Cboe Global Markets (CBOE) Q4 2001 earnings summary

Executive summary

• FY 2001 net income was $7.1M vs. $10.9M in FY 2000; record contract volume rose 2.2% YoY, while revenue fell 9.9% after equity options customer fees were eliminated.

• Market share was 40.5% overall, 38.5% in equity options and 53.7% in index options; competitive pressure reduced overall share despite higher volume.

Financial highlights

• Revenue was $157.8M vs. $175.3M in FY 2000, down $17.5M; transaction fees declined to $96.1M from $114.5M.

• Net income was $7.1M vs. $10.9M; income before taxes was $11.9M vs. $18.8M.

• Excluding the $16.0M FY 2000 class-action settlement expense, operating expenses increased 3.8% in FY 2001, driven by data processing, depreciation and amortization, and royalty fees.

• Cash from operating activities was $25.1M; capital and other asset expenditures were $37.7M.

Outlook and guidance

• Single-stock futures trading through a joint venture was anticipated to begin in early 2002; the venture was organized as a separately regulated, for-profit exchange.

• Screen-based CBOE direct was scheduled to launch October 26, 2001, initially enabling electronic trading in selected index options outside normal hours.