Barclays Global Financial Services Conference Edward Provost, President and COO September 9, 2014 CBOE HOLDINGS 1
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 and trade certain index options and futures products; increasing price competition in our industry; compliance with legal and regulatory obligations and obligations under agreements with regulatory agencies; decreases in the amount of trading volumes or a shift in the mix of products traded on our exchanges; legislative or regulatory changes; increasing competition by foreign and domestic entities; 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 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; economic, political and market conditions; our ability to maintain access fee revenues; our ability to meet our compliance obligations; 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, 2013 and other filings made from time to time with the SEC. 2 CBOE HOLDINGS
CBOE Holdings at a Glance Leading Brand and Market Position Leading Product Innovator High Performance Trading Technology 3 CBOE HOLDINGS
Remain Focused on Core Mission and Strategic Initiatives Leverage and Develop Proprietary Products Optimize Revenue in Create value for stockholders Commoditized by generating industry-leading Products profit margins and growth rates through a diversified portfolio of risk management products Broaden Customer and services. Base Provide Highest Standards in Market Regulation and Compliance 4 CBOE HOLDINGS
Strong Trading Volume Gains YTD Total ADV up 10% YTD 1 Increases in ADV across each product category Record trading in VIX options and futures YTD 2014 vs YTD 2013 ADV by Product ADV Growth by Product Category 2014 YTD Versus 2013 YTD¹ 2014 YTD¹ (in millions) 5.12 Total ADV 10% 4.64 1.58 Total Futures 17% 1.48 1.42 Index Options 7% 1.36 Options on ETPs 4% 1.64 1.93 2013 YTD¹ 2014 YTD¹ Equity Options 18% Equities ETPs Index Futures ¹YTD through August 31, 2014 and 2013 5 CBOE HOLDINGS
S&P 500 Index (SPX) Product Line SPX Annual ADV* (in thousands) SPX Weeklys - fastest growing product in SPX complex 835 823 784 696 698 SPX ADV up 1% through August 2014 615 SPX Weeklys up 36% SPX Weeklys represent 32% of total SPX volume 2009 2010 2011 2012 2013 2014¹ *includes SPX Weeklys SPX Weeklys appeal to both retail Total ADV SPX AM Settled Total ADV Total ADV SPX Weeklys investors and semi-pros Chart Title 300,000 35% SPX Weeklys ADV 270,000 30% 240,000 25% 210,000 % of all SPX 180,000 20% 150,000 15% 120,000 90,000 10% 60,000 5% 30,000 0 0% 2009 2010 2011 2012 2013 2014¹ SPX Weeklys ADV Weeklys % of All SPX ¹Through August 31, 2014 6 CBOE HOLDINGS
Broadening our SPX Customer Base Continue to see significant opportunities to grow trading among likely SPX users Intensifying educational and marketing efforts in 2014 Targeted user groups include: Users of SPY options and SPY Weeklys Institutional investors Overseas investors 7 CBOE HOLDINGS
VIX Trading Continues to Achieve Strong Growth Posted all-time volume records in VIX VIX Options ADV Chart Title (in thousands) options and futures in 2013 and 1Q14 653 VIX options ADV up 15% through 567 443 August 31, 2014 389 248 132 VIX futures ADV up 18% through August 31, 2014 2009 2010 2011 2012 2013 2014¹ VIX Futures ADV Chart Title Volatility space poised for growth (in thousands) 190 159 95 48 17 5 2009 2010 2011 2012 2013 2014¹ ¹Through August 31, 2014 8 CBOE HOLDINGS
VIX: the Proxy for Global Market Volatility VIX universe of users continues to expand Still in early stages of developing VIX customer segments globally “Mainstreaming” of VIX options and futures Investors of every type can use VIX options and futures as a means of portfolio diversification 9 CBOE HOLDINGS
VIX Trading Poised for Further Growth To the extent VIX returns to historical norms, we expect to see even greater participation in VIX options and futures trading 10 CBOE HOLDINGS
VIX Futures Trading Poised for Further Growth Key indicators supporting our growth outlook include: Increased demand for VIX futures market data over last six months Shift in mix of market participants to include users that are generally more active traders Continuing to add new trading privilege holders Increased participation provided from 24-hour trading 11 CBOE HOLDINGS
Increasing Access to VIX Futures Trading Through Extended Trading Hours Nearly 10% of VIX futures trading took place during non-U.S. trading hours in July and August, the first full months of 24-hour trading Plan to add trading hours for VIX and SPX options in 4Q14, pending regulatory approval VIX Futures ADV During Non-U.S. Trading Hours (ETH) - By Time Period 30,000 12% VIX Futures ADV During ETH 11% 25,000 10% 20,000 5:00 PM-2:00 AM 9% 2:00-7:00 AM 15,000 8% 3:30-5:00 PM 10,000 7% 7:00-8:30 AM 5,000 % of All VIX Futures 6% 0 5% Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 ¹ ¹Thru Aug 31 12 CBOE HOLDINGS
Expanding Volatility Suite of Products Futures and Options on Short-Term Volatility Index (VXST) Low-volatility environment has posed headwinds for VXST Believe market participants will embrace the utility of VXST futures and options Launched targeted educational and social media programs 13 CBOE HOLDINGS
Expanding Volatility Suite of Products CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (VXTYN Index) Began disseminating index values in May 2013 Plan to launch futures on the CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (VXTYN Index) on November 13 th , pending regulatory review We view interest-rate volatility as an exciting new frontier in the volatility marketplace 14 CBOE HOLDINGS
Responding to Growing Demand for Education in Volatility Trading Investor education goes hand in hand with new products Options Institute curriculum heavily weighted toward VIX futures and options Social media programs reflect strong interest in VIX-related online chatter and blogs 15 CBOE HOLDINGS
CBOE RMC Attracts Most Active and Sophisticated VIX Customers Boosting awareness of CBOE’s proprietary products U.S. Risk Management Looking For an Edge in Conference now in its 30 th Managing Risk? year The CBOE Risk Management Conference is Third annual RMC Europe the premier educational was held last week in Dublin forum for users of equity derivatives and volatility products. Join us for the 3rd Annual CBOE RISK MANAGEMENT CONFERENCE EUROPE SEPTEMBER 3-5, 2014 The Powerscourt Hotel Powerscourt Estate, Enniskerry, Co. Wicklow, Ireland 16 CBOE HOLDINGS
Optimizing Revenue and Market Share in Multiply-Listed Options Focused on being among the leaders in options market share YTD through August, CBOE multiply- CBOE Market Share¹ listed market share of 21.0% versus 30% 18.7% for same period in 2013 27% 24% YTD through August, CBOE total 21% market share of 30.1% versus 27.8% 18% for the same period in 2013 15% CBOE & C2 accounted for 31.9% of 12% Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 industry volume; up versus 29.7% CBOE Multiply-Listed Products CBOE Total through August 2013 ¹Market share stats exclude dividend trades 17 CBOE HOLDINGS
Strong Track Record of Organic Growth ¹Adjusted to reflect the impact of certain items. See appendix for “Non - GAAP Information.” ²YTD through June 2014 18 CBOE HOLDINGS
Enhancing Stockholder Value Strong cash flow generation and disciplined approach to managing cash Cash of $145MM at June 30, 2014 Generated $121MM in operating cash flow through June 30, 2014 Returned nearly $975MM to shareholders since IPO in 2010 Cash Used for Share Repurchases ($ in millions) $88 $50 $47 $45 $1 2010 2011 2012 2013 YTD 2014¹ ¹YTD through June 2014 19 CBOE HOLDINGS
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