Chicago Board Options Exchange Annual Report 2001 - CBOE.com

CBOE FY 2001:
THE NUMBER ONE OPTIONS
EXCHANGE FOR 28 YEARS
FINANCIAL SUMMARY
For the fiscal year ended June 30, 2001, the Chicago Board Options Exchange earned net income of $7.1 million compared
to $10.9 million in fiscal year 2000.
A new record was set for the total amount of contract volume during the year. Approximately 1,271,000 contracts per day were
traded, a 3.4% increase over the previous record established in fiscal year 2000. However, total Exchange revenues declined by
$17.5 million or 9.9% due to the elimination of equity options customer fees.
Excluding a $16.0 million consolidated class action settlement expense recorded in fiscal year 2000, operating expenses
increased by 3.8% in fiscal year 2001. This increase was attributed to higher data processing expenses mainly related to
capacity expansion ($3.1 million), non-cash depreciation and amortization expense related to investments in systems
hardware and software ($2.6 million), and royalty fees due to the highly successful launch of options on the Nasdaq-100
Index Trust ($1.0 million).
The Exchange invested $37.7 million in capital spending during fiscal year 2001. Most of these expenditures were for systems
hardware and software related to capacity increases, new trading technology, website redesign, complex orders on ORS, and a
new trading floor printer system.
During the year, $10.7 million was paid into an escrow account, representing the first two installment payments of a
consolidated class action settlement. The third payment of $5.3 million is due on July 1, 2002. Note 7 to the consolidated
financial statements summarizes the status of the settlement.
Retained earnings increased to $109.3 million and total members’ equity at June 30, 2001 was $130.2 million. At year’s end,
the Exchange was debt-free with working capital of $17.6 million.
17 CBOE ‘01