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  1. Homepage
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  4. CBOE GLOBAL MARKETS INC.
  5. Cboe Global Markets, Inc.
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    CBOE   US12503M1080

CBOE GLOBAL MARKETS, INC.

(CBOE)
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CBOE GLOBAL MARKETS : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

02/19/2021 | 04:13pm EDT

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included in Item 8 of this Annual Report on Form 10-K. The following discussion contains forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. See "Risk Factors" and "Forward-Looking Statements" above.

A detailed comparison of the Company's 2019 operating results to its 2018 operating results can be found in the Management's Discussion and Analysis of Financial Condition and Results of Operations section in the Company's 2019 Annual Report on Form 10-K filed February 21, 2020 at www.sec.gov.

INTRODUCTION

Management's Discussion and Analysis of Financial Condition and Results of Operations is organized as follows:

Executive Summary - Includes an overview of the Company's business; a

description of notable recent developments, current economic, competitive and

? regulatory trends relevant to our business; the Company's current business

strategy; and the Company's primary sources of operating and non-operating

revenues and expenses.

Results of Operations - Includes an analysis of the Company's 2020 and 2019

? financial results and a discussion of any known events or trends which are

likely to impact future results.

? Liquidity and Capital Resources - Includes a discussion of the Company's future

cash requirements, capital resources, and financing arrangements.

Critical Accounting Policies - Provides an explanation of accounting policies

? which may have a significant impact on the Company's financial results and the

estimates, assumptions and risks associates with those policies.

Recent Accounting Pronouncements - Includes an evaluation of recent accounting

? pronouncements and the potential impact of their future adoption on the

Company's financial results.


EXECUTIVE SUMMARY

Overview

Cboe Global Markets, Inc. ("Cboe" or "the Company") is one of the world's
largest exchange holding companies, offering cutting-edge trading and investment
solutions to investors around the world. The Company is committed to defining
markets to benefit its participants and drive the global marketplace forward
through product innovation, leading edge technology and seamless trading
solutions.

Cboe offers trading across a diverse range of products in multiple asset classes
and geographies, including options, futures, U.S., Canadian and European
equities, exchange-traded products ("ETPs"), global foreign exchange ("FX") and
volatility products based on the VIX Index, recognized as the world's premier
gauge of U.S. equity market volatility.

Cboe's subsidiaries include the largest options exchange and the third largest
stock exchange operator in the U.S. In addition, the Company operates one of the
largest stock exchanges by value traded in Europe, and owns EuroCCP, a leading
pan-European equities clearinghouse, MATCHNow, a leading equities ATS in Canada,
and as of December 31, 2020, BIDS Trading, the leading block-trading ATS by
volume in the U.S. Cboe also is a leading market globally for ETP listings and
trading.

The Company is headquartered in Chicago with offices in Kansas City, New York,
London, San Francisco, Sarasota Springs, Toronto, Belfast, Amsterdam, Calgary,
Singapore, Hong Kong, and Ecuador.

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Recent Developments

Acquisitions of Hanweck, FT Options and Trade Alert


On February 3, 2020, the Company purchased Hanweck Associates, LLC ("Hanweck")
and the assets of FT Providers, LLC ("FT Options"). Hanweck is a real-time risk
analytics company based in New York. FT Options is a portfolio management
platform provider based in Chicago. Both companies are providers of risk
analytics market data and included in the Company's Options segment.
Additionally, on June 1, 2020, the Company purchased the assets of Trade Alert,
LLC ("Trade Alert"), a real-time alerts and order flow analysis service provider
included in the Company's Options segment. Hanweck, FT Options, and TradeAlert
are being integrated with Cboe Information Solutions' comprehensive suite of
data solutions, analytics and indices that help market participants understand
and access financial markets. See Note 5 ("Acquisitions") for more information.

Chicago Trading Floor


On March 13, 2020, the Cboe Options trading floor was temporarily closed and
transitioned to all-electronic trading mode as a precautionary measure to reduce
the risk of COVID-19. The Cboe Options trading floor reopened on June 15, 2020
and is accommodating open-outcry trading activity with a modified floor layout,
with stringent health and safety protocols in place for the well-being of the
trading floor community, which includes Cboe associates and trading permit
holders.

Acquisition of EuroCCP

On July 1, 2020, the Company completed the acquisition of the remaining 80%
interest in EuroCCP which is included in the Company's European Equities
segment. EuroCCP is a European equities central counterparty that provides
post-trade services to stock exchanges, MTFs and for over-the-counter trades.
EuroCCP clears equities from eighteen European markets and from the United
States, as well as Depositary Receipts, ETFs, and exchanged traded currencies.
In connection with the acquisition, EuroCCP put in place a committed revolving
credit facility of up to €1.5 billion, see Note 13 ("Debt") for more
information.

Acquisition of MATCHNow

On August 4, 2020, the Company completed the acquisition of MATCHNow, one of the largest equities ATSs in Canada, which is included in the Company's North American Equities segment. MATCHNow is a Canadian marketplace that offers execution for institutional, proprietary, and retail orders by combining frequent call matches and continuous execution opportunities in a fully confidential trading book. See Note 5 ("Acquisitions") for more information.

Acquisition of BIDS Holdings


On December 31, 2020, the Company completed the acquisition of BIDS Holdings,
which is included in the Company's North American Equities segment. BIDS
Holdings owns BIDS Trading, a registered broker-dealer and the operator of the
BIDS ATS. The BIDS ATS is not a registered national securities exchange or a
facility thereof. BIDS Trading's proven block trading capability provides the
Company a foothold in the off-exchange segment of the U.S. equities market.
Additionally, BIDS Trading's differentiated network of global buy-side
investment managers and sell-side constituents provides the foundation for Cboe
to potentially build more off-exchange products and services in non-U.S.
equities or options products and in other geographies beyond the U.S.

Business Segments


The Company reports five business segments: Options, North American Equities,
Futures, European Equities, and Global FX. Segment performance is primarily
based on operating income (loss). The Company has aggregated all of its
corporate costs and eliminations, as well as other business ventures, within
Corporate Items and Eliminations; however, operating expenses that relate to
activities of a specific segment have been allocated to that segment. Our
management allocates resources, assesses performance and manages our business
according to these segments:

Options. The Options segment includes listed options on market indices ("index
options"), as well as on the stocks of individual corporations ("equity
options") and options on ETPs, such as exchange-traded funds ("ETFs") and
exchange-traded notes ("ETNs"), which are "multi-listed" options and listed on a
non-exclusive basis. These options trade on Cboe Options, C2 Options, BZX
Options, and EDGX Options, all U.S. national security exchanges. Cboe Options is
the

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Company's primary options market and offers trading in listed options through a
single system that integrates electronic trading and traditional open outcry
trading on the Cboe Options trading floor in Chicago. There was a temporary
suspension of open outcry trading between March 13, 2020 and June 14, 2020 in
response to the COVID-19 pandemic. C2 Options, BZX Options, and EDGX Options are
all-electronic options exchanges, and typically operate with different market
models and fee structures than Cboe Options. The Options segment also includes
applicable market data revenue generated from the consolidated tape plans, the
licensing of proprietary options market data, index licensing, and access and
capacity services.

North American Equities (formerly U.S. Equities). The North American Equities
segment includes listed U.S. equities and ETP transaction services that occur on
fully electronic exchanges owned and operated by BZX Equities, BYX Equities,
EDGX Equities, and EDGA Equities and Canadian equities and other transaction
services that occur on or through the MATCHNow ATS. This segment was previously
referred to as the U.S. Equities segment, but has been updated as a result of
the acquisition of MATCHNow, which provides Canadian equities and other
transaction services. In addition, in connection with the closing of the
acquisition of BIDS Trading, starting January 1, 2021, this segment also
includes equities transactions that occur on the BIDS Trading platforms. The
North American Equities segment also includes ETP listings on BZX, the Cboe
Global Markets, Inc. common stock listing, applicable market data revenue
generated from the consolidated tape plans, the licensing of proprietary
equities market data, routing services, access and capacity services and
advertising activity from ETF.com.

Futures. The Futures segment includes transaction services provided by the
Company's fully electronic futures exchange, CFE, which includes offerings for
trading VIX futures and other futures products, the licensing of proprietary
market data, as well as access and capacity services.

European Equities. The European Equities segment includes the pan-European
listed equities transaction services, ETPs, exchange traded commodities, and
international depository receipts that are hosted on MTFs operated by Cboe
Europe Equities. It also includes the ETP listings business on RMs and clearing
activities of EuroCCP. Cboe Europe Equities operates lit and dark books, a
periodic auctions book, and a Large-in-Scale ("LIS") trading negotiation
facility. Cboe NL, launched in October 2019, operates similar business
functionality to that offered by Cboe Europe, and provides for trading only in
European Economic Area symbols. Cboe Europe Equities also includes revenue
generated from the licensing of proprietary market data and from access and
capacity services.

Global FX. The Global FX segment includes institutional FX trading services that
occur on the Cboe FX fully electronic trading platform, non-deliverable forward
FX transactions ("NDFs") offered for execution on Cboe SEF and Cboe Swiss, as
well as revenue generated from the licensing of proprietary market data and from
access and capacity services.

General Factors Affecting Results of Operations


In broad terms, our business performance is impacted by a number of drivers,
including macroeconomic events affecting the risk and return of financial
assets, investor sentiment, the regulatory environment for capital markets,
geopolitical events, tax policies, central bank policies and changing
technology, particularly in the financial services industry. We believe our
future revenues and net income will continue to be influenced by a number of
domestic and international economic trends, including:

? trading volumes on our proprietary products such as VIX options and futures and

SPX options;

trading volumes in listed equity securities and ETPs in both North America and

? Europe, clearing volumes in listed equity securities and ETPs in Europe,

volumes in listed equity options, and volumes in institutional FX trading;

the demand for and pricing structure of the U.S. tape plan market data

? distributed by the Securities Information Processors (SIPs), which determines

the pool size of the industry market data revenue we receive based on our

market share;

? consolidation and expansion of our customers and competitors in the industry;

the demand for information about, or access to, our markets, which is dependent

? on the products we trade, our importance as a liquidity center and the quality

and pricing of our data and access and capacity services;

? continuing pressure in transaction fee pricing due to intense competition in

the United States and Europe;

? significant fluctuations in foreign currency translation rates or weakened

value of currencies; and

regulatory changes relating to market structure and increased capital

? requirements, and those which affect certain types of instruments,

transactions, pricing structures, capital market participants or reporting or

compliance requirements, including any changes resulting from Brexit.


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A number of significant structural, political and monetary issues and the COVID-19 pandemic continue to confront the global economy, and instability could continue, resulting in an increased or subdued level of market volatility, changes in trading volumes and greater uncertainty.

On March 11, 2020, the World Health Organization declared COVID-19 a global
pandemic. We are closely monitoring developments around COVID-19 and following
guidance provided by governmental and public health agencies. In response to
COVID-19, we have provided frequent communications to employees, customers,
regulators, critical vendors, technology equipment suppliers, data and disaster
recovery centers, and other service providers and instructed non-essential
employees to work from home on a temporary basis, implemented travel
restrictions, and temporarily suspended open outcry trading between March 13,
2020 and June 14, 2020, without any known significant disruptions to our
business or control processes. We expect to continue to take further actions as
necessary in response to addressing COVID-19. As of the date of this report, it
is too early to determine the full impact this virus may have on the global
financial markets and the overall economy. Our business and operations could be
materially and adversely affected by the effects of COVID-19, however, the
extent to which our results could be affected by COVID-19 largely depends on
future developments which cannot be accurately predicted and are uncertain.
Further, changes in trading behavior, additional suspensions of open outcry
trading, market disruptions and other future developments caused by the effects
of COVID-19 could impact trading volumes and the demand for our products, market
data, and services, which could have a material adverse effect on our business,
financial condition, operating results and cash flows for fiscal year 2021 and
could be material during any future period impacted either directly or
indirectly by this pandemic.

Components of Revenues

Transaction and Clearing Fees
Transaction fees represent fees charged by the Company for the performance
obligation of executing a trade on its markets. These fees can be variable based
on trade volume tiered discounts; however, as all tiered discounts are
calculated monthly, the actual discount is recorded on a monthly basis.
Transaction fees are recognized across all segments. Clearing fees, which
include settlement fees, are charged by the Company for transactions cleared and
settled by EuroCCP. Clearing fees can be variable based on trade volume tiered
discounts; however, as all tiered discounts are calculated monthly, the actual
discount is recorded on a monthly basis. Clearing fees are recognized in the
European Equities segment. Transaction and clearing fees, as well as any tiered
volume discounts, are calculated and billed monthly in accordance with the
Company's published fee schedules.

Access and Capacity Fees


Access and capacity fees represent fees assessed for the opportunity to trade,
including fees for trading-related functionality across all segments, terminal
and other equipment rights, maintenance services, trading floor space and
telecommunications services. Facilities, systems services and other fees are
generally monthly fee-based. These fees are billed monthly in accordance with
the Company's published fee schedules and recognized on a monthly basis when the
performance obligation is met. All access and capacity fees associated with the
trading floor are recognized in the Options segment. There is no remaining
performance obligation after revenue is recognized.

Market Data Fees

Market data fees represent the fees from the U.S. tape plans and fees from
customers for proprietary market data. Fees from the U.S. tape plans are
collected monthly based on published fee schedules and distributed quarterly to
the U.S. Exchanges based on a known formula using trading and/or quoting
activity. A contract for proprietary market data is entered into and charged on
a monthly basis in accordance with the Company's published fee schedules as the
service is provided. Both types of market data are satisfied over time, and
revenue is recognized on a monthly basis as the customer receives and consumes
the benefit as the Company provides the data. U.S. tape plan market data is
recognized in the North American Equities and Options segments. Proprietary
market data fees are recognized across all segments.

Regulatory Fees

Regulatory fees primarily represent fees collected by the Company to cover the
Section 31 fees charged to the Exchanges under the authority of the SEC (Cboe
Options, C2, BZX, BYX, EDGX, and EDGA) and are charged by the SEC. Consistent
with industry practice, the fees charged to customers are based on the fee set
by the SEC per notional value of U.S. Equities exchange transactions and per
round turn of Options transactions executed on the Company's U.S.

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securities markets. These fees are calculated and billed monthly and are
recognized in the North American Equities and Options segments. As the Exchanges
are responsible for the ultimate payment to the SEC, the Exchanges are
considered the principals in these transactions. Regulatory fees also include
the options regulatory fee ("ORF") which supports the Company's regulatory
oversight function in the Options segment, along with other miscellaneous
regulatory fees, and neither can be used for non-regulatory purposes. The ORF
and miscellaneous fees are recognized when the performance obligation is
fulfilled.

Other Revenue


Other revenue primarily includes among other items, revenue from various
licensing agreements, interest income from clearing operations, all fees related
to the trade reporting facility operated in the European Equities segment, and
revenue associated with advertisements through the Company's websites.

Components of Cost of Revenues

Liquidity Payments


Liquidity payments are directly correlated to the volume of securities traded on
our markets. As stated above, we record the liquidity rebates paid to market
participants providing liquidity, in the case of C2, BZX, EDGX, and Cboe Europe
Limited, as cost of revenue. BYX and EDGA offer a pricing model where we rebate
liquidity takers for executing against an order resting on our book, which is
also recorded as a cost of revenue.

Routing and Clearing

Various rules require that U.S. options and equities trade executions occur at
the National Best Bid/Offer ("NBBO") displayed by any exchange. Linkage order
routing consists of the cost incurred to provide a service whereby Cboe equities
and options exchanges deliver orders to other execution venues when there is a
potential for obtaining a better execution price or when instructed to directly
route an order to another venue by the order provider. The service affords
exchange order flow providers an opportunity to obtain the best available
execution price and may also result in cost benefits to those clients. Such an
offering improves our competitive position and provides an opportunity to
attract orders which would otherwise bypass our exchanges. We utilize
third-party brokers or our broker-dealer, Cboe Trading, to facilitate such
delivery. Also included within routing and clearing are settlement costs
incurred for the settlement process executed by EuroCCP.

Section 31 Fees

Exchanges under the authority of the SEC (Cboe Options, C2, BZX, BYX, EDGX, and
EDGA) are assessed fees pursuant to the Exchange Act designed to recover the
costs to the U.S. government of supervision and regulation of securities markets
and securities professionals. We treat these fees as a pass-through charge to
customers executing eligible listed equities and listed equity options trades.
Accordingly, we recognize the amount that we are charged under Section 31 as a
cost of revenues and the corresponding amount that we charge our customers as
regulatory transaction fees revenue. Since the regulatory transaction fees
recorded in revenues are equal to the Section 31 fees recorded in cost of
revenues, there is no impact on our operating income. CFE, Cboe Europe Limited
and Cboe FX are not U.S. national securities exchanges, and accordingly are
not
charged Section 31 fees.

Royalty Fees

Royalty fees primarily consist of license fees paid by us for the use of
underlying indices in our proprietary products usually based on contracts
traded. The Company has licenses with the owners of the S&P 500 Index, S&P 100
Index and certain other S&P indices, FTSE Russell indices, the DJIA, MSCI, and
certain other index products. This category also includes fees related to the
dissemination of market data related to S&P indices and PULSe system terminal
fees.

Components of Operating Expenses

Compensation and Benefits

Compensation and benefits represent our largest expense category and tend to be driven by our staffing requirements, financial performance, and the general dynamics of the employment market. Stock-based compensation is


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a non-cash expense related to equity awards. Stock-based compensation can vary
depending on the quantity and fair value of the award on the date of grant and
the related service period.

Depreciation and Amortization

Depreciation and amortization expense results from the depreciation of long-lived assets purchased, the amortization of purchased and internally developed software, and the amortization of intangible assets.

Technology Support Services


Technology support services consists primarily of costs related to the
maintenance of computer equipment supporting our system architecture, circuits
supporting our wide area network, support for production software, operating
system license and support fees, fees paid to information vendors for displaying
data and off-site system hosting fees.

Professional Fees and Outside Services

Professional fees and outside services consist primarily of consulting services, which include supplemental staff activities primarily related to systems development and maintenance, legal, regulatory and audit, and tax advisory services.

Travel and Promotional Expenses

Travel and promotional expenses primarily consist of advertising, costs for special events, sponsorship of industry conferences, options education seminars and travel-related expenses.


Facilities Costs

Facilities costs primarily consist of expenses related to owned and leased properties including rent, maintenance, utilities, real estate taxes and telecommunications costs.

Acquisition-Related Costs


Acquisition-related costs relate to acquisitions and other strategic
opportunities, including the Merger. The acquisition-related costs include fees
for investment banking advisors, lawyers, accountants, tax advisors, public
relations firms, severance and retention costs, impairment of goodwill,
capitalized software and facilities, and other external costs directly related
to the mergers and acquisitions, as well as compensation-related expenses.

Other Expenses

Other expenses represent costs necessary to support our operations that are not already included in the above categories.

Non-Operating Income (Expense)


Income and expenses incurred through activities outside of our core operations
are considered non-operating and are classified as other income (expense). These
activities primarily include interest earned on the investing of excess cash,
interest expense related to outstanding debt facilities, dividend income, income
and unrealized gains and losses related to investments held in a rabbi trust for
the Company's non-qualified retirement and benefit plans, and equity earnings or
losses from our investments in other business ventures.

RESULTS OF OPERATIONS

The following are summaries of changes in financial performance and include
certain non-GAAP financial measures. These non-GAAP financials measures assist
management in comparing our performance on a consistent basis for purposes of
business decision making by removing the impact of certain items management
believes do not reflect our underlying operations. Please see the footnotes
below for additional information and reconciliations from our consolidated
financial statements.

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Comparison of Years Ended December 31, 2020 and 2019

Overview

The following summarizes changes in financial performance for the year ended December 31, 2020, compared to the year ended December 31, 2019:


                           [[Image Removed: Graphic]]



(1) These are Non-GAAP figures for which reconciliations are provided below.



                                                              Year Ended
                                                             December 31,                         Increase/               Percent
                                                     2020                   2019                  (Decrease)               Change

                                                     (in millions, except percentages, earnings per share, and as noted below)
Total revenues                                 $         3,427.1      $         2,496.1      $              931.0                37.3 %
Total cost of revenues                                   2,172.8                1,359.2                     813.6                59.9 %
Revenues less cost of revenues                           1,254.3           
    1,136.9                     117.4                10.3 %
Total operating expenses                                   592.1                  599.7                     (7.6)               (1.3) %
Operating income                                           662.2                  537.2                     125.0                23.3 %
Income before income tax provision                         660.4           
      501.4                     159.0                31.7 %
Income tax provision                                       192.2                  130.6                      61.6                47.2 %
Net income                                     $           468.2      $           370.8      $               97.4                26.3 %
Basic earnings per share                       $            4.28      $            3.35      $               0.93                27.7 %
Diluted earnings per share                                  4.27                   3.34                      0.93                27.8 %
Organic net revenue(1)                         $         1,212.9      $         1,136.9      $               76.0                 6.7 %
EBITDA(2)                                      $           855.3      $           715.8      $              139.5                19.5 %
EBITDA margin(3)                                            68.2 %                 63.0 %                     5.2 %                   *
Adjusted EBITDA(2)                             $           874.6      $           784.1      $               90.5                11.5 %
Adjusted EBITDA margin(4)                                   69.7 %                 69.0 %                     0.7 %                   *
Adjusted earnings(5)                           $           576.5      $           528.6      $               47.9                 9.1 %
Adjusted earnings margin(5)                                 46.0 %                 46.5 %                   (0.5) %                   *
Diluted weighted average shares outstanding                109.3                  111.8                     (2.5)               (2.2) %
Adjusted Diluted earnings per share(6)         $            5.27      $    
       4.73      $               0.54                11.4 %


* Not meaningful

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Organic net revenue is defined as revenues less cost of revenues excluding

revenues less cost of revenues of any acquisition for the year the business

was acquired through the following comparable year. Organic net revenue does

not represent, and should not be considered as, an alternative to revenues

less cost of revenues, or net revenue, as determined in accordance with GAAP.

We have presented organic net revenue because we consider it an important

supplemental measure of our performance and we use it as the basis for (1) monitoring our operating financial performance before the effects of

acquisitions. We also believe that it is frequently used by analysts,

investors and other interested parties in the evaluation of companies. We

believe that investors may find this non-GAAP measure useful in evaluating

our performance compared to that of peer companies in our industry. Other

companies may calculate organic net revenue differently that we do. Organic

    net revenue has limitations as an analytical tool, and you should not
    consider it in isolation or as a substitute for analysis of our results as
    reported under GAAP.



                                                                     Year Ended
                                                                    December 31,
                                                                  2020         2019
Revenues less cost of revenues                                 $  1,254.3   $  1,136.9
Recent acquisitions:
Acquisition revenues less cost of revenues (since acquisition) $   (41.4)  
$        -
Organic net revenue                                            $  1,212.9   $  1,136.9



EBITDA is defined as income before interest, income taxes, depreciation and

amortization. Adjusted EBITDA is defined as EBITDA before acquisition-related

costs, provision for notes receivable, bargain purchase gain, and impairment

charges attributed to noncontrolling interest. EBITDA and adjusted EBITDA do

not represent, and should not be considered as, alternatives to net income as

determined in accordance with GAAP. We have presented EBITDA and adjusted

EBITDA because we consider them important supplemental measures of our (2) performance and believe that they are frequently used by analysts, investors

and other interested parties in the evaluation of companies. In addition, we

use adjusted EBITDA as a measure of operating performance for preparation of

our forecasts and evaluating our leverage ratio for the debt to earnings

covenant included in our outstanding credit facility. Other companies may

calculate EBITDA and adjusted EBITDA differently than we do. EBITDA and

adjusted EBITDA have limitations as analytical tools, and you should not

consider them in isolation or as substitutes for analysis of our results as

reported under GAAP.

(3) EBITDA margin represents EBITDA divided by revenues less cost of revenues.

(4) Adjusted EBITDA margin represents adjusted EBITDA divided by revenues less

    cost of revenues.


    Adjusted earnings is defined as net income adjusted for amortization of
    purchased intangibles, acquisition-related costs, provision for notes
    receivable, bargain purchase gain, change in redemption value of
    noncontrolling interest, tax effect of adjustments, deferred tax

re-measurements, impairment charges attributed to noncontrolling interest,

and net income allocated to participating securities, net of the income tax

effects of these adjustments. Adjusted earnings does not represent, and

should not be considered as, an alternative to net income, as determined in

accordance with GAAP. We have presented adjusted earnings because we consider (5) it an important supplemental measure of our performance and we use it as the

basis for monitoring our own core operating financial performance relative to

other operators of exchanges. We also believe that it is frequently used by

analysts, investors and other interested parties in the evaluation of

companies. We believe that investors may find this non-GAAP measure useful in

evaluating our performance compared to that of peer companies in our

industry. Other companies may calculate adjusted earnings differently than we

do. Adjusted earnings has limitations as an analytical tool, and you should

not consider it in isolation or as a substitute for analysis of our results

as reported under GAAP.

(6) Adjusted diluted earnings per share represents adjusted earnings divided by

    diluted weighted average shares outstanding.


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The following is a reconciliation of net income (loss) allocated to common stockholders to EBITDA and adjusted EBITDA:


                                                                           Year Ended December 31,
                                                                                    2020
                                                       North
                                                      American                    European
                                        Options       Equities       Futures      Equities      Global FX      Corporate      Total
                                                                                (in millions)
Net income (loss) allocated to
common stockholders                      $ 278.6       $   132.0     $   

25.4 $ 46.7 $ 5.8 $ (21.5) $ 467.0 Interest expense, net

                          -               -            -           6.9              -           30.7        37.6
Income tax provision (benefit)             151.8            27.3         28.3          12.4              -         (27.6)       192.2
Depreciation and amortization               30.9            68.7          3.2          29.1           26.6              -       158.5
EBITDA                                     461.3           228.0         56.9          95.1           32.4         (18.4)       855.3
Acquisition-related costs                   12.9            15.1            -             -              -           17.2        45.2
Provision for notes receivable               1.7             5.0           
-             -              -              -         6.7
Bargain purchase gain                          -               -            -        (32.0)              -          (0.6)      (32.6)
Adjusted EBITDA                          $ 475.9       $   248.1     $   56.9      $   63.1     $     32.4     $    (1.8)    $  874.6

                                                                           Year Ended December 31,
                                                                                    2019
                                                       North
                                                      American                    European
                                        Options       Equities       Futures      Equities      Global FX      Corporate      Total
                                                                                (in millions)
Net income (loss) allocated to
common stockholders                      $ 202.7       $   111.8     $   

45.5 $ 18.3 $ (5.0) $ (0.6) $ 372.7 Interest expense (income), net

                 -               -            -         (0.4)              -           36.3        35.9
Income tax provision (benefit)             124.8            20.2         37.4           3.2            0.1         (55.1)       130.6
Depreciation and amortization               38.5            76.0          2.5          28.7           29.9            1.0       176.6
EBITDA                                     366.0           208.0         85.4          49.8           25.0         (18.4)       715.8
Acquisition-related costs                   20.5               -            -           1.7            0.3           26.0        48.5
Provision for notes receivable               6.1            17.3            -             -              -              -        23.4
Impairment charges attributable to
noncontrolling interest                        -               -            -             -              -          (3.6)       (3.6)
Adjusted EBITDA                          $ 392.6       $   225.3     $   85.4      $   51.5     $     25.3     $      4.0    $  784.1




The following is a reconciliation of net income allocated to common stockholders
to adjusted earnings:


                                                                   Year Ended December 31,
                                                                    2020             2019

                                                                        (in millions)
Net income allocated to common stockholders                     $      467.0     $      372.7
Amortization                                                           124.7            138.5
Acquisition-related costs                                               45.2             48.5
Provision for notes receivable                                           6.7             23.4
Bargain purchase gain                                                 (32.6)                -
Change in redemption value of noncontrolling interest                      -              0.5
Tax effect of adjustments                                             (38.0)           (50.7)
Deferred tax re-measurements                                             4.1                -
Impairment charges attributed to noncontrolling interest                   -            (3.6)
Net income allocated to participating securities                       (0.6)            (0.7)
Adjusted earnings                                               $      576.5     $      528.6




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The following summarizes changes in certain operational and financial metrics
for the year ended December 31, 2020, compared to the year ended December 31,
2019. The metrics listed for Canadian Equities and EuroCCP in the table on the
following page are newly added for the year ended December 31, 2020 as a result
of acquisitions completed during the year. Therefore, the table does not include
results from 2019 or the periods preceding each acquisition for the applicable
metrics.



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              chart

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                                                        Year Ended
                                                       December 31,                      Increase/               Percent
                                                 2020               2019                (Decrease)                Change

                                                   (in millions, except percentages, trading days, and as noted below)
Options:
Average daily volume (ADV) (in millions
of contracts):
Total touched contracts                               10.1                7.3                        2.8                38.4 %
Market ADV                                            29.5               19.4                       10.1                52.1 %
Index contract ADV                                     1.8                1.9                      (0.1)               (5.3) %
Multi-Listed contract ADV                              8.3                5.4                        2.9                53.7 %
Number of trading days                                 253                252                          1                 0.4 %
Total Options revenue per contract (RPC)
(1)                                          $       0.193      $       0.235      $             (0.042)              (17.9) %
Multi-Listed Options RPC (1)                         0.057              0.059                    (0.002)               (3.4) %
Index Options RPC (1)                                0.819              0.746                      0.073                 9.8 %
Total Options Market Share                            34.3 %             37.7 %                    (3.4) %                   *
Multi-Listed Options Market Share                     30.0 %             31.1 %                    (1.1) %                   *
Index Options Market Share                            99.2 %             99.2 %                        - %                   *
North American Equities:
U.S. Equities:
ADV:
Total touched shares (in billions)                     1.8                1.2                        0.6                50.0 %
Market ADV (in billions)                              10.9                7.0                        3.9                55.7 %
Trading days                                           253                252                          1                 0.4 %
Market share                                          15.8 %             16.3 %                    (0.5) %                   *
U.S. Equities (net capture per one
hundred touched shares) (2)                  $       0.021      $       0.025      $             (0.004)              (16.0) %
U.S. ETPs: launches (number of launches)               114                 57                         57               100.0 %
U.S. ETPs: listings (number of listings)               437                353                         84                23.8 %
Canadian Equities:
ADV (matched shares, in millions)                     43.1                  -                       43.1                   - %
Trading days                                           104                  -                        104                   - %
Net capture (per 10,000 touched shares,
in Canadian dollars) (3)                             8.264                 
-                      8.264                   - %
Futures:
ADV (in thousands)                                   200.6              249.0                     (48.4)              (19.4) %
Trading days                                           253                252                          1                 0.4 %
Revenue per contract                         $       1.665      $       1.756      $             (0.091)               (5.2) %
European Equities:
ADNV:
Matched and touched ADNV (in billions)       €         6.9      €      
  7.7      €               (0.8)              (10.4) %
Market ADNV (in billions)                             40.1               37.9                        2.2                 5.8 %
Trading days                                           258                256                          2                 0.8 %
Market share                                          17.2 %             20.2 %                    (3.0) %                   *
European Equities (net capture per
matched notional value in basis points)
(4)                                                  0.249              0.227                      0.022                 9.7 %
EuroCCP:
Trades cleared (5)                                   545.5                  -                      545.5                   - %
Fee per trade cleared (6)                    €       0.011      €           -      €               0.011                   - %
Net settlement volume (7)                              4.1                  -                        4.1                   - %
Net fee per settlement (8)                   €       0.811      €      
    -      €               0.811                   - %
Global FX:
ADNV (in billions)                           $        34.7      $        32.3      $                 2.4                 7.4 %
Trading days                                           260                259                          1                 0.4 %
Global FX (net capture per one million
dollars traded) (9)                                   2.70               2.71                     (0.01)               (0.4) %

Average British pound/U.S. dollar
exchange rate                                $       1.283      $       1.277      $               0.006                 0.5 %
Average Canadian dollar/U.S. dollar
exchange rate                                $       0.746      $           -      $               0.746                   - %

Average Euro/U.S. dollar exchange rate $ 1.141 $ 1.119 $

               0.022                 2.0 %
Average Euro/British pound exchange rate     £       0.889      £       0.877      £               0.012                 1.4 %


* Not meaningful



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Revenue per contract represents transaction fees less liquidity payments and (1) routing and clearing costs divided by total contracts traded during the

period.

Net capture per one hundred touched shares refers to transaction fees less (2) liquidity payments and routing and clearing costs divided by the product of

one-hundredth ADV of touched shares on BZX, BYX, EDGX and EDGA and the number

of trading days for the period.

Net capture per 10,000 shares refers to transaction fees divided by the (3) product of one-ten thousandth ADV of shares for MATCHNow and the number of

trading days for the period.

Net capture per matched notional value in basis points refers to transaction (4) fees less liquidity payments in British pounds divided by the product of ADNV

in British pounds of shares matched on Cboe Europe Limited and the number of

trading days for the period.

(5) Trades cleared refers to the total number of non-interoperable trades

cleared.

(6) Fee per trade cleared refers to clearing fees divided by number of

non-interoperable trades cleared.

(7) Net settlement volume refers to the total number of settlements executed

after netting.

(8) Net fee per settlement refers to settlement fees less direct costs incurred

to settle divided by the number of settlements executed after netting.

Net capture per one million dollars traded refers to net transaction and (9) clearing fees, divided by the product of one one-millionth of ADNV traded on

the Cboe FX market, the number of trading days, and two, which represents the

    buyer and seller that are both charged on the transaction for the period.




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Revenues

Total revenues for the year ended December 31, 2020 increased $931.0 million, or
37.3%, compared to the prior period primarily due to a $701.8 million, or 40.9%
increase in transaction and clearing fees as a result of an increase in market
volumes on the U.S. Equities exchanges and in the Options segment, coupled with
an increase in regulatory fees. The following summarizes changes in revenues for
the year ended December 31, 2020 compared to the year ended December 31, 2019:


                                       Year Ended
                                      December 31,          Increase/     Percent
                                   2020         2019       (Decrease)     Change

                                        (in millions, except percentages)
Transaction and clearing fees    $ 2,418.0    $ 1,716.2    $     701.8     
 40.9 %
Access and capacity fees             236.7        221.9           14.8        6.7 %
Market data fees                     232.0        213.5           18.5        8.7 %
Regulatory fees                      500.2        311.7          188.5       60.5 %
Other revenue                         40.2         32.8            7.4       22.6 %
Total revenues                   $ 3,427.1    $ 2,496.1    $     931.0       37.3 %



Transaction and Clearing Fees


Transaction and clearing fees increased for the year ended December 31, 2020
compared to the same period in 2019, primarily due to a 55.7% increase in U.S.
Equities exchange market ADV, a 53.7% increase in multi-listed options ADV, and
additional revenue attributed to EuroCCP, which was acquired in the third
quarter of 2020, partially offset by a 19.4% decrease in Futures ADV.

Access and Capacity Fees


Access and capacity fees increased for the year ended December 31, 2020 compared
to the same period in 2019, primarily due to an increase in logical port revenue
in the Options, European Equities, and North American Equities segments.

Market Data Fees

Market data fees increased for the year ended December 31, 2020 compared to the
same period in 2019, primarily due to additional revenue attributed to the
acquisitions of Hanweck, FT Options, and Trade Alert during 2020, partially
offset by a decrease in tape plan market data revenue within the North American
Equities segment resulting from a decline in market share.

Regulatory Fees

Regulatory transaction fees increased for the year ended December 31, 2020 compared to the same period in 2019, primarily due to an increase in Section 31 fees as a result of higher volumes in the North American Equities segment, coupled with an increase in the average Section 31 fee rate for 2020.

Other Revenue

Other revenue increased for the year ended December 31, 2020 compared to the same period in 2019 primarily due to additional net interest income from EuroCCP, which the Company acquired in the third quarter of 2020.



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Cost of Revenues
Cost of revenues increased in the year ended December 31, 2020 compared to the
same period in 2019 primarily due to higher liquidity payments driven by an
increase in volumes traded on the U.S. Equities and Options exchanges, as well
as an increase in Section 31 fees within the North American Equities and Options
segments, which increased $172.1 million and $21.5 million, respectively. The
following summarizes changes in cost of revenues for the year ended December 31,
2020 compared to the prior year:




                              Year Ended
                             December 31,          Increase/     Percent
                          2020         2019       (Decrease)     Change

                               (in millions, except percentages)
Liquidity payments      $ 1,554.1    $   964.7    $     589.4       61.1 %
Routing and clearing         70.4         35.8           34.6       96.6 %
Section 31 fees             465.0        271.4          193.6       71.3 %
Royalty fees                 83.4         86.8          (3.4)      (3.9) %
Other                       (0.1)          0.5          (0.6)    (120.0) %
Total                   $ 2,172.8    $ 1,359.2    $     813.6       59.9 %




Liquidity Payments
Liquidity payments increased for the year ended December 31, 2020 compared to
the same period in 2019, primarily due to an increase in volumes traded on the
U.S. Equities and Options exchanges.

Routing and Clearing


The increase in routing and clearing fees for the year ended December 31, 2020
compared to the same period in 2019 was primarily due to an increase in routed
shares on the U.S. Equities exchanges.

Section 31 Fees

Section 31 fees increased for the year ended December 31, 2020 compared to the
same period in 2019, primarily due to higher volumes in the North American
Equities segment, coupled with an increase in the average Section 31 fee rate
for 2020.

Royalty Fees

Royalty fees decreased for the year ended December 31, 2020 compared to the same period in 2019, primarily due to a decline in trading volume in licensed products.

Revenues Less Cost of Revenues


Revenues less cost of revenues increased $117.4 million, or 10.3%, in the year
ended December 31, 2020 compared to the same period in 2019, primarily due to a
$77.8 million, or 10.9%, increase in transaction and clearing fees less
liquidity payments and routing and clearing costs, coupled with increases in
market data fees and access and capacity fees.



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The following summarizes the components of revenues less cost of revenues for
the year ended December 31, 2020, presented as a percentage of revenues less
cost of revenues and compared to the prior year:


                                                                                 Percentage of
                                                                                 Revenues Less
                                                                                    Cost of
                                                                                   Revenues
                                                 Year Ended                       Year Ended
                                                December 31,         Percent     December 31,
                                             2020         2019       Change      2020     2019

                                                    (in millions, except percentages)
Transaction and clearing fees less
liquidity payments and routing and
clearing costs                             $   793.5    $   715.7       10.9 %    63.2 %   63.0 %
Access and capacity fees                       236.7        221.9        6.7 %    18.9 %   19.5 %
Market data fees                               232.0        213.5        8.7 %    18.5 %   18.8 %
Regulatory fees, less Section 31 fees           35.2         40.3     (12.7) %     2.8 %    3.5 %
Royalty fees                                  (83.4)       (86.8)        3.9 %   (6.6) %  (7.6) %
Other                                           40.3         32.3       24.8 %     3.2 %    2.8 %
Revenues less cost of revenues             $ 1,254.3    $ 1,136.9       10.3 %   100.0 %  100.0 %



Transaction and Clearing Fees Less Liquidity Payments and Routing and Clearing Costs


Transaction and clearing fees less liquidity payments and routing and clearing
costs ("Net Transaction and Clearing Fees") increased for the year ended
December 31, 2020 compared to the same period in 2019, primarily due to a 53.7%
increase in multi-listed options ADV, a 55.7% increase in U.S. Equities exchange
market ADV, and additional revenues attributed to EuroCCP, which was acquired in
the third quarter of 2020.

Access and Capacity Fees
Access and fees increased for the year ended December 31, 2020 compared to the
same period in 2019, primarily due to an increase in logical port revenue in the
Options, European Equities, and North American Equities segments.

Market Data Fees

Market data fees increased for the year ended December 31, 2020 compared to the
same period in 2019, primarily due to additional revenue attributed to the
acquisitions of Hanweck, FT Options, and Trade Alert during 2020, partially
offset by a decrease in tape plan market data revenue within the North American
Equities segment resulting from a decline in market share.

Regulatory Fees, Less Section 31 Fees


Regulatory fees, less Section 31 Fees, decreased for the year ended December 31,
2020 compared to the same period in 2019, primarily due to a decrease in fines
and assessment fees.

Royalty Fees
Royalty fees decreased for the year ended December 31, 2020 compared to the same
period in 2019, primarily due to lower trading volumes in licensed products
in
2020.

Other

Other revenue increased for the year ended December 31, 2020 compared to the same period in 2019 primarily due to additional net interest income from EuroCCP, which the Company acquired in the third quarter of 2020.

Operating Expenses

For the year ended December 31, 2020 compared to the year ended December 31, 2019, total operating expenses decreased primarily due to declines in depreciation and amortization and other expenses, partially offset by an increase in


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compensation and benefits. The following summarizes changes in operating expenses for the year ended December 31, 2020 compared to the prior year:


                                              Year Ended
                                             December 31,        Increase/     Percent
                                           2020       2019      (Decrease)     Change

                                                (in millions, except percentages)
Operating Expenses:
Compensation and benefits                 $ 224.9    $ 199.0    $      25.9       13.0 %
Depreciation and amortization               158.5      176.6         (18.1)     (10.2) %
Technology support services                  54.5       46.2            8.3       18.0 %
Professional fees and outside services       60.6       68.3          (7.7)     (11.3) %
Travel and promotional expenses               6.6       11.9          (5.3)
    (44.5) %
Facilities costs                             17.6       11.0            6.6       60.0 %
Acquisition-related costs                    45.2       48.5          (3.3)      (6.8) %
Other expenses                               24.2       38.2         (14.0)     (36.6) %
Total operating expenses                  $ 592.1    $ 599.7    $     (7.6)      (1.3) %


Compensation and Benefits

Compensation and benefits increased for the year ended December 31, 2020 compared to the same period in 2019, primarily due to an increase in compensation expense related to acquisitions of $16.3 million and a decline in capitalized wages of $8.7 million due to a decrease in software projects eligible for capitalization, partially offset by a $2.2 million decline in benefits primarily due to healthcare rebates received.

Depreciation and Amortization


Depreciation and amortization decreased for the year ended December 31, 2020
compared to the same period in 2019, due to a decline in amortization under the
discounted cash flow method for the intangibles acquired in the Bats
acquisition, coupled with the write-off of the Cboe Command software in the
fourth quarter of 2019.

Technology Support Services

Technology support services costs increased for the year ended December 31, 2020
compared to the same period in 2019, primarily due to increases in purchased
hardware and market data support services fees related to the acquisitions in
2020.

Professional Fees and Outside Services


Professional and outside services fees decreased for the year ended December 31,
2020 compared to the same period in 2019, primarily due to declines in
regulatory service fees of $5.3 million, legal fees of $3.9 million, and
accounting fees of $1.2 million, partially offset by a $2.7 million increase in
contract services due to the acquisition of EuroCCP.

Travel and Promotional Expenses


Travel and promotional expenses decreased for the year ended December 31, 2020
compared to the same period in 2019, primarily due to travel restrictions
implemented in March 2020 in response to the COVID-19 pandemic coupled with a
decline in marketing expenses also driven by lack of sponsored events due to the
COVID-19 pandemic.

Facilities Costs
Facilities costs increased for the year ended December 31, 2020 compared to the
same period in 2019, primarily due to additional rent expense incurred for the
new headquarters location beginning in January 2020 and for the new trading

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floor location beginning in May 2020, coupled with a reversal of deferred rent expense of $1.3 million in the first quarter of 2019 that did not recur in 2020.

Acquisition-Related Costs


Acquisition-related costs decreased for the year ended December 31, 2020
compared to the same period in 2019, primarily due to severance costs incurred
in the third quarter of 2019 that did not recur in 2020, coupled with the write
down of goodwill attributed to a 2016 acquisition recorded in the second quarter
of 2019, offset by the costs related to the six acquisitions closed in 2020.
Acquisition-related costs include fees for investment banking advisors, lawyers,
accountants, tax advisors, public relations firms, severance and retention
costs, impairment of goodwill, capitalized software and facilities, and other
external costs directly related to the mergers and acquisitions, as well as
compensation-related expenses.

Other Expenses


Other expenses decreased for the year ended December 31, 2020 compared to the
same period in 2019, primarily due to a $23.4 million provision for the notes
receivable recorded in the fourth quarter of 2019 as a result of circumstances
associated with the development of the CAT, partially offset by a $6.7 million
provision recorded in the third quarter of 2020, also related to the CAT.

Operating Income


As a result of the items above, operating income for the year ended December 31,
2020 was $662.2 million, compared to $537.2 million for the year ended December
31, 2019, an increase of $125 million, or 23.3%.

Interest Expense, Net


Net interest expense increased in the year ended December 31, 2020 primarily due
to the commitment fees related to the EuroCCP Credit Facility and fees related
to the amended Revolving Credit Agreement, partially offset by the decrease in
the variable interest rate on the term loan agreement.

Other Income, Net

Net other income increased in the year ended December 31, 2020 compared to the same period in 2019 primarily due to a $32.6 million bargain purchase gain related to the EuroCCP acquisition recorded in the third quarter of 2020.

Income Before Income Tax Provision


As a result of the above, income before income tax provision for the year ended
December 31, 2020 was $660.4 million compared to $501.4 million for the year
ended December 31, 2019, an increase of $159.0 million, or 31.7%.

Income Tax Provision


For the year ended December 31, 2020, the income tax provision was $192.2
million compared with $130.6 million for the year ended December 31, 2019, an
increase of $61.6 million, primarily due to the increase in income before income
tax provision and a higher tax rate for the year ended December 31, 2020. The
effective tax rate for the year ended December 31, 2020 was 29.1%, compared to a
rate of 26.0% for the year ended December 31, 2019.

Net Income

As a result of the items above, net income for the year ended December 31, 2020
was $468.2 million, or 37.3% of revenues less cost of revenues, compared to
$370.8 million, or 32.6% of revenues less cost of revenues, for the year ended
December 31, 2019, an increase of $97.4 million, or 26.3%.

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Segment Operating Results
We report results from our five segments: Options, North American Equities,
Futures, European Equities, and Global FX. Segment performance is primarily
based on operating income (loss). We have aggregated all corporate costs, as
well as other business ventures, within the Corporate Items and Eliminations as
those activities should not be used to evaluate a segment's operating
performance. All operating expenses that relate to activities of a specific
segment have been allocated to that segment.

The following summarizes our total revenues by segment:




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                                  generated]]








                                                                 Percentage of
                                                                     Total
                                                                   Revenues
                                 Year Ended                       Year Ended
                                December 31,         Percent     December 31,
                             2020         2019       Change      2020     2019

                                    (in millions, except percentages)
Options                    $ 1,330.1    $   983.1       35.3 %    38.8 %   39.4 %
North American Equities      1,789.5      1,213.1       47.5 %    52.2 %   48.6 %
Futures                        109.2        135.9     (19.6) %     3.2 %    5.4 %
European Equities              140.5        110.8       26.8 %     4.1 %    4.4 %
Global FX                       57.8         53.0        9.1 %     1.7 %    2.1 %
Corporate                          -          0.2    (100.0) %       - %      - %
Total revenues             $ 3,427.1    $ 2,496.1       37.3 %   100.0 %  100.0 %




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The following summarizes our revenues less cost of revenues by segment:

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                                  generated]]














                                                                                   Percentage of
                                                                                   Total Revenues
                                                                               less Cost of Revenues
                                               Year Ended                            Year Ended
                                              December 31,         Percent          December 31,
                                           2020         2019       Change        2020           2019

                                                       (in millions, except percentages)
Options                                  $   649.7    $   564.1       15.2 %         51.9 %       49.6 %
North American Equities                      326.6        300.8        8.6 %         26.0 %       26.5 %
Futures                                      105.8        131.3     (19.4) %          8.4 %       11.5 %
European Equities                            114.4         87.5       30.7 %          9.1 %        7.7 %
Global FX                                     57.8         53.0        9.1 %          4.6 %        4.7 %
Corporate                                        -          0.2    (100.0) %            - %          - %
Total revenues less cost of revenues     $ 1,254.3    $ 1,136.9       10.3 %        100.0 %      100.0 %




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Options

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our Options segment:


                                                                          Percentage
                                                                           of Total
                                                                           Revenues
                                       Year Ended                         Year Ended
                                      December 31,          Percent      December 31,
                                   2020         2019        Change      2020       2019

                                            (in millions, except percentages)
Revenues less cost of revenues    $ 649.7      $ 564.1         15.2 %    48.8 %    57.4 %
Operating expenses                  219.3        229.8        (4.6) %    16.5 %    23.4 %
Operating income                  $ 430.4      $ 334.3         28.7 %    32.4 %    34.0 %
EBITDA(1)                         $ 461.3      $ 366.0         26.0 %    34.7 %    37.2 %
EBITDA margin(2)                     71.0 %       64.9 %       *          *         *


*  Not meaningful

See footnote (1) to the table under "Overview" above for a reconciliation of (1) net income to EBITDA, and management's reasons for using such non-GAAP

measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.



Revenues less cost of revenues increased $85.6 million for the year ended
December 31, 2020 compared to the year ended December 31, 2019, primarily due to
a 53.7% increase in multi-listed options ADV, coupled with a 9.8% increase in
index options RPC and an increase in proprietary market data revenue as a result
of the acquisitions of Hanweck, FT Options, and Trade Alert. For the year ended
December 31, 2020, operating income increased $96.1 million compared to the year
ended December 31, 2019 primarily due to higher revenues less cost of revenues.
Operating expenses decreased $10.5 million for the year ended December 31, 2020
compared to the prior period, primarily due to decreases in professional fees
and outside services, acquisition-related costs, and depreciation and
amortization, partially offset by an increase in compensation and benefits,
facilities costs, and technology support services.

North American Equities


The following summarizes revenues less cost of revenues, operating expenses,
operating income, EBITDA and EBITDA margin for our North American Equities
segment:


                                                                          Percentage
                                                                           of Total
                                                                           Revenues
                                       Year Ended                         Year Ended
                                      December 31,          Percent      December 31,
                                   2020         2019        Change      2020       2019

                                            (in millions, except percentages)
Revenues less cost of revenues    $ 326.6      $ 300.8          8.6 %    18.3 %    24.8 %
Operating expenses                  167.1        168.3        (0.7) %     9.3 %    13.9 %
Operating income                  $ 159.5      $ 132.5         20.4 %     8.9 %    10.9 %
EBITDA(1)                         $ 228.0      $ 208.0          9.6 %    12.7 %    17.1 %
EBITDA margin(2)                     69.8 %       69.1 %       *          *         *


*   Not meaningful

See footnote (1) to the table under "Overview" above for a reconciliation of (1) net income to EBITDA, and management's reasons for using such non-GAAP

measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.



Revenues less cost of revenues increased $25.8 million for the year ended
December 31, 2020 compared to the year ended December 31, 2019, primarily due to
a 50.0% increase in volumes traded and shares routed on our U.S. Equities
exchanges. For the year ended December 31, 2020, the North American Equities
segment's operating income increased $27.0 million compared to the year ended
December 31, 2019 as a result of higher revenues less cost of revenues.
Operating expenses decreased slightly for the year ended December 31, 2020
compared to the year ended December

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31, 2019, primarily due to a decrease in other expenses and depreciation and amortization, offset by an increase in acquisition-related costs.

Futures

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA, and EBITDA margin for our Futures segment:


                                                                         Percentage
                                                                          of Total
                                                                          Revenues
                                       Year Ended                        Year Ended
                                      December 31,         Percent      December 31,
                                   2020         2019       Change      2020       2019

                                           (in millions, except percentages)
Revenues less cost of revenues    $ 105.8      $ 131.3      (19.4) %    96.9 %    96.6 %
Operating expenses                   52.0         48.2         7.9 %    47.6 %    35.5 %
Operating income                  $  53.8      $  83.1      (35.3) %    49.3 %    61.1 %
EBITDA(1)                         $  56.9      $  85.4      (33.4) %    52.1 %    62.8 %
EBITDA margin(2)                     53.8 %       65.0 %      *          *         *


*   Not meaningful

See footnote (1) to the table under "Overview" above for a reconciliation of (1) net income to EBITDA, and management's reasons for using such non-GAAP

measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.



Revenues less cost of revenues decreased $25.5 million for the year ended
December 31, 2020 compared to the year ended December 31, 2019, primarily due to
a 19.4% decline in Futures ADV, coupled with a 5.2% decrease in revenue per
contract. For the year ended December 31, 2020, the Futures segment's operating
income decreased $29.3 million compared to the year ended December 31, 2019 due
to lower revenues less cost of revenues. Operating expenses increased $3.8 for
the year ended December 31, 2020 compared to the year ended December 31, 2019,
primarily due to an increase in compensation and benefits.

European Equities


The following summarizes revenues less cost of revenues, operating expenses,
operating income, EBITDA and EBITDA margin for our European Equities segment:


                                                                         Percentage
                                                                          of Total
                                                                          Revenues
                                      Year Ended                         Year Ended
                                     December 31,          Percent      December 31,
                                   2020         2019       Change      2020       2019

                                           (in millions, except percentages)
Revenues less cost of revenues    $ 114.4      $ 87.5         30.7 %    81.4 %    79.0 %
Operating expenses                   80.9        67.2         20.4 %    57.6 %    60.6 %
Operating income                  $  33.5      $ 20.3         65.0 %    23.8 %    18.3 %
EBITDA(1)                         $  95.1      $ 49.8         91.0 %    67.7 %    44.9 %
EBITDA margin(2)                     83.1 %      56.9 %       *          *         *


*   Not meaningful

See footnote (1) to the table under "Overview" above for a reconciliation of (1) net income to EBITDA, and management's reasons for using such non-GAAP

measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.



Revenues less cost of revenues increased $26.9 million for the year ended
December 31, 2020 compared to the year ended December 31, 2019, primarily due to
additional revenue attributable to the acquisition of EuroCCP, as well as a 9.7%
increase in net capture and a 5.8% increase in market ADNV. For the year ended
December 31, 2020, operating income increased $13.2 million compared to the year
ended December 31, 2019 as a result of higher revenues less cost

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of revenues. Operating expenses increased $13.7 million for the year ended December 31, 2020 compared to the year ended December 31, 2019, primarily due to an increase in compensation and benefits, professional fees and outside services, and technology support services as a result of the EuroCCP acquisition, partially offset by a decrease in other expenses and acquisition-related costs.

Global FX

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our Global FX segment:


                                                                         Percentage
                                                                          of Total
                                                                          Revenues
                                      Year Ended                         Year Ended
                                     December 31,          Percent      December 31,
                                   2020        2019        Change      2020      2019

                                           (in millions, except percentages)
Revenues less cost of revenues    $ 57.8      $  53.0          9.1 %   100.0 %   100.0 %
Operating expenses                  51.8         57.9       (10.5) %    89.6 %   109.2 %
Operating income (loss)           $  6.0      $ (4.9)        222.4 %    10.4 %   (9.2) %
EBITDA(1)                         $ 32.4      $  25.0         29.6 %    56.1 %    47.2 %
EBITDA margin(2)                    56.1 %       47.2 %       *          *         *


*   Not meaningful

See footnote (1) to the table under "Overview" above for a reconciliation of (1) net income to EBITDA, and management's reasons for using such non-GAAP

measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.



Revenues less cost of revenues increased $4.8 million for the year ended
December 31, 2020 compared to the year ended December 31, 2019, primarily due to
a 7.4% increase in Global FX ADNV during 2020. For the year ended December 31,
2020, the Global FX segment's operating income increased $10.9 million compared
to the year ended December 31, 2019 due to a decline in operating expenses,
coupled with higher revenues less costs of revenues. Operating expenses
decreased $6.1 million for the year ended December 31, 2020 compared to the year
ended December 31, 2019, primarily due to decreases in depreciation and
amortization, professional fees and outside services, and travel and promotional
expenses.

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LIQUIDITY AND CAPITAL RESOURCES

Below are charts that reflect our capital allocation:

[[Image Removed: Chart Description automatically generated]]


We expect our cash on hand at December 31, 2020 and other available resources,
including cash generated from operations, to be sufficient to continue to meet
our cash requirements for the foreseeable future. In the near term, we expect
that our cash from operations and availability under the Revolving Credit
Facility will meet our cash needs to fund our operations, capital expenditures,
interest payments on debt, debt repayments, any dividends, potential strategic
acquisitions, and opportunities for common stock repurchases under the
previously announced program. We may also utilize excess cash on hand to pay
down amounts outstanding under the Term Loan Agreement. See Note 13 ("Debt") of
the consolidated financial statements for further information.

On July 1, 2020, in connection with the Company's acquisition of EuroCCP,
EuroCCP as borrower and the Company as guarantor of scheduled interest and fees
on borrowings (but not the principal amount of any borrowings), entered into a
€1.5 billion committed syndicated multicurrency revolving and swingline credit
facility agreement (the "Facility"). The Facility is available to be drawn by
EuroCCP towards (a) financing unsettled amounts in connection with the
settlement of transactions in securities and other items processed through
EuroCCP's clearing system and (b) financing any other liability or liquidity
requirement of EuroCCP incurred in the operation of its clearing system.
Borrowings under the Facility are secured by cash, eligible government bonds and
eligible equity assets deposited by EuroCCP into secured accounts. As a result,
should the Facility be drawn by EuroCCP it could potentially impact EuroCCP's
liquidity, and we can give no assurance that this Facility will be sufficient to
meet all of such obligations or sufficiently mitigate EuroCCP's liquidity risk
to meet its payment obligations when due. Additionally, a default of the
Facility may allow lenders, under certain circumstances, to accelerate any
related drawn amounts and may result in the acceleration of the Company's other
outstanding debt to which a cross-acceleration or cross-default provision
applies, which may limit the Company's liquidity, business and financing
activities. The Facility is expected to terminate on July 1, 2021 and we may not
be able to enter into a replacement facility on commercially reasonable terms,
or at all.

 Our long-term cash needs will depend on many factors, including an introduction
of new products, enhancements of current products, the geographic mix of our
business and any potential acquisitions. We believe our cash from operations and
the availability under our Revolving Credit Facility will meet any long-term
needs unless a significant acquisition is identified, in which case we expect
that we would be able to borrow the necessary funds and/or issue additional
shares of our common stock to complete such an acquisition. In addition, we do
not expect COVID-19 to have a material impact on our liquidity or capital
resources, including cash from operations or uses of cash, or change our ability
to access capital markets in the near term or the foreseeable future.

Cash and cash equivalents include cash in banks and all non-restricted, highly
liquid investments with original maturities of three months or less at the time
of purchase. Cash and cash equivalents as of December 31, 2020 increased

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$16.1 million from December 31, 2019 primarily due to proceeds from long-term
debt and net income, partially offset by acquisitions net of cash of acquired of
$351.5 million and share repurchases of $349.1 million. See "Cash Flow" below
for further discussion.

Our cash and cash equivalents held outside of the United States in various
foreign subsidiaries totaled $128.2 million and $85.1 million as of December 31,
2020 and December 31, 2019, respectively. The remaining balance was held in the
United States and totaled $117.2 million and $144.1 million as of December 31,
2020 and December 31, 2019, respectively. Any offshore cash repatriated to the
United States could subject us to additional United States income taxes, less
applicable foreign tax credits.

Our financial investments include deferred compensation plan assets, as well as
investments with original or acquired maturities longer than three months but
that mature in less than one year from the balance sheet date and are recorded
at fair value. As of December 31, 2020, financial investments consisted of U.S.
Treasury securities and deferred compensation plan assets.

Cash Flow


The following table summarizes our cash flow data for the years ended December
31, 2020, 2019 and 2018:


                                                                For the Year Ended
                                                                   December 31,
                                                          2020         2019         2018

                                                                   (in millions)
Net cash provided by operating activities               $ 1,458.8    $   632.8    $   534.7
Net cash used in investing activities                     (430.5)       (15.9)       (25.6)
Net cash used in financing activities                     (201.7)      

(662.9) (371.6) Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents

                                                   1.6          

0.2 (5.9) Increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents

                    $   828.2    $  (45.8)    $   131.6

                                                                As of December 31,
                                                          2020         2019         2018

                                                                   (in millions)
Reconciliation of cash, cash equivalents, and
restricted cash and cash equivalents:
Cash and cash equivalents                               $   245.4    $   229.3    $   275.1
Restricted cash and cash equivalents (margin
deposits and clearing funds)                                812.1            -            -
Total                                                   $ 1,057.5    $   229.3    $   275.1



Net Cash Flows Provided by Operating Activities


During the year ended December 31, 2020, net cash provided by operating
activities was $990.6 million higher than net income. The variance is primarily
attributed to the addition of $812.1 million of restricted cash and cash
equivalents (margin deposits and clearing funds) resulting from the EuroCCP
acquisition, the adjustment for depreciation and amortization expense of $158.5
million, the change in accounts payable and accrued liabilities of $59.4
million, and the change in Section 31 fees payable of $53.9 million, partially
offset by the change in accounts receivable of $90.0 million.

Net cash provided by operating activities was $1,458.8 million and $632.8
million for the years ended December 31, 2020 and 2019, respectively. The
increase in net cash flows provided by operating activities was primarily due to
the addition of margin deposits and clearing funds resulting from the EuroCCP
acquisition and the increase in net income.

Net cash provided by operating activities was $262.0 million higher than net
income for the fiscal year ended December 31, 2019. The variance is primarily
attributed to the adjustment for depreciation expense of $176.6 million and the
change in accounts receivable of $50.3 million, partially offset by the
adjustment for provision of deferred taxes of $37.2 million, the change in
accounts payable and accrued liabilities of $25.7 million, and other prepaid
expenses of $16.9 million.

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Net cash provided by operating activities was $632.8 million and $534.7 million
for the years ended December 31, 2019 and 2018, respectively. The increase in
net cash flows provided by operating activities was primarily due to higher net
income.

Net Cash Flows Used in Investing Activities


Net cash flows used in investing activities was $430.5 million and $15.9 million
for the years ended December 31, 2020 and 2019, respectively. The variance is
primarily due to acquisitions, net of cash acquired in 2020 and the return of
capital from investments in 2019.

Net cash flows used in investing activities totaled $15.9 million and $25.6 million for the years ended December 31, 2019 and 2018, respectively. Expenditures for capital and other assets totaled $35.1 million and $36.3 million for the years ended December 31, 2019 and 2018, respectively, primarily representing purchases of systems hardware and development of software to develop and enhance our trading platform and operations. In 2019 and 2018, investing activities primarily represented purchases of property and equipment.

Capital expenditures are expected to be in the range of $60 to $65 million, reflecting expenditures associated with the Company's planned trading floor relocation in 2021 and ongoing capacity and technology-related investments.

Net Cash Flows Used in Financing Activities

For the year ended December 31, 2020, the Company received proceeds from long-term debt of $493.7 million, of which $70.0 million was used to pay down the revolving credit facility draw taken in the third quarter of 2020, repurchased $349.1 million of common stock, paid dividends totaling $170.6 million, and paid down $155.0 million of long-term debt.

Net cash flows used in financing activities totaled $662.9 million for the year
ended December 31, 2019. The Company paid down $350.0 million of long-term debt,
repurchased $156.9 million of common stock, and paid dividends of $150.0
million. Net cash flows used in financing activities totaled $371.6 million for
the year ended December 31, 2018. The $291.3 million decrease in net cash flows
provided by financing activities resulted primarily from the long-term debt
repayment in 2019.

Financial Assets

The following summarizes our financial assets excluding margin deposits and clearing funds as of December 31, 2020, 2019 and 2018:


                                                  As of December 31,
                                             2020         2019        2018

                                                     (in millions)
Cash and cash equivalents                  $   245.4    $  229.3    $  275.1
Financial investments                           92.4        71.0        35.7
Less deferred compensation plan assets        (24.5)      (23.4)           -
Less cash collected for Section 31 Fees      (103.0)      (69.0)      (53.1)
Adjusted Cash(1)                           $   210.3    $  207.9    $  257.7

Adjusted Cash is a non-GAAP measure and represents cash and cash equivalents

plus financial investments minus deferred compensation plan assets and cash (1) collected for Section 31 fees. We have presented Adjusted Cash because we

consider it an important supplemental measure of our liquidity and believe

    that it is frequently used by analysts, investors and other interested
    parties in the evaluation of companies.




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Debt

The following summarizes our debt obligations as of December 31, 2020, 2019 and
2018:


                                                            As of December 31,
                                                       2020        2019        2018

                                                               (in millions)
Debt:
Term Loan Agreement                                  $    70.0    $ 225.0    $   275.0
3.650% Senior Notes                                      650.0      650.0        650.0
1.950% Senior Notes                                          -          -        300.0
1.625% Senior Notes                                      500.0          -            -
Revolving Credit Agreement                                   -          -            -
EuroCCP Credit Facility                                      -          -            -

Less unamortized discount and debt issuance costs (16.1) (7.4)

     (9.6)
Total debt                                           $ 1,203.9    $ 867.6    $ 1,215.4



At December 31, 2020, we were in compliance with the covenants of our debt agreements.


In addition to the debt outstanding, as of December 31, 2020 we had an
additional $250.0 million available through our revolving credit facility, with
the ability to borrow another $100.0 million by increasing the commitments under
the facility. Together with Adjusted Cash, we had $460.3 million available to
fund our operations, capital expenditures, potential acquisitions, debt
repayments and any dividends as of December 31, 2020.

Dividends

The Company's expectation is to continue to pay dividends. The decision to pay a
dividend, however, remains within the discretion of the Company's board of
directors and may be affected by various factors, including our earnings,
financial condition, capital requirements, level of indebtedness and other
considerations our board of directors deems relevant. Future debt obligations
and statutory provisions, among other things, may limit, or in some cases
prohibit, our ability to pay dividends.

Share Repurchase Program


In 2011, the board of directors approved an initial authorization for the
Company to repurchase shares of its outstanding common stock of $100 million and
approved additional authorizations of $100 million in each of 2012, 2013, 2014,
2015 and 2016, $150 million in February 2018, $100 million in August 2018, $250
million in October 2019, and $250 million in June 2020, for a total
authorization of $1.4 billion. The program permits the Company to purchase
shares through a variety of methods, including in the open market or through
privately negotiated transactions, in accordance with applicable securities
laws. It does not obligate the Company to make any repurchases at any specific
time or situation.

Under the program, for the year ended December 31, 2020, the Company repurchased
3,534,115 shares of common stock at an average cost per share of $98.78,
totaling $349.1 million. Since inception of the program through December 31,
2020, the Company has repurchased 17,250,124 shares of common stock at an
average cost per share of $66.66, totaling $1.1 billion.

As of December 31, 2020, the Company had $200.1 million of availability remaining under its existing share repurchase authorizations.

OCC Capital Management Policy


The Company's contributed capital to OCC has been recorded under investments in
the consolidated balance sheets as of December 31, 2020. Under OCC's current
capital management policy, which was approved by the SEC on January 24, 2020, if
OCC's equity capital falls below certain defined thresholds, OCC can access
additional capital through an operational loss fee charged to clearing members.
None of OCC's shareholders (including Cboe Options) has any obligation to
contribute capital to OCC under the capital management policy, nor does any
shareholder have the right to receive dividends from OCC under such policy. OCC
did not pay its shareholders any dividend or other return on the retained
portion of their capital contributions. As such, the Company reversed the $8.8
million OCC dividend declared in

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2018, which was to be paid in 2019, in other expense, net in the consolidated statement of income for the year ended December 31, 2019.

Lease and Obligations


The Company currently leases additional office space, data centers and remote
network operations center, with lease terms remaining from 4 months to
180 months as of December 31, 2020. In September 2019, we entered into two
leases that commenced in 2020 for a new principal office space and trading floor
space, both located in Chicago, Illinois.

Total rent expense related to current and former lease obligations for the years
ended December 31, 2020, 2019 and 2018 totaled $20.2 million, $12.4 million and
$10.1 million, respectively. In addition to our lease obligations, we have
contractual obligations related to certain operating leases, data and
telecommunications agreements, and our long-term debt outstanding.

Purchase obligations include our estimate of the minimum outstanding obligations
under agreements to purchase goods or services that we believe are enforceable
and legally binding and that specify all significant terms, including fixed or
minimum quantities to be purchased; fixed or minimum and maximum amounts to be
paid; and the approximate timing of the transaction. Purchase obligations
include licensing agreements with various licensors which contain annual minimum
fee requirements that total $361.6 million for the next five years. Purchase
obligations exclude agreements that are cancellable at any time without penalty.

We have excluded from the contractual obligations listed below $812.1 million in
cash margin deposits and clearing funds. Clearing participants of EuroCCP are
required to make deposits to a clearing fund. The cash deposits made by clearing
participants are recorded in the consolidated balance sheet as current assets
with equal and offsetting current liabilities. See Note 15 ("Clearing
Operations") to our consolidated financial statements for additional information
on EuroCCP and the margin deposits and clearing funds.

Future minimum payments under these leases and agreements were as follows as of
December 31, 2020:


                                                                    Payments Due by Period
                                                           Less than                                    More than
                                              Total         1 year        1-3 years      4-5 years       5 years

Contractual Obligations                                                 (in millions)
Operating leases                            $   157.7    $      16.4    $      33.1    $      21.4    $      86.8
Purchase obligations                            963.0           70.1          143.5          148.0          601.4
Principal payments of debt                    1,220.0           70.0              -              -        1,150.0
Interest payments on debt                       224.9           32.7           63.7           63.7           64.8
Total                                       $ 2,565.6    $     189.2    $     240.3    $     233.1    $   1,903.0



Commercial Commitments and Contractual Obligations


As of December 31, 2020, our commercial commitments and contractual obligations
included operating leases, data and telecommunications agreements, equipment
leases, our long-term debt outstanding, contingent considerations and other
obligations. See Note 24 ("Commitments, Contingencies, and Guarantees") to the
consolidated financial statements for a discussion of commitments and
contingencies, Note 13 ("Debt") for a discussion of the outstanding debt, Note
15 ("Clearing Operations") for information on EuroCCP's clearinghouse exposure
guarantee, and Note 25 ("Leases") for discussion on operating leases and
equipment leases.

Off-Balance Sheet Arrangements

See Note 15 ("Clearing Operations") for discussion of contingent assets and liabilities related to clearing operations in connection with the Company's acquisition of EuroCCP.

Guarantees

We use Wedbush and Morgan Stanley to clear our routed equities transactions for
our U.S. Equities exchanges. Wedbush and Morgan Stanley guarantee the trade
until one day after the trade date, after which time the NSCC provides a
guarantee. In the case of failure to perform on the part of one of our clearing
firms, Wedbush or Morgan Stanley, we provide the guarantee to the counterparty
to the trade. OCC acts as a central counterparty on all transactions in listed
equity options in our Options segment, and as such, guarantees clearance and
settlement of all of our options transactions. We believe that any potential
requirement for us to make payments under these guarantees is remote and

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accordingly, have not recorded any liability in the consolidated financial
statements for these guarantees. Similarly, with respect to U.S. listed equity
options and futures, we deliver matched trades of our customers to the OCC,
which acts as a central counterparty on all transactions occurring on Cboe
Options, C2, BZX, EDGX, and CFE and, as such, guarantees clearance and
settlement of all of our matched options and futures trades. With respect to
Canadian equities, we deliver matched trades of our customers to The Canadian
Depository for Securities, which acts as a central counterparty on all
transactions occurring on MATCHNow and, as such, guarantees clearance and
settlement of all of our matched Canadian equities trades. The BIDS Trading ATS
platform delivers matched trades to BofA Securities, Inc., which delivers the
matched trades to the NSCC.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with U.S.
GAAP requires our management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of the amounts of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ materially from those estimates. On an ongoing
basis, the Company evaluates its estimates, including those related to areas
that require a significant level of judgment or are otherwise subject to an
inherent degree of uncertainty. The Company bases its estimates on historical
experience, observance of trends in particular areas, information available from
outside sources and various other assumptions that are believed to be reasonable
under the circumstances. Information from these sources form the basis for
making judgments about the carrying values of assets and liabilities that may
not be readily apparent from other sources.

We have identified the policies below as critical to our business operations and
the understanding of our results of operations. The impact of, and any
associated risks related to, these policies on our business operations is
discussed throughout "Management's Discussion and Analysis of Financial
Condition and Results of Operations." For a detailed discussion on the
application of these and other accounting policies, see Note 2 ("Summary of
Significant Accounting Policies") to our consolidated financial statements and
related notes included elsewhere in this Annual Report on Form 10-K.

Revenue Recognition

For further discussion related to revenue recognition of fees, such as transaction and clearing fees, access and capacity fees, market data fees, and regulation transaction and Section 31 fees, see Note 4 ("Revenue Recognition").

Goodwill and Other Intangible Assets


Our acquisitions of Bats, Cboe Vest Financial Group Inc. ("Vest"), Silexx
Financial Systems, LLC ("Silexx"), LiveVol, Hanweck, FT Options, Trade Alert,
MATCHNow, and BIDS Holdings resulted in the recording of goodwill and other
intangible assets, while our acquisition of EuroCCP, resulted in a bargain
purchase gain and other intangible assets. In accordance with ASC
350-Intangibles-Goodwill and Other, we test the carrying values of goodwill and
indefinite-lived intangible assets for impairment at least annually, or more
frequently when events or changes in circumstances signal indicators of
impairment are present. We perform our annual impairment test of goodwill and
other indefinite-lived intangible assets during the fourth quarter of our fiscal
year, using the October 1 carrying values. Goodwill is tested for impairment at
the reporting unit level in accordance with ASC 350-20. If the carrying value of
the reporting unit exceeds its fair value, an impairment loss will be recognized
in an amount equal to the excess. If the fair value of indefinite-lived
intangible assets is less than their carrying value, an impairment loss will be
recognized in an amount equal to the difference. We performed our annual
goodwill impairment test as of October 1, 2020 and determined that no impairment
existed.

The estimated fair values of our reporting units are based on the market
approach and the income approach (using discounted estimated future cash flows).
The estimated fair values of indefinite-lived intangibles used the income
approach. The discounted cash flow analysis requires significant judgment,
including judgments about the discount rate, forecasted revenue growth rate, and
operating expenses, that are inherent in these fair value estimates over the
estimated remaining operating period. As such, actual results may differ from
these estimates and lead to a revaluation of our goodwill and indefinite-lived
intangible assets. If updated estimates indicate that the fair value of goodwill
or any indefinite-lived intangibles is less than the carrying value of the
asset, an impairment charge is expected to be recorded in the consolidated
statements of income in the period of the change in estimate.

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Purchase Accounting

Tangible and intangible assets acquired and liabilities assumed in an acquired
business are recorded at their estimated fair values on the date of acquisition.
The difference between the purchase price amount and the net fair value of
assets acquired and liabilities assumed is recognized as goodwill on the balance
sheet if the purchase price exceeds the estimated net fair value or as a bargain
purchase gain on the income statement if the purchase price is less than the
estimated net fair value. Determining the fair value of assets acquired and
liabilities assumed requires management's judgment, often utilizes independent
valuation experts and involves the use of significant estimates and assumptions
with respect to the timing and amounts of future cash inflows and outflows,
discount rates, market prices and asset lives, among other items. The judgments
made in the determination of the estimated fair value assigned to the assets
acquired and liabilities assumed, as well as the estimated useful life of each
asset and the duration of each liability, could significantly impact the
financial statements in periods after acquisition, such as through depreciation
and amortization expense. When available, the estimated fair values of these
assets and liabilities are determined based on observable inputs, such as quoted
market prices, information from comparable transactions, offers made by other
prospective acquirers, in such cases where we may have certain rights to acquire
additional interests in existing investments, and the replacement cost of assets
in the same condition or stage of usefulness (Level 1 and 2). Unobservable
inputs, such as expected future cash flows or internally developed estimates of
value (Level 3), are used if observable inputs are not available. As noted in
ASC 805-Business Combinations, the allocation of the purchase price may be
modified up to twelve months after the acquisition date as more information is
obtained about the fair value of assets acquired and liabilities assumed. See
Note 5 ("Acquisitions") for additional information.

Income Taxes


Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in our opinion, it is more
likely than not that all or some portion of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.

The Company recognizes the tax benefit from an uncertain tax position only if it
is more likely than not that the tax position will be sustained on examination
by the taxing authorities, based upon the technical merits of the position. The
tax benefit recognized in the consolidated financial statements from such a
position is measured based on the largest benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement. Also, interest and
penalties expense is recognized on the full amount of deferred benefits for
uncertain tax positions. The Company's policy is to include interest and
penalties related to unrecognized tax benefits in the income tax provision
within the consolidated statements of income.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 3 ("Recent Accounting Pronouncements") to the consolidated financial statements for further discussion of recently adopted and recently issued accounting pronouncements that are applicable to the Company.





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05/18CBOE GLOBAL MARKETS, INC. : Change in Directors or Principal Officers, Submission of Matte..
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04/30CBOE GLOBAL MARKETS : Management's Discussion and Analysis of Financial Condition and Resu..
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Managers and Directors
Edward Thomas Tilly Chairman, President & Chief Executive Officer
Brian N. Schell Chief Financial Officer, Treasurer & Executive VP
Eric Crampton Chief Technology Officer & Senior Vice President
Christopher A. Isaacson Chief Operating Officer & Executive VP
Janet P. Froetscher Independent Director
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