10-K 1 cboe-1231201610k.htm 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
| | |
|---|
| | |
| ý | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended December 31, 2016 | | |
| or | | |
| o | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to | | |
Commission File No. 001-34774
CBOE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| | |
|---|
| | |
| Delaware (State or other jurisdiction of incorporation or organization) | | 20-5446972 (I.R.S. Employer Identification Number) |
| 400 South LaSalle Street Chicago, Illinois (Address of principal executive offices) | | 60605 (Zip Code) |
Registrant's telephone number, including area code
(312) 786-5600
Securities registered pursuant to Section 12(b) of the Act:
| | |
|---|
| | |
| Title of Each Class | | Name of Exchange on Which Registered |
| Common Stock, par value $0.01 per share | | NASDAQ Global Select Market |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (of for such shorter period that the registrant was required to submit and post such files). Yes ý No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One):
| | | | | | |
|---|
| | | | | | |
| Large accelerated filer ý | | Accelerated filer o | | Non-accelerated filer ¨ (Do not check if a smaller reporting company) | | Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý
As of June 30, 2016, the aggregate market value of the Registrant's outstanding voting common equity held by non-affiliates was approximately $5.4 billion based on the closing price of $66.62 per share of common stock.
The number of outstanding shares of the registrant's common stock as of February 16, 2017 was 81,285,307 shares of common stock.
DOCUMENTS INCORPORATED BY REFERENCE
| | |
|---|
| | |
| Documents | | Form 10-K Reference |
| Portions of the Company's Proxy Statement for the 2017 Annual Meeting of Stockholders | | Part III |
TABLE OF CONTENTS
CBOE HOLDINGS, INC.
2016 FORM 10-K
CERTAIN DEFINED TERMS
Throughout this document, unless otherwise specified or the context so requires:
| |
|---|
| • | "CBOE Holdings," "we," "us," "our" or "the Company" refers to CBOE Holdings, Inc. and its subsidiaries. |
| |
|---|
| • | "CBOE" refers to Chicago Board Options Exchange, Incorporated, a wholly-owned subsidiary of CBOE Holdings, Inc. |
| |
|---|
| • | "C2" refers to C2 Options Exchange, Incorporated, a wholly-owned subsidiary of CBOE Holdings, Inc. |
| |
|---|
| • | "CFE" refers to CBOE Futures Exchange, LLC, a wholly-owned subsidiary of CBOE Holdings, Inc. |
| |
|---|
| • | "CFTC" refers to the U.S. Commodity Futures Trading Commission. |
| |
|---|
| • | "Consent Order" refers to the consent order that CBOE and C2 entered into with the SEC on June 11, 2013. |
| |
|---|
| • | "FASB" refers to the Financial Accounting Standards Board. |
| |
|---|
| • | "GAAP" refers to Generally Accepted Accounting Principles in the U.S. |
| |
|---|
| • | "Our exchanges" refers to CBOE, C2 and CFE. |
| |
|---|
| • | "SEC" refers to the U.S. Securities and Exchange Commission. |
| |
|---|
| • | "SPX" refers to our S&P 500 Index exchange-traded options products. |
| |
|---|
| • | "TPH" refers to either a Trading Permit Holder or Trading Privilege Holder. |
| |
|---|
| • | "VIX" refers to the CBOE Volatility Index methodology. |
TRADEMARK INFORMATION
CBOE®, Chicago Board Options Exchange®, CBOE Volatility Index®, CFE®, Livevol®, FLEX®, FLexible EXchange®, Hybrid®, LEAPS® and VIX® are registered trademarks and BuyWriteSM, CBOE Futures ExchangeSM, CBOE VestSM, CBOE Options InstituteSM, CBOE Russell 2000 Volatility IndexSM, CBOE/CBOT 10-year U.S. Treasury Note Volatility IndexSM and WeeklysSM are service marks of CBOE. C2SM and C2 Options ExchangeSM are service marks of C2. Standard & Poor's®, S&P®, S&P 100® and S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC and have been licensed for use by CBOE, C2 and CFE. Russell®, Russell 1000® and Russell 2000® are registered trademarks of Frank Russell Company, used under license. Dow Jones®, Dow Jones Industrial Average®, DJIA® and Dow Jones Indexes are registered trademarks or service marks of Dow Jones Trademark Holdings, LLC, used under license. MSCI, and the MSCI index names are service marks of MSCI Inc., used under license. FTSE® and the FTSE indexes are trademarks and service marks of FTSE International Limited, used under license. CBOT is a trademark of CME Group, Inc. ("CME"). CBOE has, with the permission of CME, used the CBOT trademark in CBOE/CBOT 10-year U.S. Treasury Note Volatility Index. CME makes no representation regarding the advisability of investing in any investment product that is based on such indexes. All other trademarks and service marks are the property of their respective owners.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. You can identify these statements by forward-looking words such as "may," "might," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements, including statements in "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. In particular, you should consider the risks and uncertainties described under "Risk Factors" in this Annual Report.
While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Some factors that could cause actual results to differ include:
| |
|---|
| • | the loss of our right to exclusively list and trade certain index options and futures products; |
| |
|---|
| • | economic, political and market conditions; |
| |
|---|
| • | compliance with legal and regulatory obligations, including our obligations under the Consent Order; |
| |
|---|
| • | increasing price competition in our industry; |
| |
|---|
| • | decreases in trading volumes or a shift in the mix of products traded on our exchanges; |
| |
|---|
| • | legislative or regulatory changes; |
| |
|---|
| • | increasing competition by foreign and domestic entities; |
| |
|---|
| • | our dependence on third party service providers; |
| |
|---|
| • | our index providers' ability to maintain the quality and integrity of their indexes and to perform under our agreements; |
| |
|---|
| • | our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; |
| |
|---|
| • | our ability to accommodate trading volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; |
| |
|---|
| • | our ability to protect our systems and communication networks from security risks, including cyber-attacks; |
| |
|---|
| • | the accuracy of our estimates and expectations; |
| |
|---|
| • | our ability to maintain access fee revenues; |
| |
|---|
| • | our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; |
| |
|---|
| • | the ability of our compliance and risk management methods to effectively monitor and manage our risks; |
| |
|---|
| • | our ability to attract and retain skilled management and other personnel; |
| |
|---|
| • | our ability to manage our growth and strategic acquisitions or alliances effectively; |
| |
|---|
| • | restrictions imposed by our debt obligations; |
| |
|---|
| • | the satisfaction of the conditions precedent to the consummation of our proposed acquisition of Bats Global Markets, Inc. (“Bats”), including, without limitation, the receipt of regulatory approvals on the terms desired or anticipated; |
| |
|---|
| • | unanticipated difficulties or expenditures relating to the proposed transaction, including, without limitation, difficulties that result in the failure to realize expected synergies, efficiencies and cost savings from the proposed transaction within the expected time period (if at all), whether in connection with integration, combining trading platforms, broadening distribution of product offerings or otherwise; |
| |
|---|
| • | our ability to maintain an investment grade credit rating; |
| |
|---|
| • | risks relating to the value of our shares to be issued in the proposed transaction; |
| |
|---|
| • | disruptions of our and Bats’ current plans, operations and relationships with market participants caused by the announcement and pendency of the proposed transaction; and |
| |
|---|
| • | potential difficulties in our and Bats’ ability to retain employees as a result of the announcement and pendency of the proposed transaction. |
For a detailed discussion of these and other factors that might affect our performance, see Part I, Item 1A. of this Report. We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this filing.
PART I
filings.tools