||
Trading volume incentives
|
|
3.5
|
|
|
4.6
|
|
|
(1.1
|
)
|
|
(23.9
|
)%
|
|||
Travel and promotional expenses
|
|
2.4
|
|
|
2.7
|
|
|
(0.3
|
)
|
|
(11.1
|
)%
|
|||
Facilities costs
|
|
1.1
|
|
|
1.4
|
|
|
(0.3
|
)
|
|
(21.4
|
)%
|
|||
Other expenses
|
|
1.6
|
|
|
0.8
|
|
|
0.8
|
|
|
100.0
|
%
|
|||
Total operating expenses
|
|
$
|
68.6
|
|
|
$
|
71.1
|
|
|
$
|
(2.5
|
)
|
|
(3.5
|
)%
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
(in millions, except per share amounts)
|
|
|
|||||||||||
Total operating revenues
|
|
$
|
387.9
|
|
|
$
|
319.7
|
|
|
$
|
68.2
|
|
|
21.3
|
%
|
Total operating expenses
|
|
199.0
|
|
|
204.2
|
|
|
(5.2
|
)
|
|
(2.5
|
)%
|
|||
Operating income
|
|
188.9
|
|
|
115.5
|
|
|
73.4
|
|
|
63.5
|
%
|
|||
Total other income/(expense)
|
|
(1.2
|
)
|
|
(0.8
|
)
|
|
(0.4
|
)
|
|
50.0
|
%
|
|||
Income before income taxes
|
|
187.7
|
|
|
114.7
|
|
|
73.0
|
|
|
63.6
|
%
|
|||
Income tax provision
|
|
80.1
|
|
|
46.7
|
|
|
33.4
|
|
|
71.5
|
%
|
|||
Net income
|
|
$
|
107.6
|
|
|
$
|
68.0
|
|
|
$
|
39.6
|
|
|
58.2
|
%
|
Net income allocated to common stockholders
|
|
$
|
105.3
|
|
|
$
|
67.4
|
|
|
$
|
37.9
|
|
|
56.2
|
%
|
Operating income percentage
|
|
48.7
|
%
|
|
36.1
|
%
|
|
|
|
|
|||||
Net income percentage
|
|
27.7
|
%
|
|
21.3
|
%
|
|
|
|
|
|||||
Diluted net income per share allocated to common stockholders
|
|
$
|
1.17
|
|
|
$
|
0.71
|
|
|
|
|
|
•
|
The Company’s market share of total options contracts traded was
26.7%
for the
nine months ended September 30,
2011, compared with
29.6%
for the same period in 2010.
|
•
|
Total operating revenues
increased
due to higher transaction fees, access fees and regulatory fees, partially offset by lower market data fees.
|
•
|
Total operating expenses
decreased
primarily due to lower employee costs, outside services, trading volume incentives and travel and promotional expenses, partially offset by higher depreciation and amortization and royalty fees.
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
|
|
(in millions)
|
|
|
|
|
|||||||
Transaction fees
|
|
$
|
286.0
|
|
|
$
|
250.4
|
|
|
$
|
35.6
|
|
|
14.2
|
%
|
Access fees
|
|
51.6
|
|
|
23.0
|
|
|
28.6
|
|
|
124.3
|
%
|
|||
Exchange services and other fees
|
|
13.5
|
|
|
12.8
|
|
|
0.7
|
|
|
5.5
|
%
|
|||
Market data fees
|
|
14.8
|
|
|
16.2
|
|
|
(1.4
|
)
|
|
(8.6
|
)%
|
|||
Regulatory fees
|
|
15.0
|
|
|
11.4
|
|
|
3.6
|
|
|
31.6
|
%
|
|||
Other revenue
|
|
7.0
|
|
|
5.9
|
|
|
1.1
|
|
|
18.6
|
%
|
|||
Total operating revenues
|
|
$
|
387.9
|
|
|
$
|
319.7
|
|
|
$
|
68.2
|
|
|
21.3
|
%
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
|
|
(in millions)
|
|
|
|
|
|||||||
Equities
|
|
$
|
66.4
|
|
|
$
|
75.0
|
|
|
$
|
(8.6
|
)
|
|
(11.5
|
)%
|
Indexes
|
|
149.5
|
|
|
122.3
|
|
|
27.2
|
|
|
22.2
|
%
|
|||
Exchange-traded funds
|
|
56.2
|
|
|
48.5
|
|
|
7.7
|
|
|
15.9
|
%
|
|||
Total options transaction fees
|
|
272.1
|
|
|
245.8
|
|
|
26.3
|
|
|
10.7
|
%
|
|||
Futures
|
|
13.9
|
|
|
4.6
|
|
|
9.3
|
|
|
202.2
|
%
|
|||
Total transaction fees
|
|
$
|
286.0
|
|
|
$
|
250.4
|
|
|
$
|
35.6
|
|
|
14.2
|
%
|
|
|
2011
|
|
2010
|
|
Volume
Percent Change |
|
ADV
Percent Change |
||||||||||
|
|
Volume
|
|
ADV
|
|
Volume
|
|
ADV
|
|
|
||||||||
|
|
|
|
(in millions)
|
|
|
|
|
|
|
||||||||
Equities
|
|
409.3
|
|
|
2.17
|
|
|
428.1
|
|
|
2.28
|
|
|
(4.4
|
)%
|
|
(4.8
|
)%
|
Indexes
|
|
244.7
|
|
|
1.29
|
|
|
207.0
|
|
|
1.10
|
|
|
18.2
|
%
|
|
17.3
|
%
|
Exchange-traded funds
|
|
282.3
|
|
|
1.49
|
|
|
213.0
|
|
|
1.13
|
|
|
32.5
|
%
|
|
31.9
|
%
|
Total options contracts
|
|
936.3
|
|
|
4.95
|
|
|
848.1
|
|
|
4.51
|
|
|
10.4
|
%
|
|
9.8
|
%
|
Futures contracts
|
|
9.7
|
|
|
0.05
|
|
|
2.6
|
|
|
0.01
|
|
|
269.8
|
%
|
|
267.9
|
%
|
Total contracts
|
|
946.0
|
|
|
5.00
|
|
|
850.7
|
|
|
4.52
|
|
|
11.2
|
%
|
|
10.6
|
%
|
|
|
2011
|
|
2010
|
|
Percent
Change |
|||||
Equities
|
|
$
|
0.162
|
|
|
$
|
0.175
|
|
|
(7.4
|
)%
|
Indexes
|
|
0.611
|
|
|
0.591
|
|
|
3.4
|
%
|
||
Exchange-traded funds
|
|
0.199
|
|
|
0.228
|
|
|
(12.7
|
)%
|
||
Total options average transaction fee per contract
|
|
0.291
|
|
|
0.290
|
|
0.3
|
%
|
|||
Futures
|
|
1.441
|
|
|
1.753
|
|
|
(17.8
|
)%
|
||
Total average transaction fee per contract
|
|
$
|
0.302
|
|
|
$
|
0.294
|
|
|
2.7
|
%
|
|
|
2011
|
|
2010
|
|
Inc./(Dec.)
|
|
Percent
Change |
|||||||
|
|
|
|
(in millions)
|
|
|
|
|
|||||||
Employee costs
|
|
$
|
76.2
|
|
|
$
|
80.4
|
|
|
$
|
(4.2
|
)
|
|
(5.2
|
)%
|
Depreciation and amortization
|
|
26.6
|
|
|
21.7
|
|
|
4.9
|
|
|
22.6
|
%
|
|||
Data processing
|
|
13.7
|
|
|
14.6
|
|
|
(0.9
|
)
|
|
(6.2
|
)%
|
|||
Outside services
|
|
20.6
|
|
|
24.5
|
|
|
(3.9
|
)
|
|
(15.9
|
)%
|
|||
Royalty fees
|
|
35.5
|
|
|
31.6
|
|
|
3.9
|
|
|
12.3
|
%
|
|||
Trading volume incentives
|
|
11.8
|
|
|
15.6
|
|
|
(3.8
|
)
|
|
(24.4
|
)%
|
|||
Travel and promotional expenses
|
|
6.5
|
|
|
7.9
|
|
|
(1.4
|
)
|
|
(17.7
|
)%
|
|||
Facilities costs
|
|
4.0
|
|
|
4.1
|
|
|
(0.1
|
)
|
|
(2.4
|
)%
|
|||
Other expenses
|
|
4.1
|
|
|
3.8
|
|
|
0.3
|
|
|
7.9
|
%
|
|||
Total operating expenses
|
|
$
|
199.0
|
|
|
$
|
204.2
|
|
|
$
|
(5.2
|
)
|
|
(2.5
|
)%
|
•
|
Cash and cash equivalents
increased
by
$93.4 million
to
$147.2 million
at
September 30, 2011
from
$53.8 million
at
December 31, 2010
, reflecting an increase in funds available due to positive cash generated from operations and the prepayment of liquidity provider transaction fees. Our cash and cash equivalents were primarily comprised of investments in institutional prime money market funds.
|
•
|
Accounts receivable
increased
by
$8.3 million
to
$46.0 million
at
September 30, 2011
from
$37.7 million
at
December 31, 2010
, primarily due to increased trading volume in September 2011 compared to December 2010.
|
|
|
Total
|
|
Less than
1 year |
|
1-3 years
|
|
3-5 years
|
||||||||
Operating leases
|
|
$
|
4,947
|
|
|
$
|
2,718
|
|
|
$
|
2,229
|
|
|
$
|
—
|
|
Contractual obligations
|
|
1,777
|
|
|
1,777
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
6,724
|
|
|
$
|
4,495
|
|
|
$
|
2,229
|
|
|
$
|
—
|
|
Period
|
|
Total
Number of Shares Purchased |
|
Average
Price Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Approximate Dollar Value of Shares that May Yet Be
Purchased Under the Plans or Programs |
||||||
July 1, 2011 – July 31, 2011
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
100,000,000
|
|
August 1, 2011 – August 31, 2011
|
|
301,900
|
|
|
23.32
|
|
|
301,900
|
|
|
92,959,692
|
|
||
September 1, 2011 – September 30, 2011
|
|
298,000
|
|
|
26.33
|
|
|
298,000
|
|
|
85,113,352
|
|
||
Totals
|
|
599,900
|
|
|
$
|
24.82
|
|
|
599,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CBOE HOLDINGS, INC.
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
By:
|
/s/ William J. Brodsky
|
|
|
|
William J. Brodsky
|
|
|
|
Chairman and Chief Executive Officer
|
Date:
|
November 8, 2011
|
|
|
|
|
|
|
|
|
By:
|
/s/ Alan J. Dean
|
|
|
|
Alan J. Dean
|
|
|
|
Executive Vice President and Chief Financial Officer
|
Date:
|
November 8, 2011
|
|
|
Exhibit No.
|
|
Description
|
10.1
|
|
Amendment No. 1, dated August 22, 2011, to the Amended and Restated License Agreement, dated September 29, 2006, by and between CME Group Index Services LLC (as successor-in-interest to Dow Jones & Company, Inc.) and the Chicago Board Options Exchange, Incorporated (Filed herewith).
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14 (Filed herewith).
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14 (Filed herewith).
|
|
|
|
32.1
|
|
Certificate of Chief Executive Officer pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (Filed herewith).
|
|
|
|
32.2
|
|
Certificate of Chief Financial Officer pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (Filed herewith).
|
|
|
|
101.INS*
|
|
XBRL Instance Document (Filed herewith)
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document (Filed herewith).
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document (Filed herewith).
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase (Filed herewith).
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document (Filed herewith).
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document (Filed herewith).
|
|
|
|
|
|
*Pursuant to Rule 406T of Regulation S-T, the Interactive Data files on Exhibit 101 hereto are deemed not
|
|
|
filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of
|
|
|
1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of
|
|
|
1934, as amended, and otherwise are not subject to liability under those sections.
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
Dated:
|
November 8, 2011
|
|
/s/ William J. Brodsky
|
|
|
|
William J. Brodsky
|
|
|
|
Chairman and Chief Executive Officer
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
Dated:
|
November 8, 2011
|
|
/s/ Alan J. Dean
|
|
|
|
Alan J. Dean
|
|
|
|
Executive Vice President and Chief Financial Officer
|
/s/ William J. Brodsky
|
|
|
William J. Brodsky
|
|
|
November 8, 2011
|
|
|
/s/ Alan J. Dean
|
|
|
Alan J. Dean
|
|
|
November 8, 2011
|
|
|