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Press Release: Cboe Global Markets Reports 2020 -4-

· 02/05/2021 07:30
Cboe Global Markets, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Three Months and Full Year Ended December 31, 2020 and 2019 Three Months Twelve Months Ended Ended December 31, December 31, (in millions, except per share amounts) 2020 2019 2020 2019 Revenues: Transaction and clearing fees $592.7 $394.2 $2,418.0 $1,716.2 Access and capacity fees 62.7 57.3 236.7 221.9 Market data fees 57.6 53.8 232.0 213.5 Regulatory fees 120.9 85.2 500.2 311.7 Other revenue 10.3 8.1 40.2 32.8 Total Revenues 844.2 598.6 3,427.1 2,496.1 Cost of Revenues: Liquidity payments 386.7 215.5 1,554.1 964.7 Routing and clearing 21.8 8.1 70.4 35.8 Section 31 fees 113.2 73.5 465.0 271.4 Royalty fees 19.0 21.0 83.4 86.8 Other (3.6) 0.2 (0.1) 0.5 Total Cost of Revenues 537.1 318.3 2,172.8 1,359.2 Revenues Less Cost of Revenues 307.1 280.3 1,254.3 1,136.9 Operating Expenses: Compensation and benefits 57.5 49.0 224.9 199.0 Depreciation and amortization 40.5 42.8 158.5 176.6 Technology support services 15.0 11.9 54.5 46.2 Professional fees and outside services 17.6 15.4 60.6 68.3 Travel and promotional expenses 2.4 3.6 6.6 11.9 Facilities costs 4.9 3.2 17.6 11.0 Acquisition-related costs 28.8 8.7 45.2 48.5 Other expenses 5.6 26.5 24.2 38.2 Total Operating Expenses 172.3 161.1 592.1 599.7 Operating Income 134.8 119.2 662.2 537.2 Non-operating Income (Expenses): Interest expense, net (13.5) (7.8) (37.6) (35.9) Other income, net 1.6 2.8 35.8 0.1 Total Non-operating Income (Expenses) (11.9) (5.0) (1.8) (35.8) Income Before Income Tax Provision 122.9 114.2 660.4 501.4 Income tax provision 35.6 27.9 192.2 130.6 Net Income 87.3 86.3 468.2 370.8 Net loss attributable to redeemable noncontrolling interest -- -- -- 4.1 Net Income Excluding Redeemable Noncontrolling Interest 87.3 86.3 468.2 374.9 Change in redemption value of redeemable noncontrolling interest -- -- -- (0.5) Net income allocated to participating securities (0.2) (0.2) (1.2) (1.7) Net Income Allocated to Common Stockholders $87.1 $86.1 $467.0 $372.7 Net Income Per Share Allocated to Common Stockholders: Basic earnings per share $0.81 $0.78 $4.28 $3.35 Diluted earnings per share 0.81 0.77 4.27 3.34 Weighted average shares used in computing income per share: Basic 107.9 110.9 109.1 111.4 Diluted 108.0 111.2 109.3 111.8 Cboe Global Markets, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) December 31, 2020 and 2019 December 31, December 31, (in millions) 2020 2019 Assets Current Assets: Cash and cash equivalents $ 245.4 $ 229.3 Financial investments 92.4 71.0 Accounts receivable, net 337.3 234.7 Margin deposits and clearing funds 812.1 -- Income taxes receivable 53.1 56.8 Other current assets 26.5 15.8 Total Current Assets 1,566.8 607.6 Investments 42.7 61.2 Property and equipment, net 82.6 47.0 Property held for sale 13.0 21.1 Operating lease right of use assets 111.0 53.4 Goodwill 2,895.1 2,682.1 Intangible assets, net 1,729.0 1,589.9 Other assets, net 76.3 51.6 Total Assets $ 6,516.5 $ 5,113.9 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable and accrued liabilities $ 250.0 $ 171.9 Section 31 fees payable 152.9 99.0 Deferred revenue 10.2 4.5 Margin deposits and clearing funds 812.1 -- Income taxes payable 4.2 4.0 Current portion of long-term debt 68.7 -- Current portion of contingent consideration liabilities 15.2 2.2 Total Current Liabilities 1,313.3 281.6 Long-term debt 1,135.2 867.6 Unrecognized tax benefits 164.7 135.9 Deferred income taxes 377.6 399.7 Non-current operating lease liabilities 132.1 46.7 Contingent consideration liabilities 17.5 -- Other non-current liabilities 27.2 26.8 Total Liabilities 3,167.6 1,758.3 Stockholders' Equity: Preferred stock -- -- Common stock 1.2 1.2 Treasury stock at cost (1,250.4) (887.1) Additional paid-in-capital 2,713.3 2,691.3 Retained earnings 1,810.2 1,512.6 Accumulated other comprehensive income, net 74.6 37.6 Total Stockholders' Equity 3,348.9 3,355.6 Total Liabilities and Stockholders' Equity $ 6,516.5 $ 5,113.9

Canadian Equities data reflects the acquisition of MATCHNow effective August 4, 2020. Canadian Equities, "net capture per 10,000 shares" refers to transaction fees divided by the product of one-ten thousandth ADV of shares for MATCHNow and the number of trading days. Total market share represents MATCHNow volume divided by the total volume of the Canadian Equities market. TSX listed volume market share represents MATCHNow volume divided by the total volume in TSX listed equities.

European Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in British pounds divided by the product of matched ADNV in British pounds and the number of trading days. EuroCCP data reflects the acquisition of EuroCCP effective July 1, 2020. "Trades cleared" refers to the total number of non-interoperable trades cleared. "Net settlement volume" refers to the total number of settlements executed after netting.

Global FX, "net capture per one million dollars traded" refers to net transaction fees divided by the product of 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. Market Share represents Cboe FX volume divided by the total volume of publicly reporting spot FX venues (Cboe FX, EBS, Refinitiv, and Euronext FX).

Average transaction fees per contract can be affected by various factors, including exchange fee rates, volume-based discounts and transaction mix by contract type and product type.

Non-GAAP Information

In addition to disclosing results determined in accordance with GAAP, Cboe Global Markets has disclosed certain non-GAAP measures of operating performance. These measures are not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. The non-GAAP measures provided in this press release include net transaction and clearing fees, adjusted operating expenses, adjusted operating income, organic net revenue, adjusted operating margin, adjusted net income allocated to common stockholders and adjusted diluted earnings per share, effective tax rate on adjusted earnings, adjusted cash, EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin.

Management believes that the non-GAAP financial measures presented in this press release, including adjusted operating income, organic net revenue and adjusted operating expenses, provide additional and comparative information to assess trends in our core operations and a means to evaluate period-to-period comparisons. Non-GAAP financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing our financial condition and operating results.

Organic net revenue and organic net revenue guidance: Are non-GAAP financial measures that exclude or have otherwise been adjusted for the impact of our acquisitions for the period or guidance, as applicable. Management believes the organic net revenue growth and guidance measures provide users with supplemental information regarding the company's ongoing and future potential revenue performances and trends by presenting revenue growth and guidance excluding the impact of the acquisitions.

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February 05, 2021 07:30 ET (12:30 GMT)