William J. Brodsky, Chairman and CEO CBOE Holdings, Inc. 2012 - - PowerPoint PPT Presentation

William J. Brodsky, Chairman and CEO CBOE Holdings, Inc. 2012 Sandler O’Neill Global Exchange & Brokerage Conference

CBOE Holdings, Inc.

June 8, 2012

Forward Looking Statements

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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 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 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 thi d t i id d th bilit f li d i k t th d t

• n third party service providers; and the ability of our compliance and risk management methods to

effectively monitor and manage our risks.

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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, Inc.

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filings made from time to time with the SEC.

• p. 2

At a Glance

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Leading Brand and Market Position

L di U S ti h

• Leading U.S. options exchange
• CBOE and VIX are industry’s leading brands
• Well positioned to benefit from secular growth

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Leading Product Innovator

• Exclusive index franchise differentiates CBOE
• Volatility suite provides strong growth potential

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High Performance Trading Technology

• Proprietary, state of the art electronic platform;

built and maintained in-house

• Powers CBOE, C2, CFE, CBSX and

OneChicago

CBOE Holdings, Inc.

• p. 3

Strong Financial Performance

First Quarter 2012 Highlights:

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Operating Revenues

Adjusted Operating Revenues¹

• $121.4 million, down 2%
• Slight decline related to industry-wide decline

in trading volume YOY

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Adjusted Operating Margin

• 47.5%, up 80 bps

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Adjusted Net Income Allocated to Common Stockholders

• $33.0 Million, up 2%

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Adjusted Diluted EPS

Adjusted Operating Margin¹

j

• $0.37, up 3%
• 7th consecutive quarter of adjusted EPS

growth YOY

CBOE Holdings, Inc.

g

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

• p. 4

Mission and Strategy

Develop New Products Optimize

Create value for stockholders by offering a diversified

Optimize Revenue and Market Share in Commoditized Products

portfolio of risk management products and services which generate industry leading

Broaden Customer Base

g y g profit margins and growth rates while maintaining the highest standards of market

Leverage Customized Trading Technology

g regulation

CBOE Holdings, Inc.

Technology

• p. 5

Leader in Product Innovation

Focus on developing exclusive products that generate premium fees

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S&P 500 complex

• Flagship SPX contract
• SPX Weeklys
• SPXpm

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VIX product line

• Sector ETFs and single-stock VIX

Sector ETFs and single stock VIX products

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New futures products on CFE

CBOE Holdings, Inc.

• p. 6

SPX Drives Strong Index Volume

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SPX most actively traded cash index

• 13% increase in 2011 versus 2010
• 8% YOY increase through May 2012
• 8% YOY increase through May 2012

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SPX Weeklys important component of SPX complex

• 283% increase in 2011 versus 2010
• 50% increase YOY through May 2012

CBOE Holdings, Inc.

• p. 7

¹YTD through May 31, 2012

SPXpm Gaining Traction

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Working closely with early adopters

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Expanded comprehensive marketing and educational program

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Expanded comprehensive marketing and educational program

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Customer feedback continues to be positive

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Open interest topped 100,000 contracts during each of last three months

6,000 7,000 8,000 100,000 120,000 140,000 me t (OI) 1,000 2,000 3,000 4,000 5,000 20,000 40,000 60,000 80,000 Daily Volum Open Interes Oct Nov Dec Jan Feb Mar Apr May

Peak OI ADV

CBOE Holdings, Inc.

• p. 8

SPXpm Provides Greater Efficiency, More Control and Lower Costs

Strong Growth in Volatility Trading

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Strong future growth potential

• VIX options up 13% through May
• VIX options up 13% through May

2012 YOY; up 36% in 1Q12 vs 4Q11

• VIX futures up 73% through May

p g y 2012 YOY; up 74% in 1Q12 vs 4Q11

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Growth fueled in part by ETPs tied to VIX index

• AUM up 82% to $5.1 billion from

$2.8 billion in Dec. 2011

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Adding new VIX benchmarks and tradable products

• Began publishing values for the

CBOE Holdings, Inc.

g p g CBOE “VIX of VIX” Index

• p. 9

¹YTD through May 31, 2012

CBOE Volatility Benchmark Indexes

CBOE Equity Index Volatility Indexes

CBOE V l tilit I d (VIX)

CBOE VIX Indexes on Individual Equities

• CBOE Volatility Index (VIX)
• CBOE DJIA Volatility Index (VXD)
• CBOE Nasdaq-100 Volatility Index (VXN)
• CBOE S&P 100 Volatility Index (VXO)
• Apple (VXAPL)
• Amazon (VXAZN)
• Goldman Sachs (VXGS)
• Google (VXGOG)

CBOE ETF VIX Indexes

• CBOE Gold ETF Volatility Index (GVZ)¹
• CBOE Emerging Markets ETF Volatility Index (VXEEM)²
• IBM (VXIBM)

Other CBOE Volatility-Related Indexes

• CBOE “VIX of VIX” Index (VVIX)
• CBOE Brazil ETF Volatility Index (VXEWZ)³
• CBOE Crude Oil ETF Volatility Index (OVX)4
• CBOE Silver ETF Volatility Index (VXSLV)
• CBOE China ETF Volatility Index (VXFXI)
• CBOE Tail Hedge Strategy Index (VXTH)
• CBOE S&P 500 SKEW Index (SKEW)
• CBOE VIX Premium Strategy Index (VPD)
• CBOE Capped VIX Premium Strategy Index (VPN)
• CBOE Gold Miners ETF Volatility Index (VXGDX)
• CBOE Energy Sector ETF Volatility Index (VXXLE)
• CBOE EuroCurrency ETF Volatility Index (EVZ)

¹Futures and options began trading in 2011

• CBOE S&P 500 Implied Correlation Indexes

(KCJ, ICJ, JCJ)

CBOE Holdings, Inc.

• p. 10

¹Futures and options began trading in 2011 ²Futures and options began trading in January 2012 ³Futures began trading in February 2012; options launched in March 2012

4Futures began trading in March; options began trading in April 2012

Optimizing Revenue and Market Share In Commoditized Products

Achieved significant market share gains:

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Positive customer response to VIP

• Pays credits to firms for certain types

and levels of business at CBOE

28.5%

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Market share in multiply-listed

• ptions up 3.3 percentage points to

22.4% for May 2012 versus 19.1% in D b 2011

22.4%

December 2011

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Ensure optimal returns in proprietary products

• Revised liquidity provider sliding scale

to exclude proprietary products

¹Excludes dividend trades CBOE Holdings, Inc.

• p. 11

Strong Initial Response to VIP

Expanding User Base

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Focus on customer segments with FLEX Index Options ADV greatest potential

• Users of OTC market
• Institutional investors
• Volatility traders

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OTC-type trades migrating to CBOE

• 29% increase YOY in FLEX index

products through May 2012

• 21% growth in FLEX index products

i 2011 2010 in 2011 vs 2010

CBOE Holdings, Inc.

• p. 12

¹YTD through May 31, 2012

Providing Enhanced CFLEX Technology

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Introducing new CFLEX 2.0, customized trading technology

• Enables convenient access to FLEX options
• Features Automated Improvement Mechanism (AIM)
• Began gradual roll out; expect to be fully functional by end of June
• Began gradual roll out; expect to be fully functional by end of June

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Expected to attract additional trading to the CBOE marketplace

CBOE Holdings, Inc.

• p. 13

Rollout of CBOE Command™

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Rollout of new trade engine technology

• CFLEX 2.0
• New API

New API

• Servers move to New Jersey

4Q12

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Systems development

CBOE Command™

y p embedded in value proposition

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Systems designed in-house

• Provide flexibility, scalability
• Cost effective

CBOE Holdings, Inc.

• p. 14

Undisputed Leader in Options Innovation

1983 Introduced Index Options 2003 Began operating Hybrid trading model 2011 Launched SPXpm 1985 1973 CBOE became first marketplace for trading options 1993 Devised methodology for the VIX Index, the market-leading measure of volatility 2006 Began trading VIX options 2007 Introduced CFLEX execution system Options Institute established measure of volatility

1973 2012

1997 Selected by Dow Jones to introduce the first 2004 execution system 2010 Launched C2, all electronic Launched 1990 Introduced LEAPS

• ptions contracts, giving

investors the ability to establish long term

• ption on the DJIA

Opened CBOE Futures Exchange (CFE) and launched VIX futures all electronic exchange Created Pulse, a multi-asset universal CFLEX 2.0, execution system Launching CBOE establish long-term positions, to U.S. market access electronic order system Command, new trade engine technology

CBOE Holdings, Inc.

Product & Technology Investment Focuses on Customer Needs & Product Synergies

• p. 15

Ongoing Value Proposition

D l N Develop New Products Optimize

Maintain the highest standards of Continue to drive Capitalize

• n operating

leverage Reinvest capital to drive growth and return

Revenue and Market Share in Commoditized Products

standards of market regulation margins and cash flow leverage inherent in the business and return excess cash to stockholders

Broaden Customer Base Leverage Customized Trading Technology

CBOE Holdings, Inc.

• p. 16

Questions & Answers

CBOE Holdings, Inc.

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Appendix Materials

CBOE Holdings, Inc.

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Large and Growing U.S. Market

18,106 (ADV in thousands) 14,181 14,385 15,578 16,907 8,079 11,406 2,884 3,150 3,106 3,613 4,700 5,992 4,717 4,503 4,441 4,781 4,794 1,295 1,237 1,062 1,127 1,433 1,858 2,688 3,763 4,717 , 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD¹

U.S. Options Average Daily Volume (ADV) CBOE & C2 Options Average Daily Volume

CBOE Holdings, Inc.

U.S. Options Average Daily Volume (ADV) CBOE & C2 Options Average Daily Volume

Source: Options Clearing Corporation and CBOE

• p. 19

¹YTD through May 31, 2012

1Q12 Financial Overview

Adjusted Basis1 (in millions, except EPS and RPC)

1Q12 1Q11 $ Chg. % Chg. g g

Operating Revenues

$121.4 $124.0 $ (2.6)

• 2%

Adjusted Operating Expenses

63.8 66.1 2.3

• 3%

Adjusted Operating Income

$ 57 6 $ 57 9 $ (0 3) 1%

Adjusted Operating Income

$ 57.6 $ 57.9 $ (0.3)

• 1%

Adjusted Operating Margin %

47.5% 46.7% 80 bps

Adjusted Net Income Allocated to Common Stockholders

$ 33 0 $ 32 5 $ 0 5 2%

Common Stockholders

$ 33.0 $ 32.5 $ 0.5 2%

Adjusted Diluted EPS

$ 0.37 $ 0.36 $ 0.01 3%

Total Contracts per Day

4.88 5.08

• 4%

Rate per Contract

$0.280 $0.285 $0.005

• 2%

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

• p. 20

1Q12 Reported 7th Consecutive Quarter of Year-Over-Year Margin Improvement

Quarterly Adjusted Operating Income and Margin¹

($ in millions)

55.0% $80.0 50.0% $60.0 $70.0 45.0% $40.0 $50.0 35 0% 40.0% $20.0 $30.0 30.0% 35.0% $0.0 $10.0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

CBOE Holdings, Inc.

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

Q Q Q Q Q Q Q Q Q Q Q Q Q Operating Income Margin

• p. 21

Highlights of 2012 Fee Changes

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Implemented a new volume incentive program (VIP)

CBOE Achieved Significant Gains in Market Share¹

Millions

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Revised liquidity provider sliding scale to exclude proprietary and exclusive products

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Increased fees for certain exchange services

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Modified access fees

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Modified access fees

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Increased fees at CFE

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Made additional adjustments to fine tune and optimize revenues and expenses Drive incremental volume leverage proprietary products ensure competitive pricing

¹Market share excludes dividend trades CBOE Holdings, Inc.

• p. 22

Drive incremental volume, leverage proprietary products, ensure competitive pricing

Transaction Fees Driven by Volume and Rate Per Contract

Overall Transaction Fee per Contract (RPC) Overall Transaction Fee per Contract (RPC)

Thousands 4Q11 RPC up versus 4Q10 due to higher mix of index

• ptions and futures and lower volume discounts

RPC decline reflects net impact of VIP, volume discounts and other fee changes Thousands RPC

CBOE Holdings, Inc.

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Options ADV Up 13% 1Q12 Compared with 4Q11

CBOE Holdings Quarterly Options ADV

(contracts in millions) CBOE Holdings, Inc.

• p. 24

¹2Q12 TD through May 31, 2012

Mix of Products Traded and Transaction Fees

Mix of Products Traded Mix of Transaction Fees

CBOE Holdings, Inc.

• p. 25

Leading Across Markets – 2012 YTD

5% 4% 3%

5% 4% 3%

Total Industry Volume

• Excl. Dividend Trades

CBOE C2 PHLX ISE

27% 1% 20% 16% 14% 10%

28% 1% 17% 15% 10% ISE NYSE/Amex NYSE/Arca NOM BOX

29.8% 28.4%

16%

17% 17%

E it O ti ¹ Index Options¹

BOX BATS 24% 6% 5% 4% 22% 2% 10% 5% 4% 3% 2% 2% 1%

Equity Options¹ ETF Options¹ Index Options¹

1% 18% 16% 16% 11% 2% 18% 21% 16% 10% 95% CBOE Holdings, Inc. Source: Options Clearing Corporation and CBOE ¹YTD through May 31, 2012, Excludes Dividend Trades May not add to 100 percent due to rounding.

• p. 26

Quarterly Core Operating Expenses¹

1Q 2012 % rev 4Q 2011 % rev 3Q 2011 % rev 2Q 2011 % rev 1Q 2011 % rev Total Operating Expenses $63,977 53% $67,529 56% $68,638 48% $63,838 53% $66,507 54% ($ in thousands)

• ta Ope at

g pe ses $ , $ , $ , $ , $ , Less: Depreciation and Amortization 8,320 7% 7,506 6% 8,897 6% 8,996 7% 8,696 7% Accelerated stock-based compensation 194

• 113
• 340
• Severance expense pursuant to executive employment

agreement

• 3,709

3%

• Volume-based Expense:

Royalty Fees 11 191 9% 12 346 10% 13 956 10% 10 373 9% 11 146 9% Royalty Fees 11,191 9% 12,346 10% 13,956 10% 10,373 9% 11,146 9% Trading Volume Incentives 2,649 2% 2,440 2% 3,525 2% 2,515 2% 5,759 5% Core Operating Expenses (non-GAAP)¹: $41,623 34% $41,528 35% $42,260 29% $41,841 35% $40,566 33% Less: Continuing stock-based compensation (2,745)

• 2%

(3,010)

• 3%

(2,976)

• 2%

(3,106)

• 3%

(3,073)

• 3%

Core Operating Expenses excluding continuing stock- based compensation (non-GAAP)¹: $38,878 32% $38,518 32% $39,284 27% $38,735 32% $37,493 30% Core Operating Expense Detail: Employee Costs $25,096 21% $24,560 20% $25,945 18% $24,391 20% $25,396 20% Data Processing 4,899 4% 4,263 4% 4,337 3% 4,905 4% 4,428 4% Outside Services 7,170 6% 6,657 6% 6,881 5% 7,190 6% 6,579 5% Travel and Promotion Expenses 2,167 2% 3,345 3% 2,416 2% 2,368 2% 1,685 1% Facilities Costs 1,303 1% 1,426 1% 1,081 1% 1,400 1% 1,492 1% Other Expenses 988 1% 1,277 1% 1,600 1% 1,587 1% 986 1% $41,623 $41,528 $42,260 $41,841 $40,566 Number of Full Time Employees 601 596 591 588 582

May not foot due to rounding

¹Please see our disclaimer regarding Non-GAAP financial measures.

CBOE Holdings, Inc.

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Annual Core Operating Expenses¹ Annual Core Operating Expenses

2011 % rev 2010 % rev 2009 % rev 2008 % rev Total Operating E penses $266 512 52% $269 763 62% $248 497 62% $229 473 55% ($ in thousands) Total Operating Expenses $266,512 52% $269,763 62% $248,497 62% $229,473 55% Less: Depreciation and Amortization 34,094 7% 29,891 7% 27,512 7% 25,633 6% Accelerated stock-based compensation 453 0% 12,969 3% Severance 3,708 1% Volume-based Expense: Royalty Fees 47,822 9% 41,353 10% 33,079 8% 35,243 8% Trading Volume Incentives 14,239 3% 21,294 5% 28,631 7% 15,437 4% Trading Volume Incentives 14,239 3% 21,294 5% 28,631 7% 15,437 4% Non-Operating Items: Exercise Right Appeal Settlement

• 2,086

1%

• Core Operating Expenses (non-GAAP)¹:

$166,196 33% $164,256 38% $157,189 39% $153,160 37% Less: Continuing stock-based compensation (12,165)

• 2%

(7,832)

• 2%

Core Operating Expenses excluding continuing stock- based compensation (non-GAAP)¹: $154,031 30% $156,424 36% $157,189 39% $153,160 37% Core Operating Expense Detail (excluding stock based Core Operating Expense Detail (excluding stock-based compensation): Employee Costs $88,128 17% $85,442 20% $84,481 21% $83,140 20% Data Processing 17,933 4% 19,501 5% 20,475 5% 20,556 5% Outside Services 27,310 5% 31,245 7% 30,726 8% 27,370 7% Travel and Promotion Expenses 9,812 2% 9,569 2% 10,249 3% 10,483 3% Facilities Costs 5,400 1% 5,801 1% 5,624 1% 4,730 1% Other Expenses 5,448 1% 4,866 1% 5,634 1% 6,881 2% p , , , , Number of Full Time Employees 596 581 597 576 May not foot due to rounding ¹Please see our disclaimer regarding Non-GAAP financial measures.

CBOE Holdings, Inc.

• p. 28

Strong Debt-Free Balance Sheet

Our Business Model Generates Significant Cash

Cash Flow Highlights $ in millions

1Q11 2Q11 3Q11 4Q11 1Q12

Net Cash Flow from Operating Acti ities $ 78.2 $ 14.3 $ 71.1 $ 38.3 $ 63.3 Activities Capital Expenditures (7.1) (11.2) (5.1) (5.7) (7.9) Dividend Payments (9.2) (9.2) (11.0) (10.9) (10.7) Purchase of Unrestricted Stock ‐ (3.1) (14.8) (33.4) (30.6) Net Increase (Decrease) in Cash and Cash Equivalents $ 61.9 $(9.1) $40.7 $(12.3) $ 13.7 Cash and Cash Equivalents at Quarter end $115.7 $106.5 $147.2 $134.9 $148.6

CBOE Holdings, Inc.

• p. 29

2012 Full-Year Guidance

($ in millions)

2011 Actual 2012 Guidance

Exchange services and other fees $18.2 $24 to $26 Access fees $68.7 $64 to $67 Core operating expenses¹ $166.2 $173 to $178² Tax rate 41.9% 41.2% to 41.7% Depreciation and amortization $34.1 $33 to $35 Capital expenditures $29 1 $30 to $35 Capital expenditures $29.1 $30 to $35

(1) The company expects core expenses to be at the low end of the guidance range if volume in 2012 is flat to up 4 percent and at the high end of the range if volume growth is 5 percent or higher. (2) Continuing stock-based compensation expense, included in core expenses, is expected to be in the range of $12.2 to $12.7 million, i l d d i l t 2011 i l d d ti i t k b d ti f $12 2 illi CBOE Holdings, Inc. included in employee costs; 2011 core expenses included continuing stock based compensation of $12.2 million.

• p. 30

CBOE Holdings Rolling 3-Month RPC

2012 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Equities $0.151 $0.128 $0.110 $0.112 Indexes 0.640 0.651 0.658 0.667 Exchange-traded funds 0.206 0.188 0.171 0.172 T t l ti 0 297 0 275 0 261 0 267 Total options average 0.297 0.275 0.261 0.267 Futures 1.474 1.610 1.697 1.655 Total average transaction fee per contract $0.308 $0.289 $0.280 $0.290 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 funds 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 average 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 average transaction fee per contract $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 funds 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 average 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 average transaction fee per contract $0.286 $0.294 $0.300 $0.286 $0.279 $0.281 $0.293 $0.301 $0.306 $0.302 $0.300 $0.293 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Equities $0.179 $0.188 $0.195 $0.188 $0.183 $0.188 $0.187 $0.181 $0.171 $0.168 $0.172 $0.172 Indexes 0.583 0.573 0.569 0.563 0.565 0.565 0.570 0.567 0.574 0.578 0.574 0.563 Exchange-traded funds 0.259 0.267 0.285 0.285 0.272 0.263 0.247 0.245 0.237 0.235 0.234 0.233

CBOE Holdings, Inc.

• p. 31
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Total options average 0.287 0.287 0.292 0.282 0.273 0.272 0.272 0.270 0.264 0.266 0.273 0.274 Futures 1.728 1.696 1.689 1.657 1.670 1.738 1.819 1.927 1.938 2.077 2.106 2.186 Total average transaction fee per contract $0.288 $0.288 $0.292 $0.283 $0.274 $0.273 $0.273 $0.272 $0.266 $0.268 $0.277 $0.278

Calculation of Weighted Average Shares

Shares Days Outstanding Total Days Weighted Avg Shares Days Outstanding Total Days Weighted Avg 1Q 2012 Year 2011 Unrestricted common stock 88,768,885 91 91 88,768,885 90,084,711 365 365 90,084,711 Vesting of participating securities (restricted stock) on 5/17/11 22,641 228 365 14,143 Vesting of participating securities (restricted stock) on 6/15/11 413,175 199 365 225,265 Vesting of participating securities (various dates) 84,358 various 365 7,405 Vesting of participating securitites (various dates) 72 66 91 52 Treasury share purchases (various dates) (1,149,000) various (623,110) (1,836,000) various (337,527) Total weighted average shares - basic and diluted 88,145,827 89,993,997 g g 88, 5,8 89,993,99 Participating securities for the period 1,474,323 1,474,323 1,860,371 1,860,371 Weighted average shares including participating securities 89,620,150 91,854,368 Percentage of net income allocated to participating securities 1.65% 2.03% Net income allocated to common stockholders equals net income less the percentage of net income allocated to participating securities. GAAP EPS i l l t d b di idi t i ll t d t t kh ld b th t t l i ht d h t t di d i th i d f b i d dil t d 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. Total shares outstanding at April 16, 2012 were 87,449,029

CBOE Holdings, Inc.

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GAAP to Non-GAAP Reconciliation

CBOE Holdings, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share amounts) Three months ended March 31, 2012 Items Impacting Results Reported (GAAP) Accelerated stock- based compensation After Considering Items (non-GAAP) Total Operating Revenues $ 121,392 $ 121,392 Total Operating Expenses 63,977 (194) 63,783 Operating Income 57,415 194 57,609 Operating Margin 47.3 % 47.5 % Total Other Income /(Expense) (453) (453) Income Before Income Taxes 56,962 194 57,156 Income Tax Provision 23,545 80 23,625 Effective Income tax rate 41.3 % 41.3 % Net Income $ 33,417 $ 114 $ 33,531 Net Income Allocated to Participating Securities (554) (2) (556) Net Income Allocated to Common Stockholders $ 32,863 $ 112 $ 32,975 Diluted Net Income per Share Allocated to Common Stockholders $ 0.37 $ 0.00 $ 0.37

CBOE Holdings, Inc.

NOTE: May not foot due to rounding

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GAAP to Non-GAAP Reconciliation

CBOE Holdings, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share amounts) Three months ended December 31, 2011 Twelve months ended December 31, 2011 Items Impacting Results Items Impacting Results Reported (GAAP) Other Expense Income Tax Expense After Considering Items (non- GAAP) Reported (GAAP) Operating Expenses Income Tax Expense Other Expense After Considering Items (non- GAAP) Total Operating Revenues $ 120,208 $ 120,208 $ 508,144 $ 508,144 Total Operating Expenses 67,529 (3,709) 63,820 266,512 (4,162) 262,350 Operating Income 52 679 3 709 56 388 241 632 4 162 245 794 Operating Income 52,679 3,709 56,388 241,632 4,162 245,794 Operating Margin 43.8 % 46.9 % 47.6 % 48.4 % Total Other Income /(Expense) (343) (343) (1,548) 460 (1,088) Income Before Income Taxes 52,336 3,709 56,045 240,084 4,162 460 244,706 Income Tax Provision 20,529 1,478 322 22,329 100,678 1,677 (3,901) 185 98,639 Effective Income tax rate 39.2 % 0.6% 39.8 % 41.9 % (1.6)% 40.3 % N t I $ 31 807 $ 2 231 $ (322) $ 33 716 $ 139 406 $ 2 485 $ 3 901 $ 275 $ 146 067 Net Income $ 31,807 $ 2,231 $ (322) $ 33,716 $ 139,406 $ 2,485 $ 3,901 $ 275 $ 146,067 Net Income Allocated to Participating Securities (520) (37) 5 (552) (2,824) (50) (79) (6) (2,959) Net Income Allocated to Common Stockholders $ 31,287 $ 2,194 $ (317) $ 33,164 $ 136,582 $ 2,435 $ 3,822 $ 269 $ 143,108 Diluted Net Income per Share Allocated to Common Stockholders $ 0.35 $ 0.02 $ 0.00 $ 0.37 $ 1.52 $ 0.03 $ 0.04 $ 0.00 $ 1.59

CBOE Holdings, Inc.

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GAAP to Non-GAAP Reconciliation

CBOE Holdings, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except per share amounts)

Items Impacting Results After Three months ended Septebmber 30, 2011 Reported (GAAP) Income tax reserve adjustment Considering Items (non- GAAP) Total Operating Revenues $143,604 143,604 $ Total Operating Expenses 68,638 68,638 Operating Income 74 966 74 966 Operating Income 74,966 74,966 Operating Margin 52.2% 52.2% Total Other Income /(Expense) (401) (401) Income Before Income Taxes 74,565 74,565 Income Tax Provision 33,238 (4,223) 29,015 Effective Income Tax Rate 44.6% 38.9% Net Income $41,327 $4,223 45,550 $ Net Income Allocated to Participating Securities (730) (75) (805) Net Income Allocated to Common Stockholders $40,597 $4,148 44,745 $ Diluted Net Income per Share Allocated to Common Stockholders $0.45 $0.05 0.50 $

CBOE Holdings, Inc.

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GAAP to Non-GAAP Reconciliation

CBOE Holdings, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except per share amounts)

Items Impacting Results Three months ended June 30, 2011 Three months ended March 31, 2011 Items Impacting Results Reported (GAAP) Accelerated stock-based compensation Impairment charge After Considering Items (non- GAAP) Reported (GAAP) Accelerated stock-based compensation After Considering Items (non- GAAP) Total Operating Revenues 124,042 $ 124,042 $ 120,290 $ 120,290 $ Total Operating Expenses 66 507 (340) 66 167 63 838 (113) 63 725 Total Operating Expenses 66,507 (340) 66,167 63,838 (113) 63,725 Operating Income 57,535 340 57,875 56,452 113 56,565 Operating Margin 46.4% 46.7% 46.9% 47.0% Total Other Income /(Expense) (643) 459 (184) (162) (162) Income Before Income Taxes 56,892 340 459 57,691 56,290 113 56,403 Income Tax Provision 24,021 143 194 24,358 22,889 46 22,935 Net Income 32,871 $ 197 $ 265 $ 33,333 $ 33,401 $ 67 $ 33,468 $ Net Income Allocated to Participating Securities (782) (5) (6) (793) (792) (2) (794) Net Income Allocated to Common Stockholders 32,089 $ 192 $ 259 $ 32,540 $ 32,609 $ 65 $ 32,674 $ Dil t d N t I Sh All t d t C St kh ld 0 36 $ 0 00 $ 0 00 $ 0 36 $ 0 36 $ 0 00 $ 0 36 $ CBOE Holdings, Inc.

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Diluted Net Income per Share Allocated to Common Stockholders 0.36 $ 0.00 $ 0.00 $ 0.36 $ 0.36 $ 0.00 $ 0.36 $

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GAAP to Non-GAAP Reconciliation

CBOE Holdings, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, ex cept per share amounts)

Items Impacting Results Items Impacting Results After After Three months ended September 30, 2010 Three months ended December 31, 2010 Reported (GAAP) Accelerated stock-based compensation After Considering Items (non- GAAP) Reported (GAAP) Recognition of prior-period revenue Accelerated stock-based compensation Impairment charge After Considering Items (non- GAAP) Total Operating Revenues 106,015 $

• $

106,015 $ 117,391 $ (4,406) $ 112,985 $ Total Operating Expenses 71,082 (10,965) 60,117 65,537 (2,004) 63,533 Operating Income 34,933 10,965 45,898 51,854 (4,406) 2,004 49,452 Operating Margin 33.0% 43.3% 44.2% 43.8% Total Other Income /(Expense) (235) (235) (1 898) 1 620 (278) Total Other Income /(Expense) (235) (235) (1,898) 1,620 (278) Income Before Income Taxes 34,698 10,965 45,663 49,956 (4,406) 2,004 1,620 49,174 Income Tax Provision 14,244 4,461 18,705 18,579 (1,638) 745 602 18,288 Net Income 20,454 $ 6,504 $ 26,958 $ 31,377 $ (2,768) $ 1,259 $ 1,018 $ 30,886 $ Net income allocated to Participating Securities (434) $ (144) $ (578) $ (690) $ 61 $ (28) $ (22) $ (679) $ Net Income Allocated to Common Stockholders 20,020 $ 6,360 $ 26,380 $ 30,687 $ (2,707) $ 1,231 $ 995 $ 30,206 $ Diluted Net Income Per Share Allocated to Common Stockholders 0.20 $ 0.06 $ 0.26 $ 0.31 $ (0.03) $ 0.01 $ 0.01 $ 0.31 $ Diluted Net Income Per Share for all Stockholders 0.20 $ 0.06 $ 0.26 $ 0.32 $ (0.03) $ 0.01 $ 0.01 $ 0.32 $

(in thousands, ex cept per share amounts)

Year ended December 31, 2009 Items Impacting Results Reported (GAAP) Recognition of prior-period revenue Accelerated stock-based compensation Impairment charge After Considering Items (non- GAAP) Reported (GAAP) Recognition of deferred access fee revenue Exercise right appeal settlement After Considering Items (non- GAAP) Total Operating Revenues 437,104 $ (4,406) $ 432,698 $ 426,082 $ (24,086) $ 401,996 $ Items Impacting Results Year ended December 31, 2010 Total Operating Expenses 269,763 (12,968) 256,795 248,498 (2,086) 246,412 Operating Income 167,341 (4,406) 12,968 175,903 177,584 (24,086) 2,086 155,584 Operating Margin 38.3% 40.7% 41.7% 38.7% Total Other Income /(Expense) (2,718) 1,620 (1,098) (355) (355) Income Before Income Taxes 164,623 (4,406) 12,968 1,620 174,805 177,229 (24,086) 2,086 155,229 Income Tax Provision 65,227 (1,746) 5,138 642 69,261 70,778 (9,619) 833 61,992 Net Income 99,396 $ (2,660) $ 7,830 $ 978 $ 105,544 $ 106,451 $ (14,467) $ 1,253 $ 93,237 $ Net income allocated to Participating Securities (1 229) $ 33 $ (97) $ (12) $ (1 305) $ $ $ $ $

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Net income allocated to Participating Securities (1,229) $ 33 $ (97) $ (12) $ (1,305) $

• $
• $
• $
• $

Net Income Allocated to Common Stockholders 98,167 $ (2,627) $ 7,733 $ 966 $ 104,239 $ 106,451 $ (14,467) $ 1,253 $ 93,237 $ Diluted Net Income Per Share Allocated to Common Stockholders 1.03 $ (0.03) $ 0.08 $ 0.01 $ 1.09 $ 1.17 $ ($0.16) $0.01 1.03 $ Diluted Net Income Per Share for all Stockholders 1.04 $ (0.03) $ 0.08 $ 0.01 $ 1.10 $ 1.17 $ ($0.16) $0.01 1.03 $

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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 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. M t b li th t th GAAP fi i l t d i

►

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 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 fi i l d b th i 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

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p , ( ) p p ( ) unusual or one-time expenses.

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CBOE Holdings, Inc.

400 South LaSalle Street 400 South LaSalle Street Chicago, IL 60605

Debbie Koopman Vice President, Investor Relations koopman@cboe com koopman@cboe.com 312-786-7136

CBOE Holdings, Inc.

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