Exhibit 99.1
INTERACTIVE BROKERS GROUP ANNOUNCES 2009 RESULTS
— — —
REPORTS INCOME BEFORE TAXES OF $545 MILLION ON $1.1 BILLION IN NET REVENUES, EARNINGS PER SHARE OF $0.87
GREENWICH, CONN, January 21, 2010 — Interactive Brokers Group, Inc. (NASDAQ GS: IBKR) an automated global electronic market maker and broker, today reported diluted earnings per share of $0.87 for the year ended December 31, 2009, compared to diluted earnings per share of $2.24 in 2008.
Net revenues were $1,100 million and income before income taxes was $545 million for the year, compared to net revenues of $1,850 million and income before income taxes of $1,250 million in 2008.
Business Highlights
• | 50% pre-tax profit margin for 2009. |
• | 49% Electronic Brokerage pre-tax margin for 2009. |
• | Customer equity grew by 71%, to $15.2 billion from prior year and customer accounts grew by 21%. |
• | Cleared DARTs were 316,000 in 2009, even with the prior year. |
• | Market Making pre-tax income decreased 68% from the prior year. |
• | 53% Market Making pre-tax profit margin for 2009. |
"In 2009, as a consequence of the credit crises, risk aversion has greatly increased among institutional traders," said Thomas Peterffy, our CEO. “The resulting high option premiums, which we need to pay as part of our hedging costs, were difficult to make up for with trading profits in an environment of shrinking spreads and diminishing volumes.
We have nevertheless, escaped the crises without any losses. As the largest publicly traded non-bank, Broker-Dealer, with equity capital of $4.9 billion, we are well positioned to continue building our business in a strengthening world economy."
Segment Overview
Electronic Brokerage
Electronic Brokerage segment income before income taxes grew 3% in 2009. Customer accounts grew 21% from the prior year and customer equity increased 71% during 2009, partly offset by reduced customer trading activity. Net interest income declined 27% due to the historically low benchmark interest rates. Pre-tax profit margin was 49% for 2009. Total DARTs* for cleared and execution-only customers decreased 3% to 347,000 in 2009, compared to 357,000 during 2008, which was an extraordinarily turbulent year in the markets. Cleared DARTs were 316,000 in 2009, even with the prior year.
Market Making
Market Making segment income before income taxes decreased 68% in 2009. Pre-tax profit margin narrowed to 53% in 2009 from 77% in 2008. Low market volatility, compressed bid/offer spreads in options and heightened competition reduced the trading opportunities for our automated market making system. In the latter part of 2009, the ratio of implied to actual volatility was relatively high, making it expensive to maintain our desired hedged position. We continued to avoid counterparty risks and balance sheet exposure from illiquid positions by making markets primarily in exchange-traded products that are cleared through central clearing houses. Market Making options contract volume decreased by 17% and futures volume decreased by 30% in 2009.
*Daily average revenue trades (DARTs) are based on customer orders.
_____________________
Conference Call Information:
Interactive Brokers Group will hold a conference call with investors today, January 21, 2010, at 5:00 p.m. ET to discuss its 2009 results. Investors who would like to listen to the conference call live should dial 888-213-3754 (U.S. domestic) and 913-312-0865 (international). The number should be dialed approximately ten minutes prior to the start of the conference call. Ask for the “Interactive Brokers Conference Call.”
The conference call will also be accessible simultaneously, and through replays, as an audio webcast through the Investor Relations section of the Interactive Brokers web site, www.interactivebrokers.com/ir.
About Interactive Brokers Group, Inc.:
Interactive Brokers Group, Inc., together with its subsidiaries, is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures, foreign exchange instruments, bonds and funds on more than 80 electronic exchanges and trading venues around the world. As a market maker, we provide liquidity at these marketplaces and, as a broker, we provide professional traders and investors with electronic access to stocks, options, futures, forex, bonds and mutual funds from a single IB Universal AccountSM. Employing proprietary software on a global communications network, Interactive Brokers is continuously integrating its software with a growing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention.
Cautionary Note Regarding Forward-Looking Statements:
The foregoing information contains certain forward-looking statements that reflect the company's current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company's operations and business environment which may cause the company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. Any forward-looking statements in this release are based upon information available to the company on the date of this release. The company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.
For Interactive Brokers Group, Inc. Media: Andrew Wilkinson, 203-913-1369 or Investors: Deborah Liston, 203-618-4070.
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
OPERATING DATA
TRADE VOLUMES:
(in 000's, except %)
| | | | | Brokerage | | | | |
| Market | | Brokerage | | Non | | | | Avg. Trades |
| Making | % | Cleared | % | Cleared | % | Total | % | per U.S. |
Period | Trades | Change | Trades | Change | Trades | Change | Trades | Change | Trading Day |
2003 | 32,772 | | 22,748 | | 2,367 | | 57,887 | | 230 |
2004 | 41,506 | 27% | 28,876 | 27% | 2,932 | 24% | 73,314 | 27% | 290 |
2005 | 54,044 | 30% | 34,800 | 21% | 7,380 | 152% | 96,224 | 31% | 382 |
2006 | 66,043 | 22% | 51,238 | 47% | 12,828 | 74% | 130,109 | 35% | 518 |
2007 | 99,086 | 50% | 72,931 | 42% | 16,638 | 30% | 188,655 | 45% | 752 |
2008 | 101,672 | 3% | 120,195 | 65% | 16,966 | 2% | 238,833 | 27% | 944 |
2009 | 93,550 | -8% | 127,338 | 6% | 13,636 | -20% | 234,524 | -2% | 934 |
| | | | | | | | | |
4Q2008 | 29,628 | | 33,187 | | 3,953 | | 66,768 | | 1,043 |
4Q2009 | 19,671 | -34% | 31,664 | -5% | 4,590 | 16% | 55,925 | -16% | 888 |
CONTRACT AND SHARE VOLUMES:
(in 000’s, except %)
TOTAL
| Options | % | Futures* | % | Stocks | % |
Period | (contracts) | Change | (contracts) | Change | (shares) | Change |
2003 | 194,358 | | 31,034 | | 17,038,250 | |
2004 | 269,715 | 39% | 37,748 | 22% | 17,487,528 | 3% |
2005 | 409,794 | 52% | 44,560 | 18% | 21,925,120 | 25% |
2006 | 563,623 | 38% | 62,419 | 40% | 34,493,410 | 57% |
2007 | 673,144 | 19% | 83,134 | 33% | 47,324,798 | 37% |
2008 | 757,732 | 13% | 108,984 | 31% | 55,845,428 | 18% |
2009 | 643,380 | -15% | 82,345 | -24% | 75,449,891 | 35% |
| | | | | | |
4Q2008 | 179,024 | | 26,284 | | 15,902,631 | |
4Q2009 | 156,058 | -13% | 19,687 | -25% | 19,521,440 | 23% |
MARKET MAKING
| Options | % | Futures* | % | Stocks | % |
Period | (contracts) | Change | (contracts) | Change | (shares) | Change |
2003 | 177,459 | | 6,638 | | 12,578,584 | |
2004 | 236,569 | 33% | 10,511 | 58% | 12,600,280 | 0% |
2005 | 308,613 | 30% | 11,551 | 10% | 15,625,801 | 24% |
2006 | 371,929 | 21% | 14,818 | 28% | 21,180,377 | 36% |
2007 | 447,905 | 20% | 14,520 | -2% | 24,558,314 | 16% |
2008 ** | 514,629 | 15% | 21,544 | 48% | 26,008,433 | 6% |
2009 ** | 428,810 | -17% | 15,122 | -30% | 26,205,229 | 1% |
| | | | | | |
4Q2008 ** | 127,468 | | 5,776 | | 8,085,820 | |
4Q2009 ** | 97,520 | -23% | 3,446 | -40% | 5,378,987 | -33% |
____________________
* Includes options on futures
** In Brazil, an equity option contract typically represents 1 share of the underlying stock; however, the typical minimum trading quantity is 100
contracts. To make a fair comparison to volume at other exchanges, we have adopted a policy of reporting Brazilian equity options contracts
divided by their trading quantity of 100.
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
OPERATING DATA, CONTINUED
BROKERAGE TOTAL
| Options | % | Futures* | % | Stocks | % |
Period | (contracts) | Change | (contracts) | Change | (shares) | Change |
2003 | 16,898 | | 24,396 | | 4,459,667 | |
2004 | 33,146 | 96% | 27,237 | 12% | 4,887,247 | 10% |
2005 | 101,181 | 205% | 33,009 | 21% | 6,299,319 | 29% |
2006 | 191,694 | 89% | 47,601 | 44% | 13,313,033 | 111% |
2007 | 225,239 | 17% | 68,614 | 44% | 22,766,484 | 71% |
2008 | 243,103 | 8% | 87,440 | 27% | 29,836,995 | 31% |
2009 | 214,570 | -12% | 67,223 | -23% | 49,244,662 | 65% |
| | | | | | |
4Q2008 | 51,556 | | 20,508 | | 7,816,811 | |
4Q2009 | 58,538 | 14% | 16,241 | -21% | 14,142,453 | 81% |
| Options | % | Futures* | % | Stocks | % |
Period | (contracts) | Change | (contracts) | Change | (shares) | Change |
2003 | 11,351 | | 19,086 | | 3,612,503 | |
2004 | 16,438 | 45% | 24,118 | 26% | 4,339,462 | 20% |
2005 | 23,456 | 43% | 30,646 | 27% | 5,690,308 | 31% |
2006 | 32,384 | 38% | 45,351 | 48% | 12,492,870 | 120% |
2007 | 51,586 | 59% | 66,278 | 46% | 20,353,584 | 63% |
2008 | 77,207 | 50% | 85,599 | 29% | 26,334,752 | 29% |
2009 | 93,868 | 22% | 66,241 | -23% | 46,627,344 | 77% |
| | | | | | |
4Q2008 | 18,711 | | 20,164 | | 6,961,864 | |
4Q2009 | 23,679 | 27% | 15,977 | -21% | 13,335,438 | 92% |
__________________
* Includes options on futures
BROKERAGE STATISTICS
(in 000's, except % and where noted)
| 4Q2009 | 4Q2008 | % Change |
Total Accounts | 134 | 111 | 21% |
Customer Equity (in billions) * | $15.2 | $8.9 | 71% |
Cleared DARTs | 309 | 340 | -9% |
Total Customer DARTs | 346 | 372 | -7% |
| | | |
(in $'s, except DART per account) | | | |
Commission per DART | $4.36 | $3.86 | 13% |
DART per Avg. Account (Annualized) | 597 | 789 | -24% |
Net Revenue per Avg. Account (Annualized) | $3,529 | $3,939 | -10% |
___________________
* Excludes non-customers
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(UNAUDITED)
| | Three Months | | Twelve Months |
| | Ended December 31, | | Ended December 31, |
| | 2009 | | 2008 | | 2009 | | 2008 |
| | (in millions) |
Market Making | Net revenues | $ 75.2 | | $ 308.8 | | $ 626.4 | | $ 1,343.5 |
| Non-interest expenses | 78.7 | | 87.2 | | 295.6 | | 315.9 |
| | | | | | | | |
| Income before income taxes | $ (3.5) | | $ 221.6 | | $ 330.8 | | $ 1,027.6 |
| | | | | | | | |
| Pre-tax profit margin | -5% | | 72% | | 53% | | 77% |
| | | | | | | | |
Electronic Brokerage | Net revenues | $ 125.1 | | $ 118.7 | | $ 474.4 | | $ 505.8 |
| Non-interest expenses | 63.5 | | 75.7 | | 243.2 | | 281.8 |
| | | | | | | | |
| Income before income taxes | $ 61.6 | | $ 43.0 | | $ 231.2 | | $ 224.0 |
| | | | | | | | |
| Pre-tax profit margin | 49% | | 36% | | 49% | | 44% |
| | | | | | | | |
Corporate* | Net revenues | $ 0.1 | | $1.8 | | $ (0.5) | | $ 0.8 |
| Non-interest expenses | 6.0 | | (2.6) | | 17.0 | | 2.7 |
| | | | | | | | |
| Income before income taxes | $ (5.9) | | $ 4.4 | | $ (17.5) | | $ (1.9) |
| | | | | | | | |
| | | | | | | | |
Total | Net revenues | $ 200.4 | | $ 429.3 | | $ 1,100.3 | | $ 1,850.1 |
| Non-interest expenses | 148.2 | | 160.3 | | 555.8 | | 600.4 |
| | | | | | | | |
| Income before income taxes | $ 52.2 | | $ 269.0 | | $ 544.5 | | $ 1,249.7 |
| | | | | | | | |
| Pre-tax profit margin | 26% | | 63% | | 50% | | 68% |
* Corporate includes corporate related activities as well as inter-segment eliminations.
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Three Months | | Twelve Months |
| Ended December 31, | | Ended December 31, |
| 2009 | | 2008 | | 2009 | | 2008 |
| (in millions, except share and per share data) |
Revenues: | | | | | | | |
Trading gains | $ 75.1 | | $ 298.0 | | $ 633.9 | | $ 1,304.0 |
Commissions and execution fees | 89.5 | | 87.6 | | 353.0 | | 359.5 |
Interest income | 31.9 | | 63.4 | | 121.6 | | 437.2 |
Other income | 19.3 | | 25.8 | | 61.3 | | 81.4 |
| | | | | | | |
Total revenues | 215.8 | | 474.8 | | 1,169.8 | | 2,182.1 |
| | | | | | | |
Interest expense | 15.4 | | 45.5 | | 69.5 | | 332.0 |
| | | | | | | |
Total net revenues | 200.4 | | 429.3 | | 1,100.3 | | 1,850.1 |
| | | | | | | |
Non-interest expenses: | | | | | | | |
Execution and clearing | 71.8 | | 78.7 | | 273.2 | | 322.7 |
Employee compensation and benefits | 47.5 | | 38.6 | | 175.8 | | 158.0 |
Occupancy, depreciation and amortization | 10.9 | | 10.1 | | 40.4 | | 37.7 |
Communications | 6.2 | | 5.3 | | 22.8 | | 18.7 |
General and administrative | 11.8 | | 27.6 | | 43.6 | | 63.3 |
| | | | | | | |
Total non-interest expenses | 148.2 | | 160.3 | | 555.8 | | 600.4 |
| | | | | | | |
Income before income taxes | 52.2 | | 269.0 | | 544.5 | | 1,249.7 |
| | | | | | | |
Income tax expense | 4.3 | | 34.0 | | 54.4 | | 128.4 |
| | | | | | | |
Net income | 47.9 | | 235.0 | | 490.1 | | 1,121.3 |
| | | | | | | |
Net income attributable to non-controlling interests | 45.6 | | 214.7 | | 453.9 | | 1,028.3 |
| | | | | | | |
Net income available for common shareholders | $ 2.3 | | $ 20.3 | | $ 36.2 | | $ 93.0 |
| | | | | | | |
| | | | | | | |
Earnings per share | | | | | | | |
Basic | $ 0.06 | | $ 0.50 | | $ 0.88 | | $ 2.30 |
Diluted | $ 0.06 | | $ 0.49 | | $ 0.87 | | $ 2.24 |
| | | | | | | |
Weighted average common shares outstanding | | | | | | | |
Basic | 41,214,762 | | 40,576,319 | | 40,973,290 | | 40,434,273 |
Diluted | 41,973,635 | | 41,524,142 | | 41,799,489 | | 41,461,018 |
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| | December 31, 2009 | | December 31, 2008 |
| | (in millions) |
Assets | | | | |
Cash and cash equivalents | | $ 806.6 | | $ 943.5 |
Cash and securities - segregated for regulatory purposes | | 6,728.9 | | 4,992.1 |
Securities purchased under agreements to resell | | 413.0 | | 715.7 |
Securities borrowed | | 5,063.0 | | 5,911.9 |
Trading assets, at fair value | | 9,344.0 | | 11,114.7 |
Receivables from customers, net of allowance | | 3,239.6 | | 1,621.2 |
Receivables from brokers, dealers and clearing organizations | | 493.1 | | 2,528.0 |
Other assets | | 517.4 | | 529.6 |
| | | | |
Total assets | | $ 26,605.6 | | $ 28,356.7 |
| | | | |
| | | | |
Liabilities and equity | | | | |
| | | | |
Liabilities | | | | |
Trading liabilities - financial instruments sold but not yet purchased, at fair value | | $ 8,763.2 | | $ 13,476.8 |
Securities loaned | | 1,133.7 | | 656.6 |
Short-term borrowings | | 320.8 | | 208.1 |
Other payables: | | | | |
Customers | | 10,587.7 | | 6,929.6 |
Brokers, dealers and clearing organizations | | 164.5 | | 1,614.8 |
Other payables | | 552.8 | | 619.6 |
| | 11,305.0 | | 9,164.0 |
| | | | |
Senior notes payable and senior secured credit facility | | 205.8 | | 443.1 |
| | | | |
Equity | | | | |
Stockholders' equity | | 574.9 | | 513.9 |
Non-controlling interests | | 4,302.2 | | 3,894.2 |
Total equity | | 4,877.1 | | 4,408.1 |
| | | | |
Total liabilities and equity | | $ 26,605.6 | | $ 28,356.7 |