Cboe Global Markets (CBOE) Q4 2003 earnings summary

Executive summary

• FY03 net income was $7.4 million, versus a $5.6 million loss in FY02; total options market share was 33%, retaining the leading position by volume.

• CBOEdirect HyTS launched June 12, 2003, combining electronic execution and quoting with open-outcry trading and liquidity.

Financial highlights

• Revenue was $163.8 million in FY03, versus $148.8 million in FY02; higher index-options volume was the main driver of the increase.

• Net income was $7.392 million in FY03, versus a $5.620 million loss in FY02; income before taxes was $13.391 million, versus a $3.428 million loss.

• Expenses were $150.4 million, down $1.8 million YoY; FY02 included $4.5 million of severance, while FY03 royalty fees and OneChicago losses increased.

• Operating cash flow was $42.2 million; cash and cash equivalents ended FY03 at $20.6 million, versus $6.9 million a year earlier.

Outlook and guidance

• HyTS conversion was expected to continue through the rest of 2003; by year-end, converted classes were projected to represent ~90% of national equity-options volume.

• The system was designed for flexible adaptation to future customer needs; the stated strategic focus was sustaining leadership through technology and trading-process innovation.