Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 31, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CBOE Holdings, Inc. | |
Entity Central Index Key | 1,374,310 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 112,777,346 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 148.6 | $ 97.3 |
Financial investments | 110.4 | 0 |
Accounts receivables, net | 231.3 | 76.7 |
Income taxes receivable | 10.7 | 53.7 |
Other current assets | 18.7 | 7.4 |
Total Current Assets | 519.7 | 235.1 |
Investments | 82 | 72.9 |
Land | 4.9 | 4.9 |
Property and equipment, net | 75.6 | 55.9 |
Goodwill | 2,686.4 | 26.5 |
Intangible assets, net | 1,970.4 | 8.7 |
Other assets, net | 56.6 | 72.7 |
Total Assets | 5,395.6 | 476.7 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 151 | 82.4 |
Section 31 fees payable | 150.9 | 4.4 |
Deferred revenue | 14.3 | 3.1 |
Income taxes payable | 3.9 | 0 |
Contingent consideration liability | 56.2 | 0 |
Total Current Liabilities | 376.3 | 89.9 |
Long-term debt | 1,411.3 | 0 |
Income tax liability | 68.6 | 52.1 |
Deferred income taxes | 703.4 | 0 |
Other non-current liabilities | 6.7 | 4.2 |
Commitments and Contingencies | ||
Redeemable Noncontrolling Interest | 12.6 | 12.6 |
Stockholders’ Equity: | ||
Preferred stock, $0.01 par value: 20,000,000 shares authorized, no shares issued and outstanding at June 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.01 par value: 325,000,000 shares authorized, 124,632,833 and 112,777,346 shares issued and outstanding, respectively at June 30, 2017 and 92,950,065 and 81,285,307 shares issued and outstanding, respectively at December 31, 2016 | 1.2 | 0.9 |
Treasury stock, at cost: 11,855,487 shares at June 30, 2017 and 11,664,758 shares at December 31, 2016 | (548.2) | (532.2) |
Additional paid-in capital | 2,596.8 | 139.2 |
Retained earnings | 737.3 | 710.8 |
Accumulated other comprehensive income (loss), net | 29.6 | (0.8) |
Total Stockholders’ Equity | 2,816.7 | 317.9 |
Total Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity | $ 5,395.6 | $ 476.7 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 325,000,000 | 325,000,000 |
Common stock, shares issued (in shares) | 124,632,833 | 92,950,065 |
Common stock, shares outstanding (in shares) | 112,777,346 | 81,285,307 |
Treasury stock (in shares) | 11,855,487 | 11,664,758 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Transaction fees | $ 453.9 | $ 127.6 | $ 710.3 | $ 253.8 |
Access fees | 29.7 | 13.2 | 47.5 | 26.4 |
Exchange services and other fees | 19.9 | 11.4 | 35.3 | 22.8 |
Market data fees | 48 | 8.2 | 70.5 | 16.2 |
Regulatory fees | 83.3 | 9.2 | 121.6 | 18.3 |
Other revenue | 6 | 3.5 | 11.8 | 6.1 |
Total Revenues | 640.8 | 173.1 | 997 | 343.6 |
Cost of Revenues: | ||||
Liquidity payments | 266.5 | 7.1 | 371.8 | 13.7 |
Routing and clearing | 12.2 | 2.6 | 18.5 | 4.3 |
Section 31 fees | 74.6 | 0 | 104.6 | 0 |
Royalty fees | 20.6 | 19.3 | 41.8 | 38.4 |
Total Cost of Revenues | 373.9 | 29 | 536.7 | 56.4 |
Revenues less Cost of Revenues | 266.9 | 144.1 | 460.3 | 287.2 |
Operating Expenses: | ||||
Compensation and benefits | 50 | 28.5 | 97.8 | 55.6 |
Depreciation and amortization | 55.8 | 12.3 | 80.9 | 24.2 |
Technology support services | 12 | 5.7 | 19.5 | 11.4 |
Professional fees and outside services | 16.9 | 14.7 | 31.3 | 28.3 |
Travel and promotional expenses | 4.2 | 2.5 | 7.5 | 5 |
Facilities costs | 2.7 | 1.4 | 4.8 | 2.9 |
Acquisition-related costs | 4.7 | 0 | 69.9 | 0 |
Change in contingent consideration | 0.5 | 0 | 0.7 | 0 |
Other expenses | 2.3 | 1 | 4 | 2.3 |
Total Operating Expenses | 149.1 | 66.1 | 316.4 | 129.7 |
Operating Income | 117.8 | 78 | 143.9 | 157.5 |
Non-operating (Expenses) Income: | ||||
Interest expense, net | (12.5) | 0 | (20.4) | 0 |
Other income | 0.8 | 5.8 | 0.9 | 6.8 |
Income Before Income Tax Provision | 106.1 | 83.8 | 124.4 | 164.3 |
Income tax provision | 38.1 | 32.9 | 41.2 | 64.2 |
Net income | 68 | 50.9 | 83.2 | 100.1 |
Net loss attributable to redeemable noncontrolling interest | 0.3 | 0.3 | 0.6 | 0.5 |
Net Income Excluding Noncontrolling Interest | 68.3 | 51.2 | 83.8 | 100.6 |
Change in redemption value of noncontrolling interest | (0.3) | (0.3) | (0.6) | (0.5) |
Net income allocated to participating securities | (0.7) | (0.2) | (0.8) | (0.4) |
Net Income Allocated to Common Stockholders | $ 67.3 | $ 50.7 | $ 82.4 | $ 99.7 |
Net Income Per Share Allocated to Common Stockholders: | ||||
Basic earnings per share (in USD per share) | $ 0.60 | $ 0.62 | $ 0.81 | $ 1.22 |
Diluted earnings per share (in USD per share) | $ 0.60 | $ 0.62 | $ 0.81 | $ 1.22 |
Basic weighted average shares outstanding (in shares) | 112,100 | 81,300 | 102,100 | 81,600 |
Diluted weighted average shares outstanding (in shares) | 112,500 | 81,300 | 102,300 | 81,600 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 68 | $ 50.9 | $ 83.2 | $ 100.1 |
Foreign currency translation adjustments | 27.1 | 0 | 30.2 | 0 |
Unrealized holding gains on available-for-sale investments | 0.3 | 0 | 0.2 | 0 |
Comprehensive Income | 95.4 | 50.9 | 113.6 | 100.1 |
Comprehensive loss attributable to noncontrolling interest | 0.3 | 0.3 | 0.6 | 0.5 |
Comprehensive Income Excluding Noncontrolling Interest | 95.7 | 51.2 | 114.2 | 100.6 |
Change in redemption value of noncontrolling interest | (0.3) | (0.3) | (0.6) | (0.5) |
Comprehensive income allocated to participating securities | (0.9) | (0.2) | (1) | (0.4) |
Comprehensive Income Allocated to Common Stockholders | $ 94.5 | $ 50.7 | $ 112.6 | $ 99.7 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Stockholder's Equity (unaudited) - 6 months ended Jun. 30, 2017 - USD ($) $ in Millions | Total | Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income, net | Redeemable Noncontrolling Interests |
December 31, 2016 at Dec. 31, 2016 | $ 317.9 | $ 0 | $ 0.9 | $ (532.2) | $ 139.2 | $ 710.8 | $ (0.8) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of stock for acquisition of Bats Global Markets, Inc. | 2,424.7 | 0.3 | 2,424.4 | |||||
Repurchase of restricted stock from employees | (16) | (16) | ||||||
Common stock issued from employee stock plans | 3.1 | 3.1 | ||||||
Stock-based compensation | 30.1 | 30.1 | ||||||
Net income excluding noncontrolling interest | 83.8 | 83.8 | ||||||
Cash dividends on common stock of $0.50 per share | (56.7) | (56.7) | ||||||
Other comprehensive income | 30.4 | 30.4 | ||||||
Redemption value adjustment | (0.6) | (0.6) | ||||||
June 30, 2017 at Jun. 30, 2017 | 2,816.7 | $ 0 | $ 1.2 | $ (548.2) | $ 2,596.8 | $ 737.3 | $ 29.6 | |
December 31, 2016 at Dec. 31, 2016 | 12.6 | $ 12.6 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Net loss attributable to redeemable noncontrolling interest | 0.6 | (0.6) | ||||||
Redemption value adjustment | 0.6 | 0.6 | ||||||
June 30, 2017 at Jun. 30, 2017 | $ 12.6 | $ 12.6 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Changes in Stockholder's Equity (unaudited) (Parenthetical) | 6 Months Ended |
Jun. 30, 2017$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Dividends (in USD per share) | $ 0.50 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 83.2 | $ 100.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 80.9 | 24.2 |
Amortization of debt issuance cost | 1 | 0 |
Change in contingent consideration | 0.7 | 0 |
Realized gain on available-for-sale securities | (0.2) | 0 |
Provision for deferred income taxes | (15) | (0.4) |
Stock-based compensation expense | 30.1 | 7.1 |
Impairment of data processing software | 14.9 | 0 |
Equity in investments | (0.1) | (0.5) |
Excess tax benefit from stock-based compensation | 5.7 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | (33.9) | (10) |
Income taxes receivable | 48.3 | (4.6) |
Other current assets | (8.4) | (5.3) |
Accounts payable and accrued liabilities | 9.1 | (3.2) |
Section 31 fees payable | 2.9 | 0 |
Deferred revenue | 6.7 | 6.6 |
Income taxes payable | (50.1) | (1.6) |
Income tax liability | (3.9) | 2.5 |
Other liabilities | 0.2 | 0 |
Net Cash Flows provided by Operating Activities | 172.1 | 114.9 |
Cash Flows from Investing Activities: | ||
Acquisitions, net of cash acquired | (1,405.4) | (14.3) |
Purchases of available-for-sale financial investments | (89.2) | 0 |
Proceeds from maturities of available-for-sale financial investments | 45 | 0 |
Investments | 1.4 | (24.2) |
Purchases of property and equipment | (19.2) | (25.4) |
Net Cash Flows used in Investing Activities | (1,467.4) | (63.9) |
Cash Flows from Financing Activities: | ||
Proceeds from long-term debt | 1,944.2 | 0 |
Principal payments of long term debt | (525) | 0 |
Debt issuance costs | (1.3) | 0 |
Dividends paid | (56.7) | (37.7) |
Purchase of unrestricted stock from employees | (16) | 0 |
Proceeds from exercise of stock-based compensation | 1.3 | 0 |
Excess tax benefit from stock-based compensation | 0 | 1.2 |
Proceeds from employee stock purchase plan | 0 | (4.1) |
Purchase of common stock under announced program | 0 | (60.5) |
Net Cash provided by (used in) Financing Activities | 1,346.5 | (101.1) |
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash equivalents | 0.1 | 0 |
Increase (Decrease) in Cash and Cash Equivalents | 51.3 | (50.1) |
Beginning of Period | 97.3 | 102.3 |
End of Period | 148.6 | 52.2 |
Supplemental disclosure of noncash transactions: | ||
Forfeiture of common stock for payment of exercise of stock options | 1.7 | 0 |
Supplemental disclosure of noncash investing activities: | ||
Accounts receivable acquired | 117.8 | 0 |
Financial investments | 66 | 0 |
Property and equipment acquired | 21.8 | 0 |
Goodwill acquired | 2,649.3 | 0 |
Intangible assets acquired | 2,000 | 0 |
Other assets acquired | 32.8 | 0 |
Accounts payable and accrued expenses acquired | (60.1) | 0 |
Section 31 fees payable acquired | (143.6) | 0 |
Deferred tax liability acquired | (718.5) | 0 |
Other liabilities assumed | (135.4) | 0 |
Issuance of common stock related to acquisition | $ (2,424.7) | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION CBOE Holdings, Inc. (CBOE Holdings or the Company) is the owner of the Chicago Board Options Exchange, the Bats Exchanges, CBOE Futures Exchange (CFE) and other subsidiaries. The Company is one of the world’s largest exchange holding companies and a leader in providing global investors cutting-edge trading and investment solutions. The Company offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S. and European equities, exchange-traded products (ETPs), and multi-asset volatility and global foreign exchange ("FX") products. CBOE Holdings’ fourteen trading venues include the largest options exchange by volume in the United States, and the largest pan-European stock exchange in Europe by volume. The Company is the second-largest stock exchange operator in the United States by volume and a leading market globally for ETP trading. Basis of Presentation These interim unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, valuation of redeemable noncontrolling interests and reported amounts of revenues and expenses. On an ongoing basis, management evaluates its estimates based upon historical experience, observance of trends, information available from outside sources and various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different conditions or assumptions. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of the results of operations for the full year. For those consolidated subsidiaries in which the Company's ownership is less than 100% and for which the Company has control over the assets and liabilities and the management of the entity, the outside stockholders' interest are shown as non-controlling interests. In 2017, the Company changed the presentation of liquidity payments, or rebates paid to customers in accordance with published fee schedules, to be a cost of revenues, which historically had been netted against transaction fees. The Company also changed the presentation of royalty fees to be a cost of revenues. The presentation of routing fees and costs were also changed. Routing fees were presented in transaction fees in total revenues and routing and clearing costs in total cost of revenues. These fees were previously presented as a net operating expense. These changes were made to conform to current presentation and the changes have been reflected in all periods presented. Segment information The Company previously operated as a single reportable business segment. As a result of the Bats acquisition on February 28, 2017 (Note 3), the Company is reporting five business segments: Options, U.S. Equities, Futures, European Equities, and Global FX, which is reflective of how the Company's chief operating decision-maker reviews and operates the business (Note 15). This change has been reflected in all periods presented. Recent Accounting Pronouncements - Adopted In the first quarter of 2017, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company applied the five-step method outlined in the ASU to all revenue streams and elected the full retrospective implementation method. The additional disclosures required by the ASU have been included in Note 2. In the first quarter of 2017, the Company adopted ASU 2016-09, Compensation — Stock Compensation . This ASU simplifies several aspects of the accounting for stock-based payment transactions, including the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. The Company has chosen to use the actual forfeiture rate and applied the prospective transition method for excess tax benefits and employees taxes paid. As of the adoption date, the Company did not have any awards classified as a liability under the previous guidance. In the first quarter of 2017, the Company adopted ASU 2016-16, Accounting for Income Taxes:Intra-Entity Transfers of Assets other than Inventory . The ASU requires that the income tax impact of intra-entity sales and transfers of property, except for inventory, be recognized when the transfer occurs. The Company applied the full retrospective application which did not result in any impact to the financial statements. Recent Accounting Pronouncements - Issued, not yet Adopted In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) that provides additional guidance around which changes to a share-based payment award requires an entity to apply modification accounting. Specifically, an entity is to account for the effects of a modification, unless all of the following are satisfied: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or as a liability instrument is the same as the classification of the original award immediately before the original award is modified. For public entities, the update is effective beginning after December 15, 2017. Early adoption is permitted. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715) . This ASU requires an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. For public entities, the update is effective beginning after December 15, 2017. Early adoption is permitted. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business. ASU No. 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. There are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities (collectively, a “set”) that is a business usually has outputs, outputs are not required to be present. Additionally, all of the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs. ASU No. 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If, however, the screen is not met, then the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. Finally, the amendments in this ASU narrow the definition of the term “output” so that it is consistent with the manner in which outputs are described in Topic 606 - Revenue from Contracts with Customers . For public entities, the update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2018. Early adoption is permitted under certain circumstances. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. In computing the implied fair value of goodwill under Step 2, an entity, prior to the amendments in ASU No. 2017-04, had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, including unrecognized assets and liabilities, in accordance with the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. However, under this ASU, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, ASU No. 2017-04 removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. For public entities, the update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. This update is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In September 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force). ASU No. 2016-15 addresses eight specific cash flow issues in an effort to reduce diversity in practice: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon bonds; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The ASU is effective for the Company for fiscal years beginning after December 15, 2017, and for the interim periods within that fiscal year. Early adoption is permitted, including adoption during an interim period. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION As of January 1, 2017, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606. The Company has elected to apply the ASU and all related ASUs retrospectively to each prior reporting period presented. The implementation of the guidance had no material impact on the measurement or recognition of revenue of prior periods, however, additional disclosures have been added in accordance with the ASU. The main types of revenue contracts are: • Transaction 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, as well as any tiered volume discounts, are calculated and billed monthly in accordance with the Company’s published fee schedules. Transaction fees are recognized across all segments. The Company also pays liquidity payments to customers based on its published fee schedules. The Company uses these payments to improve the liquidity on its markets and therefore recognizes those payments as a cost of revenue. • Access fees - Access fees represent fees assessed for the opportunity to trade, including fees for trading-related functionality across all segments. 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. There is no remaining performance obligation after revenue is recognized. • Exchange services and other fees - To facilitate trading, the Company offers technology services, terminal and other equipment rights, maintenance services, trading floor space and telecommunications services. Trading floor and equipment rights are generally on a month-to-month basis. Facilities, systems services and other fees are generally monthly fee-based, although certain services are influenced by trading volume or other defined metrics, while others are based solely on demand. All fees associated with the trading floor are recognized in the Options segment. • Market data fees - Market data fees represent the fees received by the Company from the U.S. tape plans and fees charged to 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. 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 U.S. Equities and Options segments. Proprietary market data fees are recognized across all segments. • Regulatory fees - There are two types of regulatory fees that the Company recognizes. The first type represents fees collected by the Company to cover the Section 31 fees charged to the Exchanges by the SEC. The fees charged to customers are based on the fee set by the SEC per notional value of the transaction executed on the Company’s U.S. securities markets. These fees are calculated and billed monthly and are recognized in the U.S. Equities and Options segments. As the Exchanges are responsible for the ultimate payment to the SEC, the exchanges are considered the principal in these transactions. Regulatory fees also includes the options regulatory fee (ORF) which supports the Company’s regulatory oversight function in the Options segment and other miscellaneous regulatory fees. • Other revenue - Other revenue primarily includes revenue from various licensing agreements, all fees related to the trade reporting facility operated in the European Equities segment, and revenue associated with advertisements through the Company’s website. All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line and segment (in millions): Corporate U.S. European Global Items and Options Equities Futures Equities FX Eliminations Total Three months ended June 30, 2017 Transaction fees $ 181.2 $ 208.3 $ 34.0 $ 20.8 $ 9.6 $ — $ 453.9 Access fees 13.9 12.7 0.5 1.8 0.8 — 29.7 Exchange services and other fees 10.1 5.9 2.2 1.2 0.5 — 19.9 Market data fees 10.5 33.9 0.8 2.8 — — 48.0 Regulatory fees 14.7 68.6 — — — — 83.3 Other revenue 3.1 1.7 — 1.0 — 0.2 6.0 $ 233.5 $ 331.1 $ 37.5 $ 27.6 $ 10.9 $ 0.2 $ 640.8 Timing of revenue recognition Services transferred at a point in time $ 199.0 $ 278.6 $ 34.0 $ 21.8 $ 9.6 $ 0.2 $ 543.2 Services transferred over time 34.5 52.5 3.5 5.8 1.3 — 97.6 $ 233.5 $ 331.1 $ 37.5 $ 27.6 $ 10.9 $ 0.2 $ 640.8 Three months ended June 30, 2016 Transaction fees $ 99.8 $ — $ 27.8 $ — $ — $ — $ 127.6 Access fees 13.0 — 0.2 — — — 13.2 Exchange services and other fees 9.4 — 2.0 — — — 11.4 Market data fees 7.4 — 0.8 — — — 8.2 Regulatory fees 9.2 — — — — — 9.2 Other revenue 2.9 — 0.6 — — — 3.5 $ 141.7 $ — $ 31.4 $ — $ — $ — $ 173.1 Corporate U.S. European Global Items and Options Equities Futures Equities FX Eliminations Total Six months ended June 30, 2017 Transaction fees $ 321.4 $ 285.0 $ 62.7 $ 28.0 $ 13.2 $ — $ 710.3 Access fees 26.2 16.9 1.0 2.4 1.0 — 47.5 Exchange services and other fees 23.0 7.9 2.2 1.6 0.6 — 35.3 Market data fees 20.9 45.0 0.8 3.7 0.1 — 70.5 Regulatory fees 27.4 94.2 — — — — 121.6 Other revenue 7.3 2.3 0.7 1.2 — 0.3 11.8 $ 426.2 $ 451.3 $ 67.4 $ 36.9 $ 14.9 $ 0.3 $ 997.0 Timing of revenue recognition Services transferred at a point in time $ 356.1 $ 381.5 $ 63.4 $ 29.2 $ 13.2 $ 0.3 $ 843.7 Services transferred over time 70.1 69.8 4.0 7.7 1.7 — 153.3 $ 426.2 $ 451.3 $ 67.4 $ 36.9 $ 14.9 $ 0.3 $ 997.0 Six months ended June 30, 2016 Transaction fees $ 204.3 $ — $ 49.5 $ — $ — $ — $ 253.8 Access fees 26.0 — 0.4 — — — 26.4 Exchange services and other fees 18.9 — 3.9 — — — 22.8 Market data fees 14.6 — 1.6 — — — 16.2 Regulatory fees 18.3 — — — — — 18.3 Other revenue 5.5 — 0.6 — — — 6.1 $ 287.6 $ — $ 56.0 $ — $ — $ — $ 343.6 Contract liabilities for the period ended June 30, 2017 primarily represent prepayments of transaction fees and certain access and market data fees to the Exchanges. The revenue recognized from contract liabilities and the remaining balance is shown below (in millions): January 1, 2017 Cash Additions Revenue Recognition June 30, 2017 Liquidity provider sliding scale (1) $ — $ 12.0 $ (6.0 ) $ 6.0 Other, net 3.1 11.0 (5.8 ) 8.3 Total deferred revenue $ 3.1 $ 23.0 $ (11.8 ) $ 14.3 (1) Liquidity providers are eligible to participate in the sliding scale program, which involves prepayment of transaction fees, and to receive reduced fees based on the achievement of certain volume thresholds within a calendar month. These transaction fees are amortized and recorded ratably as the transactions occur over the period. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Bats Global Markets, Inc. On February 28, 2017, pursuant to the Agreement and Plan of Merger, dated as of September 25, 2016 (the “Merger Agreement”), by and among CBOE Holdings, Inc., a Delaware corporation (“CBOE Holdings”), Bats Global Markets, Inc., a Delaware corporation (“Bats”), CBOE Corporation, a Delaware corporation and a wholly-owned subsidiary of CBOE Holdings (“Merger Sub”), and CBOE V, LLC, a Delaware limited liability company and a wholly-owned subsidiary of CBOE Holdings (“Merger LLC”), CBOE Holdings completed the merger (the “Merger”) of Merger Sub with and into Bats and the subsequent merger (the “Subsequent Merger”) of Bats with and into Merger LLC. As a result of the Merger, Bats became a wholly-owned subsidiary of CBOE Holdings. The acquisition-date fair value of the consideration transferred totaled $ 4.0 billion , which consisted of the following (in millions): Cash $ 955.5 Common stock issued 2,387.3 Equity awards issued 37.4 3,380.2 Debt extinguished 580.0 Total consideration paid $ 3,960.2 As a result of the Merger, each share of voting common stock of Bats, par value of $ 0.01 per share (“Bats Voting Common Stock”), and each share of non-voting common stock of Bats, par value of $ 0.01 per share (“Bats Non-Voting Common Stock” and, together with the Bats Voting Common Stock, “Bats Common Stock”), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares held by CBOE Holdings, Bats or any of their respective subsidiaries, shares held by any holder of Bats Common Stock who was entitled to demand and properly demanded appraisal of such shares under Delaware law and unvested restricted shares of Bats Common Stock granted under any Bats equity incentive plan (all such shares described in this parenthetical, “Excluded Shares”)) was converted into, at the election of the holder of such share, either (i) 0.3201 of a share of common stock, par value of $ 0.01 per share, of CBOE Holdings (“CBOE Holdings Common Stock”) and $ 10.00 in cash (the “Mixed Consideration”), (ii) $ 14.99 in cash and 0.2577 of a share of CBOE Holdings Common Stock (the “Cash Election Consideration”) or (iii) 0.4452 of a share of CBOE Holdings Common Stock (the “Stock Election Consideration”). Pursuant to the terms of the Merger Agreement, the Cash Election Consideration and Stock Election Consideration payable in the Merger were calculated based on the volume-weighted average price (rounded to four decimal places) of shares of CBOE Holdings Common Stock on The Nasdaq Stock Market LLC for the period of ten consecutive trading days ended on February 24, 2017, which was $ 79.9289 . The Cash Election Consideration and the Stock Election Consideration were subject to automatic adjustment, as described in the Merger Agreement and in the definitive joint proxy statement/prospectus dated December 9, 2016, filed by CBOE Holdings with the SEC on December 12, 2016, as amended and supplemented from time to time (the “Prospectus”), to ensure that the total amount of cash paid and the total number of shares of CBOE Common Stock issued in the Merger were the same as what would have been paid and issued if all holders of Bats Common Stock received the Mixed Consideration at the Effective Time. The amounts in the table below represent the allocation of the purchase price and are subject to revision during the remainder of the measurement period, a period not to exceed twelve months from the acquisition date. Adjustments to the provisional values during the measurement period will be recorded in the reporting period in which the adjustment amounts are determined. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Cash and cash equivalents $ 130.1 Accounts receivable 117.8 Financial investments 66.0 Property and equipment 21.8 Other assets 32.8 Goodwill 2,649.3 Intangibles 2,000.0 Accounts payable (33.7 ) Accrued expenses (26.4 ) Section 31 fee payable (143.6 ) Income tax payable (52.8 ) Deferred tax liability (718.5 ) Other liabilities (82.6 ) $ 3,960.2 For tax purposes, no tax deductible goodwill was generated as a result of this acquisition. Goodwill was assigned to the Options, U.S. Equities, European Equities, and Global FX segments as further described in Note 9 and is attributable to the expansion of asset classes, broadening of geographic reach, and expected synergies of the combined workforce, products and technologies of the Company and Bats. The intangible assets were assigned to the Options, U.S. Equities, European Equities, and Global FX segments in the following manner and will be amortized over the following useful lives: U.S. European (amounts in millions) Options Equities Equities Global FX Useful life Trading registrations and licenses $ 95.5 $ 572.7 $ 171.8 $ — indefinite Customer relationships 37.1 222.9 160.0 140.0 20 years Market data customer relationships 53.6 322.0 60.0 64.4 15 years Technology 22.5 22.5 22.5 22.5 7 years Trademarks and trade names 1.0 6.0 1.8 1.2 2 years Goodwill 226.4 1,736.4 419.3 267.2 $ 436.1 $ 2,882.5 $ 835.4 $ 495.3 There were no goodwill or intangible assets assigned to the Futures segment as a result of this transaction as Bats did not operate a Futures business and no synergies are attributable to this segment. The fair value of accounts receivable acquired was $ 117.8 million . The gross amount of accounts receivable was $ 118.0 million of which $0.2 million was deemed uncollectable. The Company expensed $ 4.7 million of acquisition-related costs expensed during the three months ended June 30, 2017 that included $3.4 million of compensation-related costs and $ 1.3 million of professional fees. These costs are included in acquisition-related costs in the condensed consolidated statements of income. The Company expensed $ 69.9 million of acquisition-related costs during the six months ended June 30, 2017 that included $ 33.5 million of compensation-related costs, $ 20.6 million of professional fees, $ 14.9 million of an impairment of capitalized data processing software, and $ 0.9 million of facilities expenses. These costs are included in acquisition-related costs in the condensed consolidated statements of income. The amounts of revenue, operating income and net income of Bats are included in the Company’s condensed consolidated statements of income from the acquisition date to the three and six months ended June 30, 2017 and are as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2017 2017 Revenue $ 446.0 $ 605.8 Operating income 28.6 26.6 Net income 18.3 17.6 The financial information in the table below summarizes the combined results of operations of the Company and Bats, on a pro forma basis, as though the companies had been combined as of January 1, 2016. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented. Such pro forma financial information is based on the historical financial statements of the Company and Bats. This pro forma financial information is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information, including, without limitation, preliminary purchase accounting adjustments. The pro forma financial information does not reflect any synergies or operating cost reductions that may be achieved from the combined operations. The pro forma financial information combines the historical results for the Company and Bats for the three months ended June 30, 2016 and six months ended June 30, 2017 and 2016 in the following table (in millions, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 Revenue $ 639.0 $ 1,269.9 $ 1,320.6 Operating income 100.9 229.4 207.9 Net income allocated to common stockholders 59.4 157.3 116.4 Earnings per share: Basic $ 0.53 $ 1.40 $ 1.04 Diluted $ 0.53 $ 1.40 $ 1.03 The supplemental 2017 and 2016 pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results to reflect the additional amortization that would have been charged assuming the adjusted fair values of acquired intangible assets had been applied on January 1, 2017 and on January 1, 2016. The supplemental 2017 pro forma financial information includes pro forma adjustments of $ 93.3 million for acquisition-related costs, such as fees to investment bankers, attorneys, accountants and other professional advisors, as well as severance to employees. |
SEVERANCE
SEVERANCE | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
SEVERANCE | SEVERANCE Subsequent to the Bats acquisition, the Company determined that certain employees' positions were redundant. As such, the Company communicated employee termination benefits to these employees. The following is a summary of the employee termination benefits recognized within acquisition costs in the Corporate Items and Eliminations unit in the condensed consolidated statements of income (in millions): Employee Termination Benefits Balance at December 31, 2016 $ 0.4 Termination benefits accrued 20.3 Termination payments made (15.2 ) Balance at June 30, 2017 $ 5.5 |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS As of June 30, 2017 and December 31, 2016 , the Company's investments were comprised of the following (in millions): June 30, 2017 December 31, 2016 Equity Method: Investment in Signal Trading Systems, LLC $ 12.6 $ 12.4 Investment in EuroCCP 8.7 — Total equity method investments 21.3 12.4 Cost Method: Investment in OCC 30.3 30.3 Other cost method investments 30.4 30.2 Total cost method investments 60.7 60.5 Total Investments $ 82.0 $ 72.9 Equity Method Equity method investments include investments in Signal Trading Systems, LLC ("Signal") and EuroCCP, a Dutch domiciled clearing house. EuroCCP is one of three interoperable central counterparties, or CCPs, used to clear trades conducted on Bats Europe's markets. BTL owns 20% of EuroCCP and can exercise significant influence over the entity as an equal shareholder with four other investors. Cost method The carrying amount of cost method investments totaled $60.7 million as of June 30, 2017 and $60.5 million as of December 31, 2016 , and is included in investments in the condensed consolidated balance sheets. The Company accounts for these investments using the cost-method of accounting primarily as a result of the Company's inability to exercise significant influence as the Company is a smaller shareholder of these investments. As of June 30, 2017 , cost method investments primarily reflect a 20% investment in OCC and minority investments in American Financial Exchange, CurveGlobal and Eris Exchange Holdings, LLC. In December 2014, OCC announced a newly-formed capital plan. The OCC capital plan was designed to strengthen OCC's capital base and facilitate its compliance with proposed SEC regulations for Systemically Important Financial Market Utilities ("SIFMUs") as well as international standards applicable to financial market infrastructures. On February 26, 2015, the SEC issued a notice of no objection to OCC's advance notice filing regarding the capital plan, and OCC and OCC's existing exchange stockholders, which include CBOE, subsequently executed agreements effecting the capital plan. Under the plan, each of OCC's existing exchange stockholders agreed to contribute its pro-rata share, based on ownership percentage, of $ 150 million in equity capital, which would increase OCC's shareholders' equity, and to provide its pro rata share in replenishment capital, up to a maximum of $40 million per exchange stockholder, if certain capital thresholds are breached. OCC also adopted policies under the plan with respect to fees, customer refunds, and stockholder dividends, which envision an annual dividend payment to the exchange stockholders equal to the portion of OCC's after-tax income that exceeds OCC's capital requirements after payment of refunds to OCC's clearing members (with such customer refunds generally to constitute 50% of the portion of OCC's pre-tax income that exceeds OCC's capital requirements). On March 3, 2015, in accordance with the plan, CBOE contributed $30 million to OCC. On March 6, 2015, OCC informed CBOE that the SEC, acting though delegated authority, had approved OCC's proposed rule filing for the capital plan. The SEC approval order was stayed on March 13, 2015 automatically as a result of the initiation of petitions to review the order. On September 10, 2015, the SEC issued orders that discontinued the automatic stay of the approval order and granted the petitions for the SEC to review the approval order. On September 15, 2015, the petitioners filed motions to reinstitute the automatic stay. On February 11, 2016, based on a de novo review of the entire record, the SEC approved the proposed rule change implementing OCC's capital plan and dismissed the petitions for review and the petitioners' motions. Certain petitioners subsequently appealed the SEC approval order for the OCC capital plan to the U.S. Court of Appeals for the D.C. Circuit and moved to stay the SEC approval order. On February 23, 2016, the Court denied the petitioners' motion to stay. The appeal of the SEC approval order remains pending. CBOE's contribution has been recorded under investments in the condensed consolidated balance sheets as of June 30, 2017. |
FINANCIAL INVESTMENTS
FINANCIAL INVESTMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
FINANCIAL INVESTMENTS | FINANCIAL INVESTMENTS The Company’s financial investments with original or acquired maturities longer than three months, but that mature in less than one year from the condensed consolidated balance sheet date and any money market funds that are considered cash and cash equivalents are classified as current assets and are summarized as follows (in millions): June 30, 2017 Cost basis Unrealized gains Unrealized losses Fair value Available-for-sale: U.S. Treasury securities $ 110.1 — $ (0.2 ) $ 109.9 Trading securities: U.S. Treasury securities 0.5 — — 0.5 Money market funds: 31.5 — — 31.5 Total $ 142.1 $ — $ (0.2 ) $ 141.9 December 31, 2016 Cost basis Unrealized gains Unrealized losses Fair value Money market funds $ 67.5 — — $ 67.5 Total $ 67.5 $ — $ — $ 67.5 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, December 31, 2017 2016 Construction in progress $ 8.9 $ 0.2 Building 77.3 77.0 Furniture and equipment 162.0 138.8 Total property and equipment 248.2 216.0 Less accumulated depreciation (172.6 ) (160.1 ) Total property and equipment, net $ 75.6 $ 55.9 Depreciation expense using the straight-line method was $8.7 million and $6.0 million for the three months ended June 30, 2017 and 2016, respectively, and $15.2 million and $11.9 million for the six months ended June 30, 2017 and 2016 , respectively. |
OTHER ASSETS, NET
OTHER ASSETS, NET | 6 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS, NET | OTHER ASSETS, NET Other assets, net consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, December 31, 2017 2016 Software development work in progress $ 7.8 $ 12.3 Data processing software 217.7 222.6 Less accumulated depreciation (180.0 ) (172.0 ) Data processing software, net 45.5 62.9 Other assets (1) 11.1 9.8 Data processing software and other assets, net $ 56.6 $ 72.7 (1) At December 31, 2016, other assets included $ 6.2 million of deferred financing costs and $3.5 million of deferred tax assets. The deferred financing costs were reclassified in 2017 and recorded as a reduction of long-term debt. At June 30, 2017, the majority of the balance included long-term prepaid assets and notes receivable. Amortization expense related to data processing software was $4.4 million and $5.8 million for the three months ended June 30, 2017 and 2016, respectively, and $8.5 million and $11.4 million for the six months ended June 30, 2017 and 2016 , respectively. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET The following table presents the details of goodwill by segment (in millions): U.S. European Global Corporate Items Options Equities Equities FX and Eliminations Total Balance as of December 31, 2016 $ 7.7 $ — $ — $ — $ 18.8 $ 26.5 Additions 226.4 1,736.4 419.3 267.2 — 2,649.3 Dispositions (1.4 ) — — — — (1.4 ) Changes in foreign currency exchange rates — — 12.0 — — 12.0 Balance as of June 30, 2017 $ 232.7 $ 1,736.4 $ 431.3 $ 267.2 $ 18.8 $ 2,686.4 Goodwill has been allocated to specific reporting units for purposes of impairment testing - Options, U.S. Equities, European Equities and Global FX. Goodwill impairment testing is performed annually in the fiscal fourth quarter or more frequently if conditions exist that indicate that the asset may be impaired. The allocation of the new goodwill did not impact the existing goodwill assignment to reporting units and there are no aggregate impairments of goodwill. The following table presents the details of the intangible assets (in millions): U.S. European Global Corporate Items Options Equities Equities FX and Eliminations Total Balance as of December 31, 2016 $ 2.0 $ — $ — $ — $ 6.7 $ 8.7 Additions 209.7 1,146.1 416.1 228.1 — 2,000.0 Dispositions (0.2 ) — — — — (0.2 ) Amortization (6.0 ) (29.7 ) (9.5 ) (11.4 ) (0.6 ) (57.2 ) Changes in foreign currency exchange rates — — 19.1 — — 19.1 Balance as of June 30, 2017 $ 205.5 $ 1,116.4 $ 425.7 $ 216.7 $ 6.1 $ 1,970.4 For the three months ended June 30, 2017 and 2016, amortization expense was $42.7 million and $0.5 million , respectively. For the six months ended June 30, 2017 and 2016, amortization expense was $57.2 million and $0.9 million , respectively. The estimated future amortization expense is $84.7 million for the remainder of 2017, $158.1 million for 2018, $137.2 million for 2019, $120.8 million for 2020, $105.6 million for 2021 and $93.4 million for 2022. The amounts in the table below represent the preliminary allocation of the purchase price and are subject to revision during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments to the provisional values during the measurement period will be recorded in the reporting period in which the adjustment amounts are determined. The following tables present the categories of intangible assets as of June 30, 2017 and December 31, 2016 (in millions): Remaining June 30, 2017 Weighted Average U.S. European Corporate Items Amortization Options Equities Equities Global FX and Eliminations Period (in years) Trading registrations and licenses $ 95.5 $ 572.7 $ 179.7 $ — $ — Indefinite Customer relationships 38.0 222.9 167.3 140.0 3.0 20 Market data customer relationships 53.6 322.0 62.8 64.4 — 15 Technology 23.4 22.5 23.5 22.5 4.0 7 Trademarks and tradenames 1.4 6.0 1.9 1.2 1.0 2 Other 0.2 — — — — 2 Accumulated amortization (6.6 ) (29.7 ) (9.5 ) (11.4 ) (1.9 ) $ 205.5 $ 1,116.4 $ 425.7 $ 216.7 $ 6.1 Remaining December 31, 2016 Weighted Average U.S. European Corporate Amortization Options Equities Equities Global FX and Other Period (in years) Trading registrations and licenses $ — $ — $ — $ — $ — — Customer relationships 0.9 — — — 3.0 9 Market data customer relationships — — — — — — Technology 1.1 — — — 4.0 4 Trademarks and tradenames 0.4 — — — 1.0 6 Other 0.2 — — — — 2 Accumulated amortization (0.6 ) — — — (1.3 ) $ 2.0 $ — $ — $ — $ 6.7 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, 2017 December 31, 2016 Compensation and benefit-related liabilities $ 11.9 $ 25.1 Termination benefits 5.5 0.4 Royalties 18.2 17.8 Accrued liabilities 51.5 25.4 Marketing fee payable 9.0 7.2 Accounts payable 54.9 6.5 $ 151.0 $ 82.4 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The Company's long-term debt consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, December 31, 2017 2016 Term Loan Agreement $ 468.7 $ — 3.650% Senior Notes 643.6 — 1.950% Senior Notes 299.0 — Revolving Credit Agreement — — Total long-term debt $ 1,411.3 $ — In connection with the Merger, on December 15, 2016, the Company entered into the Term Loan agreement (as defined below) providing for a $ 1.0 billion senior unsecured delayed draw term loan facility and on January 12, 2017, the Company issued $ 650 million aggregate principal amount of 3.650% Senior Notes due 2027 (" 3.650% Senior Notes"). The proceeds from this delayed draw term loan facility and issuance of our senior notes, in addition to using cash on hand at CBOE Holdings and Bats, were used to finance a portion of the cash component of the Merger consideration, to refinance existing indebtedness of Bats and its subsidiaries and to pay related fees and expenses. In addition, on December 15, 2016, the Company entered into a $ 150 million revolving credit facility to be used for working capital and other general corporate purposes. On June 29, 2017, CBOE Holdings refinanced approximately $300 million of the amounts outstanding under the Term Loan Agreement through the issuance of $300 million in aggregate principal amount of 1.950% Senior Notes due 2019 (" 1.950% Senior Notes" and, together with the 3.650% Senior Notes, the "Notes"). Term Loan Agreement On December 15, 2016, the Company, as borrower, entered into a Term Loan Credit Agreement (the “Term Loan Agreement”) with Bank of America, N.A., as administrative agent, certain lenders named therein (the “Term Lenders”), Merrill Lynch, Pierce, Fenner & Smith Incorporated, as sole lead arranger and sole bookrunner, Morgan Stanley MUFG Loan Partners, LLC, as syndication agent, and Citibank, N.A., PNC Bank, National Association and JPMorgan Chase Bank, N.A., as co-documentation agents. The Term Loan Agreement provided for a senior unsecured delayed draw term loan facility (the “Term Loan Facility”) in an aggregate principal amount of $1.0 billion . Loans under the Term Loan Agreement bears interest, at our option, at either (i) the London Interbank Offered Rate (“LIBOR”) periodically fixed for an interest period (as selected by us) of one, two, three or six months plus a margin (based on our public debt ratings) ranging from 1.00 percent per annum to 1.75 percent per annum or (ii) a daily floating rate based on the agent’s prime rate (subject to certain minimums based upon the federal funds effective rate or LIBOR) plus a margin (based on our public debt ratings) ranging from zero percent per annum to 0.75 percent per annum. The Company was required to pay a ticking fee to the agent for the account of the Term Lenders which initially accrued at a rate (based on our public debt ratings) ranging from 0.10 percent per annum to 0.30 percent per annum multiplied by the undrawn aggregate commitments of the Term Lenders in respect of the Term Loan Facility, accruing during the period commencing on December 15, 2016 and ending on the earlier of the date on which the loans are drawn. The Term Loan Agreement contains customary representations, warranties and affirmative and negative covenants for facilities of its type, including financial covenants, events of default and indemnification provisions in favor of the Term Lenders. The negative covenants include restrictions regarding the incurrence of liens, the incurrence of indebtedness by our subsidiaries and fundamental changes, subject to certain exceptions in each case. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio of not less than 4.00 to 1.00 and a maximum consolidated leverage ratio of not greater than 3.50 to 1.00. At June 30, 2017 , the Company was in compliance with these covenants. On February 28, 2017, CBOE Holdings made a draw under the Term Loan Agreement in the amount of $1.0 billion . CBOE Holdings used the proceeds to finance a portion of the cash component of the aggregate consideration for the Merger, repaid certain existing indebtedness of Bats, paid fees and expenses incurred in connection with the transactions contemplated by the Merger Agreement, funded working capital needs, and for other general corporate purposes. On June 29, 2017, CBOE Holdings refinanced approximately $ 300 million of the amounts outstanding under the Term Loan Agreement through the issuance of $300 million in aggregate principal amount of 1.950% Senior Notes. 1.950% Senior Notes due 2019 On June 29, 2017, the Company issued $ 300 million aggregate principal amount of 1.950% Senior Notes. The form and terms of the 1.950% Senior Notes were established pursuant to an Officer’s Certificate, dated as of June 29, 2017, supplementing the Indenture (as defined below). Underwriter fees of $0.8 million were also capitalized and netted against long-term debt in the consolidated balance sheet, while other issuance fees of $0.9 million were expensed and are included in debt issuance costs on the consolidated statement of income for the three and six months ended June 30, 2017. The Company used the net proceeds from the 1.950% Senior Notes to repay amounts under the Term Loan Agreement. The 1.950% Senior Notes mature on June 28, 2019 and bear interest at the rate of 1.950% per annum, payable semi-annually in arrears on June 28 and December 28 of each year, commencing December 28, 2017. The 1.950% Senior Notes are unsecured obligations of the Company and rank equally with all of the Company’s other existing and future unsecured, senior indebtedness, but are effectively junior to the Company’s secured indebtedness, to the extent of the value of the assets securing such indebtedness, and will be structurally subordinated to the secured and unsecured indebtedness of the Company’s subsidiaries. The Company has the option to redeem some or all of the 1.950% Senior Notes, at any time in whole or from time to time in part, at the redemption prices set forth in the Officer’s Certificate. The Company may also be required to offer to repurchase the 1.950% Senior Notes upon the occurrence of a Change of Control Triggering Event (as such term is defined in the Officer’s Certificate) at a repurchase price equal to 101% of the aggregate principal amount of 1.950% Senior Notes to be repurchased. 3.650% Senior Notes due 2027 On January 12, 2017, the Company entered into an indenture (the “Indenture”), by and between the Company and Wells Fargo Bank, National Association, as trustee, in connection with the issuance of $650 million aggregate principal amount of the Company’s 3.650% Senior Notes. The form and terms of the 3.650% Senior Notes were established pursuant to an Officer’s Certificate, dated as of January 12, 2017, supplementing the Indenture. The Company used a portion of the net proceeds from the 3.650% Senior Notes to fund, in part, the Merger, including the payment of related fees and expenses and the repayment of Bats’ existing indebtedness, and the remainder for general corporate purposes. The 3.650% Senior Notes mature on January 12, 2027 and bear interest at the rate of 3.650% per annum, payable semi-annually in arrears on January 12 and July 12 of each year, commencing July 12, 2017. The 3.650% Senior Notes are unsecured obligations of the Company and rank equally with all of the Company’s other existing and future unsecured, senior indebtedness, but are effectively junior to the Company’s secured indebtedness, to the extent of the value of the assets securing such indebtedness, and will be structurally subordinated to the secured and unsecured indebtedness of the Company’s subsidiaries. The Company has the option to redeem some or all of the 3.650% Senior Notes, at any time in whole or from time to time in part, at the redemption prices set forth in the Officer’s Certificate. The Company may also be required to offer to repurchase the 3.650% Senior Notes upon the occurrence of a Change of Control Triggering Event (as such term is defined in the Officer’s Certificate) at a repurchase price equal to 101% of the aggregate principal amount of 3.650% Senior Notes to be repurchased. Indenture Under the Indenture, the Company may issue debt securities, which includes the Notes, at any time and from time to time, in one or more series without limitation on the aggregate principal amount. The Indenture governing the Notes contains customary restrictions, including a limitation that restricts our ability and the ability of certain of our subsidiaries to create or incur secured debt. Such Indenture also limits certain sale and leaseback transactions and contains customary events of default. At June 30, 2017 , the Company was in compliance with these covenants. Revolving Credit Agreement On December 15, 2016, the Company, as borrower, entered into a Credit Agreement (the “Revolving Credit Agreement”) with Bank of America, N.A., as administrative agent and as swing line lender, certain lenders named therein (the “Revolving Lenders”), Merrill Lynch, Pierce, Fenner & Smith Incorporated, as sole lead arranger and sole bookrunner, Morgan Stanley MUFG Loan Partners, LLC, as syndication agent, and Citibank, N.A., PNC Bank, National Association and JPMorgan Chase Bank, N.A., as co-documentation agents. The Revolving Credit Agreement provides for a senior unsecured $150 million five -year revolving credit facility (the “Revolving Credit Facility”) that includes a $25 million swing line sub-facility. The Company may also, subject to the agreement of the applicable lenders, increase the commitments under the Revolving Credit Facility by up to $100 million , for a total of $250 million . Subject to specified conditions, the Company may designate one or more of its subsidiaries as additional borrowers under the Revolving Credit Agreement provided that it guarantees all borrowings and other obligations of any such subsidiaries. As of June 30, 2017 , no subsidiaries were designated as additional borrowers. Funds borrowed under the Revolving Credit Agreement may be used to fund working capital and for other general corporate purposes. As of June 30, 2017, no borrowings were outstanding under the Revolving Credit Agreement. Accordingly, at June 30, 2017 , $150 million of borrowing capacity was available for the purposes permitted by the Revolving Credit Agreement. Loans under the Revolving Credit Agreement will bear interest, at our option, at either (i) LIBOR periodically fixed for an interest period (as selected by us) of one, two, three or six months plus a margin (based on our public debt ratings) ranging from 1.00 percent per annum to 1.75 percent per annum or (ii) a daily floating rate based on our prime rate (subject to certain minimums based upon the federal funds effective rate or LIBOR) plus a margin (based on our public debt ratings) ranging from zero percent per annum to 0.75 percent per annum. Subject to certain conditions stated in the Revolving Credit Agreement, the Company may borrow, prepay and reborrow amounts under the Revolving Credit Facility at any time during the term of the Revolving Credit Agreement. The Revolving Credit Agreement will terminate and all amounts owing thereunder will be due and payable on December 15, 2021, unless the commitments are terminated earlier, either at our request or, if an event of default occurs, by the Revolving Lenders (or automatically in the case of certain bankruptcy-related events). The Revolving Credit Agreement contains customary representations, warranties and affirmative and negative covenants for facilities of its type, including financial covenants, events of default and indemnification provisions in favor of the Revolving Lenders. The negative covenants include restrictions regarding the incurrence of liens, the incurrence of indebtedness by our subsidiaries and fundamental changes, subject to certain exceptions in each case. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio of not less than 4.00 to 1.00 and a maximum consolidated leverage ratio of not greater than 3.50 to 1.00. At June 30, 2017 , the Company was in compliance with these covenants. Bridge Facility In connection with entering into the Merger Agreement, the Company entered into a commitment letter with Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates) (Bank of America, N.A., and other such financial institutions that accede as lender to such debt commitment letter in accordance with its terms are referred to herein as the “Lenders”), which provides that, subject to the satisfaction and waiver of certain conditions which are usual and customary for financing of this type, the Lenders are committed to provide debt financing for the purposes of funding (i) the cash consideration to be paid in the transactions contemplated by the Merger Agreement, (ii) the refinancing of certain existing indebtedness of Bats and its subsidiaries and (iii) related fees and expenses, which debt financing consists of a senior unsecured 364 -day bridge loan facility in an aggregate principal amount of up to $1.65 billion to the extent the Company fails to generate gross cash proceeds in an aggregate principal amount of up to $1.65 billion from permanent financing including in the form of a senior unsecured term loan facility and the issuance of senior unsecured notes on or prior to the consummation of the transaction contemplated by the Merger Agreement. The Company paid commitment and structuring fees of $6.0 million . Through June 30, 2017, the Company has amortized $6.0 million of these fees as a result of the Company entering into more permanent debt arrangements. The Company entered into a term loan agreement and completed a notes offering, as described below, securing $1.65 billion to finance the cash portion of its acquisition of Bats as well as the repayment of Bats' existing indebtedness. As a result of securing the financing discussed above, the bridge facility was terminated. Loan and Notes Payments and Contractual Interest The future expected loan repayments related to the Term Loan Agreement and the Notes as of June 30, 2017 is as follows (in millions): 2017 $ — 2018 — 2019 300.0 2020 — 2021 — Thereafter 1,125.0 Principal amounts repayable 1,425.0 Debt issuance cost (7.9 ) Unamortized discount on Notes (5.8 ) Total debt outstanding $ 1,411.3 Interest expense recognized on the Term Loan Agreement and the Notes is included in interest expense, net in the condensed consolidated statements of income, for the three and six months ended June 30, 2017 and 2016 is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Components of interest expense: Contractual interest $ 10.9 $ — $ 18.5 $ — Amortization of debt discount 0.2 — 0.2 — Amortization of debt issuance cost 1.4 — 2.3 — Interest expense 12.5 — 21.0 — Interest income — — (0.6 ) — Interest expense, net $ 12.5 $ — $ 20.4 $ — |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME, NET | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME, NET | ACCUMULATED OTHER COMPREHENSIVE INCOME, NET The following represents the changes in accumulated other comprehensive income by component (in millions): Foreign Unrealized Total Other Currency Investment Post-Retirement Comprehensive Translation Gain/Loss Benefits Income Balance at December 31, 2016 $ — $ — $ (0.8 ) $ (0.8 ) Other comprehensive income 30.2 0.2 — 30.4 Balance at June 30, 2017 $ 30.2 $ 0.2 $ (0.8 ) $ 29.6 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASURMENTS Fair value is the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk. The Company applied Financial Accounting Standards Board ASC 820, Fair Value Measurement and Disclosure , which provides guidance for using fair value to measure assets and liabilities by defining fair value and establishing the framework for measuring fair value. ASC 820 applies to financial and nonfinancial instruments that are measured and reported on a fair value basis. The three-level hierarchy of fair value measurements is based on whether the inputs to those measurements are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The fair-value hierarchy requires the use of observable market data when available and consists of the following levels: • Level 1—Unadjusted inputs based on quoted markets for identical assets or liabilities. • Level 2—Observable inputs, either direct or indirect, not including Level 1, corroborated by market data or based upon quoted prices in non-active markets. • Level 3—Unobservable inputs that reflect management’s best assumptions of what market participants would use in valuing the asset or liability. The Company has included a tabular disclosure for financial assets and liabilities that are measured at fair value on a recurring basis in the condensed consolidated balance sheet as of June 30, 2017 and December 31, 2016 . Instruments Measured at Fair Value on a Recurring Basis The following tables presents the Company’s fair value hierarchy for those assets measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 (in millions): June 30, 2017 Total Level 1 Level 2 Level 3 Assets: Available-for-sale securities: U.S. Treasury securities $ 109.9 $ 109.9 $ — $ — Trading securities: U.S. Treasury securities 0.5 0.5 — — Money market funds 31.5 31.5 — — Total assets $ 141.9 $ 141.9 $ — $ — Liabilities: Contingent consideration liability $ 56.2 $ — $ — $ 56.2 Total liabilities $ 56.2 $ — $ — $ 56.2 December 31, 2016 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 67.5 $ 67.5 $ — $ — Total assets $ 67.5 $ 67.5 $ — $ — The following is a description of the Company’s valuation methodologies used for instruments measured at fair value on a recurring basis: Available-for-sale and trading securities Financial investments classified as trading and available‑for‑sale consist of highly liquid U.S. Treasury securities. These securities are valued by obtaining feeds from a number of live data sources, including active market makers and inter‑dealer brokers and therefore categorized as Level 1. Contingent consideration liability In connection with the acquisition of Bats, the Company acquired a contingent consideration arrangement with the former owners of Hotspot. The fair value of this liability at June 30, 2017 was $56.2 million . That value is based on estimates of discounted future cash payments, a significant unobservable input, and is considered a Level 3 measurement. Fair Value of Financial Instruments The following table presents the Company’s fair value hierarchy for those financial instruments held by the Company as of June 30, 2017 and December 31, 2016 (in millions): June 30, 2017 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 148.6 $ 148.6 $ — $ — Trading investments 0.5 0.5 — — Available-for-sale investments 109.9 109.9 — — Accounts receivable 231.3 231.3 — — Income tax receivable 10.7 10.7 — — Total assets $ 501.0 $ 501.0 $ — $ — Liabilities: Accounts payable $ 54.9 $ — $ 54.9 $ — Section 31 fees payable 150.9 — 150.9 — Contingent consideration liability 56.2 — — 56.2 Long-term debt 1,411.3 — 1,411.3 — Total liabilities $ 1,673.3 $ — $ 1,617.1 $ 56.2 December 31, 2016 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 97.3 $ 97.3 $ — $ — Accounts receivable 76.7 76.7 — — Income tax receivable 53.7 53.7 — — Total assets $ 227.7 $ 227.7 $ — $ — Liabilities: Accounts payable $ 6.5 $ — $ 6.5 $ — Total liabilities $ 6.5 $ — $ 6.5 $ — The carrying amounts of cash and cash equivalents, accounts receivable, income tax receivable, accounts payable and Section 31 fees payable approximate fair value due to their liquid or short-term nature. Long-term debt The carrying amount of long-term debt approximates its fair value based on quoted LIBOR at June 30, 2017 and is considered a Level 2 measurement. Information on Level 3 Financial Liabilities The following table sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities during the six months ended June 30, 2017 . Level 3 Financial Liabilities for the Six Months Ended June 30, 2017 Balance at Beginning of Period Acquired During Period Settlements Balances at end of period Liabilities Contingent consideration liability $ — $ 56.2 $ — $ 56.2 Total Liabilities $ — $ 56.2 $ — $ 56.2 |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTEREST | 6 Months Ended |
Jun. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE NONCONTROLLING INTEREST | REDEEMABLE NONCONTROLLING INTEREST Redeemable noncontrolling interest are reported on the consolidated balance sheets in mezzanine equity in Redeemable Noncontrolling Interest. The Company recognizes changes to the redemption value of redeemable noncontrolling interest as they occur and adjust the carrying value to equal the redemption value at the end of each reporting period. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges or credits against retained earnings, or in the absence of retained earnings, additional paid in capital. The redemption amounts have been estimated based on the fair value of the majority-owned subsidiary, determined based on a weighting of the discounted cash flow and other economic factors. For the six months ended June 30, 2017 , the following reflects changes in our redeemable noncontrolling interest (in millions): Redeemable Noncontrolling Interest Balance as at December 31, 2016 $ 12.6 Net loss attributable to redeemable noncontrolling interest (0.6 ) Redemption value adjustment 0.6 Balance as at June 30, 2017 $ 12.6 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company previously operated as a single reportable business segment as of December 31, 2016 . As a result of the Bats acquisition, beginning in 2017, the Company is reporting five segments: Options, U.S. Equities, Futures, European Equities, and Global FX, which is reflective of how the Company's chief operating decision-maker reviews and operates the business (Note 1). This change has been reflected in all periods presented. Segment performance is primarily based on operating income (loss). The Company has aggregated all of its corporate costs, acquisition-related costs, as well as other business ventures, within the Corporate Items and Eliminations unit based on the decision that those activities should not be used to evaluate the segment's operating performance; however, operating expenses that relate to activities of a specific segment have been allocated to that segment. The Options segment includes our options exchange business, which lists for trading options on market indexes (index options), mostly on an exclusive basis, as well as on non-exclusive "multiply-listed" options, such as options on the stocks of individual corporations (equity options) and options on other exchange-traded products (ETP options), such as exchange-traded funds (ETF options) and exchange-traded notes (ETN options) that occur on CBOE, C2, BZX and EDGX. It also includes the listed equity options routed transaction services that occur on Trading. The U.S. Equities segment includes listed cash equities and ETP transaction services that occur on BZX, BYX, EDGX and EDGA. It also includes market data fees generated from the U.S. tape plans as well as fees generated from the sale of proprietary market data of these exchanges. It also includes the listed cash equities and ETPs routed transaction services, the listings business where ETPs are listed on BZX, and advertising activity from ETF.com. The Futures segment includes the business of our futures exchange, CFE, which includes offering for trading futures on the VIX Index and other futures products. The European Equities segment includes the pan‑European listed cash equities transaction services, ETPs, exchange‑traded commodities, and international depository receipts that occur on the Recognised Investment Exchange, operated by BTL. It also includes the listed cash equities and ETPs routed transaction services that occur on Chi-X Europe, as well as the listings business where ETPs can be listed on BTL. The Global FX segment includes institutional FX services that occur on Bats Hotspot. Summarized financial data of reportable segments was as follows (in millions): Corporate U.S. European items and Options Equities Futures Equities Global FX eliminations Total Three months ended June 30, 2017 Revenues $ 233.5 $ 331.1 $ 37.5 $ 27.6 10.9 $ 0.2 $ 640.8 Operating income (loss) 61.2 33.3 33.4 3.5 (4.1 ) (9.5 ) 117.8 Three months ended June 30, 2016 Revenues $ 141.7 $ — $ 31.4 $ — — $ — $ 173.1 Operating income (loss) 53.6 — 26.5 — — (2.1 ) 78.0 Corporate U.S. European items and Options Equities Futures Equities Global FX eliminations Total Six Months Ended June 30, 2017 Revenues $ 426.2 $ 451.3 $ 67.4 $ 36.9 $ 14.9 $ 0.3 $ 997.0 Operating income (loss) 126.2 45.5 59.3 5.1 (5.3 ) (86.9 ) 143.9 Six Months Ended June 30, 2016 Revenues $ 287.6 $ — $ 56.0 $ — $ — $ — $ 343.6 Operating income (loss) 115.9 — 46.7 — — (5.1 ) 157.5 |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 6 Months Ended |
Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS Legacy CBOE and new employees are eligible to participate in the Chicago Board Options Exchange SMART Plan (“SMART Plan”). The SMART Plan is a defined contribution plan, which is qualified under Internal Revenue Code Section 401(k). In addition, eligible employees may participate in the Supplemental Employee Retirement Plan, Executive Retirement Plan and Deferred Compensation Plan. Effective January 1, 2017, the Executive Retirement Plan is closed to new executive officers and employees. Each plan is a defined contribution plan that is non-qualified under Internal Revenue Code. The Company contributed $2.7 million and $2.7 million to the defined contribution plans for the three months ended June 30, 2017 and 2016, respectively, and $5.3 million and $4.0 million , respectively, to the defined contribution plans for the six months ended June 30, 2017 and 2016 , respectively. For the six months ended June 30, 2017, $1.2 million of this expense was related to the Bats Acquisition and is included in acquisition-related costs in the condensed consolidated statements of income. The remaining expense is included in compensation and benefits in the condensed consolidated statements of income. Upon completion of the Merger, the Company assumed the BTL stakeholder contribution plan and the Bats' defined contribution plan that offers a 401(k) retirement plan eligible to all legacy Bats U.S. employees. Under the plan, the Company matches participating employee contributions dollar for dollar of up to five percent of salary. The Company’s contribution amounted to $0.5 million and $0.7 million for the three and six months ended June 30, 2017 , respectively. This expense is included in compensation and benefits in the condensed consolidated statements of income. BTL operates a stakeholder contribution plan and contributes to employee‑selected stakeholder contribution plans. The Company matches participating employee contributions of up to five percent of salary. All employees of BTL are eligible to participate. The Company’s contribution amounted to $0.1 million and $0.2 million for the three and six months ended June 30, 2017 , respectively. This expense is included in compensation and benefits in the condensed consolidated statements of income. |
REGULATORY CAPITAL
REGULATORY CAPITAL | 6 Months Ended |
Jun. 30, 2017 | |
Brokers and Dealers [Abstract] | |
REGULATORY CAPITAL | REGULATORY CAPITAL As a broker‑dealer registered with the SEC, Bats Trading is subject to the SEC’s Uniform Net Capital Rule (Rule 15c3‑1), which requires the maintenance of minimum net capital, as defined. The SEC’s requirement also provides that equity capital may not be withdrawn or a cash dividend paid if certain minimum net capital requirements are not met. Trading computes the net capital requirements under the basic method provided for in Rule 15c3‑1. As of June 30, 2017 , Trading is required to maintain net capital equal to the greater of 6.67% of aggregate indebtedness items, as defined, or $0.1 million . At June 30, 2017, Trading had net capital of $10.1 million , which was $9.7 million in excess of its required net capital of $0.4 million . As entities regulated by the FCA, BTL is subject to the Financial Resource Requirement ("FRR") and Chi-X Europe is subject to the Capital Resources Requirement ("CRR"). As a RIE, BTL computes its FRR in accordance with its Financial Risk Assessment, as agreed by the FCA. This FRR was $19.5 million at June 30, 2017. At June 30, 2017 , BTL had capital in excess of its required FRR of $22.0 million . As a Banks, Investment firms, PRUdential (BIPRU) 50k firm, as defined by the Markets in Financial Instruments Directive of the FCA, Chi‑X Europe computes its CRR as the greater of the base requirement of $0.1 million at June 30, 2017 , or the summation of the credit risk, market risk and fixed overheads requirements, as defined. At June 30, 2017, Chi‑X Europe had capital in excess of its required CRR of $0.4 million . As a swap execution facility regulated by the CFTC, Bats Hotspot SEF, LLC is required to meet two capital adequacy tests: (i) its financial resources must be equal to at least twelve months of its projected operating costs and (ii) its unencumbered, liquid financial assets must be equal to at least six months of its projected operating costs. As of June 30, 2017, Bats Hotspot SEF, LLC had annual operating expenses of $ 1.6 million and had financial resources that exceeded this amount. Additionally, as of June 30, 2017, Bats Hotspot SEF, LLC, had projected operating expenses from six months of $ 0.8 million and had unencumbered, liquid financial assets that exceeded this amount. As a designated contract market regulated by the CFTC, CFE is required to meet two capital adequacy tests: (i) its financial resources must be equal to at least twelve months of its projected operating costs and (ii) its unencumbered, liquid financial assets must be equal to at least six months of its projected operating costs. As of June 30, 2017 , CFE had annual projected operating expenses of $ 17.8 million and had financial resources that exceeded this amount. Additionally, as of June 30, 2017 , CFE had projected operating expenses for six months of $ 9.7 million and had unencumbered, liquid financial assets that exceeded this amount. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation is based on the fair value of the award on the date of grant, which is recognized over the related service period, net of actual forfeitures. The service period is the period over which the related service is performed, which is generally the same as the vesting period. In the first quarter of 2017, the Company adopted ASU 2016-09, Compensation — Stock Compensation . This ASU simplifies several aspects of the accounting for stock-based payment transactions (See Note 1). On February 19, 2017, the Company granted 251,273 restricted stock units ("RSUs"), each of which entitles the holder to one share of common stock upon vesting, to certain officers and employees at a fair value of $80.40 per share. The RSUs vest ratably over three years, with one-third vesting on each anniversary of the grant date, and vesting accelerates upon the occurrence of a change in control. Unvested RSUs will be forfeited if the officer or employee leaves the Company prior to the applicable vesting date, except in limited circumstances. The RSUs have no voting rights but entitle the holder to receive dividend equivalents. On February 28, 2017, the Company granted 68,254 RSUs, each of which entitles the holder to one share of common stock upon vesting, to certain officers and employees at a fair value of $78.05 per share. The RSUs vest ratably over three years, with one-third vesting on each anniversary of the grant date, and vesting accelerates upon the occurrence of a change in control. Unvested RSUs will be forfeited if the officer or employee leaves the Company prior to the applicable vesting date, except in limited circumstances. The RSUs have no voting rights but entitle the holder to receive dividend equivalents. On February 28, 2017, the Company granted 49,703 RSUs, each of which entitles the holder to one share of common stock upon vesting, to certain officers and employees at a fair value of $78.05 per share. The RSUs vest on the third anniversary of the grant date, and vesting accelerates upon the occurrence of a change in control. Unvested RSUs will be forfeited if the officer or employee leaves the Company prior to the applicable vesting date, except in limited circumstances. The RSUs have no voting rights but entitle the holder to receive dividend equivalents. The merger agreement provided that the number of shares of CBOE Holdings common stock into which each such award of CBOE Holdings Restricted Shares is converted will be equal to the number of shares of Bats common stock subject to the corresponding Bats Restricted Share award multiplied by the exchange ratio, which is the sum of (a) 0.3201 of a share of CBOE Holdings common stock and (b) the quotient obtained by dividing $ 10.00 by the volume-weighted average price, rounded to four decimal places, of shares of CBOE Holdings common stock on NASDAQ for the ten consecutive trading day period ending on the second full trading day prior to the effective time of the merger. The remaining service period will be completed post-merger and future vesting and expense will be recognized accordingly. Pursuant to the Merger Agreement, each award of restricted Bats common stock (“Bats restricted shares”) granted under any of the Bats Plans that was unvested immediately prior to the Effective Time was assumed by the Registrant and converted into awards of restricted shares totaling 622,527 of Common Stock at a fair value of $78.05 per share. In addition, on February 19, 2017 and February 28, 2017, the Company granted 41,481 and 19,255 RSUs, respectively, contingent on the achievement of performance conditions at a fair value of $111.00 and $102.00 , respectively, per RSU, related to total shareholder return during the performance period. The Company used the Monte Carlo valuation model method to estimate the fair value of the total shareholder return RSUs which incorporated the following assumptions: risk-free interest rate (0.90)% , three-year volatility (21.1)% and three year correlation with S&P 500 Index (0.41) . Each of these performance shares has a performance condition under which the number of units ultimately awarded will vary from 0% to 200% of the original grant, with each unit representing the contingent right to receive one share of our common stock. The vesting period for the RSUs contingent on the achievement of performance is three years . For each of the performance awards, the RSUs will be settled in shares of our common stock following vesting of the RSU assuming that the participant has been continuously employed during the vesting period, subject to acceleration in the event of a change in control of the Company or in the event of a participant’s earlier death or disability. Participants have no voting rights with respect to RSUs until the issuance of the shares of stock. Dividends are accrued by the Company and will be paid once the RSUs contingent on the achievement of performance conditions vest. On May 18, 2017, the Company granted 15,405 shares of stock, at a fair value of $84.41 per share, to non employee members of the board of directors. The shares have a one -year vesting period and vesting accelerates upon the occurrence of a change in control of the Company. Unvested portions of the stock will be forfeited if the director leaves the Company prior to the applicable vesting date. On May 15, 2017, the Company granted 2,655 RSUs, each of which entitles the holder to one share of common stock upon vesting, to certain officers and employees at a fair value $ 85.00 per share. The RSUs vest ratably over three -years , with one-third vesting on each anniversary of the grant date, and vesting accelerates upon the occurrence of a change in control. Unvested RSUs will be forfeited if the officer or employee leaves the Company prior to the applicable vesting date, except in limited circumstances. The RSUs have no voting rights but entitle the holder to receive dividend equivalents. The Company recognized stock-based compensation expense of $9.2 million and $3.7 million for the three months ended June 30, 2017 and 2016, respectively, and $30.1 million and $7.1 million for the six months ended June 30, 2017 and 2016. Stock-based compensation expense includes $9.1 million of accelerated expense recorded in the first quarter for certain officers and employees as a result of attaining certain age and service based requirements in our long-term incentive plan and award agreements. Stock-based compensation expense is included in compensation and benefits and acquisition-related costs in the condensed consolidated statements of income. Pursuant to the Merger Agreement, each outstanding option to purchase Bats common stock (each, a “Bats stock option”) granted under any of the Bats Global Markets, Inc. 2009 Stock Option Plan, the Bats Global Markets, Inc. Third Amended and Restated 2012 Equity Incentive Plan and the Bats Global Markets, Inc. 2016 Omnibus Incentive Plan (collectively, the “Bats Plans”) that was outstanding immediately prior to the effective time of the Merger (the “Effective Time”) was converted into an option to purchase Common Stock, on the same terms and conditions (including vesting schedule) as were applicable to such Bats stock option (but taking into account any changes, including any acceleration of vesting of such Bats stock option occurring by reason of the transactions contemplated by the Merger Agreement). The number of shares of Common Stock subject to each such converted stock option equals the number of shares of Bats common stock subject to the corresponding Bats stock option immediately prior to the Effective Time, multiplied by the exchange ratio (as defined below) (subject to certain adjustments and rounding). The exercise price per share for each such converted stock option equals the per share exercise price specified in the corresponding Bats stock option divided by the exchange ratio (rounded up to the nearest cent). The “exchange ratio” is equal to 0.4452 , which equals the sum of 0.3201 plus the fraction obtained by dividing $10.00 by the volume-weighted average price, rounded to four decimal points, of a share of Common Stock on the NASDAQ Stock Market LLC for the ten consecutive trading days ended February 24, 2017. Pursuant to the Merger Agreement, each award of restricted Bats common stock (“Bats restricted shares”) granted under any of the Bats Plans that was unvested immediately prior to the Effective Time was assumed by the Company and converted into an award of restricted shares of Common Stock, subject to the same terms and conditions (including vesting schedule) that applied to the applicable Bats restricted shares immediately prior to the Effective Time (but taking into account any changes, including any acceleration of vesting of such Bats restricted shares, occurring by reason provided for in the Merger Agreement). The number of shares of Common Stock subject to each such converted award of Bats restricted shares equals the number of shares of Bats common stock subject to the corresponding Bats restricted share award multiplied by the exchange ratio (as defined above). The activity in the Company's stock options, restricted stock and restricted stock units for the six months ended June 30, 2017 was as follows: Stock Options Summary stock option activity is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in millions) Outstanding, December 31, 2016 — — — — Granted 683,390 $ 22.45 4.8 years $ 40.1 Exercised (172,166 ) $ 17.20 Outstanding and expected to vest at June 30, 2017 511,224 $ 24.22 5.3 years $ 34.3 Exercisable at June 30, 2017 430,156 $ 23.49 4.9 years $ 29.2 The Company estimated the grant date fair value of options awarded during 2017 using the Black-Scholes valuation model with the following assumptions: 2017 Expected term (in years) 4.2 Expected volatility 19.8% Expected dividend yield 1.3% Risk-free rate 1.78% Forfeiture rate —% Summary of the status of nonvested options is presented below: Nonvested Options Options Weighted Average Grant-Date Fair Value January 1, 2017 - Nonvested — $ — Vested — — Granted 81,068 49.17 Forfeited — — June 30, 2017 - Nonvested 81,068 $ 49.17 In the six months ended June 30, 2017, to satisfy employee's tax obligations and cash exercise payment due upon the election to exercise 172,166 stock options, the Company purchased 48,099 shares at a cost of $4.1 million . As of June 30, 2017, there were $ 2.8 million in total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 1.4 years as the stock options vest. Restricted Stock and Restricted Stock Units Summary restricted stock activity is presented below: Number of Shares Weighted Average Grant Date Fair Value Nonvested stock at December 31, 2016 480,595 $ 63.44 Granted 1,090,231 78.91 Vested (379,955 ) 66.03 Forfeited (4,104 ) 72.83 Nonvested stock at June 30, 2017 1,186,767 $ 76.31 In the six months ended June 30, 2017, to satisfy employees' tax obligations upon the vesting of restricted stock, the Company purchased 142,630 shares totaling $11.8 million as the result of the vesting of 379,955 shares of restricted stock. As of June 30, 2017, there were $63.6 million in total unrecognized compensation costs related to restricted stock and restricted stock units. These costs are expected to be recognized over a weighted average period of 2.0 years. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company records income tax expense during interim periods based on the best estimate of the full year’s tax rate as adjusted for discrete items, if any, that are taken into account in the relevant interim period. Each quarter, the Company updates its estimate of the annual effective tax rate and any change in the estimated rate is recorded on a cumulative basis. The effective tax rate from continuing operations was 35.9% and 39.2% for the three months ended June 30, 2017 and 2016 , respectively, and 33.1% and 39.1% for the six months ended June 30, 2017 and 2016 , respectively. The decrease in the effective tax rate for the three and six months ended June 30, 2017 against the comparable period in the prior year was primarily due to excess tax benefits associated with the exercise and vesting of stock-based compensation during the periods. |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE | NET INCOME PER COMMON SHARE The computation of basic net income allocated to common stockholders is calculated by reducing net income for the period by dividends paid or declared and undistributed net income for the period that are allocated to participating securities to arrive at net income allocated to common stockholders. Net income allocated to common stockholders is divided by the weighted average number of common shares outstanding during the period to determine net income per share allocated to common stockholders. The computation of diluted earnings per share is calculated by dividing net income allocated to common stockholders by the sum of the weighted average number of common shares outstanding plus all additional common shares that would have been outstanding if the potentially dilutive common shares had been issued. The dilutive effect is calculated using the more dilutive of the two-class or treasury stock method. Additionally, the change in the redemption value for the noncontrolling interest reduces net income allocated to common shareholders. The following table reconciles net income allocated to common stockholders and the number of shares used to calculate the basic and diluted net income per common share for the three months ended June 30, 2017 and 2016 : Three Months Ended Six Months Ended (in millions, except per share amounts) 2017 2016 2017 2016 Basic EPS Numerator: Net Income $ 68.0 $ 50.9 $ 83.2 $ 100.1 Loss attributable to noncontrolling interest 0.3 0.3 0.6 0.5 Net Income Excluding Noncontrolling Interest 68.3 51.2 83.8 100.6 Change in redemption value of noncontrolling interest (0.3 ) (0.3 ) (0.6 ) (0.5 ) Earnings allocated to participating securities (0.7 ) (0.2 ) (0.8 ) (0.4 ) Net Income Allocated to Common Stockholders $ 67.3 $ 50.7 $ 82.4 $ 99.7 Basic EPS Denominator: Weighted average shares outstanding 112.1 81.3 102.1 81.6 Basic Net Income Per Common Share $ 0.60 $ 0.62 $ 0.81 $ 1.22 Diluted EPS Numerator: Net Income $ 68.0 $ 50.9 $ 83.2 $ 100.1 Loss attributable to noncontrolling interest 0.3 0.3 0.6 0.5 Net Income Excluding Noncontrolling Interest 68.3 51.2 83.8 100.6 Change in redemption value of noncontrolling interest (0.3 ) (0.3 ) (0.6 ) (0.5 ) Earnings allocated to participating securities (0.7 ) (0.2 ) (0.8 ) (0.4 ) Net Income Allocated to Common Stockholders $ 67.3 $ 50.7 $ 82.4 $ 99.7 Diluted EPS Denominator: Weighted average shares outstanding 112.1 81.3 102.1 81.6 Dilutive common shares issued under stock program 0.4 — 0.2 — Total Dilutive Weighted Average Shares 112.5 81.3 102.3 $ 81.6 Diluted Net Income Per Common Share $ 0.60 $ 0.62 $ 0.81 $ 1.22 For the periods presented, the Company did not have shares of stock-based compensation that would have an anti-dilutive effect on the computation of diluted net income per common share. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings As of June 30, 2017 , the Company was subject to the various legal proceedings and claims discussed below, as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. The Company reviews its legal proceedings and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. The Company's assessment of whether a loss is reasonably possible or probable is based on its assessment of the ultimate outcome of the matter following all appeals. As of June 30, 2017 , the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these reviews, inspections or other legal proceedings, if any, has been incurred. While the consequences of certain unresolved proceedings are not presently determinable, the outcome of any litigation is inherently uncertain and an adverse outcome from certain matters could have a material effect on our earnings in any given reporting period. However, in the opinion of management, the ultimate liability is not expected to have a material effect on our financial position, liquidity or capital resources. There have been no material changes during the period covered by this Form 10-Q from the legal proceedings disclosures in our Annual Report on Form 10-K for the year ended December 31, 2016. Contractual obligations The Company currently leases office space, data centers and remote network operations centers, with lease terms remaining ranging from three months to one hundred months as of June 30, 2017. Total rent expense related to these lease obligations, reflected in technology support services and facilities costs line items on the condensed consolidated statements of income, for the three months ended June 30, 2017 and 2016 were $2.7 million and $1.7 million , respectively, and $4.4 million and $3.8 million , for the six months ended June 30, 2017 and 2016, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On July 28, 2017, the Company announced that its board of directors declared a quarterly cash dividend of $0.27 per share. The dividend is payable September 15, 2017 to stockholders of record at the close of business on September 1, 2017. There have been no additional subsequent events that would require disclosure in, or adjustment to, the condensed consolidated financial statements as of and for the six months ended June 30, 2017 . |
ORGANIZATION AND BASIS OF PRE31
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These interim unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, valuation of redeemable noncontrolling interests and reported amounts of revenues and expenses. On an ongoing basis, management evaluates its estimates based upon historical experience, observance of trends, information available from outside sources and various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different conditions or assumptions. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of the results of operations for the full year. For those consolidated subsidiaries in which the Company's ownership is less than 100% and for which the Company has control over the assets and liabilities and the management of the entity, the outside stockholders' interest are shown as non-controlling interests. In 2017, the Company changed the presentation of liquidity payments, or rebates paid to customers in accordance with published fee schedules, to be a cost of revenues, which historically had been netted against transaction fees. The Company also changed the presentation of royalty fees to be a cost of revenues. The presentation of routing fees and costs were also changed. Routing fees were presented in transaction fees in total revenues and routing and clearing costs in total cost of revenues. These fees were previously presented as a net operating expense. These changes were made to conform to current presentation and the changes have been reflected in all periods presented. |
Segment information | Segment information The Company previously operated as a single reportable business segment. As a result of the Bats acquisition on February 28, 2017 (Note 3), the Company is reporting five business segments: Options, U.S. Equities, Futures, European Equities, and Global FX, which is reflective of how the Company's chief operating decision-maker reviews and operates the business (Note 15). This change has been reflected in all periods presented. |
Recent Adopted Accounting Pronouncements | Recent Accounting Pronouncements - Adopted In the first quarter of 2017, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company applied the five-step method outlined in the ASU to all revenue streams and elected the full retrospective implementation method. The additional disclosures required by the ASU have been included in Note 2. In the first quarter of 2017, the Company adopted ASU 2016-09, Compensation — Stock Compensation . This ASU simplifies several aspects of the accounting for stock-based payment transactions, including the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. The Company has chosen to use the actual forfeiture rate and applied the prospective transition method for excess tax benefits and employees taxes paid. As of the adoption date, the Company did not have any awards classified as a liability under the previous guidance. In the first quarter of 2017, the Company adopted ASU 2016-16, Accounting for Income Taxes:Intra-Entity Transfers of Assets other than Inventory . The ASU requires that the income tax impact of intra-entity sales and transfers of property, except for inventory, be recognized when the transfer occurs. The Company applied the full retrospective application which did not result in any impact to the financial statements. Recent Accounting Pronouncements - Issued, not yet Adopted In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) that provides additional guidance around which changes to a share-based payment award requires an entity to apply modification accounting. Specifically, an entity is to account for the effects of a modification, unless all of the following are satisfied: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or as a liability instrument is the same as the classification of the original award immediately before the original award is modified. For public entities, the update is effective beginning after December 15, 2017. Early adoption is permitted. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715) . This ASU requires an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. For public entities, the update is effective beginning after December 15, 2017. Early adoption is permitted. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business. ASU No. 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. There are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities (collectively, a “set”) that is a business usually has outputs, outputs are not required to be present. Additionally, all of the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs. ASU No. 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If, however, the screen is not met, then the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. Finally, the amendments in this ASU narrow the definition of the term “output” so that it is consistent with the manner in which outputs are described in Topic 606 - Revenue from Contracts with Customers . For public entities, the update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2018. Early adoption is permitted under certain circumstances. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. In computing the implied fair value of goodwill under Step 2, an entity, prior to the amendments in ASU No. 2017-04, had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, including unrecognized assets and liabilities, in accordance with the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. However, under this ASU, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, ASU No. 2017-04 removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. For public entities, the update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. This update is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. In September 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force). ASU No. 2016-15 addresses eight specific cash flow issues in an effort to reduce diversity in practice: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon bonds; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The ASU is effective for the Company for fiscal years beginning after December 15, 2017, and for the interim periods within that fiscal year. Early adoption is permitted, including adoption during an interim period. The Company is in the process of evaluating this guidance and assessing the impact the ASU could have on the consolidated financial statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of Revenue by Product Line and Segment | All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line and segment (in millions): Corporate U.S. European Global Items and Options Equities Futures Equities FX Eliminations Total Three months ended June 30, 2017 Transaction fees $ 181.2 $ 208.3 $ 34.0 $ 20.8 $ 9.6 $ — $ 453.9 Access fees 13.9 12.7 0.5 1.8 0.8 — 29.7 Exchange services and other fees 10.1 5.9 2.2 1.2 0.5 — 19.9 Market data fees 10.5 33.9 0.8 2.8 — — 48.0 Regulatory fees 14.7 68.6 — — — — 83.3 Other revenue 3.1 1.7 — 1.0 — 0.2 6.0 $ 233.5 $ 331.1 $ 37.5 $ 27.6 $ 10.9 $ 0.2 $ 640.8 Timing of revenue recognition Services transferred at a point in time $ 199.0 $ 278.6 $ 34.0 $ 21.8 $ 9.6 $ 0.2 $ 543.2 Services transferred over time 34.5 52.5 3.5 5.8 1.3 — 97.6 $ 233.5 $ 331.1 $ 37.5 $ 27.6 $ 10.9 $ 0.2 $ 640.8 Three months ended June 30, 2016 Transaction fees $ 99.8 $ — $ 27.8 $ — $ — $ — $ 127.6 Access fees 13.0 — 0.2 — — — 13.2 Exchange services and other fees 9.4 — 2.0 — — — 11.4 Market data fees 7.4 — 0.8 — — — 8.2 Regulatory fees 9.2 — — — — — 9.2 Other revenue 2.9 — 0.6 — — — 3.5 $ 141.7 $ — $ 31.4 $ — $ — $ — $ 173.1 Corporate U.S. European Global Items and Options Equities Futures Equities FX Eliminations Total Six months ended June 30, 2017 Transaction fees $ 321.4 $ 285.0 $ 62.7 $ 28.0 $ 13.2 $ — $ 710.3 Access fees 26.2 16.9 1.0 2.4 1.0 — 47.5 Exchange services and other fees 23.0 7.9 2.2 1.6 0.6 — 35.3 Market data fees 20.9 45.0 0.8 3.7 0.1 — 70.5 Regulatory fees 27.4 94.2 — — — — 121.6 Other revenue 7.3 2.3 0.7 1.2 — 0.3 11.8 $ 426.2 $ 451.3 $ 67.4 $ 36.9 $ 14.9 $ 0.3 $ 997.0 Timing of revenue recognition Services transferred at a point in time $ 356.1 $ 381.5 $ 63.4 $ 29.2 $ 13.2 $ 0.3 $ 843.7 Services transferred over time 70.1 69.8 4.0 7.7 1.7 — 153.3 $ 426.2 $ 451.3 $ 67.4 $ 36.9 $ 14.9 $ 0.3 $ 997.0 Six months ended June 30, 2016 Transaction fees $ 204.3 $ — $ 49.5 $ — $ — $ — $ 253.8 Access fees 26.0 — 0.4 — — — 26.4 Exchange services and other fees 18.9 — 3.9 — — — 22.8 Market data fees 14.6 — 1.6 — — — 16.2 Regulatory fees 18.3 — — — — — 18.3 Other revenue 5.5 — 0.6 — — — 6.1 $ 287.6 $ — $ 56.0 $ — $ — $ — $ 343.6 |
Schedule of Contract Liabilities | The revenue recognized from contract liabilities and the remaining balance is shown below (in millions): January 1, 2017 Cash Additions Revenue Recognition June 30, 2017 Liquidity provider sliding scale (1) $ — $ 12.0 $ (6.0 ) $ 6.0 Other, net 3.1 11.0 (5.8 ) 8.3 Total deferred revenue $ 3.1 $ 23.0 $ (11.8 ) $ 14.3 (1) Liquidity providers are eligible to participate in the sliding scale program, which involves prepayment of transaction fees, and to receive reduced fees based on the achievement of certain volume thresholds within a calendar month. These transaction fees are amortized and recorded ratably as the transactions occur over the period. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Consideration Transferred | The acquisition-date fair value of the consideration transferred totaled $ 4.0 billion , which consisted of the following (in millions): Cash $ 955.5 Common stock issued 2,387.3 Equity awards issued 37.4 3,380.2 Debt extinguished 580.0 Total consideration paid $ 3,960.2 |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Cash and cash equivalents $ 130.1 Accounts receivable 117.8 Financial investments 66.0 Property and equipment 21.8 Other assets 32.8 Goodwill 2,649.3 Intangibles 2,000.0 Accounts payable (33.7 ) Accrued expenses (26.4 ) Section 31 fee payable (143.6 ) Income tax payable (52.8 ) Deferred tax liability (718.5 ) Other liabilities (82.6 ) $ 3,960.2 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired | The intangible assets were assigned to the Options, U.S. Equities, European Equities, and Global FX segments in the following manner and will be amortized over the following useful lives: U.S. European (amounts in millions) Options Equities Equities Global FX Useful life Trading registrations and licenses $ 95.5 $ 572.7 $ 171.8 $ — indefinite Customer relationships 37.1 222.9 160.0 140.0 20 years Market data customer relationships 53.6 322.0 60.0 64.4 15 years Technology 22.5 22.5 22.5 22.5 7 years Trademarks and trade names 1.0 6.0 1.8 1.2 2 years Goodwill 226.4 1,736.4 419.3 267.2 $ 436.1 $ 2,882.5 $ 835.4 $ 495.3 |
Schedule of Pro Forma Information | The financial information in the table below summarizes the combined results of operations of the Company and Bats, on a pro forma basis, as though the companies had been combined as of January 1, 2016. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented. Such pro forma financial information is based on the historical financial statements of the Company and Bats. This pro forma financial information is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information, including, without limitation, preliminary purchase accounting adjustments. The pro forma financial information does not reflect any synergies or operating cost reductions that may be achieved from the combined operations. The pro forma financial information combines the historical results for the Company and Bats for the three months ended June 30, 2016 and six months ended June 30, 2017 and 2016 in the following table (in millions, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 Revenue $ 639.0 $ 1,269.9 $ 1,320.6 Operating income 100.9 229.4 207.9 Net income allocated to common stockholders 59.4 157.3 116.4 Earnings per share: Basic $ 0.53 $ 1.40 $ 1.04 Diluted $ 0.53 $ 1.40 $ 1.03 The amounts of revenue, operating income and net income of Bats are included in the Company’s condensed consolidated statements of income from the acquisition date to the three and six months ended June 30, 2017 and are as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2017 2017 Revenue $ 446.0 $ 605.8 Operating income 28.6 26.6 Net income 18.3 17.6 |
SEVERANCE (Tables)
SEVERANCE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of Employee Termination Benefits | The following is a summary of the employee termination benefits recognized within acquisition costs in the Corporate Items and Eliminations unit in the condensed consolidated statements of income (in millions): Employee Termination Benefits Balance at December 31, 2016 $ 0.4 Termination benefits accrued 20.3 Termination payments made (15.2 ) Balance at June 30, 2017 $ 5.5 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Equity Method Investments | As of June 30, 2017 and December 31, 2016 , the Company's investments were comprised of the following (in millions): June 30, 2017 December 31, 2016 Equity Method: Investment in Signal Trading Systems, LLC $ 12.6 $ 12.4 Investment in EuroCCP 8.7 — Total equity method investments 21.3 12.4 Cost Method: Investment in OCC 30.3 30.3 Other cost method investments 30.4 30.2 Total cost method investments 60.7 60.5 Total Investments $ 82.0 $ 72.9 |
Schedule of Cost Method Investments | As of June 30, 2017 and December 31, 2016 , the Company's investments were comprised of the following (in millions): June 30, 2017 December 31, 2016 Equity Method: Investment in Signal Trading Systems, LLC $ 12.6 $ 12.4 Investment in EuroCCP 8.7 — Total equity method investments 21.3 12.4 Cost Method: Investment in OCC 30.3 30.3 Other cost method investments 30.4 30.2 Total cost method investments 60.7 60.5 Total Investments $ 82.0 $ 72.9 |
FINANCIAL INVESTMENTS (Tables)
FINANCIAL INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Financial Investments | The Company’s financial investments with original or acquired maturities longer than three months, but that mature in less than one year from the condensed consolidated balance sheet date and any money market funds that are considered cash and cash equivalents are classified as current assets and are summarized as follows (in millions): June 30, 2017 Cost basis Unrealized gains Unrealized losses Fair value Available-for-sale: U.S. Treasury securities $ 110.1 — $ (0.2 ) $ 109.9 Trading securities: U.S. Treasury securities 0.5 — — 0.5 Money market funds: 31.5 — — 31.5 Total $ 142.1 $ — $ (0.2 ) $ 141.9 December 31, 2016 Cost basis Unrealized gains Unrealized losses Fair value Money market funds $ 67.5 — — $ 67.5 Total $ 67.5 $ — $ — $ 67.5 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, December 31, 2017 2016 Construction in progress $ 8.9 $ 0.2 Building 77.3 77.0 Furniture and equipment 162.0 138.8 Total property and equipment 248.2 216.0 Less accumulated depreciation (172.6 ) (160.1 ) Total property and equipment, net $ 75.6 $ 55.9 |
OTHER ASSETS, NET (Tables)
OTHER ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets, Net | Other assets, net consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, December 31, 2017 2016 Software development work in progress $ 7.8 $ 12.3 Data processing software 217.7 222.6 Less accumulated depreciation (180.0 ) (172.0 ) Data processing software, net 45.5 62.9 Other assets (1) 11.1 9.8 Data processing software and other assets, net $ 56.6 $ 72.7 (1) At December 31, 2016, other assets included $ 6.2 million of deferred financing costs and $3.5 million of deferred tax assets. The deferred financing costs were reclassified in 2017 and recorded as a reduction of long-term debt. At June 30, 2017, the majority of the balance included long-term prepaid assets and notes receivable. |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill details by segment | The following table presents the details of goodwill by segment (in millions): U.S. European Global Corporate Items Options Equities Equities FX and Eliminations Total Balance as of December 31, 2016 $ 7.7 $ — $ — $ — $ 18.8 $ 26.5 Additions 226.4 1,736.4 419.3 267.2 — 2,649.3 Dispositions (1.4 ) — — — — (1.4 ) Changes in foreign currency exchange rates — — 12.0 — — 12.0 Balance as of June 30, 2017 $ 232.7 $ 1,736.4 $ 431.3 $ 267.2 $ 18.8 $ 2,686.4 |
Schedule of Indefinite-lived Intangible Assets | The following table presents the details of the intangible assets (in millions): U.S. European Global Corporate Items Options Equities Equities FX and Eliminations Total Balance as of December 31, 2016 $ 2.0 $ — $ — $ — $ 6.7 $ 8.7 Additions 209.7 1,146.1 416.1 228.1 — 2,000.0 Dispositions (0.2 ) — — — — (0.2 ) Amortization (6.0 ) (29.7 ) (9.5 ) (11.4 ) (0.6 ) (57.2 ) Changes in foreign currency exchange rates — — 19.1 — — 19.1 Balance as of June 30, 2017 $ 205.5 $ 1,116.4 $ 425.7 $ 216.7 $ 6.1 $ 1,970.4 |
Schedule of Definite-lived Intangible Assets | The following table presents the details of the intangible assets (in millions): U.S. European Global Corporate Items Options Equities Equities FX and Eliminations Total Balance as of December 31, 2016 $ 2.0 $ — $ — $ — $ 6.7 $ 8.7 Additions 209.7 1,146.1 416.1 228.1 — 2,000.0 Dispositions (0.2 ) — — — — (0.2 ) Amortization (6.0 ) (29.7 ) (9.5 ) (11.4 ) (0.6 ) (57.2 ) Changes in foreign currency exchange rates — — 19.1 — — 19.1 Balance as of June 30, 2017 $ 205.5 $ 1,116.4 $ 425.7 $ 216.7 $ 6.1 $ 1,970.4 The following tables present the categories of intangible assets as of June 30, 2017 and December 31, 2016 (in millions): Remaining June 30, 2017 Weighted Average U.S. European Corporate Items Amortization Options Equities Equities Global FX and Eliminations Period (in years) Trading registrations and licenses $ 95.5 $ 572.7 $ 179.7 $ — $ — Indefinite Customer relationships 38.0 222.9 167.3 140.0 3.0 20 Market data customer relationships 53.6 322.0 62.8 64.4 — 15 Technology 23.4 22.5 23.5 22.5 4.0 7 Trademarks and tradenames 1.4 6.0 1.9 1.2 1.0 2 Other 0.2 — — — — 2 Accumulated amortization (6.6 ) (29.7 ) (9.5 ) (11.4 ) (1.9 ) $ 205.5 $ 1,116.4 $ 425.7 $ 216.7 $ 6.1 Remaining December 31, 2016 Weighted Average U.S. European Corporate Amortization Options Equities Equities Global FX and Other Period (in years) Trading registrations and licenses $ — $ — $ — $ — $ — — Customer relationships 0.9 — — — 3.0 9 Market data customer relationships — — — — — — Technology 1.1 — — — 4.0 4 Trademarks and tradenames 0.4 — — — 1.0 6 Other 0.2 — — — — 2 Accumulated amortization (0.6 ) — — — (1.3 ) $ 2.0 $ — $ — $ — $ 6.7 |
ACCOUNTS PAYABLE AND ACCRUED 40
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, 2017 December 31, 2016 Compensation and benefit-related liabilities $ 11.9 $ 25.1 Termination benefits 5.5 0.4 Royalties 18.2 17.8 Accrued liabilities 51.5 25.4 Marketing fee payable 9.0 7.2 Accounts payable 54.9 6.5 $ 151.0 $ 82.4 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company's long-term debt consisted of the following as of June 30, 2017 and December 31, 2016 (in millions): June 30, December 31, 2017 2016 Term Loan Agreement $ 468.7 $ — 3.650% Senior Notes 643.6 — 1.950% Senior Notes 299.0 — Revolving Credit Agreement — — Total long-term debt $ 1,411.3 $ — |
Schedule of Maturities of Long-term Debt | The future expected loan repayments related to the Term Loan Agreement and the Notes as of June 30, 2017 is as follows (in millions): 2017 $ — 2018 — 2019 300.0 2020 — 2021 — Thereafter 1,125.0 Principal amounts repayable 1,425.0 Debt issuance cost (7.9 ) Unamortized discount on Notes (5.8 ) Total debt outstanding $ 1,411.3 |
Schedule of Interest Expense | Interest expense recognized on the Term Loan Agreement and the Notes is included in interest expense, net in the condensed consolidated statements of income, for the three and six months ended June 30, 2017 and 2016 is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Components of interest expense: Contractual interest $ 10.9 $ — $ 18.5 $ — Amortization of debt discount 0.2 — 0.2 — Amortization of debt issuance cost 1.4 — 2.3 — Interest expense 12.5 — 21.0 — Interest income — — (0.6 ) — Interest expense, net $ 12.5 $ — $ 20.4 $ — |
ACCUMULATED OTHER COMPREHENSI42
ACCUMULATED OTHER COMPREHENSIVE INCOME, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss, Net | The following represents the changes in accumulated other comprehensive income by component (in millions): Foreign Unrealized Total Other Currency Investment Post-Retirement Comprehensive Translation Gain/Loss Benefits Income Balance at December 31, 2016 $ — $ — $ (0.8 ) $ (0.8 ) Other comprehensive income 30.2 0.2 — 30.4 Balance at June 30, 2017 $ 30.2 $ 0.2 $ (0.8 ) $ 29.6 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis | The following tables presents the Company’s fair value hierarchy for those assets measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 (in millions): June 30, 2017 Total Level 1 Level 2 Level 3 Assets: Available-for-sale securities: U.S. Treasury securities $ 109.9 $ 109.9 $ — $ — Trading securities: U.S. Treasury securities 0.5 0.5 — — Money market funds 31.5 31.5 — — Total assets $ 141.9 $ 141.9 $ — $ — Liabilities: Contingent consideration liability $ 56.2 $ — $ — $ 56.2 Total liabilities $ 56.2 $ — $ — $ 56.2 December 31, 2016 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 67.5 $ 67.5 $ — $ — Total assets $ 67.5 $ 67.5 $ — $ — |
Schedule of Fair Value Hierarchy of Financial Instruments Held | The following table presents the Company’s fair value hierarchy for those financial instruments held by the Company as of June 30, 2017 and December 31, 2016 (in millions): June 30, 2017 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 148.6 $ 148.6 $ — $ — Trading investments 0.5 0.5 — — Available-for-sale investments 109.9 109.9 — — Accounts receivable 231.3 231.3 — — Income tax receivable 10.7 10.7 — — Total assets $ 501.0 $ 501.0 $ — $ — Liabilities: Accounts payable $ 54.9 $ — $ 54.9 $ — Section 31 fees payable 150.9 — 150.9 — Contingent consideration liability 56.2 — — 56.2 Long-term debt 1,411.3 — 1,411.3 — Total liabilities $ 1,673.3 $ — $ 1,617.1 $ 56.2 December 31, 2016 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 97.3 $ 97.3 $ — $ — Accounts receivable 76.7 76.7 — — Income tax receivable 53.7 53.7 — — Total assets $ 227.7 $ 227.7 $ — $ — Liabilities: Accounts payable $ 6.5 $ — $ 6.5 $ — Total liabilities $ 6.5 $ — $ 6.5 $ — |
Summary of Changes in the Fair Value of the Company's Level 3 Financial Liabilities | The following table sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities during the six months ended June 30, 2017 . Level 3 Financial Liabilities for the Six Months Ended June 30, 2017 Balance at Beginning of Period Acquired During Period Settlements Balances at end of period Liabilities Contingent consideration liability $ — $ 56.2 $ — $ 56.2 Total Liabilities $ — $ 56.2 $ — $ 56.2 |
REDEEMABLE NONCONTROLLING INT44
REDEEMABLE NONCONTROLLING INTEREST (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Redeemable Noncontrolling Interest | For the six months ended June 30, 2017 , the following reflects changes in our redeemable noncontrolling interest (in millions): Redeemable Noncontrolling Interest Balance as at December 31, 2016 $ 12.6 Net loss attributable to redeemable noncontrolling interest (0.6 ) Redemption value adjustment 0.6 Balance as at June 30, 2017 $ 12.6 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Summarized Financial Information by Reportable Segment | Summarized financial data of reportable segments was as follows (in millions): Corporate U.S. European items and Options Equities Futures Equities Global FX eliminations Total Three months ended June 30, 2017 Revenues $ 233.5 $ 331.1 $ 37.5 $ 27.6 10.9 $ 0.2 $ 640.8 Operating income (loss) 61.2 33.3 33.4 3.5 (4.1 ) (9.5 ) 117.8 Three months ended June 30, 2016 Revenues $ 141.7 $ — $ 31.4 $ — — $ — $ 173.1 Operating income (loss) 53.6 — 26.5 — — (2.1 ) 78.0 Corporate U.S. European items and Options Equities Futures Equities Global FX eliminations Total Six Months Ended June 30, 2017 Revenues $ 426.2 $ 451.3 $ 67.4 $ 36.9 $ 14.9 $ 0.3 $ 997.0 Operating income (loss) 126.2 45.5 59.3 5.1 (5.3 ) (86.9 ) 143.9 Six Months Ended June 30, 2016 Revenues $ 287.6 $ — $ 56.0 $ — $ — $ — $ 343.6 Operating income (loss) 115.9 — 46.7 — — (5.1 ) 157.5 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Activity | Summary stock option activity is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in millions) Outstanding, December 31, 2016 — — — — Granted 683,390 $ 22.45 4.8 years $ 40.1 Exercised (172,166 ) $ 17.20 Outstanding and expected to vest at June 30, 2017 511,224 $ 24.22 5.3 years $ 34.3 Exercisable at June 30, 2017 430,156 $ 23.49 4.9 years $ 29.2 |
Fair Value Assumptions | The Company estimated the grant date fair value of options awarded during 2017 using the Black-Scholes valuation model with the following assumptions: 2017 Expected term (in years) 4.2 Expected volatility 19.8% Expected dividend yield 1.3% Risk-free rate 1.78% Forfeiture rate —% |
Nonvested Options Activity | Summary of the status of nonvested options is presented below: Nonvested Options Options Weighted Average Grant-Date Fair Value January 1, 2017 - Nonvested — $ — Vested — — Granted 81,068 49.17 Forfeited — — June 30, 2017 - Nonvested 81,068 $ 49.17 |
Restricted Stock Activity | Summary restricted stock activity is presented below: Number of Shares Weighted Average Grant Date Fair Value Nonvested stock at December 31, 2016 480,595 $ 63.44 Granted 1,090,231 78.91 Vested (379,955 ) 66.03 Forfeited (4,104 ) 72.83 Nonvested stock at June 30, 2017 1,186,767 $ 76.31 |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted net income per common share | The following table reconciles net income allocated to common stockholders and the number of shares used to calculate the basic and diluted net income per common share for the three months ended June 30, 2017 and 2016 : Three Months Ended Six Months Ended (in millions, except per share amounts) 2017 2016 2017 2016 Basic EPS Numerator: Net Income $ 68.0 $ 50.9 $ 83.2 $ 100.1 Loss attributable to noncontrolling interest 0.3 0.3 0.6 0.5 Net Income Excluding Noncontrolling Interest 68.3 51.2 83.8 100.6 Change in redemption value of noncontrolling interest (0.3 ) (0.3 ) (0.6 ) (0.5 ) Earnings allocated to participating securities (0.7 ) (0.2 ) (0.8 ) (0.4 ) Net Income Allocated to Common Stockholders $ 67.3 $ 50.7 $ 82.4 $ 99.7 Basic EPS Denominator: Weighted average shares outstanding 112.1 81.3 102.1 81.6 Basic Net Income Per Common Share $ 0.60 $ 0.62 $ 0.81 $ 1.22 Diluted EPS Numerator: Net Income $ 68.0 $ 50.9 $ 83.2 $ 100.1 Loss attributable to noncontrolling interest 0.3 0.3 0.6 0.5 Net Income Excluding Noncontrolling Interest 68.3 51.2 83.8 100.6 Change in redemption value of noncontrolling interest (0.3 ) (0.3 ) (0.6 ) (0.5 ) Earnings allocated to participating securities (0.7 ) (0.2 ) (0.8 ) (0.4 ) Net Income Allocated to Common Stockholders $ 67.3 $ 50.7 $ 82.4 $ 99.7 Diluted EPS Denominator: Weighted average shares outstanding 112.1 81.3 102.1 81.6 Dilutive common shares issued under stock program 0.4 — 0.2 — Total Dilutive Weighted Average Shares 112.5 81.3 102.3 $ 81.6 Diluted Net Income Per Common Share $ 0.60 $ 0.62 $ 0.81 $ 1.22 |
ORGANIZATION AND BASIS OF PRE48
ORGANIZATION AND BASIS OF PRESENTATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2017venuesegment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of trading venues | venue | 14 |
Number of reportable segments | segment | 5 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Revenue by Product Line and Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 640.8 | $ 173.1 | $ 997 | $ 343.6 |
Services transferred at a point in time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 543.2 | 843.7 | ||
Services transferred over time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 97.6 | 153.3 | ||
Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.2 | 0 | 0.3 | 0 |
Corporate Items and Eliminations | Services transferred at a point in time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.2 | 0.3 | ||
Corporate Items and Eliminations | Services transferred over time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | ||
Options | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 233.5 | 141.7 | 426.2 | 287.6 |
Options | Operating Segments | Services transferred at a point in time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 199 | 356.1 | ||
Options | Operating Segments | Services transferred over time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 34.5 | 70.1 | ||
U.S. Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 331.1 | 0 | 451.3 | 0 |
U.S. Equities | Operating Segments | Services transferred at a point in time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 278.6 | 381.5 | ||
U.S. Equities | Operating Segments | Services transferred over time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 52.5 | 69.8 | ||
Futures | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 37.5 | 31.4 | 67.4 | 56 |
Futures | Operating Segments | Services transferred at a point in time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 34 | 63.4 | ||
Futures | Operating Segments | Services transferred over time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3.5 | 4 | ||
European Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 27.6 | 0 | 36.9 | 0 |
European Equities | Operating Segments | Services transferred at a point in time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 21.8 | 29.2 | ||
European Equities | Operating Segments | Services transferred over time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 5.8 | 7.7 | ||
Global FX | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 10.9 | 0 | 14.9 | 0 |
Global FX | Operating Segments | Services transferred at a point in time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9.6 | 13.2 | ||
Global FX | Operating Segments | Services transferred over time | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1.3 | 1.7 | ||
Transaction fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 453.9 | 127.6 | 710.3 | 253.8 |
Transaction fees | Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Transaction fees | Options | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 181.2 | 99.8 | 321.4 | 204.3 |
Transaction fees | U.S. Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 208.3 | 0 | 285 | 0 |
Transaction fees | Futures | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 34 | 27.8 | 62.7 | 49.5 |
Transaction fees | European Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 20.8 | 0 | 28 | 0 |
Transaction fees | Global FX | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9.6 | 0 | 13.2 | 0 |
Access fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 29.7 | 13.2 | 47.5 | 26.4 |
Access fees | Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Access fees | Options | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 13.9 | 13 | 26.2 | 26 |
Access fees | U.S. Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 12.7 | 0 | 16.9 | 0 |
Access fees | Futures | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.5 | 0.2 | 1 | 0.4 |
Access fees | European Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1.8 | 0 | 2.4 | 0 |
Access fees | Global FX | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.8 | 0 | 1 | 0 |
Exchange services and other fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 19.9 | 11.4 | 35.3 | 22.8 |
Exchange services and other fees | Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Exchange services and other fees | Options | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 10.1 | 9.4 | 23 | 18.9 |
Exchange services and other fees | U.S. Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 5.9 | 0 | 7.9 | 0 |
Exchange services and other fees | Futures | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2.2 | 2 | 2.2 | 3.9 |
Exchange services and other fees | European Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1.2 | 0 | 1.6 | 0 |
Exchange services and other fees | Global FX | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.5 | 0 | 0.6 | 0 |
Market data fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 48 | 8.2 | 70.5 | 16.2 |
Market data fees | Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Market data fees | Options | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 10.5 | 7.4 | 20.9 | 14.6 |
Market data fees | U.S. Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 33.9 | 0 | 45 | 0 |
Market data fees | Futures | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.8 | 0.8 | 0.8 | 1.6 |
Market data fees | European Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2.8 | 0 | 3.7 | 0 |
Market data fees | Global FX | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0.1 | 0 |
Regulatory fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 83.3 | 9.2 | 121.6 | 18.3 |
Regulatory fees | Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Regulatory fees | Options | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 14.7 | 9.2 | 27.4 | 18.3 |
Regulatory fees | U.S. Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 68.6 | 0 | 94.2 | 0 |
Regulatory fees | Futures | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Regulatory fees | European Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Regulatory fees | Global FX | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 6 | 3.5 | 11.8 | 6.1 |
Other revenue | Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.2 | 0 | 0.3 | 0 |
Other revenue | Options | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3.1 | 2.9 | 7.3 | 5.5 |
Other revenue | U.S. Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1.7 | 0 | 2.3 | 0 |
Other revenue | Futures | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0.6 | 0.7 | 0.6 |
Other revenue | European Equities | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1 | 0 | 1.2 | 0 |
Other revenue | Global FX | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE RECOGNITION - Rollforwa
REVENUE RECOGNITION - Rollforward of Contract Liabilities (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Movement in Deferred Revenue [Roll Forward] | |
January 1, 2017 | $ 3.1 |
Cash Additions | 23 |
Revenue Recognition | (11.8) |
June 30, 2017 | 14.3 |
Liquidity provider sliding scale | |
Movement in Deferred Revenue [Roll Forward] | |
January 1, 2017 | 0 |
Cash Additions | 12 |
Revenue Recognition | (6) |
June 30, 2017 | 6 |
Other, net | |
Movement in Deferred Revenue [Roll Forward] | |
January 1, 2017 | 3.1 |
Cash Additions | 11 |
Revenue Recognition | (5.8) |
June 30, 2017 | $ 8.3 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) | Feb. 28, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Goodwill | $ 2,649,300,000 | |||||
Finite-lived and indefinite-lived intangible assets acquired | 2,000,000,000 | |||||
Acquisition-related costs | $ 4,700,000 | $ 0 | 69,900,000 | $ 0 | ||
Compensation and benefits | 50,000,000 | 28,500,000 | 97,800,000 | 55,600,000 | ||
Professional fees and outside services | 16,900,000 | 14,700,000 | 31,300,000 | 28,300,000 | ||
Facilities expenses | 2,700,000 | 1,400,000 | 4,800,000 | 2,900,000 | ||
Impact on net income (loss) | (68,000,000) | $ (50,900,000) | (83,200,000) | $ (100,100,000) | ||
Bats Global Markets, Inc. | Voting Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in USD per share) | 0.01 | |||||
Bats Global Markets, Inc. | Non-voting Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in USD per share) | $ 0.01 | |||||
Bats Global Markets, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 3,960,200,000 | |||||
Share price, measurement period | 10 days | |||||
Share price (in USD per share) | $ 79.9289 | |||||
Goodwill expected to be deductible for tax purposes | $ 0 | |||||
Fair value of accounts receivable acquired | 117,800,000 | |||||
Gross value of accounts receivable acquired | 118,000,000 | |||||
Allowance for doubtful accounts | 200,000 | |||||
Acquisition-related costs | 4,700,000 | 69,900,000 | ||||
Bats Global Markets, Inc. | Operating Segments | Futures | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 0 | |||||
Finite-lived and indefinite-lived intangible assets acquired | $ 0 | |||||
Bats Global Markets, Inc. | Acquisition-related Costs | ||||||
Business Acquisition [Line Items] | ||||||
Impact on net income (loss) | 93,300,000 | |||||
Bats Global Markets, Inc. | Acquisition Related Costs | ||||||
Business Acquisition [Line Items] | ||||||
Compensation and benefits | 3,400,000 | 33,500,000 | ||||
Professional fees and outside services | $ 1,300,000 | 20,600,000 | ||||
Impairment of capitalized data processing software | 14,900,000 | |||||
Facilities expenses | $ 900,000 | |||||
Bats Global Markets, Inc. | Consideration Option One | ||||||
Business Acquisition [Line Items] | ||||||
Equity interests issuable per share owned by acquiree (in shares) | 0.3201 | |||||
Cash consideration (in USD per share) | $ 10 | |||||
Bats Global Markets, Inc. | Consideration Option Two | ||||||
Business Acquisition [Line Items] | ||||||
Equity interests issuable per share owned by acquiree (in shares) | 0.2577 | |||||
Cash consideration (in USD per share) | $ 14.99 | |||||
Bats Global Markets, Inc. | Consideration Option Three | ||||||
Business Acquisition [Line Items] | ||||||
Equity interests issuable per share owned by acquiree (in shares) | 0.4452 |
ACQUISITIONS - Acquisition Date
ACQUISITIONS - Acquisition Date Fair Value of Consideration Transferred (Details) - USD ($) $ in Millions | Feb. 28, 2017 | Jun. 30, 2017 | Jun. 30, 2016 |
Business Acquisition [Line Items] | |||
Cash | $ 1,405.4 | $ 14.3 | |
Bats Global Markets, Inc. | |||
Business Acquisition [Line Items] | |||
Cash | $ 955.5 | ||
Common stock issued | 2,387.3 | ||
Equity awards issued | 37.4 | ||
Total consideration paid, excluding debt extinguished | 3,380.2 | ||
Debt extinguished | 580 | ||
Total consideration paid | $ 3,960.2 |
ACQUISITIONS - Fair Values of A
ACQUISITIONS - Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Feb. 28, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,686.4 | $ 26.5 | |
Bats Global Markets, Inc. | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 130.1 | ||
Accounts receivable | 117.8 | ||
Financial investments | 66 | ||
Property and equipment | 21.8 | ||
Other assets | 32.8 | ||
Goodwill | 2,649.3 | ||
Intangibles | 2,000 | ||
Accounts payable | (33.7) | ||
Accrued expenses | (26.4) | ||
Section 31 fee payable | (143.6) | ||
Income tax payable | (52.8) | ||
Deferred tax liability | (718.5) | ||
Other liabilities | (82.6) | ||
Fair value of assets acquired and liabilities assumed | $ 3,960.2 |
ACQUISITIONS - Intangible Asset
ACQUISITIONS - Intangible Assets Acquired (Details) - USD ($) $ in Millions | Feb. 28, 2017 | Jun. 30, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 2,649.3 | |
Finite-lived and indefinite-lived intangible assets acquired | $ 2,000 | |
Options | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Goodwill | $ 226.4 | |
Finite-lived and indefinite-lived intangible assets acquired | 436.1 | |
U.S. Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Goodwill | 1,736.4 | |
Finite-lived and indefinite-lived intangible assets acquired | 2,882.5 | |
European Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Goodwill | 419.3 | |
Finite-lived and indefinite-lived intangible assets acquired | 835.4 | |
Global FX | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Goodwill | 267.2 | |
Finite-lived and indefinite-lived intangible assets acquired | $ 495.3 | |
Customer relationships | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Useful life | 20 years | |
Customer relationships | Options | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 37.1 | |
Customer relationships | U.S. Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 222.9 | |
Customer relationships | European Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 160 | |
Customer relationships | Global FX | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 140 | |
Market data customer relationships | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Useful life | 15 years | |
Market data customer relationships | Options | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 53.6 | |
Market data customer relationships | U.S. Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 322 | |
Market data customer relationships | European Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 60 | |
Market data customer relationships | Global FX | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 64.4 | |
Technology | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Useful life | 7 years | |
Technology | Options | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 22.5 | |
Technology | U.S. Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 22.5 | |
Technology | European Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 22.5 | |
Technology | Global FX | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 22.5 | |
Trademarks and tradenames | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Useful life | 2 years | |
Trademarks and tradenames | Options | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 1 | |
Trademarks and tradenames | U.S. Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 6 | |
Trademarks and tradenames | European Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 1.8 | |
Trademarks and tradenames | Global FX | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 1.2 | |
Trading registrations and licenses | Options | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets acquired | 95.5 | |
Trading registrations and licenses | U.S. Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets acquired | 572.7 | |
Trading registrations and licenses | European Equities | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets acquired | 171.8 | |
Trading registrations and licenses | Global FX | Bats Global Markets, Inc. | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets acquired | $ 0 |
ACQUISITIONS - Revenue and Inco
ACQUISITIONS - Revenue and Income Since Acquisition Date (Details) - Bats Global Markets, Inc. - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||
Revenue | $ 446 | $ 605.8 |
Operating income | 28.6 | 26.6 |
Net income | $ 18.3 | $ 17.6 |
ACQUISITIONS - Pro Forma Financ
ACQUISITIONS - Pro Forma Financial Information (Details) - Bats Global Markets, Inc. - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition [Line Items] | |||
Revenue | $ 639 | $ 1,269.9 | $ 1,320.6 |
Operating income | 100.9 | 229.4 | 207.9 |
Net income allocated to common stockholders | $ 59.4 | $ 158.1 | $ 116.4 |
Earnings per share: | |||
Basic (in USD per share) | $ 0.53 | $ 1.41 | $ 1.04 |
Diluted (in USD per share) | $ 0.53 | $ 1.41 | $ 1.03 |
SEVERANCE (Details)
SEVERANCE (Details) - Severance $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
December 31, 2016 | $ 0.4 |
Termination benefits accrued | 20.3 |
Termination payments made | (15.2) |
June 30, 2017 | $ 5.5 |
INVESTMENTS - Schedule of Inve
INVESTMENTS - Schedule of Investments (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Cost and Equity Method Investments [Line Items] | ||
Equity Method: | $ 21.3 | $ 12.4 |
Cost Method: | 60.7 | 60.5 |
Total Investments | 82 | 72.9 |
Investment in Signal Trading Systems, LLC | ||
Schedule of Cost and Equity Method Investments [Line Items] | ||
Equity Method: | 12.6 | 12.4 |
Investment in EuroCCP | ||
Schedule of Cost and Equity Method Investments [Line Items] | ||
Equity Method: | 8.7 | 0 |
Investment in OCC | ||
Schedule of Cost and Equity Method Investments [Line Items] | ||
Cost Method: | 30.3 | 30.3 |
Other cost method investments | ||
Schedule of Cost and Equity Method Investments [Line Items] | ||
Cost Method: | $ 30.4 | $ 30.2 |
INVESTMENTS - Equity Method Inv
INVESTMENTS - Equity Method Investments, Narrative (Details) | Jun. 30, 2017central_counterpartyinvestor |
Bats Global Markets, Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Number of central counterparties | central_counterparty | 3 |
Investment in EuroCCP | BATS Trading Limited | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 20.00% |
Equity Method Investment, Number of Other Investors | investor | 4 |
INVESTMENTS - Cost Method Inves
INVESTMENTS - Cost Method Investments, Narrative (Details) - USD ($) | Mar. 03, 2015 | Feb. 26, 2015 | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Cost-method Investments [Line Items] | ||||
Cost method investments | $ 60,700,000 | $ 60,500,000 | ||
Investment in OCC | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Cost method investments | $ 30,300,000 | $ 30,300,000 | ||
Ownership percentage | 20.00% | |||
Contribution requirement | $ 150,000,000 | |||
Contribution requirement, shareholder cap | $ 40,000,000 | |||
Customer refunds, percent of pre-tax income exceeding capital requirements | 50.00% | |||
Contributions | $ 30,000,000 |
FINANCIAL INVESTMENTS - Schedu
FINANCIAL INVESTMENTS - Schedule of Financial Investments (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Available-for-sale: | ||||
Unrealized gains | $ 0 | $ 0 | ||
Unrealized losses | (0.2) | 0 | ||
Fair value | 109.9 | |||
Trading securities: | ||||
Fair value | 0.5 | |||
Money market funds: | ||||
Cost basis | 148.6 | 97.3 | $ 52.2 | $ 102.3 |
Money market funds | 148.6 | 97.3 | ||
Financial Investments | ||||
Cost basis | 142.1 | 67.5 | ||
Fair Value | 141.9 | 67.5 | ||
Money market funds | ||||
Money market funds: | ||||
Cost basis | 31.5 | 67.5 | ||
Money market funds | 31.5 | $ 67.5 | ||
U.S. Treasury securities | ||||
Available-for-sale: | ||||
Cost basis | 110.1 | |||
Unrealized losses | (0.2) | |||
Fair value | 109.9 | |||
Trading securities: | ||||
Cost basis | 0.5 | |||
Fair value | $ 0.5 |
PROPERTY AND EQUIPMENT, NET -
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | $ 248.2 | $ 248.2 | $ 216 | ||
Less accumulated depreciation | (172.6) | (172.6) | (160.1) | ||
Total property and equipment, net | 75.6 | 75.6 | 55.9 | ||
Depreciation expense | 8.7 | $ 6 | 15.2 | $ 11.9 | |
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | 8.9 | 8.9 | 0.2 | ||
Building | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | 77.3 | 77.3 | 77 | ||
Furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | $ 162 | $ 162 | $ 138.8 |
OTHER ASSETS, NET - Schedule o
OTHER ASSETS, NET - Schedule of Other Assets, Net (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Less accumulated depreciation | $ (180) | $ (172) |
Data processing software, net | 45.5 | 62.9 |
Other assets | 11.1 | 9.8 |
Data processing software and other assets, net | 56.6 | 72.7 |
Deferred financing costs | 7.9 | 6.2 |
Deferred tax assets | 3.5 | |
Software development work in progress | ||
Finite-Lived Intangible Assets [Line Items] | ||
Data processing software, gross | 7.8 | 12.3 |
Data processing software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Data processing software, gross | $ 217.7 | $ 222.6 |
OTHER ASSETS, NET - Narrative (
OTHER ASSETS, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Data processing software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 4.4 | $ 5.8 | $ 8.5 | $ 11.4 |
GOODWILL AND INTANGIBLE ASSET65
GOODWILL AND INTANGIBLE ASSETS, NET - GOODWILL BY SEGMENT (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
December 31, 2016 | $ 26.5 |
Additions | 2,649.3 |
Dispositions | (1.4) |
Changes in foreign currency exchange rates | 12 |
June 30, 2017 | 2,686.4 |
Operating Segments | Options | |
Goodwill [Roll Forward] | |
December 31, 2016 | 7.7 |
Additions | 226.4 |
Dispositions | (1.4) |
Changes in foreign currency exchange rates | 0 |
June 30, 2017 | 232.7 |
Operating Segments | U.S. Equities | |
Goodwill [Roll Forward] | |
December 31, 2016 | 0 |
Additions | 1,736.4 |
Dispositions | 0 |
Changes in foreign currency exchange rates | 0 |
June 30, 2017 | 1,736.4 |
Operating Segments | European Equities | |
Goodwill [Roll Forward] | |
December 31, 2016 | 0 |
Additions | 419.3 |
Dispositions | 0 |
Changes in foreign currency exchange rates | 12 |
June 30, 2017 | 431.3 |
Operating Segments | Global FX | |
Goodwill [Roll Forward] | |
December 31, 2016 | 0 |
Additions | 267.2 |
Dispositions | 0 |
Changes in foreign currency exchange rates | 0 |
June 30, 2017 | 267.2 |
Corporate Items and Eliminations | |
Goodwill [Roll Forward] | |
December 31, 2016 | 18.8 |
Additions | 0 |
Dispositions | 0 |
Changes in foreign currency exchange rates | 0 |
June 30, 2017 | $ 18.8 |
GOODWILL AND INTANGIBLE ASSET66
GOODWILL AND INTANGIBLE ASSETS, NET - SCHEDULE OF INTANGIBLE ASSETS BY SEGMENT (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
December 31, 2016 | $ 8.7 | |||
Additions | 2,000 | |||
Dispositions | (0.2) | |||
Amortization | $ (42.7) | $ (0.5) | (57.2) | $ (0.9) |
Changes in foreign currency exchange rates | 19.1 | |||
June 30, 2017 | 1,970.4 | 1,970.4 | ||
Operating Segments | Options | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
December 31, 2016 | 2 | |||
Additions | 209.7 | |||
Dispositions | (0.2) | |||
Amortization | (6) | |||
Changes in foreign currency exchange rates | 0 | |||
June 30, 2017 | 205.5 | 205.5 | ||
Operating Segments | U.S. Equities | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
December 31, 2016 | 0 | |||
Additions | 1,146.1 | |||
Dispositions | 0 | |||
Amortization | (29.7) | |||
Changes in foreign currency exchange rates | 0 | |||
June 30, 2017 | 1,116.4 | 1,116.4 | ||
Operating Segments | European Equities | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
December 31, 2016 | 0 | |||
Additions | 416.1 | |||
Dispositions | 0 | |||
Amortization | 9.5 | |||
Changes in foreign currency exchange rates | 19.1 | |||
June 30, 2017 | 425.7 | 425.7 | ||
Operating Segments | Global FX | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
December 31, 2016 | 0 | |||
Additions | 228.1 | |||
Dispositions | 0 | |||
Amortization | (11.4) | |||
Changes in foreign currency exchange rates | 0 | |||
June 30, 2017 | 216.7 | 216.7 | ||
Corporate Items and Eliminations | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
December 31, 2016 | 6.7 | |||
Additions | 0 | |||
Dispositions | 0 | |||
Amortization | (0.6) | |||
Changes in foreign currency exchange rates | 0 | |||
June 30, 2017 | $ 6.1 | $ 6.1 |
GOODWILL AND INTANGIBLE ASSET67
GOODWILL AND INTANGIBLE ASSETS, NET - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization | $ 42.7 | $ 0.5 | $ 57.2 | $ 0.9 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Future amortization expense, remainder of 2017 | 84.7 | 84.7 | ||
Future amortization expense, 2018 | 158.1 | 158.1 | ||
Future amortization expense, 2019 | 137.2 | 137.2 | ||
Future amortization expense, 2020 | 120.8 | 120.8 | ||
Future amortization expense, 2021 | 105.6 | 105.6 | ||
Future amortization expense, 2022 | $ 93.4 | $ 93.4 |
GOODWILL AND INTANGIBLE ASSET68
GOODWILL AND INTANGIBLE ASSETS, NET - SCHEDULE OF INTANGIBLE ASSETS BY CATEGORY (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 1,970.4 | $ 8.7 |
Customer relationships | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 20 years | 9 years |
Market data customer relationships | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 15 years | |
Technology | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 7 years | 4 years |
Trademarks and tradenames | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 2 years | 6 years |
Other | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 2 years | 2 years |
Operating Segments | Options | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (6.6) | $ (0.6) |
Intangible assets, net | 205.5 | 2 |
Operating Segments | Options | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 38 | 0.9 |
Operating Segments | Options | Market data customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 53.6 | 0 |
Operating Segments | Options | Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 23.4 | 1.1 |
Operating Segments | Options | Trademarks and tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1.4 | 0.4 |
Operating Segments | Options | Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 0.2 | 0.2 |
Operating Segments | Options | Trading registrations and licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, gross | 95.5 | 0 |
Operating Segments | U.S. Equities | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | (29.7) | 0 |
Intangible assets, net | 1,116.4 | 0 |
Operating Segments | U.S. Equities | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 222.9 | 0 |
Operating Segments | U.S. Equities | Market data customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 322 | 0 |
Operating Segments | U.S. Equities | Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 22.5 | 0 |
Operating Segments | U.S. Equities | Trademarks and tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 6 | 0 |
Operating Segments | U.S. Equities | Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 0 | 0 |
Operating Segments | U.S. Equities | Trading registrations and licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, gross | 572.7 | 0 |
Operating Segments | European Equities | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | (9.5) | 0 |
Intangible assets, net | 425.7 | 0 |
Operating Segments | European Equities | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 167.3 | 0 |
Operating Segments | European Equities | Market data customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 62.8 | 0 |
Operating Segments | European Equities | Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 23.5 | 0 |
Operating Segments | European Equities | Trademarks and tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1.9 | 0 |
Operating Segments | European Equities | Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 0 | 0 |
Operating Segments | European Equities | Trading registrations and licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, gross | 179.7 | 0 |
Operating Segments | Global FX | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | (11.4) | 0 |
Intangible assets, net | 216.7 | 0 |
Operating Segments | Global FX | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 140 | 0 |
Operating Segments | Global FX | Market data customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 64.4 | 0 |
Operating Segments | Global FX | Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 22.5 | 0 |
Operating Segments | Global FX | Trademarks and tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1.2 | 0 |
Operating Segments | Global FX | Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 0 | 0 |
Operating Segments | Global FX | Trading registrations and licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, gross | 0 | 0 |
Corporate Items and Eliminations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | (1.9) | (1.3) |
Intangible assets, net | 6.1 | 6.7 |
Corporate Items and Eliminations | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 3 | 3 |
Corporate Items and Eliminations | Market data customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 0 | 0 |
Corporate Items and Eliminations | Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 4 | 4 |
Corporate Items and Eliminations | Trademarks and tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1 | 1 |
Corporate Items and Eliminations | Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 0 | 0 |
Corporate Items and Eliminations | Trading registrations and licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, gross | $ 0 | $ 0 |
ACCOUNTS PAYABLE AND ACCRUED 69
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Compensation and benefit-related liabilities | $ 11.9 | $ 25.1 |
Termination benefits | 5.5 | 0.4 |
Royalties | 18.2 | 17.8 |
Accrued liabilities | 51.5 | 25.4 |
Marketing fee payable | 9 | 7.2 |
Accounts payable | 54.9 | 6.5 |
Total | $ 151 | $ 82.4 |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 29, 2017 | Jan. 12, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 1,411.3 | $ 0 | ||
Term Loan Agreement | Term Loan Agreement | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 468.7 | 0 | ||
Senior Notes | 3.650% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 643.6 | 0 | ||
Interest rate | 3.65% | 3.65% | ||
Senior Notes | 1.950% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 299 | 0 | ||
Interest rate | 1.95% | |||
Line of Credit | Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 0 | $ 0 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | Feb. 28, 2017USD ($) | Dec. 15, 2016USD ($) | Sep. 25, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 29, 2017USD ($) | Jan. 12, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||||
Proceeds from long-term debt | $ 1,944,200,000 | $ 0 | ||||||||
Unamortized discount on Notes | $ 5,800,000 | 5,800,000 | ||||||||
Deferred financing costs | 7,900,000 | 7,900,000 | $ 6,200,000 | |||||||
Amortization of debt issuance cost | 1,000,000 | $ 0 | ||||||||
Borrowings outstanding | $ 1,411,300,000 | $ 1,411,300,000 | ||||||||
Bats Global Markets, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount secured to finance the cash portion of pending acquisition | $ 1,650,000,000 | |||||||||
Bridge Facility | Bridge Facility | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility, maximum borrowing capacity | $ 1,650,000,000 | |||||||||
Term of facility | 364 days | |||||||||
Payments of commitment and structuring fees | $ 6,000,000 | |||||||||
Amortization of commitment and structuring fees | $ 6,000,000 | |||||||||
Term Loan Agreement | Term Loan Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan agreement, maximum borrowing capacity | 1,000,000,000 | |||||||||
Minimum consolidated interest ratio | 4 | |||||||||
Maximum consolidated leverage ratio | 3.50 | 3.50 | ||||||||
Proceeds from long-term debt | $ 1,000,000,000 | |||||||||
Term Loan Agreement | Term Loan Agreement | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Ticking fee | 0.10% | |||||||||
Term Loan Agreement | Term Loan Agreement | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Ticking fee | 0.30% | |||||||||
Term Loan Agreement | Term Loan Agreement | LIBOR | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 1.00% | |||||||||
Term Loan Agreement | Term Loan Agreement | LIBOR | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 1.75% | |||||||||
Term Loan Agreement | Term Loan Agreement | Prime Rate | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 0.00% | |||||||||
Term Loan Agreement | Term Loan Agreement | Prime Rate | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 0.75% | |||||||||
Senior Notes | 3.650% Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal issued | $ 300,000,000 | $ 650,000,000 | ||||||||
Interest rate | 3.65% | 3.65% | 3.65% | |||||||
Redemption price | 101.00% | |||||||||
Senior Notes | Senior Notes due 2019 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal issued | $ 300,000,000 | |||||||||
Interest rate | 1.95% | |||||||||
Deferred financing costs | $ 800,000 | |||||||||
Amortization of debt issuance cost | $ 900,000 | $ 900,000 | ||||||||
Line of Credit | Revolving Credit Agreement | Revolving Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility, maximum borrowing capacity | $ 150,000,000 | |||||||||
Minimum consolidated interest ratio | 4 | |||||||||
Maximum consolidated leverage ratio | 3.50 | 3.50 | ||||||||
Term of facility | 5 years | |||||||||
Maximum borrowing capacity, increase limit | $ 100,000,000 | |||||||||
Maximum borrowing capacity, total with increase | 250,000,000 | |||||||||
Borrowings outstanding | $ 0 | $ 0 | ||||||||
Borrowing capacity available | $ 150,000,000 | $ 150,000,000 | ||||||||
Line of Credit | Revolving Credit Agreement | Revolving Credit Agreement | LIBOR | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 1.00% | |||||||||
Line of Credit | Revolving Credit Agreement | Revolving Credit Agreement | LIBOR | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 1.75% | |||||||||
Line of Credit | Revolving Credit Agreement | Revolving Credit Agreement | Prime Rate | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 0.00% | |||||||||
Line of Credit | Revolving Credit Agreement | Revolving Credit Agreement | Prime Rate | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable interest rate | 0.75% | |||||||||
Line of Credit | Revolving Credit Agreement | Bridge Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility, maximum borrowing capacity | $ 25,000,000 |
DEBT - Schedule of Debt Repayme
DEBT - Schedule of Debt Repayments (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Long-term Debt | ||
2,017 | $ 0 | |
2,018 | 0 | |
2,019 | 300 | |
2,020 | 0 | |
2,021 | 0 | |
Thereafter | 1,125 | |
Principal amounts repayable | 1,425 | |
Debt issuance cost | (7.9) | $ (6.2) |
Unamortized discount on Notes | (5.8) | |
Total debt outstanding | $ 1,411.3 |
DEBT - Schedule of Interest Exp
DEBT - Schedule of Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Debt Disclosure [Abstract] | ||||
Contractual interest | $ 10.9 | $ 0 | $ 18.5 | $ 0 |
Amortization of debt discount | 0.2 | 0 | 0.2 | 0 |
Amortization of debt issuance cost | 1.4 | 0 | 2.3 | 0 |
Interest expense | 12.5 | 0 | 21 | 0 |
Interest income | 0 | 0 | (0.6) | 0 |
Interest expense, net | $ 12.5 | $ 0 | $ 20.4 | $ 0 |
ACCUMULATED OTHER COMPREHENSI74
ACCUMULATED OTHER COMPREHENSIVE INCOME, NET - Schedule of Accumulated Other Comprehensive Loss, Net (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
December 31, 2016 | $ 317.9 |
Other comprehensive income | 30.4 |
June 30, 2017 | 2,816.7 |
Total Other Comprehensive Income | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
December 31, 2016 | (0.8) |
Other comprehensive income | 30.4 |
June 30, 2017 | 29.6 |
Foreign Currency Translation | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
December 31, 2016 | 0 |
Other comprehensive income | 30.2 |
June 30, 2017 | 30.2 |
Unrealized Investment Gain/Loss | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
December 31, 2016 | 0 |
Other comprehensive income | 0.2 |
June 30, 2017 | 0.2 |
Post-Retirement Benefits | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
December 31, 2016 | (0.8) |
Other comprehensive income | 0 |
June 30, 2017 | $ (0.8) |
FAIR VALUE MEASUREMENTS - Sche
FAIR VALUE MEASUREMENTS - Schedule of Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Available-for-sale investments | $ 109.9 | |
Trading investments | 0.5 | |
Money market funds | 148.6 | $ 97.3 |
Total assets | 501 | 227.7 |
Liabilities: | ||
Contingent consideration liability | 56.2 | |
Total liabilities | 1,673.3 | 6.5 |
Money market funds | ||
Assets: | ||
Money market funds | 31.5 | 67.5 |
U.S. Treasury securities | ||
Assets: | ||
Available-for-sale investments | 109.9 | |
Trading investments | 0.5 | |
Level 1 | ||
Assets: | ||
Available-for-sale investments | 109.9 | |
Trading investments | 0.5 | |
Money market funds | 148.6 | 97.3 |
Total assets | 501 | 227.7 |
Liabilities: | ||
Contingent consideration liability | 0 | |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Available-for-sale investments | 0 | |
Trading investments | 0 | |
Money market funds | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration liability | 0 | |
Total liabilities | 1,617.1 | 6.5 |
Level 3 | ||
Assets: | ||
Available-for-sale investments | 0 | |
Trading investments | 0 | |
Money market funds | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration liability | 56.2 | |
Total liabilities | 56.2 | 0 |
Recurring | ||
Assets: | ||
Total assets | 141.9 | 67.5 |
Liabilities: | ||
Contingent consideration liability | 56.2 | |
Total liabilities | 56.2 | |
Recurring | Money market funds | ||
Assets: | ||
Money market funds | 31.5 | 67.5 |
Recurring | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale investments | 109.9 | |
Trading investments | 0.5 | |
Recurring | Level 1 | ||
Assets: | ||
Total assets | 141.9 | 67.5 |
Liabilities: | ||
Contingent consideration liability | 0 | |
Total liabilities | 0 | |
Recurring | Level 1 | Money market funds | ||
Assets: | ||
Money market funds | 31.5 | 67.5 |
Recurring | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale investments | 109.9 | |
Trading investments | 0.5 | |
Recurring | Level 2 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration liability | 0 | |
Total liabilities | 0 | |
Recurring | Level 2 | Money market funds | ||
Assets: | ||
Money market funds | 0 | 0 |
Recurring | Level 2 | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale investments | 0 | |
Trading investments | 0 | |
Recurring | Level 3 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration liability | 56.2 | |
Total liabilities | 56.2 | |
Recurring | Level 3 | Money market funds | ||
Assets: | ||
Money market funds | 0 | $ 0 |
Recurring | Level 3 | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale investments | 0 | |
Trading investments | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Millions | Jun. 30, 2017USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration agreement | $ 56.2 |
Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration agreement | 56.2 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration agreement | 56.2 |
Level 3 | Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration agreement | $ 56.2 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value Hierarchy of Financial Instruments Held (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Cash and cash equivalents | $ 148.6 | $ 97.3 |
Trading investments | 0.5 | |
Available-for-sale investments | 109.9 | |
Accounts receivable | 231.3 | 76.7 |
Income tax receivable | 10.7 | 53.7 |
Total assets | 501 | 227.7 |
Liabilities: | ||
Accounts payable | 54.9 | 6.5 |
Section 31 fees payable | 150.9 | |
Contingent consideration liability | 56.2 | |
Long-term debt | 1,411.3 | |
Total liabilities | 1,673.3 | 6.5 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 148.6 | 97.3 |
Trading investments | 0.5 | |
Available-for-sale investments | 109.9 | |
Accounts receivable | 231.3 | 76.7 |
Income tax receivable | 10.7 | 53.7 |
Total assets | 501 | 227.7 |
Liabilities: | ||
Accounts payable | 0 | 0 |
Section 31 fees payable | 0 | |
Contingent consideration liability | 0 | |
Long-term debt | 0 | |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Trading investments | 0 | |
Available-for-sale investments | 0 | |
Accounts receivable | 0 | 0 |
Income tax receivable | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Accounts payable | 54.9 | 6.5 |
Section 31 fees payable | 150.9 | |
Contingent consideration liability | 0 | |
Long-term debt | 1,411.3 | |
Total liabilities | 1,617.1 | 6.5 |
Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Trading investments | 0 | |
Available-for-sale investments | 0 | |
Accounts receivable | 0 | 0 |
Income tax receivable | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Accounts payable | 0 | 0 |
Section 31 fees payable | 0 | |
Contingent consideration liability | 56.2 | |
Long-term debt | 0 | |
Total liabilities | $ 56.2 | $ 0 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Changes in the Fair Value of the Company's Level 3 Financial Liabilities (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of the period | $ 0 |
Acquired During Period | 56.2 |
Settlements | 0 |
Balance at the end of the period | 56.2 |
Contingent consideration liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of the period | 0 |
Acquired During Period | 56.2 |
Settlements | 0 |
Balance at the end of the period | $ 56.2 |
REDEEMABLE NONCONTROLLING INT79
REDEEMABLE NONCONTROLLING INTEREST - Schedule of Redeemable Noncontrolling Interest (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
December 31, 2016 | $ 12.6 |
Net loss attributable to redeemable noncontrolling interest | (0.6) |
Redemption value adjustment | 0.6 |
June 30, 2017 | $ 12.6 |
SEGMENT REPORTING - Summarized
SEGMENT REPORTING - Summarized Financial Information by Reportable Segment (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 5 | |||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 640.8 | $ 173.1 | $ 997 | $ 343.6 |
Operating income (loss) | 117.8 | 78 | 143.9 | 157.5 |
Operating Segments | Options | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 233.5 | 141.7 | 426.2 | 287.6 |
Operating income (loss) | 61.2 | 53.6 | 126.2 | 115.9 |
Operating Segments | U.S. Equities | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 331.1 | 0 | 451.3 | 0 |
Operating income (loss) | 33.3 | 0 | 45.5 | 0 |
Operating Segments | Futures | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 37.5 | 31.4 | 67.4 | 56 |
Operating income (loss) | 33.4 | 26.5 | 59.3 | 46.7 |
Operating Segments | European Equities | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 27.6 | 0 | 36.9 | 0 |
Operating income (loss) | 3.5 | 0 | 5.1 | 0 |
Operating Segments | Global FX | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 10.9 | 0 | 14.9 | 0 |
Operating income (loss) | (4.1) | 0 | (5.3) | 0 |
Corporate Items and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.2 | 0 | 0.3 | 0 |
Operating income (loss) | $ (9.5) | $ (2.1) | $ (86.9) | $ (5.1) |
EMPLOYEE BENEFITS - Narrative
EMPLOYEE BENEFITS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Chicago Board Options Exchange SMART Plan, Supplemental Employee Retirement Plan, Executive Retirement Plan and Deferred Compensation Plan | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Company contribution amount | $ 2.7 | $ 2.7 | $ 5.3 | $ 4 |
Chicago Board Options Exchange SMART Plan, Supplemental Employee Retirement Plan, Executive Retirement Plan and Deferred Compensation Plan | Acquisition Related Costs | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Company contribution amount | 1.2 | |||
Legacy BATS Employee 401k Plan | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Company contribution amount | 0.5 | $ 0.7 | ||
Company match of employee contributions | 5.00% | |||
BATs Stakeholder Contribution Plan | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Company contribution amount | $ 0.1 | $ 0.2 | ||
Company match of employee contributions | 5.00% |
REGULATORY CAPITAL - Narrative
REGULATORY CAPITAL - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Brokers and Dealers [Abstract] | |
Net capital | $ 10.1 |
Excess net capital | 9.7 |
Required net capital | 0.4 |
Financial resources requirement | 19.5 |
Capital in excess of financial resources requirement | 22 |
Capital resources requirement | 0.1 |
Capital in excess of capital resources requirement | 0.4 |
Annual operating expenses for swap execution facility capital adequacy tests | 1.6 |
Six month operating expenses for swap execution facility capital adequacy tests | 0.8 |
Annual operating expenses for registered futures exchange capital adequacy tests | 17.8 |
Six month operating expenses for registered futures exchange capital adequacy tests | $ 9.7 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Millions | May 18, 2017$ / sharesshares | May 15, 2017$ / sharesshares | Feb. 28, 2017$ / sharesshares | Feb. 19, 2017$ / sharesshares | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 172,166 | |||||||
Payments for the purchase of treasury shares | $ | $ 16 | $ 0 | ||||||
Bats Global Markets, Inc. | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share price, measurement period | 10 days | |||||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 15,405 | 2,655 | 251,273 | |||||
Number of shares of common stock of which unit is convertible (in shares) | 1 | 1 | ||||||
Fair value of equity instruments granted (in USD per share) | $ / shares | $ 84.41 | $ 85 | $ 78.05 | $ 80.40 | ||||
Vesting period | 1 year | 3 years | 3 years | 3 years | ||||
Restricted Stock Units | Bats Global Markets, Inc. | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 622,527 | |||||||
Shares used for conversion ratio (in shares) | 0.3201 | |||||||
Share price used for conversion ratio (in USD per share) | $ / shares | $ 10 | |||||||
Restricted Stock Units | First anniversary | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 33.33% | 33.33% | 33.33% | |||||
Restricted Stock Units | Second anniversary | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 33.33% | 33.33% | 33.33% | |||||
Restricted Stock Units | Third anniversary | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 33.33% | 33.33% | 33.33% | |||||
Performance Based Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 19,255 | 41,481 | ||||||
Fair value of equity instruments granted (in USD per share) | $ / shares | $ 102 | $ 111 | ||||||
Vesting period | 3 years | |||||||
Risk-free rate | (0.90%) | |||||||
Expected volatility | (21.10%) | |||||||
Correlation with S&P index | (0.41) | |||||||
Performance Based Restricted Stock Units | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Units ultimately expected to be awarded | 0.00% | |||||||
Performance Based Restricted Stock Units | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Units ultimately expected to be awarded | 200.00% | |||||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ | $ 9.2 | $ 3.7 | 30.1 | $ 7.1 | ||||
Accelerated stock-based compensation expense | $ | $ 9.1 | |||||||
Shares vesting to satisfy the employee income tax withholdings (in shares) | 142,630 | |||||||
Payments for the purchase of treasury shares | $ | $ 11.8 | |||||||
Vested (in shares) | 379,955 | |||||||
Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Risk-free rate | (1.78%) | |||||||
Expected volatility | (19.80%) | |||||||
Unrecognized compensation expense | $ | 2.8 | $ 2.8 | ||||||
Unrecognized compensation expense, period for recognition | 1 year 4 months 24 days | |||||||
Shares vesting to satisfy the employee income tax withholdings (in shares) | 48,099 | |||||||
Payments for the purchase of treasury shares | $ | $ 4.1 | |||||||
Stock options | Bats Global Markets, Inc. | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Acquisition, exchange ratio | 0.4452 | |||||||
Acquisition, exchange ratio basis | 0.3201 | |||||||
Acquisition, exchange ratio price | 10 | |||||||
Acquisition, number of consecutive trading days for volume-weighted average price | 10 days | |||||||
Restricted Stock and Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 1,090,231 | |||||||
Fair value of equity instruments granted (in USD per share) | $ / shares | $ 78.91 | |||||||
Unrecognized compensation expense | $ | $ 63.6 | $ 63.6 | ||||||
Unrecognized compensation expense, period for recognition | 2 years | |||||||
Vested (in shares) | 379,955 | |||||||
Awards Granted February 28, Grant One | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 68,254 | |||||||
Awards Granted February 28, Grant Two | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity instruments granted (in shares) | 49,703 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Number of shares | ||
Beginning balance (in shares) | 0 | |
Granted (in shares) | 683,390 | |
Exercised (in shares) | (172,166) | |
Ending balance (in shares) | 511,224 | 0 |
Weighted average exercise price | ||
Beginning balance (in USD per share) | $ 0 | |
Granted (in USD per share) | 22.45 | |
Exercised (in USD per share) | 17.20 | |
Ending balance (in USD per share) | $ 24.22 | $ 0 |
Weighted average remaining contractual term (years) | ||
Granted | 4 years 9 months 24 days | |
Outstanding | 5 years 3 months 12 days | 0 years |
Aggregate intrinsic value | ||
Beginning balance | $ 0 | |
Granted | 40.1 | |
Ending balance | $ 34.3 | $ 0 |
Exercisable | ||
Number of shares (in shares) | 430,156 | |
Weighted average exercise price (in USD per share) | $ 23.49 | |
Weighted average remaining contractual term (years) | 4 years 10 months 25 days | |
Aggregate intrinsic value | $ 29.2 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value of Assumptions for Options Granted (Details) - Stock options | 6 Months Ended |
Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years 2 months 12 days |
Expected volatility | 19.80% |
Expected dividend yield | 1.30% |
Risk-free rate | 1.78% |
Forfeiture rate | 0.00% |
STOCK-BASED COMPENSATION - Nonv
STOCK-BASED COMPENSATION - Nonvested Options Activity (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Options | |
Beginning balance (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Granted (in shares) | shares | 81,068 |
Forfeited (in shares) | shares | 0 |
Ending balance (in shares) | shares | 81,068 |
Weighted average grant-date fair value | |
Beginning balance (in USD per share) | $ / shares | $ 0 |
Vested (in USD per share) | $ / shares | 0 |
Granted (in USD per share) | $ / shares | 49.17 |
Forfeited (in USD per share) | $ / shares | 0 |
Ending balance (in USD per share) | $ / shares | $ 49.17 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Activity (Details) - Restricted Stock and Restricted Stock Units | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Number of shares | |
Beginning balance (in shares) | shares | 480,595 |
Granted (in shares) | shares | 1,090,231 |
Vested (in shares) | shares | (379,955) |
Forfeited (in shares) | shares | (4,104) |
Ending balance (in shares) | shares | 1,186,767 |
Weighted average grant date fair value | |
Beginning balance (in USD per share) | $ / shares | $ 63.44 |
Granted (in USD per share) | $ / shares | 78.91 |
Vested (in USD per share) | $ / shares | 66.03 |
Forfeited (in USD per share) | $ / shares | 72.83 |
Ending balance (in USD per share) | $ / shares | $ 76.31 |
INCOME TAXES - Narrative (Deta
INCOME TAXES - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 35.90% | 39.20% | 33.10% | 39.10% |
NET INCOME PER COMMON SHARE (De
NET INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic and Diluted EPS Numerator: | ||||
Net Income | $ 68 | $ 50.9 | $ 83.2 | $ 100.1 |
Net loss attributable to redeemable noncontrolling interest | 0.3 | 0.3 | 0.6 | 0.5 |
Net Income Excluding Noncontrolling Interest | 68.3 | 51.2 | 83.8 | 100.6 |
Change in redemption value of noncontrolling interest | (0.3) | (0.3) | (0.6) | (0.5) |
Net income allocated to participating securities | (0.7) | (0.2) | (0.8) | (0.4) |
Net Income Allocated to Common Stockholders | $ 67.3 | $ 50.7 | $ 82.4 | $ 99.7 |
Basic EPS Denominator: | ||||
Weighted average shares outstanding (in shares) | 112,100 | 81,300 | 102,100 | 81,600 |
Basic Net Income Per Common Share (in dollars per share) | $ 0.60 | $ 0.62 | $ 0.81 | $ 1.22 |
Diluted EPS Denominator: | ||||
Weighted average shares outstanding (in shares) | 112,100 | 81,300 | 102,100 | 81,600 |
Dilutive common shares issued under stock program (in shares) | 400 | 0 | 200 | 0 |
Total Dilutive Weighted Average Shares (in shares) | 112,500 | 81,300 | 102,300 | 81,600 |
Diluted Net Income Per Common Share (in dollars per share) | $ 0.60 | $ 0.62 | $ 0.81 | $ 1.22 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Loss Contingencies [Line Items] | ||||
Rent expense | $ 2.7 | $ 1.7 | $ 4.4 | $ 3.8 |
Minimum | ||||
Loss Contingencies [Line Items] | ||||
Lease terms | 3 months | |||
Maximum | ||||
Loss Contingencies [Line Items] | ||||
Lease terms | 100 months |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - $ / shares | Jul. 28, 2017 | Jun. 30, 2017 |
Subsequent Event [Line Items] | ||
Dividends (in USD per share) | $ 0.50 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Dividends (in USD per share) | $ 0.27 |