First Quarter 2013 Earnings Presentation May 3, 2013 Agenda - - PowerPoint PPT Presentation

First Quarter 2013 Earnings Presentation

May 3, 2013

2 CBOE HOLDINGS

Agenda

Strategic Review William Brodsky

Chairman and CEO

Financial Review Alan Dean

Executive Vice President, CFO and Treasurer

Questions and Answers William Brodsky Alan Dean Edward Tilly

President and Chief Operating Officer

Edward Provost

Executive Vice President and Chief Business Development Officer

3 CBOE HOLDINGS

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 right to exclusively list certain index option products; increasing price competition in our industry; compliance with legal and regulatory obligations; our ability to operate our business, monitor and maintain our systems or program them so that they operate correctly, including in response to increases in trading volume and order transaction traffic; decreases in the amount of trading volumes

• r a shift in the mix of products traded on our exchanges; legislative or regulatory changes;

increasing competition by foreign and domestic entities; economic, political and market conditions;

• ur 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 maintain access fee revenues; 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, 2012 and other filings made from time to time with the SEC.

Strategic Review William Brodsky Chairman and CEO

5 CBOE HOLDINGS

Record First Quarter Earnings

Strong financial performance despite lower industry-wide trading volume

Financial results driven by strong growth

• f proprietary products

Generate highest revenue per contract

Adjusted diluted EPS increased 35% to $0.50 per share Operating revenue increased by 18%

¹Adjusted to reflect the impact of certain items. See Appendix for “Non-GAAP Information.”

6 CBOE HOLDINGS

Regaining Market Share in Multiply-Listed Options

Made enhancements to VIP in February and March CBOE multiply-listed market share increased to 17.6% in April from 15.3% in January, up 230 bps CBOE April market share of U.S.

• ptions of 24.5%, up 170 bps from

January

Focused on being among the leaders in options market share

24.5% 24.7%

¹Market share stats exclude dividend trades

7 CBOE HOLDINGS

CBOE Extends Exclusive Licensing Rights Agreement to Span 20 Years

CBOE Holdings and S&P Dow Jones Indices (S&P) Extend 30- Year Collaborative Relationship

Extends exclusive rights to create and trade options on the S&P 500, the S&P 100 and other derivative indexes published by S&P Exclusive rights on the S&P 500 extend through 2032, non- exclusive through 2033 Extended long-standing partnership with Russell Indexes

Semi-exclusive agreement for options on Russell 2000 Index (RUT)

8 CBOE HOLDINGS

Strong Contribution from S&P 500 Index Product Line

S&P 500 Index product line: SPX, SPXpm & SPX Weeklys

¹YTD through April 30, 2013

S&P 500 Index ADV up 22% in 1Q13 versus 1Q12

SPX ADV up 21% in April

Strong growth in SPX Weeklys

ADV more than tripled in 1Q13 ADV up 235% in April

*includes SPX Weeklys

9 CBOE HOLDINGS

Record trading in VIX options and futures for 1Q13 VIX options ADV up 48% in 1Q13; up 45% through April VIX futures ADV up 131% in 1Q13; up 128% through April

1Q13 fifth consecutive record for quarterly volume April fourth consecutive record for total monthly trading volume

Growth increasingly driven by a broader user base

Record Growth in Volatility Trading

¹YTD through April 30, 2013

Strong Growth Amid Low Volatility

10 CBOE HOLDINGS

New users driving recent surge in volume and open interest

New money flowed into VIX-linked ETPs New VIX-linked products created New traders using VIX futures and options Most recent surge in VIX futures volume driven by new users

Hedge funds and proprietary trading firms

Increases in VIX options volume continues to be driven by VIX futures trading Greatest source of growth for VIX options coming from increased participation from retail customers

Growing Interest in VIX Trading

11 CBOE HOLDINGS

Broadening Global Customer Reach

Committed to extending trading hours for VIX futures

Delaying timetable for implementation Allows European investors to access a longer trading session in their local time zone Provides additional trading sessions for VIX futures Risk Management Conferences continue to showcase VIX and SPX trading strategies

12 CBOE HOLDINGS

S&P 500 Variance futures designed as an exchange traded version of OTC variance swaps

Plan to change how we convert volatility points to futures prices so that the quoted price of our variance futures contract will be more directly comparable to prices in the OTC swap market Designed to provide same quoting conventions and economic performace of OTC variance swaps

Providing the advantages of exchange-traded contracts

– Transparency – Price discovery – Counterparty clearing guarantees

Making Changes to S&P 500 Variance Futures

13 CBOE HOLDINGS

40th anniversary of CBOE 30th anniversary of CBOE’s creation of index options 20th anniversary of the CBOE VIX Volatility Index

CBOE Celebrates 40/30/20

CBOE introduces VIX Index Options in 1993. Trading begins in 2006. CBOE launches options industry - April 26, 1973 CBOE creates S&P 100 Options Exchange Index (OEX) in 1983

14 CBOE HOLDINGS

Migration of many forms of OTC trading to exchange markets Volatility trading Innovative new products Global expansion

Continued Growth Opportunities

Strong Leadership – Strong Growth Opportunities

Ed Provost

Incoming President and COO

Ed Tilly

Incoming Chief Executive Officer

Financial Review Alan Dean EVP, CFO and Treasurer

16 CBOE HOLDINGS

1Q13 Financial Overview

Adjusted Basis¹

(in millions, except EPS and RPC)

1Q13 1Q12 $ Change % Change Operating Revenues $142.7 $121.4 $ 21.3 18% Adjusted Operating Expenses 70.1 63.8 6.3 10% Adjusted Operating Income $ 72.6 $ 57.6 $ 15.0 26% Adjusted Operating Margin % 50.9% 47.5% 340 bps Adjusted Net Income Allocated to Common Stockholders $ 43.9 $ 33.0 $ 10.9 33% Adjusted Diluted EPS $ 0.50 $ 0.37 $ 0.13 35% Total ADV 4.37 4.88

• 11%

Revenue per Contract $0.378 $0.280 $0.098 35%

¹Adjusted to reflect the impact of certain items. See Appendix for “Non-GAAP Information.”

17 CBOE HOLDINGS

Overview of Operating Revenues

Key Drivers

Transaction fees

35% increase in RPC 13% decline in trading volume Shift in product mix

Regulatory Fees

Increase in CBOE ORF rate and implementation of ORF for C2

Exchange services and other fees

Positive response to new network access option

Operating Revenues (in millions) 1Q13 1Q12 % Chg Transaction fees $ 99.1 $84.8 17% Access fees 15.7 16.0

• 2%

Exchange services and

• ther fees

9.1 7.4 23% Market data fees 5.5 6.4

• 14%

Regulatory fees 9.7 4.7 106% Other revenue 3.6 2.1 71% Total Operating Revenues $142.7 $121.4 18%

18 CBOE HOLDINGS

Trading Volume Mix and RPC 1Q13 vs 1Q12

RPC Increase Reflects Shift in Mix of Trading Volume

19 CBOE HOLDINGS

Proprietary Products Account for Growing Percentage of Transaction Fee Revenue

Index options and futures contracts accounted for 76% of transaction fees in 1Q13, up from nearly 65% in 1Q12

20 CBOE HOLDINGS

Other Revenue Drivers

Regulatory fees up $5.0MM

Increase in CBOE ORF rate and implementation of ORF for C2 Fee increase to cover higher costs related to regulatory services

Exchange services up $1.7MM

Driven by positive response to new network access option

Market data down $0.9MM

Lower market share

(in millions) 1Q13 1Q12 % Chg Regulatory fees $ 9.7 $ 4.7 106% Exchange services and other fees $ 9.1 $ 7.4 23% Market data $ 5.5 $ 6.4

• 14%

21 CBOE HOLDINGS

Ongoing Focus on Controlling Expenses

Key Drivers:

Outside services

Higher legal expense related to litigation activity

Employee costs

Reflects increases in incentive compensation, stock-based compensation and salaries

Trading volume incentives

Lower trading volume in equity and ETP options and changes in program criteria

Adjusted Operating Expenses¹

(in millions)

1Q 2013 1Q 2012 % Chg Employee costs $27.6 $25.1 10% Depreciation and amortization 8.3 8.3

• Data processing

4.5 4.9

• 8%

Outside services 11.0 7.2 53% Royalty fees 13.2 11.2 18% Trading volume incentives 1.0 2.6

• 62%

Travel and promotional 2.1 2.2

• 5%

Facilities costs 1.3 1.3

• Other expenses

1.1 1.0 10% Total Operating Expenses $70.1 $63.8 10%

¹Adjusted to reflect the impact of certain items. See Appendix for “Non-GAAP Information.”

22 CBOE HOLDINGS

1Q13 Core Operating Expenses

(in millions)

1Q13 1Q12 % Chg Total Operating Expenses $ 73.3 $ 64.0 15% Less: Depreciation and amortization 8.3 8.3

• Accelerated stock-based compensation

3.2 0.2 NM Volume-based expenses: Royalty fees 13.2 11.2 18% Trading volume incentives 1.0 2.6

• 62%

Core Operating Expenses (non-GAAP)¹: $ 47.6 $ 41.6 14% Detail of Core Operating Expenses (non-GAAP) Employee costs $ 27.6 $ 25.1 10% Data processing 4.5 4.9

• 8%

Outside services 11.0 7.2 53% Travel and promotional expenses 2.1 2.2

• 5%

Facilities costs 1.3 1.3

• Other expenses

1.1 1.0 10% Total $ 47.6 $ 41.6 14%

¹Please see our disclaimer regarding Non-GAAP financial measures. May not foot due to rounding

23 CBOE HOLDINGS

Enhancing Stockholder Value

Strong cash flow generation

$210.5MM in cash at quarter end Generated $95MM in cash from

• perations

1Q13 Capital Outlays

Dividends $ 13 million Capital expenditures 6 million Total $ 19 million

Strong capital position and debt- free balance sheet

24 CBOE HOLDINGS

Reaffirming 2013 Full-Year Guidance

As of May 3, 2013 ($ in millions) 2013 Guidance

Core operating expenses $189 to $194 Continuing stock-based compensation¹ $18 Core operating expenses excluding stock- based compensation $171 to $176 Adjusted tax rate 39.5% to 40.0% Depreciation and amortization $37 to $39 Capital expenditures $35 to $40

1Stock-based compensation expense is included in employee costs.

25 CBOE HOLDINGS

Expect to see full impact on RPC from changes to VIP and

• ther fee modifications

Second quarter will be first full quarter of higher S&P royalty rates Reduction in access fees due to new access credit programs introduced May 1 Several positive developments that bode well for our growth initiatives

Extension of S&P licensing agreement Semi-exclusive agreement for options on Russell 2000 Index

Legal expenses should moderate

Looking Ahead

26 CBOE HOLDINGS

CBOE Celebrates 40 Years of Innovation

1.1 million in 1973 >1.1 billion in 2012 Options Contracts Traded

Questions & Answers

Appendix Materials

29 CBOE HOLDINGS

Quarterly Adjusted Operating Income and Margin¹

($ in millions)

¹Adjusted to reflect the impact of certain items. See Appendix for “Non-GAAP Information.”

Well Positioned to Gain Additional Leverage

30% 35% 40% 45% 50% 55% $0 $10 $20 $30 $40 $50 $60 $70 $80 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 Operating Income Margin

30 CBOE HOLDINGS

CBOE Holdings Quarterly Options ADV

(contracts in millions)

Quarterly Options ADV

31 CBOE HOLDINGS

CBOE Holdings Rolling 3-Month RPC

2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Equities $0.149 $0.153 $0.140 Indexes 0.665 0.670 0.671 Exchange-traded products 0.194 0.181 0.155 Total options RPC 0.340 0.341 0.333 Futures 1.484 1.560 1.618 Total RPC $0.376 $0.382 $0.378 2012 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Equities $0.151 $0.128 $0.110 $0.112 $0.117 $0.123 $0.124 $0.122 $0.118 $0.121 $0.124 $0.134 Indexes 0.640 0.651 0.658 0.667 0.673 0.677 0.680 0.684 0.682 0.675 0.670 0.670 Exchange-traded products 0.206 0.188 0.171 0.172 0.176 0.180 0.177 0.177 0.177 0.180 0.183 0.186 Total options RPC 0.297 0.275 0.261 0.267 0.279 0.288 0.289 0.286 0.287 0.294 0.309 0.322 Futures 1.474 1.610 1.697 1.655 1.650 1.607 1.598 1.626 1.606 1.573 1.473 1.442 Total RPC $0.308 $0.289 $0.280 $0.290 $0.304 $0.314 $0.316 $0.315 $0.317 $0.326 $0.342 $0.355 2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Equities $0.170 $0.164 $0.160 $0.163 $0.168 $0.169 $0.171 $0.159 $0.159 $0.155 $0.163 $0.167 Indexes 0.592 0.601 0.604 0.615 0.618 0.627 0.624 0.606 0.605 0.605 0.621 0.631 Exchange-traded products 0.223 0.215 0.207 0.207 0.208 0.202 0.197 0.187 0.192 0.194 0.205 0.212 Total options RPC 0.276 0.272 0.275 0.282 0.289 0.295 0.303 0.300 0.301 0.300 0.308 0.312 Futures 1.657 1.591 1.507 1.493 1.514 1.477 1.437 1.376 1.371 1.348 1.328 1.329 Total RPC $0.286 $0.282 $0.285 $0.293 $0.301 $0.308 $0.316 $0.313 $0.313 $0.311 $0.317 $0.321 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Equities $0.177 $0.180 $0.184 $0.172 $0.163 $0.162 $0.170 $0.180 $0.182 $0.180 $0.179 $0.177 Indexes 0.576 0.590 0.597 0.584 0.578 0.580 0.590 0.597 0.598 0.592 0.592 0.590 Exchange-traded products 0.234 0.237 0.236 0.225 0.215 0.217 0.222 0.233 0.236 0.228 0.228 0.224 Total options RPC 0.282 0.290 0.297 0.282 0.274 0.277 0.288 0.296 0.300 0.296 0.292 0.284 Futures 2.092 2.004 1.952 1.879 1.832 1.717 1.694 1.600 1.661 1.669 1.674 1.679 Total RPC $0.286 $0.294 $0.300 $0.286 $0.279 $0.281 $0.293 $0.301 $0.306 $0.302 $0.300 $0.293

32 CBOE HOLDINGS

Quarterly Core Operating Expenses¹

1Q 2013 % rev 4Q 2012 % rev 3Q 2012 % rev 2Q 2012 % rev 1Q 2012 % rev Total Operating Expenses $73,275 51% $70,325 54% $67,458 53% $66,480 50% $63,977 53% Less: Depreciation and amortization 8,282 6% 6,210 5% 8,634 7% 8,320 6% 8,320 7% Accelerated stock-based compensation 3,180 2% 149

• 194
• Estimated liability related to SEC investigation
• 5,000

4% Volume-based expense: Royalty fees 13,169 9% 11,639 9% 11,304 9% 12,001 9% 11,191 9% Trading volume incentives 1,013 1% 1,027 1% 1,423 1% 1,176 1% 2,649 2% Core Operating Expenses (non-GAAP)¹: $47,631 33% $46,300 36% $46,097 36% $44,983 34% $41,623 34% Less: Continuing stock-based compensation 3,559 2% 3,151 2% 3,082 2% 3,027 2% 2,745 2% Core Operating Expenses excluding continuing stock- based compensation (non-GAAP)¹: $44,072 31% $43,149 33% $43,015 34% $41,956 32% $38,878 32% Core Operating Expense Detail: Employee costs $27,657 19% $26,291 20% $27,166 21% $25,300 19% $25,096 21% Data processing 4,516 3% 4,707 4% 5,070 4% 4,927 4% 4,899 4% Outside services 11,035 8% 10,790 8% 9,075 7% 9,265 7% 7,170 6% Travel and promotional expenses 2,064 1% 1,988 2% 2,548 2% 3,303 2% 2,167 2% Facilities costs 1,253 1% 1,269 1% 1,268 1% 1,226 1% 1,303 1% Other expenses 1,106 1% 1,255 1% 970 1% 962 1% 988 1% Total $47,631 $46,300 $46,097 $44,983 $41,623 Number of full-time employees at quarter end 610 605 596 618 601

May not foot due to rounding ¹Please see our disclaimer regarding Non-GAAP financial measures.

($ in thousands)

33 CBOE HOLDINGS 2012 % rev 2011 % rev 2010 % rev 2009 % rev 2008 % rev Total Operating Expenses $268,241 52% $266,512 52% $269,763 62% $248,497 62% $229,473 55% Less: Depreciation and Amortization 31,485 6% 34,094 7% 29,891 7% 27,512 7% 25,633 6% Accelerated stock-based compensation 343

• 453
• 12,968

3%

• Severance
• 3,709

1%

• Estimated liability related to SEC investigation

5,000 1%

• Exercise Right Appeal Settlement
• 2,086

1% Volume-based Expense: Royalty Fees 46,135 9% 47,822 9% 41,353 10% 33,079 8% 35,243 8% Trading Volume Incentives 6,275 1% 14,239 3% 21,294 5% 28,631 7% 15,437 4% Core Operating Expenses (non-GAAP)¹: $179,003 35% $166,195 33% $164,257 38% $157,189 39% $153,160 37% Less: Continuing stock-based compensation 12,005 2% 12,166 2% 7,833 2%

• Core Operating Expenses excluding continuing stock-

based compensation (non-GAAP)¹: $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 $91,848 18% $88,126 17% $85,442 20% $84,481 21% $83,140 20% Data Processing 19,603 4% 17,933 4% 19,501 5% 20,475 5% 20,556 5% Outside Services 36,300 7% 27,310 5% 31,245 7% 30,726 8% 27,370 7% Travel and Promotion Expenses 10,006 2% 9,812 2% 9,569 2% 10,249 3% 10,483 3% Facilities Costs 5,066 1% 5,400 1% 5,801 1% 5,624 1% 4,730 1% Other Expenses 4,175 1% 5,448 1% 4,866 1% 5,634 1% 6,881 2% Number of Full Time Employees 605 596 581 597 576 May not foot due to rounding ¹Please see our disclaimer regarding Non-GAAP financial measures. ($ in thousands)

Annual Core Operating Expenses¹

34 CBOE HOLDINGS

Estimated 2013 Stock-Based Compensation by Quarter

Quarterly breakout of estimated 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

35 CBOE HOLDINGS NOTE: May not foot due to rounding

GAAP to Non-GAAP Reconciliation

For Years 2009, 2010 and 2011

GAAP to Non-GAAP Reconciliation (in thousands, except per share amounts) 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 FY 2009 FY2010 FY2011 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 $ 98,166 $ 136,582 $ Less: Recognition of deferred access fee revenue (24,086) Less: Recognition of prior-period revenue (4,406) (4,406) Add: Exercise right appeal settlement 2,086 Add: Accelerated stock-based compensation 10,965 2,004 340 113 12,968 453 Add: Severance expense pursuant to an executive employment agreement 3,709 3,709 Add: Impairment change 1,620 460 1,620 460 Income tax benefit/(expense) related to the items above (4,461) 291 (337) (46) (1,478) 8,786 (4,034) (1,861) Add: Income tax provision adjustment 4,223 (322) 3,901 Net income allocated to participating securities - effect on reconciling items (144) 11 (11) (2) (75) (32) (76) (109) Adjusted net income allocated to common stockholders 26,380 $ 30,207 $ 32,540 $ 32,674 $ 44,745 $ 33,164 $ 93,237 $ 104,238 $ 143,134 $ Reconciliation of GAAP Diluted EPS to Non-GAAP GAAP diluted earnings per common share 0.20 $ 0.31 $ 0.36 $ 0.36 $ 0.45 $ 0.35 $ 1.17 $ 1.03 $ 1.52 $ Per share impact of items above 0.06

• 0.05

0.02 (0.14) 0.06 0.07 Non-GAAP diluted earnings per common share 0.26 $ 0.31 $ 0.36 $ 0.36 $ 0.50 $ 0.37 $ 1.03 $ 1.09 $ 1.59 $ GAAP operating revenue 106,015 $ 117,391 $ 124,042 $ 120,290 $ 143,604 $ 120,208 $ 426,082 $ 437,104 $ 508,144 $ Non-GAAP adjustments noted above (4,406) (24,086) (4,406) Adjusted operating revenue 106,015 $ 112,985 $ 124,042 $ 120,290 $ 143,604 $ 120,208 $ 401,996 $ 432,698 $ 508,144 $ GAAP operating income 34,933 $ 51,854 $ 57,535 $ 56,452 $ 74,966 $ 52,679 $ 177,584 $ 167,341 $ 241,632 $ Non-GAAP adjustments noted above 10,965 (2,402) 340 113

• 3,709

(22,000) 8,562 4,162 Adjusted operating income 45,898 $ 49,452 $ 57,875 $ 56,565 $ 74,966 $ 56,388 $ 155,584 $ 175,903 $ 245,794 $ Adjusted operating margin 43.3% 43.8% 46.7% 47.0% 52.2% 46.9% 38.7% 40.7% 48.4%

For further information go to cboe.com/Investor Relations

Reconciliation of GAAP Operating Margin to Non-GAAP

36 CBOE HOLDINGS

GAAP to Non-GAAP Reconciliation For 2012 and 2013

GAAP to Non-GAAP Reconciliation (in thousands, except per share amounts) 1Q12 2Q12 3Q12 4Q12 FY2012

1Q13

Reconciliation of GAAP Net Income Allocated to Common Stockholder to NON-GAAP GAAP net income allocated to common stockholders 32,863 $ 37,903 $ 45,243 $ 39,246 $ 155,255 $ 41,789 $ Add: Accelerated stock-based compensation 194 149 343 3,180 Add: Estimated liability related to SEC investigation 5,000 5,000 Add: Impairment charge 245 Income tax benefit/(expense) related to the items above (80) (63) (143) (1,311) Add: Income tax provision adjustment (7,654) (5,415) (13,054) Net income allocated to participating securities - effect on reconciling items (2) 86 4 109 (29) Adjusted net income allocated to common stockholders 32,975 $ 37,903 $ 37,675 $ 38,921 $ 147,510 $ 43,874 $ Reconciliation of GAAP Diluted EPS to Non-GAAP GAAP diluted earnings per common share 0.37 $ 0.36 $ 0.52 $ 0.45 $ 1.78 $ 0.48 $ Per share impact of items above

• (0.09)
• (0.09)

0.02 Non-GAAP diluted earnings per common share 0.37 $ 0.36 $ 0.43 $ 0.45 $ 1.69 $ 0.50 $ Reconciliation of GAAP Operating Margin to Non-GAAP GAAP operating revenue 121,392 $ 132,549 $ 128,319 $ 130,077 $ 512,338 $ 142,705 $ Non-GAAP adjustments noted above Adjusted operating revenue 121,392 $ 132,549 $ 128,319 $ 130,077 $ 512,338 $ 142,705 $ GAAP operating income 57,415 $ 66,069 $ 60,861 $ 59,752 $ 244,097 $ 69,430 $ Non-GAAP adjustments noted above 194

• 5,149

5,343 3,180 Adjusted operating income 57,609 $ 66,069 $ 60,861 $ 64,901 $ 249,440 $ 72,610 $ Adjusted operating margin 47.5% 49.8% 47.4% 49.9% 48.7% 50.9%

For further information go to cboe.com/Investor Relations May not add due to rounding and/or change in shares outstanding

37 CBOE HOLDINGS

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 non- GAAP 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.

Non-GAAP Information

CBOE 400 South LaSalle Street Chicago, Illinois 60605 www.cboe.com