No the CBOE probably won’t become the TBOE, but they are looking at moving to Texas. The state of Illinois is jacking their taxes by about 25%, so the CBOE is looking at taking thousands of jobs out of state. That would be great for Texas but not so good for Illinois
The Chicago Board Options Exchange, the world’s largest futures exchange operator, may be headed for Florida or Texas in reaction to the state of Illinois raising the board’s state taxes by 25% in January taking with it a hunk of 120,000 jobs in the trading business in Chicago The exchange’s CEO and chairman, Bill Brodsky, told Dow Jones: “We’ve had a series of meetings with people in this state and outside this state.”
The CBOE is a pretty big deal. From its latest annual report:
*Adjusted operating revenues rose eight percent to $433 million in 2010, compared with $402 million the previous year.
*Adjusted operating income rose 13 percent to $176 million, up from $156 million in 2009.
*Adjusted operating margin was a solid 40.7 percent, 2.0 percentage points above the 38.7 percent in 2009.
*Adjusted diluted earnings per share increased to $1.09, six percent above the $1.03 EPS in 2009.
*Generated strong operating cash flow of $135 million compared with $113 million in 2009.
*Returned a portion of available cash to stockholders through quarterly cash dividends of $0.10 per share of common stock in the third and fourth quarters of 2010.
*Retired approximately 12 million restricted shares of Class A-1 and Class A-2 common stock through two concurrent tender offers, thereby reducing total shares outstanding by 12 percent.
*Continued to maintain a debt-free balance sheet and financial flexibility.Is this an attempt to get the state to back off on a tax hike? Undoubtedly. But once in a while, leaders in an industry that employs 120,000 people in well-paying jobs, must remind the state that they are not a piñata for politicians.
The Associated Press report:
CHICAGO (AP) — Chicago-based CBOE Holdings Inc., parent of the Chicago Board Options Exchange, is holding talks with officials of several states about a possible move of its headquarters.
With its action, the CBOE joins the CME Group Inc., the world’s largest futures exchange operator, in considering relocating its headquarters because of an increase in Illinois’ tax rate to 7 percent from 4.8 percent.
CBOE chairman Bill Brodsky told the Chicago Tribune the exchange does not want to leave, but the state’s tax structure as it relates to the exchange “is virtually punitive.”
CME Group has held discussions with at least five states about moving its headquarters and several hundred staff members. However, its main trading floor and other functions would remain in Chicago.
Both exchange operators are talking with Illinois officials.
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