Cboe Global Markets, Inc. · CBOE:CBOE
Cboe Global Markets — CBOE Holdings — Merger or Acquisition (October 2008)
23 slides from Cboe Global Markets's merger presentation, Oct 21, 2008
Slide 1: Membership Meeting October 21, 2008
Membership Meeting October 21, 2008 Filed by CBOE Holdings, Inc. pursuant to Rule 425 under the Securities Act of 1933, as amended Subject Company: CBOE Holdings, Inc. Subject Company’s Commission File No.: 333-140574 The following slide presentation was delivered at a Member Meeting of the Chicago
Slide 2: Agenda
2 Welcome Bradley Griffith, Member Vice Chairman Third Quarter 2008 Exchange Financials Edward Joyce, President and COO C2 Initiative and Exchange Performance Bradley Griffith, Member Vice Chairman Exchange Demutualization William Brodsky, Chairman and CEO Q&A Agenda
Slide 3: Trademark notice and securities law disclaimer
3 CBOE® and Chicago Board Options Exchange® are registered trademarks of Chicago Board Options Exchange, Incorporated. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdictio
Slide 4: Exchange Financials
Exchange Financials
Slide 5: Financial Results: 3Q Income Statement
5 Financial Results +56% $22.7 $35.4 Net Income +8.1 pts 42.5% 50.6% Operating Margin +48% $41.2 $60.7 Operating Income +7% 55.6 59.4 Total Expenses +24% $ 96.8 $120.1 Total Revenues %CHG 2007 2008 3Q ($ millions) Income Statement
Slide 6: Financial Results: YTD Sept 30 Income Statement
6 Financial Results +55% $59.0 $91.4 Net Income +8.9 pts 40.0% 48.9% Operating Margin +52% $103.7 $157.4 Operating Income +6% 155.6 164.6 Total Expenses +24% $ 259.3 $322.0 Total Revenues %CHG 2007 2008 YTD Sept 30 ($ millions) Income Statement
Slide 7: Cash Flow and Members Equity
7 Cash Flow and Members Equity +47% $242.2 $355.1 Total Members' Equity +52% $313.9 $475.9 Total Assets +83% $156.3 $286.8 Cash and Cash Equivalents As of Sept 30 ($ millions) +31% $26.1 $34.3 Capital Expenditures +67% $80.0 $133.8 Cash Flow from Operations %CHG 2007 2008 YTD Sept 30 ($ millions)
Slide 8: C2 Initiative
C2 Initiative
Slide 9: Overview of C2
9 Overview of C2 CBOE is working with the Securities and Exchange Commission (SEC) towards the approval of a new options exchange (“C2”) CBOE has secured a data facility site in the New York area and begun the capital investments and development work necessary to launch C2 in 2009, if approved by th
Slide 10: C2 Drivers
10 C2 Drivers CBOE currently competes with six other marketplaces Two exchange holding companies, NYSE Euronext and NASDAQ OMX Group, own and operate multiple markets NYSE Euronext has both the NYSE/ARCA options market and the American Stock Exchange NASDAQ OMX has both the NASDAQ Options Market (NO
Slide 11: C2 Next Steps
11 C2 Next Steps CBOE will be discussing C2 with its members and member firms over the next several months to determine the most advantageous market structure The proposed rules allow for significant flexibility of market models SEC approval, if granted, is not expected before 2Q09 All CBOE members
Slide 12: Recent Market Conditions
Recent Market Conditions
Slide 13: CBOE volume has held up well during extreme market conditions
13 Thus far, CBOE volume has held up well during the extreme market conditions YTD ADV of 4.90 million contracts – 31% above 2007 levels October ADV of 6.92 million contracts – 59% above Oct 2007 September ADV was 6.1 million contracts – 71% above Sep 2007 Management is currently preparing our busin
Slide 14: Exchange Performance: SPX ADV
14 Exchange Performance SPX ADV 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec 2007 2008
Slide 15: Exchange Performance: VIX ADV
15 Exchange Performance VIX ADV 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec 2007 2008
Slide 16: Exchange Performance: Total CBOE ADV
16 Exchange Performance TOTAL CBOE ADV 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec 2007 2008
Slide 17: Exchange Performance: CBOE Total Market Share
17 Exchange Performance CBOE Total Market Share 27% 28% 29% 30% 31% 32% 33% 34% 35% 36% 37% Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
Slide 18: Demutualization Update
Demutualization Update
Slide 19: Status of the Proposed Settlement
19 Status of the Proposed Settlement Several parties have raised objections to the terms of the Stipulation of Settlement filed in the Exercise Right Litigation The objections relate to the definition of the settlement class and to the criteria that must be satisfied in order for a person to become
Slide 20: Status of the Proposed Settlement
20 Status of the Proposed Settlement Neither of these Amendments represents a material change to the terms of the Stipulation of Settlement from the perspective of CBOE or its members The Court has not changed the date of the final settlement hearing – December 16, 2008 If the Delaware court approve
Slide 21: The Demutualization Plan
21 The Demutualization Plan The S-4 document is posted on the CBOE website and we encourage all CBOE members to read it carefully Updates to the document are ongoing as the legal matters progress and CBOE financials are updated When the settlement has received final approval and CBOE has updated the
Slide 22: The Future following Demutualization
22 The Future following Demutualization Demutualization will allow CBOE to: Pursue an initial public offering (IPO), or Enter into a transaction or merger with another entity, or Remain a for-profit demutualized company The chosen course will be that which provides the greatest value to CBOE owners
Slide 23: Q&A
Q&A