01—Abstract
Summary
Summary of the 10-K filed February 28, 2012. Cited figures are marked; the original filing is the authoritative source.
Cboe Global Markets, Inc. (CBOE) reported strong growth in its 2011 fiscal year, driven by an increase in trading volumes across its options and futures exchanges.
The company's revenue grew significantly, primarily due to higher transaction fees, reflecting an 8.3%a increase in average daily trading volume. This growth was propelled by strong performance in index options, particularly SPX and VIX products, which also represent higher-margin offerings. CBOE also saw substantial growth in its futures segment.
The company's strategic initiatives, including the launch of C2 Options Exchange and investments in its proprietary technology platform CBOEdirect, continue to support its market position. Despite facing intense competition from other exchanges, CBOE demonstrated resilience, maintaining a significant market share in the U.S. options market. The company's financial health appears robust, with a focus on operational efficiency and a commitment to returning value to shareholders through dividends and share repurchases, positioning it well for continued expansion in the derivatives market.
02—Key points
Key Highlights
- Total operating revenues increased by 16.2% to $508.1 million in 2011, driven by a 13.0% rise in transaction fees.
- Average daily trading volume (ADV) across all contracts increased by 8.3% to 4.83 million in 2011, with index options volume up 18.7% and futures contracts up 172.7%.
- Net income increased by 40.2% to $139.4 million in 2011, with diluted earnings per share rising to $1.52 from $1.03 in 2010.
- CBOE's market share in U.S. options contracts was 26.4% in 2011, a slight decrease from 28.7% in 2010.
- The company operates a Hybrid trading model on CBOE and an all-electronic model on C2, leveraging its proprietary CBOEdirect technology platform.
- CBOE holds exclusive licenses for trading options on the S&P 500, S&P 100, and DJIA indexes, which are significant revenue drivers.
- The company successfully completed its restructuring and initial public offering in 2010, demonstrating significant financial and operational transformation.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 28, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $508.14M$437.10M | +16.3% |
| Operating Expenses | $266.51M$269.76M | −1.2% |
| Operating Income | $241.63M$167.34M | +44.4% |
| Net Income | $139.41M$99.40M | +40.3% |
| EPS (Basic) | $1.52$1.03 | +47.6% |
| EPS (Diluted) | $1.52$1.03 | +47.6% |
| Shares Outstanding (Basic) | 89.99M95.75M | −6.0% |
| Shares Outstanding (Diluted) | 89.99M95.75M | −6.0% |
05—Questions
Frequently Asked Questions
What were CBOE's primary revenue drivers in 2011?
CBOE's primary revenue driver in 2011 was transaction fees, which accounted for 73.4% of total operating revenues. Access fees, exchange services, market data, regulatory fees, and other revenue also contributed to the total operating revenues.
How did CBOE's trading volume perform in 2011?
CBOE experienced an 8.3% increase in total average daily volume in 2011 compared to 2010. This growth was particularly strong in index options (up 18.7%) and futures contracts (up 172.7%), while equity options saw a slight decrease of 9.9%.
What are the key risks CBOE faces according to the filing?
Key risks include the potential loss of exclusive licenses for key index options, which significantly contribute to revenue. Intense competition from other options exchanges and the possibility of regulatory changes also pose material risks to CBOE's business performance and market share.
How has CBOE's market structure evolved?
CBOE operates a 'Hybrid' trading model that combines electronic and open outcry trading on its main exchange, while its C2 exchange is fully electronic. Both operate on the proprietary CBOEdirect technology platform. The company also operates the CBOE Futures Exchange (CFE).
06—Continue