first quarter earnings conference call may 1,...

First Quarter Earnings Conference Call

May 1, 2012

CBOE Holdings, Inc.

Agenda

Strategic Review William BrodskyChairman and CEO

Financial Review Alan DeanExecutive Vice PresidentExecutive Vice PresidentCFO and Treasurer

Willi B d kQuestions and Answers William Brodsky

Alan Dean

Edward TillyEdward TillyPresident and Chief Operating Officer

Edward ProvostExecutive Vice PresidentChi f B i D l t Offi

CBOE Holdings, Inc.p. 2p. 2

Chief Business Development Officer

p. 2

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 andexpectations, 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 intellectualviolating 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 ton third party service providers; and the ability of our compliance and risk management methods to effectively monitor and manage our risks.

► More detailed information about factors that may affect our performance may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2011 and other filings made from time to time with the SEC


filings made from time to time with the SEC.

p. 3

Strategic Review

William BrodskyChairman and CEO

CBOE Holdings, Inc.p. 4p. 4p. 4

Solid Financial Results

► Slight decline in operating► Slight decline in operating revenues to $121.4 million related to industry-wide decline in trading volume YOYg

► Solid expense control enhanced operating margin

► Adjusted diluted EPS up 3% to $0.37

• 7th consecutive quarter of qadjusted EPS growth YOY

► Strong gains in market share

CBOE Holdings, Inc.p. 5

Mission and Strategy

Develop New Products

Create value for stockholders by offering a diversified portfolio of risk management

Optimize Revenue and

Market Share in

portfolio of risk management products and services which generate industry leading profit margins and growth rates while Commoditized

Productsmargins and growth rates while maintaining the highest standards of market regulation

Broaden Customer

Base


SPXpm Gaining Traction

► Working closely with early adopters

► Expanded comprehensive marketing and educational program► Expanded comprehensive marketing and educational program

► Customer feedback continues to be positive

► Open interest topped 100,000 contracts in March and April


Strong Growth in Volatility Trading

► Strong future growth potential• VIX options up 4% 1Q12 YOY;

up 36% in 1Q12 vs 4Q11

• VIX futures up 57% 1Q12 YOY; up 74% in 1Q12 vs 4Q11

► Growth fueled in part by ETPs tied to VIX index

• AUM up 82% to $5.1 billion from $2.8 billion in Dec. 2011

► Adding new VIX benchmarks► Adding new VIX benchmarks and tradable products


¹YTD through March 31, 2012

CBOE Volatility Benchmark Indexes

CBOE Equity Index Volatility IndexesCBOE 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)


¹Futures and options began trading in 2011²Futures and options began trading in January 2012³Futures began trading in February 2012; options launched in March 20124Futures began trading March 26; options to begin trading April 10, 2012

Optimizing Revenue and Market Share In Commoditized ProductsAchieved significant market share gains:

► Positive customer response to VIP

• Pays credits to firms for certain types and levels of business at CBOE 28.5%

► Market share in multiply-listed options up 3.9 percentage points to 23.0% for March 2012 versus 19.1% i D b 2011

23.0%

in December 2011

► Ensure optimal returns in proprietary products

• Revised liquidity provider sliding scale to exclude proprietary products


Strong Initial Response to VIP

Expanding User Base

► Focus on customer segments with FLEX Index Options ADVgreatest potential

• Users of OTC market

• Institutional investors

• Volatility traders

► OTC-type trades migrating to CBOE

• 24% increase in FLEX index products 1Q12 vs 1Q11

• 21% growth in FLEX index products i 2011 2010in 2011 vs 2010


¹YTD through March 31, 2012

Providing Enhanced CFLEX Technology

► 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

► Expected to attract additional trading to the CBOE marketplace


Rollout of CBOE Command™

► Rollout of new trade engine technology

• CFLEX 2.0• New APINew API• Servers move to New Jersey

4Q12► Systems development CBOE Command™y p

embedded in value proposition

► Systems designed in-house

• Provide flexibility, scalability• Cost effective


Undisputed Leader in Options Innovation1983 Introduced Index Options

2003 Began operating Hybrid trading model

2011 LaunchedSPXpm1985

1973CBOE became first marketplace for trading options

1993 Devised methodology for the VIX Index, the market-leading measure of volatility

2006 Began trading VIX options

2007Introduced CFLEX execution system

Options Institute established

measure of volatility

1973 20121997 Selected by Dow Jones to introduce the first 2004

execution system

2010Launched C2, all electronic Launched

1990Introduced LEAPS options contracts, giving investors the ability to establish long term

option 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. marketaccess electronic order system

Command, new trade engine technology

CBOE Holdings, Inc.

Product & Technology Investment Focuses on Customer Needs & Product Synergiesp. 14

Financial Review

Alan DeanExecutive Vice President CFO and TreasurerCFO and Treasurer


1Q12 Financial Overview

Adjusted Basis1

(in millions, except EPS and RPC) 1Q12 1Q11 $ Chg. % Chg.g gOperating 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 bpsAdjusted 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.”


Overview of Operating Revenues

Key Drivers:► Transaction FeesOperating Revenues (in millions) 1Q12 1Q11 $ CHG % CHG

• 4% decrease in trading volume• 2% decrease in RPC

► Access Fees

p g ( ) $

Transaction fees $ 84.8 $ 89.9 $ (5.1) -6%

Access fees 16.0 17.6 (1.6) -9%► Access Fees

• Reflects fee modifications

► Exchange Services and Other FeesD i b f h

( )

Exchange services and other fees 7.4 4.7 2.7 57%

Market data fees 6.4 5.1 1.3 25%• Driven by fee changes

► Market Data• OPRA fees up due to market share

gains

Regulatory fees 4.7 5.0 (0.3) -6%

Other revenue 2.1 1.7 0.4 24%gains

• Higher fees from CBOE market data services

Total Operating Revenues $ 121.4 $ 124.0 $ (2.6) -2%


Highlights of Fee Changes

► Implemented a new volume incentive program (VIP)

CBOE Achieved Significant Gains in Market Share¹ Millions

► Revised liquidity provider sliding scale to exclude proprietary and exclusive products

► Increased fees for certain exchange services

► Modified access fees► Modified access fees

► Increased fees at CFE

► 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


Drive incremental volume, leverage proprietary products, ensure competitive pricing

Transaction Fees Driven by Volumeand 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 options and futures and lower volume discounts

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

Thousands RPC


Trading Volume Mix 1Q12 vs 1Q11

RPC Changes Primarily Reflect Impact of Fee Modifications


Strong Growth in Exchange Services and Market Data Revenue

Key Drivers:► Access fees decline

• Reflects fee modifications• Trading permits held steady• More permit holders taking

(in millions) 1Q12 1Q11 $ CHG % CHG

Access fees $ 16.0 $ 17.6 $ (1.6) -9%advantage of sliding scale pricing

• Full-year commitments

► Exchange services up 57%

Exchange services and other fees $ 7.4 $ 4.7 $ 2.7 57%

Market data fees $ 6 4 $ 5 1 $ 1 3 25%• Driven by fee changes

► Market data fees up 25%• OPRA fees up due to market share

Market data fees $ 6.4 $ 5.1 $ 1.3 25%

pgains

• Higher fees from CBOE market data services


Adjusted Operating Expenses¹

Key Drivers:Outside ServicesAdjusted Operating Expenses (in millions) 1Q12 1Q11 $ CHG % CHG

► Outside Services• Higher expenses for contract

programmers

T l d P ti l E

j g

Employee Costs $ 25.1 $ 25.4 $ (0.3) -1%

Depreciation and Amortization 8.3 8.7 (0.4) -5%

D t P i 4 9 4 4 0 5 11% ► Travel and Promotional Expenses• Advertising campaign for VIX

products and SPXpm

Data Processing 4.9 4.4 0.5 11%

Outside Services 7.2 6.6 0.6 9%

Royalty Fees 11.2 11.1 0.1 1%

► Data Processing • Reflects migration of trading

operations to Secaucus, NJ

Trading Volume Incentives 2.6 5.7 (3.1) -54%

Travel and Promotional Expenses 2.2 1.7 0.5 29%

Facilities Costs 1.3 1.5 (0.2) -13%► Trading Volume Incentives

• Down due to changes in program criteria

( )

Other Expenses 1.0 1.0 - -

Total Adjusted Operating Expenses $ 63.8 $ 66.1 $ (2.3) -3%


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

p. 22

1Q12 Core Operating Expenses up 3%

(in thousands) 1Q12 1Q11 $ CHG % CHGTotal Operating Expenses 63,977$ 66,507$ $ (2,530) -4%Less: Depreciation and amortization 8,320 8,696 (376) -4% Accelerated stock-based compensation expense 194 340 (146) NM Volume-based expenses: Royalty fees 11,191 11,146 45 - Trading volume incentives 2,649 5,759 (3,110) -54%g , ,Core Operating Expenses (non-GAAP): 41,623$ 40,566$ $ 1,057 3%

Detail of Core Operating Expenses (non-GAAP) Employee costs $25,096 $25,396 -$300 -1%

D t i 4 899 4 428 471 11% Data processing 4,899 4,428 471 11% Outside services 7,170 6,579 591 9% Travel and promotional expenses 2,167 1,685 482 29% Facilities costs 1,303 1,492 (189) -13% Other expenses 988 986 2 - Total 41,623$ 40,566$ $ 1,057 3%


NM = not meaningful

p. 23

Volume-based Expenses

(in thousands) 1Q12 1Q11 $ CHG % CHG

R lt f $ 11 191 $ 11 146 $ 45 0%

Volume-based expenses:

Royalty fees $ 11,191 $ 11,146 $ 45 0% Trading volume incentives 2,649 5,759 (3,110) -54% Total $ 13,840 $ 16,905 $ (3,065) -18%

► Royalty fees primarily determined by trading volume in licensed index products

► Trading volume incentives decline primarily due to changes in program criteria to qualify for quantity-based fee waivers


Seventh Consecutive Quarter ofYear-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. 25

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 $ 63.3ActivitiesCapital 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


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 $35Capital 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. 27

Ongoing Value Proposition

ReinvestMaintain the highest

standards of market

regulation

Continue to drive margins and cash flow

Capitalize on operating leverage

inherent in the business

Reinvest capital to drive

growth and return excess

cash to stockholdersstockholders


Questions & Answers


Appendix Materials


Options ADV Up 13% 1Q12Compared with 4Q11

CBOE Holdings Quarterly Options ADV (contracts in millions)


Quarterly Core Operating Expenses¹

1Q 2012 % rev 4Q 2011 % rev 3Q 2011 % rev 2Q 2011 % rev 1Q 2011 % revTotal Operating Expenses $63,977 53% $67,529 56% $68,638 48% $63,838 53% $66,507 54%L

($ in thousands)

Less: Depreciation and Amortization 8,320 7% 7,506 6% 8,897 6% 8,996 8% 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% 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 35% $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%

Expense Detail: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$41,623 $41,528 $42,260 $41,841 $40,566

Number of Full Time Employees 601 596 591 588 582

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


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 dGAAP EPS is calculated by dividing net income allocated to common stockholders by the total weighted average shares outstanding during the period for basic and diluted.


CBOE Holdings Rolling 3-Month RPC

2012 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecEquities $0.151 $0.128 $0.110Indexes 0.640 0.651 0.658Exchange-traded funds 0.206 0.188 0.171 Total options average 0.297 0.275 0.261Futures 1.474 1.610 1.697 Total average transaction fee per contract $0.308 $0.289 $0.280

2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecEquities $0.170 $0.164 $0.160 $0.163 $0.168 $0.169 $0.171 $0.159 $0.159 $0.155 $0.163 $0.167Indexes 0 592 0 601 0 604 0 615 0 618 0 627 0 624 0 606 0 605 0 605 0 621 0 631Indexes 0.592 0.601 0.604 0.615 0.618 0.627 0.624 0.606 0.605 0.605 0.621 0.631Exchange-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 0.312Futures 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 Decp y g pEquities $0.177 $0.180 $0.184 $0.172 $0.163 $0.162 $0.170 $0.180 $0.182 $0.180 $0.179 $0.177Indexes 0.576 0.590 0.597 0.584 0.578 0.580 0.590 0.597 0.598 0.592 0.592 0.590Exchange-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 0.284Futures 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 DecEquities $0.179 $0.188 $0.195 $0.188 $0.183 $0.188 $0.187 $0.181 $0.171 $0.168 $0.172 $0.172Indexes 0.583 0.573 0.569 0.563 0.565 0.565 0.570 0.567 0.574 0.578 0.574 0.563Exchange-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 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 0.274Futures 1 728 1 696 1 689 1 657 1 670 1 738 1 819 1 927 1 938 2 077 2 106 2 186


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

GAAP to Non-GAAP Reconciliation

CBOE Holdings, Inc. and SubsidiariesReconciliation 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 compensation¹After 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

p. 35



(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 794Operating 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 067Net 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) (2,263) (40) (63) (6) (2,372)

Net Income Allocated to Common Stockholders $ 31,287 $ 2,194 $ (317) $ 33,164 $ 137,143 $ 2,445 $ 3,838 $ 269 $ 143,695

Diluted Net Income per Share Allocated to Common Stockholders $ 0.35 $ 0.02 $ - $ 0.37 $ 1.52 $ 0.03 $ 0.04 $ - $ 1.60

CBOE Holdings, Inc.


p. 36



(in thousands, ex cept per share amounts)


After After

Three months ended Septebmber 30, 2011 Nine months ended September 30, 2011


Reported (GAAP)

Income tax reserve adjustment

Considering Items (non-GAAP)

Reported (GAAP)

Income tax reserve adjustment

Accelerated stock-based compensation

Impairment charge

Considering Items (non-GAAP)

Total Operating Revenues $143,604 143,604$ $387,935 $387,935

Total Operating Expenses 68,638 68,638 198,984 (453) 198,531

Operating Income 74 966 74 966 188 951 453 189 404 Operating Income 74,966 74,966 188,951 453 189,404

Operating Margin 52.2% 52.2% 48.7% 48.8%

Total Other Income /(Expense) (401) (401) (1,204) 460 (744)

Income Before Income Taxes 74,565 74,565 187,747 453 460 188,660

Income Tax Provision 33,238 (4,223) 29,015 80,148 (4,223) 188 191 76,304

Effective Income Tax Rate 44.6% 38.9% 42.7% 40.4%

Net Income $41,327 $4,223 45,550$ $107,599 $4,223 $265 $269 $112,356

Net Income Allocated to Participating Securities (730) (75) (805) (2,294) (90) (6) (6) (2,396)

Net Income Allocated to Common Stockholders $40,597 $4,148 44,745$ $105,305 $4,133 $259 $263 $109,960

Diluted Net Income per Share Allocated to Common Stockholders $0.45 $0.05 0.50$ $1.17 $0.05 $0.00 $0.00 $1.22

CBOE Holdings, Inc.


p. 37





Three months ended June 30, 2011Three months ended March 31, 2011


Reported (GAAP)


Impairment charge

After Considering Items (non-GAAP)

Reported (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


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$



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

p. 38

GAAP to Non-GAAP ReconciliationCBOE Holdings, Inc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Measures


Items Impacting Results Items Impacting ResultsAfter After

Three months ended September 30, 2010 Three months ended December 31, 2010

Reported (GAAP)



Reported (GAAP)

Recognition of prior-period revenue


Impairment charge


Total Operating Revenues 106,015$ -$ 106,015$ 117,391$ (4,406)$ 112,985$


Operating Income 34,933 10,965 45,898 51,854 (4,406) 2,004 49,452


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, 2009Items Impacting Results

Reported (GAAP)

Recognition of prior-period revenue


Impairment charge


Reported (GAAP)

Recognition of deferred access fee revenue

Exercise right appeal settlement


Total Operating Revenues 437,104$ (4,406)$ 432,698$ 426,082$ (24,086)$ 401,996$

Items Impacting ResultsYear ended December 31, 2010


Operating Income 167,341 (4,406) 12,968 175,903 177,584 (24,086) 2,086 155,584


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)$ $ $ $ $


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) $0.01 1.03$

NOTE: May not foot due to rounding p. 39

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 operatingcore 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 adjustedNon 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 iGAAP 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


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

p. 40

CBOE Holdings, Inc.400 South LaSalle Street400 South LaSalle StreetChicago, IL 60605

Debbie KoopmanVice President, Investor Relationskoopman@cboe [email protected]


first quarter earnings conference call may 1,...

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