First Quarter GAAP Financial Highlights
- Operating Revenues of $121.4 Million, Down 2 Percent
- Net Income Allocated to Common Stockholders was $32.9 Million; Diluted EPS Up 3 Percent to $0.37
- Operating Margin Increases 90 Basis Points to 47.3 Percent
- Average Daily Trading Volume of 4.88 Million Contracts, Down 4 Percent Versus 1Q11 and Up 14 Percent Versus 4Q11
- Total Market Share Increased to 29.9 Percent for the Quarter, Up 3.2 Percentage Points from Fourth Quarter 2011(1)
CBOE Holdings, Inc. (NASDAQ: CBOE) today reported first quarter 2012 net income allocated to common stockholders of $32.9 million, or $0.37 per diluted share, compared with $32.1 million, or $0.36 per diluted share in the first quarter of 2011. Operating revenues for the first quarter were $121.4 million, down 2 percent compared with $124.0 million in the first quarter of 2011.
"We are pleased to report our company's seventh consecutive quarter of adjusted earnings per share growth, despite lower trading volume industry-wide. CBOE Holdings also posted significant gains in market share, as a result of very positive customer response to our new Volume Incentive Program (VIP)," said William J. Brodsky, CBOE Holdings Chairman and Chief Executive Officer. "In addition, we continue to see particularly strong growth in our VIX options and futures, which we believe speaks to our ongoing commitment to expanding our suite of volatility products and to broadening our customer base through marketing and education. Our financial strength allows us to continue to deliver value to stockholders while investing in innovations that will position our company for long-term success."
"We reported solid financial results for the quarter by continuing to manage our costs while investing in future growth," said Alan J. Dean,CBOE Holdings Executive Vice President and Chief Financial Officer. "Our consistent earnings growth and financial stability provide a strong foundation for our business. During the quarter, we purchased $31 million of CBOE shares, bringing our total purchases under our $100 millionshare repurchase program to $78 million. We maintain a debt-free balance sheet, and our strong operations generate significant free cash flow, which we will continue to deploy with a careful balance between reinvesting in the business and distributing excess cash to stockholders through share repurchases and dividends," Dean added.
(1) Represents options market share for CBOE and C2, adjusted to exclude dividend trades.
The table below highlights CBOE Holdings' operating results on a GAAP basis and an adjusted basis for the comparative quarters ended March 31, 2012 and 2011. Financial results presented on an adjusted basis provide supplemental information to measure period-over-period comparisons by adjusting for certain items that are not indicative of the company's core operating performance.
Key Statistics and Financial Highlights: |
||||||||
(in millions, except per share and fee per contract) |
1Q 2012 |
1Q 2011 |
Y/Y Change |
|||||
Key Statistics: |
||||||||
Average Daily Volume (options and futures) |
4.88 |
5.08 |
(4) |
% |
||||
Total Trading Volume (options and futures) |
302.7 |
315.0 |
(4) |
% |
||||
Average Transaction Fee Per Contract |
$ |
0.280 |
$ |
0.285 |
(2) |
% |
||
GAAP Financial Highlights: |
||||||||
Total Operating Revenues |
$ |
121.4 |
$ |
124.0 |
(2) |
% |
||
Total Operating Expenses |
64.0 |
66.5 |
(4) |
% |
||||
Operating Income |
57.4 |
57.5 |
— |
% |
||||
Operating Margin % |
47.3 |
% |
46.4 |
% |
90 bps |
|||
Net Income |
$ |
33.4 |
$ |
32.9 |
2 |
% |
||
Net Income Allocated to Common Stockholders |
$ |
32.9 |
$ |
32.1 |
2 |
% |
||
Diluted EPS |
$ |
0.37 |
$ |
0.36 |
3 |
% |
||
Weighted Average Shares Outstanding |
88,146 |
90,085 |
(2) |
% |
||||
Adjusted Financial Highlights (1) |
||||||||
Total Operating Expenses |
$ |
63.8 |
$ |
66.1 |
(3) |
% |
||
Operating Income |
57.6 |
57.9 |
(1) |
% |
||||
Operating Margin % |
47.5 |
% |
46.7 |
% |
80 bps |
|||
Net Income |
$ |
33.5 |
$ |
33.3 |
1 |
% |
||
Net Income Allocated to Common Stockholders |
$ |
33.0 |
$ |
32.5 |
2 |
% |
||
Diluted EPS |
$ |
0.37 |
$ |
0.36 |
3 |
% |
(1) A full reconciliation of our non-GAAP results to our GAAP results for the 2012 and 2011 reporting periods is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables. |
Revenues
Operating revenues were $121.4 million in the first quarter of 2012, down $2.6 million, or 2 percent, from $124.0 million in last year's first quarter. This decrease was the result of a $5.1 million decline in transaction fees and a $1.6 million decrease in access fees, offset somewhat by increases in exchange services and other fees and market data fees of $2.7 million and $1.3 million, respectively. The change in access fee revenue primarily reflects fee changes implemented during the quarter for trading permits. The increase in exchange services and other fees was driven by fee increases implemented during the quarter, while the growth in market data fees is directly related to CBOE's market share gains achieved during the quarter.
Transaction fees decreased 6 percent for the quarter due to a 4 percent decline in trading volume and a 2 percent decrease in the average transaction fee per contract compared with the first quarter of 2011. Trading volume for the first quarter was 302.7 million contracts, or 4.88 million contracts per day, versus 2011 first quarter volume of 315.0 million contracts, or 5.08 million contracts per day. The average transaction fee per contract decreased to $0.280 compared with $0.285 in the first quarter of 2011.
The decrease in the average transaction fee per contract was driven by a decline in the rate per contract (RPC) in equity and ETF options. This decline resulted from strong response to CBOE's new Volume Incentive Program (VIP), implemented on January 3, and higher volume discounts for liquidity providers. The VIP provides credits to firms for qualifying customer contracts in multiply-listed products in excess of certain thresholds. Volume discounts for liquidity providers in multiply-listed products were up as liquidity providers experienced more activity trading with the customer contracts brought to CBOE through VIP. The declines in the RPC for equity and ETF options were offset significantly by increases in the RPC for index options and futures contracts. The average transaction fee per contract represents total transaction fee revenue divided by total reported trading volume for CBOE, C2 Options Exchange (C2) and CBOE Futures Exchange (CFE).
Adjusted Operating Expenses
Adjusted operating expenses, which exclude the accelerated recognition of stock-based compensation expense, decreased $2.3 million, or 3 percent, to $63.8 million compared with $66.1 million in the first quarter of 2011. This decrease primarily resulted from lower trading volume incentives, offset somewhat by increases in outside services and travel and promotional expenses.
The company's core operating expenses of $41.6 million for the first quarter of 2012 increased $1.0 million, or 3 percent, compared with last year's first quarter, primarily driven by higher costs for data processing, outside services and travel and promotional expenses.
Core operating expenses represent total operating expenses less volume-based expenses, depreciation and amortization, accelerated stock-based compensation expense and unusual or one-time expenses.
Volume-based expenses, which include royalty fees and trading volume incentives, were $13.8 million in the first quarter of 2012, representing a decrease of $3.1 million, or 18 percent, compared with the same period last year, reflecting a decline in trading volume incentives resulting from changes to the program criteria.
Adjusted Operating Margin
The company's adjusted operating margin increased 80 basis points to 47.5 percent for the first quarter of 2012, compared with 46.7 percent in the same period in 2011, representing the company's seventh consecutive quarter of year-over-year margin growth.
Effective Tax Rate
The company reported an effective tax rate of 41.3 percent versus 42.2 percent in last year's first quarter. The lower effective tax rate was primarily due to a new tax apportionment method enacted by Illinois.
First Quarter 2012 Operational Highlights and Recent Developments
- For the first quarter of 2012, CBOE increased its share of multiply-listed options products to 23.2 percent compared with 19.5 percent for the fourth quarter of 2011, a gain of 3.7 percentage points, adjusted to exclude dividend trades.
- On January 9, CFE launched trading in security futures on the CBOE Emerging Markets ETF Volatility Index. Options on the Index were launched onJanuary 31 at CBOE.
- On February 2, CFE launched futures trading on the Radar Logic 25-Metropolitan Statistical Area (MSA) RPX Composite Index, which tracks U.S. residential housing values as a whole.
- On February 21, CFE began trading in security futures on the CBOE Brazil ETF Volatility Index. Options on the Index were launched on March 6 at CBOE.
- On March 1, C2 launched trading in SPXpm(SM) longer-term index options ("Super Leaps" options), which feature longer-dated expirations - up to five years - than standard LEAPS® options (Long-term Equity AnticiPation Securities(SM)), with expirations available up to three years.
- On March 14, CBOE began publishing values for the CBOE "VIX of VIX" Index (VVIX(SM)), which tracks the volatility of the CBOE Volatility Index® (the VIX® Index).
- On March 14, trading in SPXpmSM options at the C2 Options Exchange (C2) reached a new high of 38,225 contracts, more than double the previous high of 18,965 contracts on November 17, 2011.
- On March 23, CBOE and The McGraw-Hill Companies, Inc. and its S&P Indices business asked a court in Chicago to enforce the injunction against theInternational Securities Exchange, LLC (ISE) to prohibit it from listing and trading options on what ISE has called the ISE Max SPY™ Index.
- On March 26, CFE launched trading in security futures on the CBOE Crude Oil ETF Volatility Index. Options on the Index were launched on April 10 at CBOE.
- March 2012 was the most-active trading month in CFE history as volume totaled 1,971,632 contracts, an increase of 85 percent from the 1,066,367 contracts traded in March 2011. Average daily volume (ADV) at CFE during March 2012 reached a new all-time high of 89,620 contracts, a gain of 93 percent from the 46,363 contracts traded per day a year ago. March's record trading volume surpassed the previous high of 1,828,511 contracts traded in August 2011.
- On April 26, the company announced that CFE and DRW Trading Group had entered into an agreement that will allow CFE to use DRW's patent-pending methodology to create variance futures that, for the first time, match the quoting conventions and economic performance of over-the-counter stock index variance swaps. CFE plans to introduce a new futures contract based on the variance of the S&P 500® (SPX) later this year, subject to regulatory approval.
- On May 1, the company reported that average daily volume (ADV) for total options in April was 4.54 million contracts, a six-percent decrease fromMarch 2012 ADV of 4.85 million contracts and a one-percent increase from April 2011 ADV of 4.48 million contracts. In addition, CFE reported ADV of 84,631 contracts in April 2012, up 103 percent compared with 41,744 per day during April 2011 and a six-percent decrease from 89,620 contracts per day in March 2012.
2012 Fiscal Year Financial Guidance
The company reaffirms the 2012 financial guidance that was provided in its February 8, 2012 earnings press release.
Return of Capital to Stockholders through Share Repurchase and Dividend Payments
During the first quarter of 2012, the company repurchased 1,149,000 shares of its common stock under its share repurchase program at an average price of $26.67 per share, for a total of $30.6 million. Through March 31, 2012, the company has repurchased 2,985,000 shares under its program at an average price of $26.01 per share, for an aggregate purchase price of $77.6 million. As of March 31, 2012, the company had$22.4 million remaining on its existing $100 million stock repurchase authorization.
As announced on April 25, 2012, CBOE Holdings' Board of Directors declared a quarterly dividend of $0.12 per share, payable June 22, 2012 to shareholders of record on June 1, 2012.
Earnings Conference Call
Executives of CBOE Holdings will host a conference call to review its first quarter financial results today, May 1, 2012, at 4:30 p.m. ET/3:30 p.m. CT. The conference call and any accompanying slides will be publicly available via live webcast from the Investor Relations section of the company's website at www.cboe.com under Events & Presentations. Participants may also listen via telephone by dialing (877) 372-0876 fromthe United States or Canada, or (253) 237-1167 for international callers. Telephone participants should place calls 10 minutes prior to the start of the call. The webcast will be archived on the company's website for replay. A telephone replay of the earnings call also will be available from approximately 8:00 p.m. CT, May 1, through 11:00 p.m. CT, May 15, 2012, by calling (800) 585-8367 within the U.S. and Canada, or (404) 537-3406 for international callers, using replay code 63677927.
CBOE Holdings, Inc. |
||||||||||
Selected Quarterly Operating Statistics |
||||||||||
Average Daily Volume by Product (in thousands) |
||||||||||
1Q 2012 |
4Q 2011 |
3Q 2011 |
2Q 2011 |
1Q 2011 |
||||||
PRODUCT: |
||||||||||
Equities |
2,320 |
1,695 |
1,968 |
1,936 |
2,604 |
|||||
Indexes |
1,174 |
1,202 |
1,590 |
1,114 |
1,172 |
|||||
Exchange-traded funds |
1,321 |
1,366 |
1,861 |
1,349 |
1,263 |
|||||
Total Options Average Daily Volume |
4,815 |
4,263 |
5,419 |
4,399 |
5,039 |
|||||
Futures |
67 |
38 |
62 |
48 |
42 |
|||||
Total Average Daily Volume |
4,882 |
4,301 |
5,481 |
4,447 |
5,081 |
|||||
Mix of Trading Volume by Product |
||||||||||
1Q 2012 |
4Q 2011 |
3Q 2011 |
2Q 2011 |
1Q 2011 |
||||||
PRODUCT: |
||||||||||
Equities |
47.5 |
% |
39.4 |
% |
35.9 |
% |
43.5 |
% |
51.3 |
% |
Indexes |
24.0 |
% |
28.0 |
% |
29.0 |
% |
25.1 |
% |
23.1 |
% |
Exchange-traded funds |
27.1 |
% |
31.7 |
% |
34.0 |
% |
30.3 |
% |
24.8 |
% |
Futures |
1.4 |
% |
0.9 |
% |
1.1 |
% |
1.1 |
% |
0.8 |
% |
Total |
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
Average Transaction Fee Per Contract by Product |
||||||||||
1Q 2012 |
4Q 2011 |
3Q 2011 |
2Q 2011 |
1Q 2011 |
||||||
Trading Days |
62 |
63 |
64 |
63 |
62 |
|||||
PRODUCT: |
||||||||||
Equities |
$0.110 |
$0.167 |
$0.159 |
$0.169 |
$0.160 |
|||||
Indexes |
0.658 |
0.631 |
0.605 |
0.627 |
0.604 |
|||||
Exchange-traded funds |
0.171 |
0.212 |
0.192 |
0.202 |
0.207 |
|||||
Total Options Average Transaction Fee |
0.261 |
0.312 |
0.301 |
0.295 |
0.275 |
|||||
Futures |
1.697 |
1.329 |
1.371 |
1.477 |
1.507 |
|||||
Total Average Transaction Fee Per Contract |
$0.280 |
$0.321 |
$0.313 |
$0.308 |
$0.285 |
|||||
Transaction Fees by Product (in thousands) |
||||||||||
1Q 2012 |
4Q 2011 |
3Q 2011 |
2Q 2011 |
1Q 2011 |
||||||
PRODUCT: |
||||||||||
Equities |
$15,894 |
$17,860 |
$20,019 |
$20,582 |
$25,820 |
|||||
Indexes |
47,907 |
47,808 |
61,524 |
44,028 |
43,936 |
|||||
Exchange-traded funds |
14,036 |
18,230 |
22,836 |
17,120 |
16,215 |
|||||
Total Options Transaction Fees |
$77,837 |
$83,898 |
$104,379 |
$81,730 |
$85,971 |
|||||
Futures |
6,998 |
3,149 |
5,461 |
4,510 |
3,968 |
|||||
Total Transaction Fees |
$84,835 |
$87,047 |
$109,840 |
$86,240 |
$89,939 |
Non-GAAP Information
In addition to disclosing results determined in accordance with GAAP, CBOE Holdings has disclosed certain non-GAAP measures of operating performance. 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. The non-GAAP measures provided in this press release include core operating expenses, 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 press release, 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.
The table below shows core operating expenses, which 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.
Three months ended March 31 |
|||||||||
(in thousands) |
2012 |
2011 |
|||||||
Total Operating Expenses |
$ |
63,977 |
$ |
66,507 |
|||||
Less: |
|||||||||
Depreciation and amortization |
8,320 |
8,696 |
|||||||
Accelerated stock-based compensation expense |
194 |
340 |
|||||||
Volume-based expenses: |
|||||||||
Royalty fees |
11,191 |
11,146 |
|||||||
Trading volume incentives |
2,649 |
5,759 |
|||||||
Core Operating Expenses (non-GAAP): |
$ |
41,623 |
$ |
40,566 |
|||||
Less: Continuing stock-based compensation expense |
(2,745) |
(3,073) |
|||||||
Core Operating Expenses Excluding Continuing Stock-Based Compensation (non-GAAP) |
$ |
38,878 |
$ |
37,493 |
|||||
Detail of Core Operating Expenses (non-GAAP) |
|||||||||
Employee costs |
$ |
25,096 |
$ |
25,396 |
|||||
Data processing |
4,899 |
4,428 |
|||||||
Outside services |
7,170 |
6,579 |
|||||||
Travel and promotional expenses |
2,167 |
1,685 |
|||||||
Facilities costs |
1,303 |
1,492 |
|||||||
Other expenses |
988 |
986 |
|||||||
Total |
$ |
41,623 |
$ |
40,566 |
The table below shows the reconciliation of each financial measure from GAAP to non-GAAP. The non-GAAP financial measures exclude the impact of those items detailed in the footnotes below and are referred to as adjusted financial measures.
(in thousands, except per share amounts) |
Three months ended March 31, 2012 |
Three months ended March 31, 2011 |
|||||||||||||||||||||
Items Impacting Results |
Items Impacting Results |
||||||||||||||||||||||
Reported (GAAP) |
Acceleration of stock-based compensation(1) |
After Considering Items (non-GAAP) |
Reported (GAAP) |
Accelerated stock-based compensation(2) |
Impairment charge (3) |
After Considering Items (non-GAAP) |
|||||||||||||||||
Total Operating Revenues |
$ |
121,392 |
$ |
121,392 |
$ |
124,042 |
$ |
124,042 |
|||||||||||||||
Total Operating Expenses |
63,977 |
(194) |
63,783 |
66,507 |
(340) |
66,167 |
|||||||||||||||||
Operating Income |
57,415 |
194 |
57,609 |
57,535 |
340 |
57,875 |
|||||||||||||||||
Operating Margin |
47.3 |
% |
47.5 |
% |
46.4 |
% |
46.7 |
% |
|||||||||||||||
Total Other Income /(Expense) |
(453) |
(453) |
(643) |
459 |
(184) |
||||||||||||||||||
Income Before Income Taxes |
56,962 |
194 |
57,156 |
56,892 |
340 |
459 |
57,691 |
||||||||||||||||
Income Tax Provision |
23,545 |
80 |
23,625 |
24,021 |
143 |
194 |
24,358 |
||||||||||||||||
Effective Income Tax Rate |
41.3 |
% |
41.3 |
% |
42.2 |
% |
42.2 |
% |
|||||||||||||||
Net Income |
$ |
33,417 |
$ |
114 |
$ |
33,531 |
$ |
32,871 |
$ |
197 |
$ |
265 |
$ |
33,333 |
|||||||||
Net Income Allocated toParticipating Securities |
(554) |
(2) |
(556) |
(782) |
(5) |
(6) |
(793) |
||||||||||||||||
Net Income Allocated to Common Stockholders |
$ |
32,863 |
$ |
112 |
$ |
32,975 |
$ |
32,089 |
$ |
192 |
$ |
259 |
$ |
32,540 |
|||||||||
Diluted Net Income per Share Allocated to Common Stockholders |
$ |
0.37 |
$ |
— |
$ |
0.37 |
$ |
0.36 |
$ |
— |
$ |
— |
$ |
0.36 |
|||||||||
NOTES: Amounts may not foot due to rounding. |
1) In the first quarter of 2012, the company accelerated the recognition of stock-based compensation expense to recognize the remaining fair value of the stock-based compensation awards granted to two board members leaving the Board in June 2012. |
2) In the first quarter of 2011, the company accelerated the recognition of stock-based compensation expense to recognize the remaining fair value of the stock-based compensation awards granted to three board members who left the Board in May 2011. |
3) In the first quarter of 2011, the company recorded an impairment charge to write off its investment in NSX Holdings, Inc. |
CBOE Holdings, Inc. and Subsidiaries |
||||||||||
Condensed Consolidated Statements of Income (Unaudited) |
||||||||||
Three Months Ended March 31, 2012 and 2011 |
||||||||||
Three Months Ended March 31, |
||||||||||
(in thousands, except per share amounts) |
2012 |
2011 |
||||||||
Operating Revenues: |
||||||||||
Transaction fees |
$ |
84,835 |
$ |
89,939 |
||||||
Access fees |
15,980 |
17,605 |
||||||||
Exchange services and other fees |
7,449 |
4,690 |
||||||||
Market data fees |
6,373 |
5,102 |
||||||||
Regulatory fees |
4,696 |
4,958 |
||||||||
Other revenue |
2,059 |
1,748 |
||||||||
Total Operating Revenues |
121,392 |
124,042 |
||||||||
Operating Expenses: |
||||||||||
Employee costs |
25,290 |
25,736 |
||||||||
Depreciation and amortization |
8,320 |
8,696 |
||||||||
Data processing |
4,899 |
4,428 |
||||||||
Outside services |
7,170 |
6,579 |
||||||||
Royalty fees |
11,191 |
11,146 |
||||||||
Trading volume incentives |
2,649 |
5,759 |
||||||||
Travel and promotional expenses |
2,167 |
1,685 |
||||||||
Facilities costs |
1,303 |
1,492 |
||||||||
Other expenses |
988 |
986 |
||||||||
Total Operating Expenses |
63,977 |
66,507 |
||||||||
Operating Income |
57,415 |
57,535 |
||||||||
Other Income / (Expense): |
||||||||||
Investment income |
23 |
42 |
||||||||
Net loss from investment in affiliates |
(476) |
(460) |
||||||||
Interest and other borrowing costs |
— |
(225) |
||||||||
Total Other Income / (Expense) |
(453) |
(643) |
||||||||
Income Before Income Taxes |
56,962 |
56,892 |
||||||||
Income Tax Provision |
23,545 |
24,021 |
||||||||
Net Income |
33,417 |
32,871 |
||||||||
Net Income allocated to participating securities |
(554) |
(782) |
||||||||
Net Income allocated to common stockholders |
$ |
32,863 |
$ |
32,089 |
||||||
Net income per share allocated to common stockholders |
||||||||||
Basic |
$ |
0.37 |
$ |
0.36 |
||||||
Diluted |
0.37 |
0.36 |
||||||||
Weighted average shares used in computing income per share: |
||||||||||
Basic |
88,146 |
90,085 |
||||||||
Diluted |
88,146 |
90,085 |
CBOE Holdings, Inc. and Subsidiaries |
|||||||
Condensed Consolidated Balance Sheets (Unaudited) |
|||||||
March 31, 2012 and December 31, 2011 |
|||||||
(in thousands, except share amounts) |
March 31, 2012 |
December 31, 2011 |
|||||
Assets |
|||||||
Current Assets: |
|||||||
Cash and cash equivalents |
$ |
148,629 |
$ |
134,936 |
|||
Restricted cash |
240 |
— |
|||||
Accounts receivable - net of allowances of $316 and $304 |
48,438 |
37,578 |
|||||
Marketing fee receivable |
9,421 |
5,195 |
|||||
Income taxes receivable |
361 |
6,756 |
|||||
Other prepaid expenses |
6,844 |
4,152 |
|||||
Other current assets |
941 |
1,065 |
|||||
Total Current Assets |
214,874 |
189,682 |
|||||
Investments in Affiliates |
14,222 |
14,305 |
|||||
Land |
4,914 |
4,914 |
|||||
Property and Equipment: |
|||||||
Construction in progress |
3,579 |
1,264 |
|||||
Building |
60,917 |
60,917 |
|||||
Furniture and equipment |
254,209 |
252,905 |
|||||
Less accumulated depreciation and amortization |
(242,078) |
(238,288) |
|||||
Total Property and Equipment—Net |
76,627 |
76,798 |
|||||
Other Assets: |
|||||||
Software development work in progress |
8,691 |
6,168 |
|||||
Data processing software and other assets (less accumulated amortization of $124,537 and $121,173) |
34,113 |
36,001 |
|||||
Total Other Assets—Net |
42,804 |
42,169 |
|||||
Total |
$ |
353,441 |
$ |
327,868 |
|||
Liabilities and Stockholders' Equity |
|||||||
Current Liabilities: |
|||||||
Accounts payable and accrued expenses |
$ |
35,305 |
$ |
46,071 |
|||
Marketing fee payable |
10,007 |
5,765 |
|||||
Deferred revenue |
20,405 |
351 |
|||||
Post-retirement medical benefits |
77 |
100 |
|||||
Income taxes payable |
16,845 |
— |
|||||
Total Current Liabilities |
82,639 |
52,287 |
|||||
Long-term Liabilities: |
|||||||
Post-retirement medical benefits |
1,839 |
1,781 |
|||||
Income taxes payable |
13,574 |
12,185 |
|||||
Other long-term liabilities |
3,881 |
3,906 |
|||||
Deferred income taxes |
20,306 |
21,439 |
|||||
Total Long-term Liabilities |
39,600 |
39,311 |
|||||
Total Liabilities |
122,239 |
91,598 |
|||||
Commitments and Contingencies |
|||||||
Stockholders' Equity |
|||||||
Preferred Stock, $0.01 par value: 20,000,000 shares authorized, no shares issued and outstanding at March 31, 2012 and December, 31, 2011 |
— |
— |
|||||
Unrestricted Common Stock, $0.01 par value: 325,000,000 shares authorized, 90,781,335 issued and 87,619,957 outstanding at March 31, 2012; 90,781,222 issued and 88,768,885 outstanding at December 31, 2011 |
908 |
908 |
|||||
Additional paid-in-capital |
58,408 |
55,469 |
|||||
Retained Earnings |
254,793 |
232,121 |
|||||
Treasury Stock, at cost: 3,161,378 shares at March 31, 2012 |
(81,971) |
(51,329) |
|||||
Accumulated other comprehensive loss |
(936) |
(899) |
|||||
Total Stockholders' Equity |
231,202 |
236,270 |
|||||
Total |
$ |
353,441 |
$ |
327,868 |
CBOE Holdings, Inc. and Subsidiaries |
|||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||
Three Months Ended March 31, 2012 and 2011 |
|||||||
Three Months Ended March 31, |
|||||||
(in thousands) |
2012 |
2011 |
|||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
33,417 |
$ |
32,871 |
|||
Adjustments to reconcile net income to |
|||||||
net cash flows from operating activities: |
|||||||
Depreciation and amortization |
8,320 |
8,696 |
|||||
Other amortization |
22 |
22 |
|||||
Provision for deferred income taxes |
(1,152) |
2,385 |
|||||
Stock-based compensation |
2,939 |
3,413 |
|||||
Loss on disposition of property |
— |
160 |
|||||
Loss on investment in affiliates |
476 |
— |
|||||
Impairment of investment in affiliates and other assets |
— |
460 |
|||||
Restricted cash |
(240) |
— |
|||||
Net change in assets and liabilities |
19,561 |
30,217 |
|||||
Net Cash Flows provided by Operating Activities |
63,343 |
78,224 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital and other assets expenditures |
(7,869) |
(7,134) |
|||||
Investment in affiliates |
(394) |
— |
|||||
Proceeds from disposition of property |
— |
38 |
|||||
Net Cash Flows used in Investing Activities |
(8,263) |
(7,096) |
|||||
Cash Flows from Financing Activities: |
|||||||
Payment of quarterly dividends |
(10,745) |
(9,228) |
|||||
Purchase of unrestricted stock from employees |
(1) |
— |
|||||
Purchase of unrestricted stock under repurchase program |
(30,641) |
— |
|||||
Net Cash Flows used in Financing Activities |
(41,387) |
(9,228) |
|||||
Net Increase in Cash and Cash Equivalents |
13,693 |
61,900 |
|||||
Cash and Cash Equivalents at Beginning of Period |
$ |
134,936 |
$ |
53,789 |
|||
Cash and Cash Equivalents at End of Period |
$ |
148,629 |
$ |
115,689 |
|||
Supplemental Disclosure of Cash Flow Information |
|||||||
Cash paid for income taxes |
$ |
67 |
$ |
142 |
|||
Non-cash activities: |
|||||||
Unpaid liability to acquire equipment and software |
$ |
2,453 |
$ |
2,747 |
SOURCE CBOE Holdings, Inc.