Documentation_and_Entity_Infor
Documentation and Entity Information | 3 Months Ended | ||
Mar. 31, 2014 | 8-May-14 | 8-May-14 | |
Common Class A | Common Class B | ||
Entity Registrant Name | 'INTERACTIVE BROKERS GROUP, INC. | ' | ' |
Entity Central Index Key | '0001381197 | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Fiscal Year Focus | '2014 | ' | ' |
Fiscal Period Focus | 'FY | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Well Known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Common Stock Shares Outstanding | ' | 54,666,825 | 100 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Financial Condition (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $991,439 | $1,213,241 |
Cash and securities - segregated for regulatory purposes | 15,579,679 | 13,991,711 |
Securities borrowed | 2,846,539 | 2,751,501 |
Securities purchased under agreements to resell | 282,748 | 386,316 |
Financial instruments owned, at fair value: | ' | ' |
Financial instruments owned | 2,605,766 | 3,285,313 |
Financial instruments owned and pledged as collateral | 822,434 | 1,163,531 |
Total financial instruments owned | 3,428,200 | 4,448,844 |
Receivables: | ' | ' |
Customers, less allowance for doubtful accounts of $68,024 and $67,999 at March 31, 2014 and December 31, 2013 | 14,413,560 | 13,596,650 |
Receivables from brokers, dealers and clearing organizations | 902,173 | 858,189 |
Receivable from affiliate | 38 | 55 |
Interest receivable | 36,162 | 26,489 |
Total receivables | 15,351,933 | 14,481,383 |
Other assets | 499,838 | 597,704 |
Total assets | 38,980,376 | 37,870,700 |
Liabilities and equity | ' | ' |
Financial instruments sold but not yet purchased, at fair value | 3,170,552 | 3,153,673 |
Securities loaned | 2,931,222 | 2,563,653 |
Short-term borrowings | 33,603 | 24,635 |
Payables: | ' | ' |
Customers | 26,975,572 | 26,319,420 |
Payables to brokers, dealers and clearing organizations | 241,394 | 330,956 |
Payable to affiliate | 287,215 | 287,242 |
Accounts payable, accrued expenses and other liabilities | 93,145 | 96,026 |
Interest payable | 3,467 | 2,969 |
Total payables | 27,600,793 | 27,036,613 |
Total liabilities | 33,736,170 | 32,778,574 |
Stockholders' equity: | ' | ' |
Common stock | 548 | 548 |
Additional paid-in capital | 585,070 | 583,312 |
Retained earnings | 112,491 | 98,868 |
Accumulated other comprehensive income, net of income taxes of $1,059 and $936 at March 31, 2014 and December 31, 2013 | 27,396 | 27,028 |
Treasury stock, at cost, 122,965 and 123,954 shares at March 31, 2014 and December 31, 2013 | -2,462 | -2,492 |
Total stockholders' equity | 723,043 | 707,264 |
Noncontrolling interests | 4,521,163 | 4,384,862 |
Total equity | 5,244,206 | 5,092,126 |
Total liabilities and stockholders' equity | 38,980,376 | 37,870,700 |
Common Class A | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 548 | 548 |
Common Class B | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | $0 | $0 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $68,024 | $67,999 |
Accumulated Other Comprehensive Income, Tax | $1,059 | $936 |
Treasury stock shares | 122,965 | 123,954 |
Common Class A | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 54,789,790 | 54,788,049 |
Common stock, shares outstanding | 54,666,825 | 54,664,095 |
Common Class B | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Shares authorized | 100 | 100 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Trading gains | $127,512 | $18,994 |
Commissions and execution fees | 136,641 | 119,538 |
Interest income | 85,883 | 70,502 |
Other income | 19,158 | 19,911 |
Total revenues | 369,194 | 228,945 |
Interest expense | 14,286 | 12,871 |
Total net revenues | 354,908 | 216,074 |
Non-interest expenses: | ' | ' |
Execution and clearing | 54,210 | 59,540 |
Employee compensation and benefits | 53,486 | 46,318 |
Occupancy, depreciation and amortization | 9,819 | 10,069 |
Communications | 6,002 | 5,453 |
General and administrative | 13,247 | 12,471 |
Total non-interest expenses | 136,764 | 133,851 |
Income before income taxes | 218,144 | 82,223 |
Income tax expense | 16,950 | 6,935 |
Net income | 201,194 | 75,288 |
Less net income attributable to noncontrolling interests | 182,105 | 68,731 |
Net income available for common stockholders | 19,089 | 6,557 |
Earnings per share: | ' | ' |
Basic | $0.35 | $0.14 |
Diluted | $0.34 | $0.14 |
Weighted average common shares outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 54,664,225 | 47,499,898 |
Weighted Average Number of Shares Outstanding, Diluted | 56,041,282 | 47,688,314 |
Comprehensive income: | ' | ' |
Net income available for common stockholders | 19,089 | 6,557 |
Other comprehensive income: | ' | ' |
Cumulative translation adjustment, before income taxes | 491 | -3,735 |
Income taxes related to items of other comprehensive income | 123 | 7 |
Other comprehensive income (loss), net of tax | 368 | -3,742 |
Comprehensive income available for common stockholders | 19,457 | 2,815 |
Comprehensive income attributable to noncontrolling interests: | ' | ' |
Net income attributable to noncontrolling interests | 182,105 | 68,731 |
Other comprehensive income (loss) - cumulative translation adjustment | 3,120 | -27,621 |
Comprehensive income attributable to noncontrolling interests | $185,225 | $41,110 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $201,194 | $75,288 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Deferred income taxes | 2,390 | 9,759 |
Depreciation and amortization | 4,896 | 4,969 |
Employee stock plan compensation | 10,051 | 8,470 |
(Gains) Losses on other investments, net | -162 | 133 |
Bad debt expense | 743 | 454 |
Change in operating assets and liabilities: | ' | ' |
(Increase) decrease in cash and securities - segregated for regulatory purposes | -1,585,783 | 42,571 |
Increase in securities borrowed | -95,038 | -907,250 |
Decrease (increase) in securities purchased under agreements to resell | 103,568 | -33,038 |
Decrease (increase) in financial instruments owned | 1,020,583 | -117,573 |
Increase in receivables from customers | -817,653 | -1,333,080 |
(Increase) decrease in other receivables | -53,640 | 34,475 |
Increase in other assets | -1,136 | -7,943 |
Increase in financial instruments sold but not yet purchased | 16,879 | 81,127 |
Increase in securities loaned | 367,569 | 359,492 |
Increase in payable to customers | 656,152 | 1,638,924 |
Decrease in other payables | -89,674 | -65,689 |
Net cash provided by operating activities | -259,061 | -208,911 |
Cash flows from investing activities: | ' | ' |
Purchases of other investments | -60,368 | -67,482 |
Proceeds from sales of other investments | 152,561 | 67,234 |
Distributions received from and redemptions of equity investments | 0 | 11,054 |
Purchase of property and equipment | -4,707 | -3,702 |
Net cash used in investing activities | 87,486 | 7,104 |
Cash flows from financing activities: | ' | ' |
Dividends paid to shareholders | -5,466 | -4,750 |
Dividends paid to noncontrolling interests | -57,217 | -35,137 |
Increase (decrease) in short-term borrowings, net | 8,968 | -91,573 |
Net cash used in financing activities | -53,715 | -131,460 |
Effect of exchange rate changes on cash and cash equivalents | 3,488 | -31,364 |
Net decrease in cash and cash equivalents | -221,802 | -364,631 |
Cash and cash equivalents at beginning of period | 1,213,241 | 1,380,599 |
Cash and cash equivalents at end of period | 991,439 | 1,015,968 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 13,788 | 14,460 |
Cash paid for taxes | 26,533 | 20,628 |
Non-cash financing activities: | ' | ' |
Adjustments to additional paid-in capital for changes in proportionate ownership in IBG LLC | -393 | -125 |
Adjustments to noncontrolling interests for changes in proportionate ownership in IBG LLC | ($393) | ($125) |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Changes in Equity (Unaudited) (USD $) | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income | Total Stockholders' Equity | Noncontrolling Interests |
In Thousands, except Share data | ||||||||
Balance at Dec. 31, 2012 | $4,813,147 | $478 | $493,912 | ($7,718) | $82,072 | $29,754 | $598,498 | $4,214,649 |
Common stock, shares issued at Dec. 31, 2012 | ' | 47,797,844 | ' | ' | ' | ' | ' | ' |
Common stock distributed pursuant to stock plans | 52 | ' | ' | 52 | ' | ' | 52 | ' |
Common Stock distributed pursuant to stock plans (in shares) | ' | 3,605 | ' | ' | ' | ' | ' | ' |
Compensation for stock grants vesting in the future | 8,698 | ' | 1,036 | ' | ' | ' | 1,036 | 7,662 |
Dividends paid to shareholders | -4,750 | ' | ' | ' | -4,750 | ' | -4,750 | ' |
Dividends paid by IBG LLC to other noncontrolling interests | -35,137 | ' | ' | ' | ' | ' | ' | -35,137 |
Adjustments for changes in proportionate ownership in IBG LLC | 0 | ' | -125 | ' | ' | ' | -125 | 125 |
Comprehensive Income | 43,925 | ' | ' | ' | 6,557 | -3,742 | 2,815 | 41,110 |
Balance at Mar. 31, 2013 | 4,825,935 | 478 | 494,823 | -7,666 | 83,879 | 26,012 | 597,526 | 4,228,409 |
Common stock, shares issued at Mar. 31, 2013 | ' | 47,801,449 | ' | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | 5,092,126 | 548 | 583,312 | -2,492 | 98,868 | 27,028 | 707,264 | 4,384,862 |
Common stock, shares issued at Dec. 31, 2013 | ' | 54,788,049 | ' | ' | ' | ' | ' | ' |
Common stock distributed pursuant to stock plans | 30 | ' | ' | 30 | ' | ' | 30 | ' |
Common Stock distributed pursuant to stock plans (in shares) | ' | 1,741 | ' | ' | ' | ' | ' | ' |
Compensation for stock grants vesting in the future | 10,051 | ' | 1,365 | ' | ' | ' | 1,365 | 8,686 |
Dividends paid to shareholders | -5,466 | ' | ' | ' | -5,466 | ' | -5,466 | ' |
Dividends paid by IBG LLC to other noncontrolling interests | -57,217 | ' | ' | ' | ' | ' | ' | -57,217 |
Adjustments for changes in proportionate ownership in IBG LLC | 0 | ' | 393 | ' | ' | ' | 393 | -393 |
Comprehensive Income | 204,682 | ' | ' | ' | 19,089 | 368 | 19,457 | 185,225 |
Balance at Mar. 31, 2014 | $5,244,206 | $548 | $585,070 | ($2,462) | $112,491 | $27,396 | $723,043 | $4,521,163 |
Common stock, shares issued at Mar. 31, 2014 | ' | 54,789,790 | ' | ' | ' | ' | ' | ' |
Organization_and_Nature_Of_Bus
Organization and Nature Of Business | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Consolidated Financial Statements | ' |
Organization and nature of business | ' |
1. Organization and Nature of Business | |
Interactive Brokers Group, Inc. (“IBG, Inc.” or the “Company”) is a Delaware holding company whose primary asset is its ownership of approximately 13.6% of the membership interests of IBG LLC, which, in turn, owns operating subsidiaries (collectively, “IBG LLC” or the “Group”). The accompanying condensed consolidated financial statements of IBG, Inc. reflect the consolidation of IBG, Inc.’s investment in IBG LLC for all periods presented (Note 4). IBG LLC is an automated global electronic broker and market maker specializing in routing orders and processing trades in securities, futures and foreign exchange instruments. | |
IBG LLC is a Connecticut limited liability company that conducts its business through its operating subsidiaries (collectively called the “Operating Companies”): Timber Hill LLC (“TH LLC”), Timber Hill Europe AG (“THE”), Timber Hill Securities Hong Kong Limited (“THSHK”), Timber Hill Australia Pty Limited (“THA”), Timber Hill Canada Company (“THC”), Interactive Brokers LLC (“IB LLC”) and subsidiary, Interactive Brokers Canada Inc. (“IBC”), Interactive Brokers (U.K.) Limited (“IBUK”), Interactive Brokers (India) Private Limited (“IBI”), Interactive Brokers Financial Products S.A. (“IBFP”), Interactive Brokers Hungary KFT (“IBH”), IB Exchange Corp. (“IBEC”), Interactive Brokers Securities Japan, Inc. (“IBSJ”), Interactive Brokers Software Services Estonia OU (“IBEST”) and Interactive Brokers Software Services Russia (“IBRUS”). | |
IBG, Inc. operates in two business segments, electronic brokerage and market making. IBG, Inc. conducts its electronic brokerage business through certain Interactive Brokers subsidiaries, which provide electronic execution and clearing services to customers worldwide. The Company conducts its market making business principally through its Timber Hill subsidiaries on the world’s leading exchanges and market centers, primarily in exchange-traded equities, equity options and equity-index options and futures. | |
Certain of the Operating Companies are members of various securities and commodities exchanges in North America, Europe and the Asia/Pacific region and are subject to regulatory capital and other requirements (Note 13). IB LLC, IBUK, IBC, IBI and IBSJ carry securities accounts for customers or perform custodial functions relating to customer securities. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Notes to Consolidated Financial Statements | ' | ||||
Significant Accounting Policies | ' | ||||
2. Significant Accounting Policies | |||||
Basis of Presentation | |||||
These condensed consolidated financial statements are presented in U.S. dollars and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding financial reporting with respect to Form 10-Q and accounting standards generally accepted in the United States of America (“U.S. GAAP”) promulgated in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or the “Codification”). These condensed consolidated financial statements include the accounts of the Company and its subsidiaries and include all adjustments of a normal, recurring nature necessary to present fairly the financial condition as of March 31, 2014 and December 31, 2013, the results of operations and comprehensive income for the three months ended March 31, 2014 and 2013 and cash flows for the three months ended March 31, 2014 and 2013. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in IBG, Inc.’s 2013 Annual Report on Form 10-K filed with the SEC on March 3, 2014. The condensed consolidated financial statement information as of December 31, 2013 has been derived from the 2013 audited consolidated financial statements. The results of operations for interim periods are not necessarily indicative of results for the entire year. | |||||
Principles of Consolidation, including Noncontrolling Interests | |||||
The condensed consolidated financial statements include the accounts of IBG, Inc. and its majority and wholly owned subsidiaries. As sole managing member of IBG LLC, IBG, Inc. exerts control over the Group’s operations. In accordance with ASC 810, Consolidation, the Company consolidates the Group’s financial statements and records the interests in the Group that IBG, Inc. does not own as noncontrolling interests. | |||||
The Company’s policy is to consolidate all other entities in which it owns more than 50% unless it does not have control. All inter-company balances and transactions have been eliminated. | |||||
Use of Estimates | |||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the condensed consolidated financial statements and accompanying notes. Estimates, by their nature, are based on judgment and available information. Therefore, actual results could differ materially from those estimates. Such estimates include the allowance for doubtful accounts, compensation accruals, current and deferred income taxes, and estimated contingency reserves. | |||||
Fair Value | |||||
At March 31, 2014 and December 31, 2013, substantially all of IBG, Inc.’s assets and liabilities, including financial instruments, were carried at fair value based on published market prices and were marked to market, or were assets and liabilities which are short-term in nature and were carried at amounts that approximate fair value. | |||||
IBG, Inc. applies the fair value hierarchy of ASC 820, Fair Value Measurement, to prioritize the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are: | |||||
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; | ||||
Level 2 | Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; and | ||||
Level 3 | Prices or valuations that require inputs that are both significant to fair value measurement and unobservable. | ||||
Financial instruments owned and financial instruments sold, not yet purchased are generally classified as Level 1 financial instruments. The Company’s Level 1 financial instruments, which are valued using quoted market prices as published by exchanges and clearing houses or otherwise broadly distributed in active markets, include U.S. government and sovereign obligations, active listed securities, options, futures, options on futures and corporate and municipal debt securities. IBG, Inc. does not adjust quoted prices for Level 1 financial instruments, even in the event that the Company may hold a large position whereby a purchase or sale could reasonably impact quoted prices. | |||||
Currency forward contracts are valued using broadly distributed bank and broker prices, and are classified as Level 2 financial instruments as such instruments are not exchange-traded. Other securities that are not traded in active markets are also classified in Level 2. Level 3 financial instruments are comprised of securities that have been delisted or otherwise are no longer tradable and have been valued by the Company based on internal estimates. | |||||
Other fair value investments, reported in other assets in the accompanying condensed consolidated statement of financial condition and in Note 6—Financial Assets and Financial Liabilities, are comprised of financial instruments that the Company does not carry in its market making business, which were comprised of listed stocks and options, and corporate debt securities. These investments are generally reported as Level 2 financial instruments, except for unrestricted listed equities, which are classified as Level 1 financial instruments. Other fair value liabilities are comprised of unrestricted listed equities which are classified as Level 1 financial instruments. | |||||
Earnings per Share | |||||
Earnings per share (“EPS”) are computed in accordance with ASC 260, Earnings per Share. Shares of Class A and Class B common stock share proportionately in the earnings of IBG, Inc. Basic earnings per share are calculated utilizing net income available for common stockholders divided by the weighted average number of shares of Class A and Class B common stock outstanding for that period. Diluted earnings per share are calculated utilizing the Company’s basic net income available for common stockholders divided by diluted weighted average shares outstanding with no adjustments to net income available to common stockholders for dilutive potential common shares. | |||||
Stock-Based Compensation | |||||
IBG, Inc. follows ASC 718, Compensation—Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires all share-based payments to employees to be recognized in the condensed consolidated financial statements using a fair value-based method. Grants, which are denominated in U.S. dollars, are communicated to employees in the year of grant, thereby establishing the fair value of each grant. The fair value of awards granted to employees are generally expensed as follows—50% in the year of grant in recognition of plan forfeiture provisions (described below) and the remaining 50% over the related vesting period utilizing the “graded vesting” method permitted under ASC 718-10. In the case of “retirement eligible” employees (those employees older than 59), 100% of awards are expensed when granted. | |||||
Awards granted under stock-based compensation plans are subject to forfeiture in the event an employee ceases employment with the Company. The plans provide that employees who discontinue employment with the Company without cause and continue to meet the terms of the plans’ post-employment provisions will forfeit 50% of unvested previously granted awards unless the employee is over the age of 59, in which case the employee would be eligible to receive 100% of unvested awards previously granted. | |||||
Cash and Cash Equivalents | |||||
The Company considers all highly liquid investments, with maturities of three months or less, that are not segregated and deposited for regulatory purposes or to meet margin requirements at clearing houses to be cash equivalents. | |||||
Cash and Securities—Segregated for Regulatory Purposes | |||||
As a result of customer activities, certain Operating Companies are obligated by rules mandated by their primary regulators to segregate or set aside cash or qualified securities to satisfy such regulations, which regulations have been promulgated to protect customer assets. In addition, substantially all of the Operating Companies are members of various clearing organizations at which cash or securities are deposited as required to conduct day-to-day clearance activities. Securities segregated for regulatory purposes consisted of U.S. Treasury Bills of $3.43 billion and $1.30 billion at March 31, 2014 and December 31, 2013, respectively, which are recorded as Level 1 financial assets and securities purchased under agreements to resell in the amount of $6.44 billion and $6.73 billion as of March 31, 2014 and December 31, 2013, respectively, which amounts approximate fair value. | |||||
Securities Borrowed and Securities Loaned | |||||
Securities borrowed and securities loaned are recorded at the amount of collateral advanced or received. Securities borrowed transactions require the Company to provide counterparties with collateral, which may be in the form of cash, letters of credit or other securities. With respect to securities loaned, IBG, Inc. receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. IBG, Inc. monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Receivables and payables with the same counterparty are not offset in the condensed consolidated statements of financial condition. | |||||
Securities lending fees received or paid by IBG, Inc. are recorded as interest income or interest expense in the condensed consolidated statements of comprehensive income. | |||||
Securities Purchased Under Agreements to Resell | |||||
Securities purchased under agreements to resell, which are reported as collateralized financing transactions, are recorded at contract value, plus accrued interest, which approximates fair value. To ensure that the fair value of the underlying collateral remains sufficient, this collateral is valued daily with additional collateral obtained or excess collateral returned, as permitted under contractual provisions. The Company does not net securities purchased under agreements to resell transactions with securities sold under agreements to repurchase transactions entered into with the same counterparty. | |||||
Financial Instruments Owned and Sold But Not Yet Purchased | |||||
Financial instrument transactions are accounted for on a trade date basis. Financial instruments owned and financial instruments sold but not yet purchased are recorded at fair value based upon quoted market prices. All firm-owned financial instruments pledged to counterparties where the counterparty has the right, by contract or custom, to sell or repledge the financial instruments are classified as financial instruments owned and pledged as collateral in the condensed consolidated statements of financial condition. | |||||
IBG, Inc. also enters into currency forward contracts. These transactions, which are also accounted for on a trade date basis, are agreements to exchange a fixed amount of one currency for a specified amount of a second currency at completion of the currency forward contract term. Unrealized mark-to-market gains and losses on currency forward contracts are reported as components of financial instruments owned or financial instruments sold but not yet purchased in the condensed consolidated statements of financial condition. | |||||
Customer Receivables and Payables | |||||
Customer securities transactions are recorded on a settlement date basis and customer commodities transactions are recorded on a trade date basis. Receivables from and payables to customers include amounts due on cash and margin transactions, including futures contracts transacted on behalf of customers. Securities owned by customers, including those that collateralize margin loans or other similar transactions, are not reported in the condensed consolidated statements of financial condition. Amounts receivable from customers that are determined by management to be uncollectible are expensed as a component of general and administrative expense. | |||||
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | |||||
Receivables and payables to brokers, dealers and clearing organizations include net receivables and payables from unsettled trades, including amounts related to futures and options on futures contracts executed on behalf of customers, amounts receivable for securities not delivered by IBG, Inc. to the purchaser by the settlement date (“fails to deliver”) and cash margin deposits. Payables to brokers, dealers and clearing organizations also include amounts payable for securities not received by IBG, Inc. from a seller by the settlement date (“fails to receive”). | |||||
Investments | |||||
IBG, Inc. makes certain strategic investments related to financial services and accounts for these investments under the cost method of accounting or under the equity method of accounting as required under ASC 323, Investments—Equity Method and Joint Ventures. Investments accounted for under the equity method, including where the investee is a limited partnership or limited liability company, are recorded at the fair value amount of IBG, Inc.’s initial investment and adjusted each period for IBG, Inc.’s share of the investee’s income or loss. IBG, Inc.’s share of the income or losses from equity investments is reported as a component of other income in the condensed consolidated statements of comprehensive income. The recorded amounts of IBG, Inc.’s equity method investments, $27.0 million at March 31, 2014 ($27.5 million at December 31, 2013), which are reported as a component of other assets in the condensed consolidated statements of financial condition, increase or decrease accordingly. Contributions paid to and distributions received from equity investees are recorded as additions or reductions, respectively, to the respective investment balance. | |||||
A judgmental aspect of accounting for investments is evaluating whether an other-than-temporary decline in the value of an investment has occurred. The evaluation of an other-than-temporary impairment is dependent on specific quantitative and qualitative factors and circumstances surrounding an investment, including recurring operating losses, credit defaults and subsequent rounds of financing. IBG, Inc.’s equity investments do not have readily determinable market values. All investments are reviewed for changes in circumstances or occurrence of events that suggest IBG, Inc.’s investment may not be recoverable. If an unrealized loss on any investment is considered to be other-than-temporary, the loss is recognized in the period the determination is made. | |||||
IBG, Inc. also holds exchange memberships and investments in equity securities of certain exchanges as required to qualify as a clearing member, and strategic investments in corporate stock that do not qualify for equity method accounting. Such investments, $27.2 million at March 31, 2014 ($27.6 million at December 31, 2013), are recorded at cost or, if an other-than-temporary impairment in value has occurred, at a value that reflects management’s estimate of the impairment, and are also components of other assets in the condensed consolidated statements of financial condition. Dividends received from cost basis investments are recognized as a component of other income when such dividends are received. | |||||
The Company also makes other fair value investments (which are not considered core business activities) that are accounted for at fair value (Note 6), with gains and losses recorded as a component of other income. | |||||
Property and Equipment | |||||
Property and equipment, which is a component of other assets, consists of purchased technology hardware and software, internally developed software, leasehold improvements and office furniture and equipment. Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Additions and improvements that extend the lives of assets are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation and amortization are computed using the straight-line method. Equipment is depreciated over the estimated useful lives of the assets, while leasehold improvements are amortized over the lesser of the estimated economic useful life of the asset or the term of the lease. Computer equipment is depreciated over three to five years and office furniture and equipment are depreciated over five to seven years. Qualifying costs for internally developed software are capitalized and amortized over the expected useful life of the developed software, not to exceed three years. | |||||
Comprehensive Income and Foreign Currency Translation | |||||
The Company’s operating results are reported in the condensed consolidated statement of comprehensive income pursuant to Accounting Standards Update 2011-05, Comprehensive Income. | |||||
Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). OCI is comprised of revenues, expenses, gains and losses that are reported in the comprehensive income section of the statement of comprehensive income, but are excluded from reported net income. IBG, Inc.’s OCI is comprised of foreign currency translation adjustments, net of related income taxes, where applicable. In general, the practice and intention of the Company is to reinvest the earnings of its non-U.S. subsidiaries in those operations. | |||||
IBG, Inc.’s non-U.S. domiciled subsidiaries have a functional currency that is other than the U.S. dollar. Such subsidiaries’ assets and liabilities are translated into U.S. dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of accumulated OCI. | |||||
Revenue Recognition | |||||
—Trading Gains | |||||
Trading gains and losses are recorded on trade date and are reported on a net basis. Trading gains are comprised of changes in the fair value of financial instruments owned and financial instruments sold but not yet purchased (i.e., unrealized gains and losses) and realized gains and losses. Included in trading gains are net gains and losses on exchange traded options, futures and other derivative instruments. Dividends are integral to the valuation of stocks and interest is integral to the valuation of fixed income instruments. Accordingly, both dividends and interest income and expense attributable to financial instruments owned and financial instruments sold but not yet purchased are reported on a net basis as a component of trading gains in the accompanying condensed consolidated statements of comprehensive income. | |||||
—Commissions and Execution Fees | |||||
Commissions charged for executing and clearing customer transactions are recorded on a trade date basis and are reported as commissions and execution fees in the condensed consolidated statements of comprehensive income, and the related expenses are reported as execution and clearing expenses. | |||||
—Interest Income and Expense | |||||
The Company earns interest income and incurs interest expense primarily in connection with its electronic brokerage customer business and its securities lending activities. Such interest is recorded on the accrual basis. | |||||
—Foreign Currency Transaction Gains and Losses | |||||
Foreign currency transaction gains and losses from market making are reported as a component of trading gains in the condensed consolidated statements of comprehensive income. Electronic brokerage foreign currency transaction gains and losses are included in interest (if arising from currency swap transactions) or other income. | |||||
Income Taxes | |||||
IBG, Inc. accounts for income taxes in accordance with ASC 740, Income Taxes. The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits are based on enacted tax laws (Note 10) and reflect management’s best assessment of estimated future taxes to be paid. The Company is subject to income taxes in both the United States and numerous foreign jurisdictions. Determining income tax expense requires significant judgments and estimates. | |||||
IBG, Inc. recognizes interest related to income tax matters as interest income or expense and penalties related to income tax matters as income tax expense. | |||||
Deferred income tax assets and liabilities arise from temporary differences between the tax and financial statement recognition of the underlying assets and liabilities. In evaluating the ability to recover deferred tax assets within the jurisdictions from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, historical results are adjusted for changes in accounting policies and incorporate assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, three years of cumulative operating income (loss) are considered. Deferred income taxes have not been provided for U.S. tax liabilities or for additional foreign taxes on the unremitted earnings of foreign subsidiaries that have been indefinitely reinvested. | |||||
The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company’s global operations. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows, or financial position. | |||||
ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. | |||||
The Company records tax liabilities in accordance with ASC 740 and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in payments that are different from the current estimates of these tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information becomes available. | |||||
Recently Issued Accounting Pronouncements | |||||
Subsequent to the adoption of the ASC, the FASB will issue Accounting Standards Updates (“ASUs”) as the means to add to or delete from, or otherwise amend the ASC. In 2014, prior to the issuance of the Company’s condensed consolidated financial statements, ASUs 2014-01 through 2014-08 have been issued. Following is a summary of recently issued ASUs that have affected or may affect the Company’s condensed consolidated financial statements: | |||||
Affects | Status | ||||
ASU 2013-05 | Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity | Effective for fiscal periods beginning on or after December 15, 2013. | |||
ASU 2014-06 | Technical Corrections and Improvements Related to Glossary Terms | Effective on issuance in March 2014. | |||
Adoption of those ASUs that became effective during 2014, prior to the issuance of the Company’s condensed consolidated financial statements, did not have a material effect on those financial statements. |
Trading_Activities_and_Related
Trading Activities and Related Risks | 3 Months Ended | ||
Mar. 31, 2014 | |||
Notes to Consolidated Financial Statements | ' | ||
Trading Activities and Related Risks | ' | ||
3. Trading Activities and Related Risks | |||
IBG, Inc.’s trading activities include providing securities market making and brokerage services. Trading activities expose IBG, Inc. to market and credit risks. These risks are managed in accordance with established risk management policies and procedures. To accomplish this, management has established a risk management process that includes: | |||
• | a regular review of the risk management process by executive management as part of its oversight role; | ||
• | defined risk management policies and procedures supported by a rigorous analytic framework; and | ||
• | articulated risk tolerance levels as defined by executive management that are regularly reviewed to ensure that IBG, Inc.’s risk-taking is consistent with its business strategy, capital structure, and current and anticipated market conditions. | ||
Market Risk | |||
IBG, Inc. is exposed to various market risks. Exposures to market risks arise from equity price risk, foreign currency exchange rate fluctuations and changes in interest rates. IBG, Inc. seeks to mitigate market risk associated with trading inventories by employing hedging strategies that correlate rate, price and spread movements of trading inventories and related financing and hedging activities. IBG, Inc. uses a combination of cash instruments and exchange traded derivatives to hedge its market exposures. The following discussion describes the types of market risk faced: | |||
Equity Price Risk | |||
Equity price risk arises from the possibility that equity security prices will fluctuate, affecting the value of equity securities and other instruments that derive their value from a particular stock, a defined basket of stocks, or a stock index. IBG, Inc. is subject to equity price risk primarily in financial instruments owned and sold but not yet purchased. IBG, Inc. attempts to limit such risks by continuously reevaluating prices and by diversifying its portfolio across many different options, futures and underlying securities and avoiding concentrations of positions based on the same underlying security. | |||
Currency Risk | |||
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the value of financial instruments. The Company manages this risk using spot (i.e., cash) currency transactions, currency futures contracts and currency forward contracts. | |||
Interest Rate Risk | |||
Interest rate risk arises from the possibility that changes in interest rates will affect the value of financial instruments. IBG, Inc. is exposed to interest rate risk on cash and margin balances, positions carried in equity securities, options, and futures and on its debt obligations. These risks are managed through investment policies and by entering into interest rate futures contracts. | |||
Credit Risk | |||
IBG, Inc. is exposed to risk of loss if an individual, counterparty or issuer fails to perform its obligations under contractual terms (“default risk”). Both cash instruments and derivatives expose IBG, Inc. to default risk. IBG, Inc. has established policies and procedures for mitigating credit risk on principal transactions, including reviewing and establishing limits for credit exposure, maintaining collateral, and continually assessing the creditworthiness of counterparties. | |||
The Company’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and commodities clearing houses and a small portion is settled through member firms and banks with substantial financial and operational resources. IBG, Inc. seeks to control the risks associated with its customer margin activities by requiring customers to maintain collateral in compliance with regulatory and internal guidelines. | |||
In the normal course of business, IBG, Inc. executes, settles, and finances various customer securities transactions. Execution of these transactions includes the purchase and sale of securities by IBG, Inc. that exposes IBG, Inc. to default risk arising from the potential that customers or counterparties may fail to satisfy their obligations. In these situations, IBG, Inc. may be required to purchase or sell financial instruments at unfavorable market prices to satisfy obligations to customers or counterparties. Liabilities to other brokers and dealers related to unsettled transactions (i.e., securities fails to receive) are recorded at the amount for which the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers. In the case of aged securities fails to receive, IBG, Inc. may purchase the underlying security in the market and seek reimbursement for any losses from the counterparty. | |||
For cash management purposes, IBG, Inc. enters into short-term securities purchased under agreements to resell and securities sold under agreements to repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly, securities borrowed and loaned agreements are collateralized by deposits of cash or securities. IBG, Inc. attempts to minimize credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional collateral to be deposited with or returned to IBG, Inc. as permitted under contractual provisions. | |||
Concentrations of Credit Risk | |||
IBG, Inc.’s exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of March 31, 2014, the Company did not have any material concentrations of credit risk. | |||
Off-Balance Sheet Risks | |||
IBG, Inc. may be exposed to a risk of loss not reflected in the condensed consolidated financial statements to settle futures and certain over-the-counter contracts at contracted prices, which may require repurchase or sale of the underlying products in the market at prevailing prices. Accordingly, these transactions result in off-balance sheet risk as IBG, Inc.’s cost to liquidate such contracts may exceed the amounts reported in IBG, Inc.’s condensed consolidated statements of financial condition. |
Equity_and_Earnings_Per_Share
Equity and Earnings Per Share | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Notes to Consolidated Financial Statements | ' | |||||
Equity and Earnings Per Share | ' | |||||
4. Equity and Earnings per Share | ||||||
In connection with its initial public offering of Class A common stock (“IPO”) in May 2007, IBG, Inc. purchased 10.0% of the membership interests in IBG LLC from Holdings, became the sole managing member of IBG LLC and began to consolidate IBG LLC’s financial results into its financial statements. Holdings wholly owns all Class B common stock, which common stock has voting rights in proportion to its ownership interests in IBG LLC, approximately 86.4% as of March 31, 2014. The condensed consolidated financial statements reflect the results of operations and financial position of IBG, Inc., including consolidation of its investment in IBG LLC. The noncontrolling interests in IBG LLC attributable to Holdings are reported as a component of total equity, as described below. | ||||||
Recapitalization and Post-IPO Capital Structure | ||||||
Immediately prior to and immediately following the consummation of the IPO, IBG, Inc., Holdings, IBG LLC and the members of IBG LLC consummated a series of transactions collectively referred to herein as the “Recapitalization.” In connection with the Recapitalization, IBG, Inc., Holdings and the historical members of IBG LLC entered into an exchange agreement, dated as of May 3, 2007 (the “Exchange Agreement”), pursuant to which the historical members of IBG LLC received membership interests in Holdings in exchange for their membership interests in IBG LLC. Additionally, IBG, Inc. became the sole managing member of IBG LLC. | ||||||
In connection with the consummation of the IPO, Holdings used the net proceeds to redeem 10.0% of members’ interests in Holdings in proportion to their interests. Immediately following the Recapitalization and IPO, Holdings owned approximately 90% of IBG LLC and 100% of IBG, Inc.’s Class B common stock, which has voting power in IBG, Inc. in proportion to Holdings’ ownership of IBG LLC. | ||||||
Since consummation of the IPO and Recapitalization, IBG, Inc.’s equity capital structure has been comprised of Class A and Class B common stock. All shares of common stock have a par value of $0.01 per share and have identical rights to earnings and dividends and in liquidation. As described previously in this Note 4, Class B common stock has voting power in IBG, Inc. proportionate to the extent of Holdings’ and IBG, Inc.’s respective ownership of IBG LLC. At March 31, 2014 and December 31, 2013, 1,000,000,000 shares of Class A common stock were authorized, of which 54,789,790 and 54,788,049 shares have been issued; and 54,666,825 and 54,664,095 shares were outstanding, respectively. Class B common stock is comprised of 100 authorized shares, of which 100 shares were issued and outstanding as of March 31, 2014 and December 31, 2013, respectively. In addition, 10,000 shares of preferred stock have been authorized, of which no shares are issued or outstanding as of March 31, 2014 and December 31, 2013, respectively. | ||||||
As a result of a federal income tax election made by IBG LLC applicable to the acquisition of IBG LLC member interests by IBG, Inc., the income tax basis of the assets of IBG LLC acquired by IBG, Inc. have been adjusted based on the amount paid for such interests. Deferred tax assets were recorded as of the IPO date and in connection with the 2011 and 2013 redemptions of Holdings member interests in exchange for common stock, which deferred tax assets are a component of other assets in the condensed consolidated statement of financial condition and are being amortized as additional deferred income tax expense over 15 years from the IPO date and from the 2011 and 2013 redemption dates, respectively, as allowable under current tax law. As of March 31, 2014 and December 31, 2013, the unamortized balance of these deferred tax assets was $289.3 million and $294.7 million, respectively. | ||||||
IBG, Inc. also entered into an agreement (the “Tax Receivable Agreement”) with Holdings to pay Holdings (for the benefit of the former members of IBG LLC) 85% of the tax savings that IBG, Inc. actually realizes as the result of tax basis increases. These payables, net of payments made to Holdings, are reported as payable to affiliate in the condensed consolidated statement of financial condition. | ||||||
The remaining 15% is accounted for as a permanent increase to additional paid-in capital in the condensed consolidated statement of financial condition. | ||||||
The cumulative amounts of deferred tax assets, payables to Holdings and credits to additional paid-in capital arising from stock offerings from the date of the IPO through March 31, 2014 were $420.4 million, $357.4 million and $63.1 million, respectively. Amounts payable under the Tax Receivable Agreement are payable to Holdings annually following the filing of IBG, Inc.’s federal income tax return. The Company has paid Holdings a cumulative total of $70.4 million through March 31, 2014 pursuant to the terms of the Tax Receivable Agreement. | ||||||
The Exchange Agreement, as amended June 6, 2012, provides for future redemptions of member interests and for the purchase of member interests in IBG LLC by IBG, Inc. from Holdings, which could result in IBG, Inc. acquiring the remaining member interests in IBG LLC that it does not own. On an annual basis, holders of Holdings member interests are able to request redemption of such member interests over a minimum eight (8) year period following the IPO; 12.5% annually for seven (7) years and 2.5% in the eighth year. | ||||||
At the time of the Company’s IPO in 2007, three hundred sixty (360) million shares of authorized Common Stock were reserved for future sales and redemptions. From 2008 through 2010, Holdings redeemed 5,013,259 IBG LLC shares with a total value of $114.0 million, which redemptions were funded using cash on hand at IBG LLC. Upon cash redemption these IBG LLC shares were retired. In 2013 and 2011, respectively, the Company issued 4,683,415 shares and 1,983,624 shares of Common Stock directly to Holdings in exchange for an equivalent number of shares of member interests in IBG LLC. | ||||||
As a consequence of these redemption transactions, and distribution of shares to employees (Note 9), IBG, Inc.’s interest in IBG LLC has increased to approximately 13.6%, with Holdings owning the remaining 86.4% as of March 31, 2014. The redemptions also resulted in an increase in the Holdings interest held by Thomas Peterffy and his affiliates from approximately 84.6% at the IPO to approximately 87.6% at March 31, 2014. | ||||||
Earnings per Share | ||||||
Basic earnings per share are calculated utilizing net income available for common stockholders divided by the weighted average number of shares of Class A and Class B common stock outstanding for that period: | ||||||
Three months ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Basic earnings per share: | ||||||
Net income available for common stockholders | $ | 19,089 | $ | 6,557 | ||
Weighted average shares of common stock outstanding: | ||||||
Class A | 54,664,125 | 47,499,798 | ||||
Class B | 100 | 100 | ||||
54,664,225 | 47,499,898 | |||||
Basic earnings per share | $ | 0.35 | $ | 0.14 | ||
Diluted earnings per share are calculated utilizing the Company’s basic net income available for common stockholders divided by diluted weighted average shares outstanding with no adjustments to net income available to common stockholders for potentially dilutive common shares: | ||||||
Three months ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Diluted earnings per share: | ||||||
Net income available for common stockholders | $ | 19,089 | $ | 6,557 | ||
Weighted average shares of common stock outstanding: | ||||||
Class A: | ||||||
Issued and outstanding | 54,664,125 | 47,499,798 | ||||
Potentially dilutive common shares issuable pursuant toemployee incentive plans | 1,377,057 | 188,416 | ||||
Class B | 100 | 100 | ||||
56,041,282 | 47,688,314 | |||||
Diluted earnings per share | $ | 0.34 | $ | 0.14 | ||
Member and Stockholder Dividends | ||||||
For the three months ended March 31, 2014, IBG LLC paid dividends totaling $66.2 million to its members, of which IBG, Inc.’s proportionate share was $9.0 million. In March 2014, the Company paid cash dividends of $0.10 per share of Common Stock, totaling $5.5 million. | ||||||
On April 15, 2014, the Company declared a cash dividend of $0.10 per common share, payable on June 13, 2014 to shareholders of record as of May 30, 2014. |
Comprehensive_Income
Comprehensive Income | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Notes to Consolidated Financial Statements | ' | |||||
Comprehensive Income [Text Block] | ' | |||||
5. Comprehensive Income | ||||||
The following table presents comprehensive income and earnings per share on comprehensive income: | ||||||
Three months ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Comprehensive income available for common stockholders, net of tax | $ | 19,457 | $ | 2,815 | ||
Earnings per share on comprehensive income: | ||||||
Basic | $ | 0.36 | $ | 0.06 | ||
Diluted | $ | 0.35 | $ | 0.06 | ||
Weighted average common shares outstanding: | ||||||
Basic | 54,664,225 | 47,499,898 | ||||
Diluted | 56,041,282 | 47,688,314 |
Financial_Assets_and_Financial
Financial Assets and Financial Liabilities | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Notes to Consolidated Financial Statements | ' | ||||||||||||||||||
Financial Assets and Financial Liabilities | ' | ||||||||||||||||||
6. Financial Assets and Financial Liabilities | |||||||||||||||||||
Fair Value | |||||||||||||||||||
The following tables set forth, by level within the fair value hierarchy (Note 2), financial assets and liabilities, primarily financial instruments owned and financial instruments sold, but not yet purchased at fair value as of March 31, 2014 and December 31, 2013. As required by ASC 820, financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the respective fair value measurement. | |||||||||||||||||||
Financial Assets At Fair Value as of March 31, 2014 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Securities segregated for regulatory purposes | $ | 3,428,577 | $ | - | $ | - | $ | 3,428,577 | |||||||||||
Financial instruments owned: | |||||||||||||||||||
Stocks | 990,435 | - | 119 | 990,554 | |||||||||||||||
Options | 1,418,104 | - | - | 1,418,104 | |||||||||||||||
Warrants and discount certificates | 74,891 | - | - | 74,891 | |||||||||||||||
U.S. and foreign government securities | 15,740 | 2,074 | - | 17,814 | |||||||||||||||
Corporate and municipal bonds | 77,647 | 22,998 | - | 100,645 | |||||||||||||||
Currency forward contracts | - | 3,758 | - | 3,758 | |||||||||||||||
Total financial instruments owned | 2,576,817 | 28,830 | 119 | 2,605,766 | |||||||||||||||
Financial instruments owned and pledged as collateral: | |||||||||||||||||||
Stocks | 762,857 | - | - | 762,857 | |||||||||||||||
Warrants | 205 | - | - | 205 | |||||||||||||||
U.S. and foreign government securities | 58,470 | - | - | 58,470 | |||||||||||||||
Corporate and municipal bonds | 902 | - | - | 902 | |||||||||||||||
Total financial instruments owned and pledged as collateral | 822,434 | - | - | 822,434 | |||||||||||||||
Total financial insturments owned | 3,399,251 | 28,830 | 119 | 3,428,200 | |||||||||||||||
Other fair value investments, included in other assets: | |||||||||||||||||||
Stocks and options | 33,642 | - | 112 | 33,754 | |||||||||||||||
Corporate and municipal bonds | - | 1,869 | - | 1,869 | |||||||||||||||
Total other fair value investments, included in other assets | 33,642 | 1,869 | 112 | 35,623 | |||||||||||||||
Total Financial Assets at Fair Value | $ | 68,614,470 | $ | 30,699 | $ | 231 | $ | 6,892,400 | |||||||||||
Financial Liabilities At Fair Value as of March 31, 2014 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Stocks | $ | 1,612,564 | $ | - | $ | 1 | $ | 1,612,565 | |||||||||||
Options | 1,467,109 | - | - | 1,467,109 | |||||||||||||||
Warrants and discount certificates | 1,051 | - | - | 1,051 | |||||||||||||||
U.S. and foreign government securities | 693 | 1,279 | - | 1,972 | |||||||||||||||
Corporate bonds | 75,039 | 12,213 | - | 87,252 | |||||||||||||||
Currency forward contracts | - | 603 | - | 603 | |||||||||||||||
Total financial instruments sold, not yet purchased | 3,156,456 | 14,095 | 1 | 3,170,552 | |||||||||||||||
Other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | |||||||||||||||||||
Stock | 305 | - | - | 305 | |||||||||||||||
Total other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | 305 | - | - | 305 | |||||||||||||||
Total Financial Liabilities at Fair Value | $ | 3,156,761 | $ | 14,095 | $ | 1 | $ | 3,170,857 | |||||||||||
Financial Assets At Fair Value as of December 31, 2013 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Securities segregated for regulatory purposes | $ | 1,300,016 | $ | - | $ | - | $ | 1,300,016 | |||||||||||
Financial instruments owned: | |||||||||||||||||||
Stocks | 1,243,914 | - | 57 | 1,243,971 | |||||||||||||||
Options | 1,880,481 | - | - | 1,880,481 | |||||||||||||||
Warrants and discount certificates | 57,144 | - | - | 57,144 | |||||||||||||||
U.S. and foreign government securities | 4,641 | 2,102 | - | 6,743 | |||||||||||||||
Corporate and municipal bonds | 72,750 | 18,476 | - | 91,226 | |||||||||||||||
Currency forward contracts | - | 5,748 | - | 5,748 | |||||||||||||||
Total financial instruments owned | 3,258,930 | 26,326 | 57 | 3,285,313 | |||||||||||||||
Financial instruments owned and pledged as collateral: | |||||||||||||||||||
Stocks | 1,097,734 | - | - | 1,097,734 | |||||||||||||||
Warrants | 233 | - | - | 233 | |||||||||||||||
U.S. and foreign government securities | 64,439 | - | - | 64,439 | |||||||||||||||
Corporate and municipal bonds | 1,125 | - | - | 1,125 | |||||||||||||||
Total financial instruments owned and pledged as collateral | 1,163,531 | - | - | 1,163,531 | |||||||||||||||
Total financial insturments owned | 4,422,461 | 26,326 | 57 | 4,448,844 | |||||||||||||||
Other fair value investments, included in other assets: | |||||||||||||||||||
Stocks | 25,604 | 419 | 101 | 26,124 | |||||||||||||||
Corporate and municipal bonds | 1,776 | 47,896 | - | 49,672 | |||||||||||||||
Mortgage backed securities | - | 26,892 | - | 26,892 | |||||||||||||||
Other asset backed securities | - | 22,734 | - | 22,734 | |||||||||||||||
Other | - | 5,328 | - | 5,328 | |||||||||||||||
Total other fair value assets | 27,380 | 103,269 | 101 | 130,750 | |||||||||||||||
Total Financial Assets at Fair Value | $ | 5,749,857 | $ | 129,595 | $ | 158 | $ | 5,879,610 | |||||||||||
Financial Liabilities At Fair Value as of December 31, 2013 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Stocks | $ | 1,266,429 | $ | - | $ | 3 | $ | 1,266,432 | |||||||||||
Options | 1,793,248 | - | - | 1,793,248 | |||||||||||||||
Warrants and discount certificates | 1,215 | - | - | 1,215 | |||||||||||||||
U.S. and foreign government securities | - | 4,412 | - | 4,412 | |||||||||||||||
Corporate bonds | 77,936 | 9,628 | - | 87,564 | |||||||||||||||
Currency forward contracts | - | 802 | - | 802 | |||||||||||||||
Total financial instruments sold, not yet purchased | $ | 3,138,828 | $ | 14,842 | $ | 3 | $ | 3,153,673 | |||||||||||
Transfers between Level 1 and Level 2 | |||||||||||||||||||
Transfers of financial instruments owned and sold, not yet purchased to or from Levels 1 and 2 arise where the market for a specific security has become active or inactive during the period. The fair values transferred are ascribed as if the financial assets or financial liabilities had been transferred as of the end of the period. | |||||||||||||||||||
During the three months ended March 31, 2014, the Company reclassified approximately $2.1 million of financial instruments owned from Level 1 to Level 2 and reclassified approximately $1.8 million from Level 2 to Level 1. Financial instruments sold, but not yet purchased of approximately $1.4 million were reclassified from Level 1 to Level 2 and approximately $1.1 million were reclassified from Level 2 to Level 1. The Company reclassified approximately $1.8 million of other fair value investments, recorded in other assets, from Level 1 to Level 2. | |||||||||||||||||||
During the three months ended March 31, 2013, the Company reclassified approximately $1.1 million of financial instruments owned from Level 1 to Level 2 and reclassified approximately $3.4 million from Level 2 to Level 1. Financial instruments sold, but not yet purchased of approximately $2.0 million were reclassified from Level 1 to Level 2 and approximately $3.1 million were reclassified from Level 2 to Level 1. | |||||||||||||||||||
Level 3 Financial Assets and Financial Liabilities | |||||||||||||||||||
The Company’s Level 3 financial assets and financial liabilities are comprised of delisted securities reported within financial instruments owned and financial instruments sold, not yet purchased. The following tables report Level 3 activities for the three months ended March 31, 2014: | |||||||||||||||||||
Financial assets—Level 3 activities: | |||||||||||||||||||
Balance, January 1, 2014 | $ | 158 | |||||||||||||||||
Total gains or losses (realized/unrealized) | |||||||||||||||||||
- Included in earnings | 30 | ||||||||||||||||||
Purchases, issuances and settlements | (22 | ) | |||||||||||||||||
Transfers in and/or out of Level 3 | 65 | ||||||||||||||||||
Balance, March 31, 2014 | $ | 231 | |||||||||||||||||
Financial liabilities—Level 3 activities: | |||||||||||||||||||
Balance, January 1, 2014 | $ | 3 | |||||||||||||||||
Total gains or losses (realized/unrealized) | |||||||||||||||||||
- Included in earnings | - | ||||||||||||||||||
Purchases, issuances and settlements | (2 | ) | |||||||||||||||||
Transfers in and/or out of Level 3 | - | ||||||||||||||||||
Balance, March 31, 2014 | $ | 1 | |||||||||||||||||
There were no Level 3 activities, including transfers, for the three months ended March 31, 2013. | |||||||||||||||||||
Trading Gains from Market Making Transactions | |||||||||||||||||||
Trading gains, net from market making transactions reported in the statements of comprehensive income, by major product type, are comprised of: | |||||||||||||||||||
Three months ended | |||||||||||||||||||
March 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Equities | $ | 95,145 | $ | 68,524 | |||||||||||||||
Fixed Income | 5,730 | 7,768 | |||||||||||||||||
Foreign Exchange | 26,637 | (57,325 | ) | ||||||||||||||||
Commodities | - | 27 | |||||||||||||||||
Total Trading Gains | $ | 127,512 | $ | 18,994 | |||||||||||||||
These transactions are related to the Company’s financial instruments owned and financial instruments sold, not yet purchased (all at fair value) and include both derivative and non-derivative financial instruments, including exchange traded options and futures. These gains and losses also include market making related dividend and fixed income trading interest income and expense. | |||||||||||||||||||
The gains (losses) in the above table are not representative of the integrated trading strategies applied by the Company, which utilize financial instruments across various product types. Gains and losses in one product type frequently offset gains and losses in other product types. | |||||||||||||||||||
Netting of Financial Assets and Financial Liabilities | |||||||||||||||||||
The Company adopted the guidance in ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities and ASU 2013- 01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities for periods beginning after January 1, 2013. This authoritative guidance requires companies to report disclosures of offsetting assets and liabilities. | |||||||||||||||||||
The Company does not net securities segregated for regulatory purposes, and securities borrowed and securities loaned are presented on a gross basis in the condensed consolidated statements of financial condition. In the tables below, the amounts of derivative financial instruments owned that are not offset in the condensed consolidated statements of financial condition, but could be netted against financial liabilities with specific counterparties under master netting agreements, including clearing houses (exchange traded options, warrants and discount certificates) or over the counter currency forward contract counterparties, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these derivative financial instruments. | |||||||||||||||||||
The following table sets forth the netting of financial assets and of financial liabilities as of March 31, 2014 and December 31, 2013, pursuant to the requirements of ASU 2011-11 and ASU 2013-01 (millions). | |||||||||||||||||||
31-Mar-14 | |||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Assets Presented in | ||||||||||||||||||
Condensed | the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Assets | Financial Condition | Financial Condition | Instruments | Pledged | Net Amount | ||||||||||||||
Offsetting of Financial Assets: | |||||||||||||||||||
Securities segregated for regulatory purposes - purchased under agreements to resell | $ | 6,438.70 | (1) | $ | - | $ | 6,438.7 | $ | (6,438.7 | ) | $ | - | $ | - | |||||
Securities borrowed | 2,846.5 | - | 2,846.5 | (2,793.3 | ) | - | 53.2 | ||||||||||||
Securities purchased under agreements to resell | 282.7 | - | 282.7 | (282.7 | ) | - | - | ||||||||||||
Financial Instruments owned: | |||||||||||||||||||
Options | 1,418.1 | - | 1,418.1 | (1,350.8 | ) | - | 67.3 | ||||||||||||
Warrants and discount certificates | 75.1 | - | 75.1 | (1.1 | ) | - | 74.0 | ||||||||||||
Currency forward contracts | 3.8 | - | 3.8 | - | - | 3.8 | |||||||||||||
Total | $ | 11,064.9 | $ | - | $ | 11,064.9 | $ | (10,866.6 | ) | $ | - | $ | 198.3 | ||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Liabilities Presented | ||||||||||||||||||
Condensed | in the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Liabilities | Financial Condition | Financial Condition | Instruments | Received | Net Amount | ||||||||||||||
Offsetting of Financial Liabilities: | |||||||||||||||||||
Securities loaned | $ | 2,931.2 | $ | - | $ | 2,931.2 | $ | (2,918.2 | ) | $ | - | $ | 13.0 | ||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Options | 1,467.1 | - | 1,467.1 | (1,350.8 | ) | - | 116.3 | ||||||||||||
Warrants and discount certificates | 1.1 | - | 1.1 | (1.1 | ) | - | - | ||||||||||||
Currency forward contracts | 0.6 | - | 0.6 | - | 0.6 | ||||||||||||||
Total | $ | 4,400.0 | $ | - | $ | 4,400.0 | $ | (4,270.1 | ) | $ | - | $ | 129.9 | ||||||
31-Dec-13 | |||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Assets Presented in | ||||||||||||||||||
Condensed | the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Assets | Financial Condition | Financial Condition | Instruments | Pledged | Net Amount | ||||||||||||||
Offsetting of Financial Assets: | |||||||||||||||||||
Securities segregated for regulatory purposes - purchased under agreements to resell | $ | 6,734.20 | -1 | $ | $ | 6,734.20 | $ | (6,734.2 | ) | $ | $ | - | |||||||
Securities borrowed | 2,751.5 | - | 2,751.5 | (2,694.6 | ) | - | 56.9 | ||||||||||||
Securities purchased under agreements to resell | 386.3 | - | 386.3 | (386.3 | ) | - | - | ||||||||||||
Financial Instruments owned: | |||||||||||||||||||
Options | 1,880.5 | - | 1,880.5 | (1,652.8 | ) | - | 227.7 | ||||||||||||
Warrants and discount certificates | 57.4 | - | 57.4 | (1.2 | ) | - | 56.2 | ||||||||||||
Currency forward contracts | 5.7 | - | 5.7 | - | - | 5.7 | |||||||||||||
Total | $ | 11,815.6 | $ | - | $ | 11,815.6 | $ | (11,469.1 | ) | $ | - | $ | 346.5 | ||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Liabilities Presented | ||||||||||||||||||
Condensed | in the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Liabilities | Financial Condition | Financial Condition | Instruments | Received | Net Amount | ||||||||||||||
Offsetting of Financial Liabilities: | |||||||||||||||||||
Securities loaned | $ | 2,563.7 | $ | - | $ | 2,563.7 | $ | (2,544.6 | ) | $ | - | $ | 19.1 | ||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Options | 1,793.2 | - | 1,793.2 | (1,652.8 | ) | - | 140.4 | ||||||||||||
Warrants and discount certificates | 1.2 | - | 1.2 | (1.2 | ) | - | - | ||||||||||||
Currency forward contracts | 0.8 | - | 0.8 | - | - | 0.8 | |||||||||||||
Total | $ | 4,358.9 | $ | - | $ | 4,358.9 | $ | (4,198.6 | ) | $ | - | $ | 160.3 | ||||||
-1 | As of March 31, 2014 and December 31, 2013, the Company had $6.44 billion and $6.73 billion, respectively, of securities purchased under agreements to resell that were segregated to satisfy regulatory requirements. These securities are included in “Cash and securities—segregated for regulatory purposes” in the condensed consolidated statements of financial condition. |
Collateralized_Transactions
Collateralized Transactions | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Notes to Consolidated Financial Statements | ' | |||||||||||
Collateralized Transactions | ' | |||||||||||
7. Collateralized Transactions | ||||||||||||
The Company enters into securities borrowing and lending transactions and agreements to repurchase and resell securities to finance trading inventory, to obtain securities for settlement and to earn residual interest rate spreads. In addition, the Company’s customers pledge their securities owned to collateralize margin loans. Under these transactions, the Company either receives or provides collateral, including equity, corporate debt and U.S. government securities. Under many agreements, the Company is permitted to sell or repledge securities received as collateral and use these securities to secure repurchase agreements, enter into securities lending transactions or deliver these securities to counterparties to cover short positions. | ||||||||||||
The Company also engages in securities financing transactions with and for customers through margin lending. Customer receivables generated from margin lending activity are collateralized by customer-owned securities held by the Company. Customers’ required margin levels and established credit limits are monitored continuously by risk management staff using automated systems. Pursuant to Company policy and as enforced by such systems, customers are required to deposit additional collateral or reduce positions, when necessary to avoid automatic liquidation of their positions. | ||||||||||||
Margin loans are extended to customers on a demand basis and are not committed facilities. Factors considered in the acceptance or rejection of margin loans are the amount of the loan, the degree of leverage being employed in the customer account and an overall evaluation of the customer’s portfolio to ensure proper diversification or, in the case of concentrated positions, appropriate liquidity of the underlying collateral. Additionally, transactions relating to concentrated or restricted positions are limited or prohibited by raising the level of required margin collateral (to 100% in the extreme case). Underlying collateral for margin loans is evaluated with respect to the liquidity of the collateral positions, valuation of securities, volatility analysis and an evaluation of industry concentrations. Adherence to the Company’s collateral policies significantly limits the Company’s credit exposure to margin loans in the event of a customer’s default. Under margin lending agreements, the Company may request additional margin collateral from customers and may sell securities that have not been paid for or purchase securities sold but not delivered from customers, if necessary. At March 31, 2014 and December 31, 2013, approximately $14.41 billion and $13.60 billion, respectively, of customer margin loans were outstanding. | ||||||||||||
Amounts relating to collateralized transactions at March 31, 2014 and December 31, 2013 are summarized as follows (millions): | ||||||||||||
31-Mar-14 | 31-Dec-13 | |||||||||||
Permitted | Sold or | Permitted | Sold or | |||||||||
to Repledge | Repledged | to Repledge | Repledged | |||||||||
Securities lending transactions | $ | 8,834.5 | $ | 2,492.7 | $ | 9,331.9 | $ | 2,504.3 | ||||
Agreements to resell (1) | 6,725.5 | 6,694.9 | 7,116.1 | 7,099.6 | ||||||||
Customer margin assets | 13,061.4 | 5,721.9 | 11,753.3 | 4,602.9 | ||||||||
$ | 28,621.4 | $ | 14,909.5 | $ | 28,201.3 | $ | 14,206.8 | |||||
-1 | At March 31, 2014, $6.44 billion or 96% (at December 31, 2013, $6.73 billion, or 95%), of securities acquired through agreements to resell that are shown as repledged have been deposited in a separate bank account for the exclusive benefit of customers in accordance with SEC Rule 15c3-3. | |||||||||||
In the normal course of business, the Company pledges qualified securities with clearing organizations to satisfy daily margin and clearing fund requirements. At March 31, 2014 and December 31, 2013, the majority of the Company’s government securities owned were pledged to clearing organizations. | ||||||||||||
Financial instruments owned and pledged, including amounts pledged to affiliates, where the counterparty has the right to repledge, at March 31, 2014 and December 31, 2013 consisted of the following (millions): | ||||||||||||
March 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Stocks | $ | 762.8 | $ | 1,097.8 | ||||||||
Warrants | 0.2 | 0.2 | ||||||||||
U.S. and foreign government obligations | 58.5 | 64.4 | ||||||||||
Corporate and municipal bonds | 0.9 | 1.1 | ||||||||||
$ | 822.4 | $ | 1,163.5 | |||||||||
Senior_Secured_Revolving_Credi
Senior Secured Revolving Credit Facility | 3 Months Ended | ||
Mar. 31, 2014 | |||
Notes to Consolidated Financial Statements | ' | ||
Senior Secured Revolving Credit Facility | ' | ||
8. Senior Secured Revolving Credit Facility | |||
On May 17, 2012, IBG LLC entered into a $100 million three-year senior secured revolving credit facility with Bank of America, N.A. as administrative agent and Citibank, N.A., as syndication agent. This credit facility replaced a similar two-year facility that expired on May 18, 2012. | |||
IBG LLC is the sole borrower under this credit facility. The facility’s interest rate is indexed to the overnight federal funds rate or to the British Bankers Association LIBOR rate for the relevant term, at the borrower’s option, and is secured by a first priority interest in all of the capital stock of each entity owned directly by IBG LLC (subject to customary limitations with respect to foreign subsidiaries). The facility may be used to finance working capital needs and general corporate purposes, including downstreaming funds to IBG LLC’s regulated broker-dealer subsidiaries as regulatory capital. This allows IBG LLC to take advantage of market opportunities when they arise, while maintaining substantial excess regulatory capital. The financial condition covenants contained in this credit facility include the following: | |||
• | minimum consolidated shareholders’ equity, as defined, of $3.6 billion, with quarterly increases equal to 25% of positive consolidated net income; | ||
• | maximum total debt to capitalization ratio of 30%; | ||
• | minimum liquidity ratio of 1.0 to 1.0; and | ||
• | maximum total debt to net regulatory capital ratio of 35%. | ||
At March 31, 2014 and December 31, 2013, no borrowings were outstanding under this credit facility and IBG LLC was in compliance with all of the covenants. At maturity, subject to meeting certain terms of the facility, the Company will have an option to convert the facility to a one-year term loan. |
Defined_Contribution_and_Emplo
Defined Contribution and Employee Incentive Plans | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Notes to Consolidated Financial Statements | ' | ||||
Employee Incentive Plans | ' | ||||
9. Employee Incentive Plans | |||||
Return on Investment Dollar Units (“ROI Dollar Units”) | |||||
From 1998 through January 1, 2006, IBG LLC granted all non-member employees ROI Dollar Units, which are redeemable under the amended provisions of the plan, and in accordance with regulations issued by the Internal Revenue Service (Section 409A of the Internal Revenue Code). Upon redemption, the grantee is entitled to accumulated earnings on the face value of the certificate, but not the actual face value. For grants made in 1998 and 1999, grantees may redeem the ROI Dollar Units after vesting on the fifth anniversary of the date of their grant and prior to the tenth anniversary of the date of their grant. For grants made between January 1, 2000 and January 1, 2005, grantees must elect to redeem the ROI Dollar Units upon the fifth, seventh or tenth anniversary date. These ROI Dollar Units have vested at the fifth anniversary of the date of their grant and will continue to accumulate earnings until the elected redemption date. For grants made on or after January 1, 2006, all ROI Dollar Units vested on the fifth anniversary date of their grant and were or will be automatically redeemed. Subsequent to the IPO, no additional ROI Dollar Units have been or will be granted, and non-cash compensation to employees will consist primarily of grants of shares of Common Stock as described below under “2007 Stock Incentive Plan.” | |||||
As of March 31, 2014 and December 31, 2013, payables to employees for ROI Dollar Units were $3.9 million and $5.6 million, respectively, all of which were vested. These amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. Compensation expense for the ROI Dollar Unit plan, included in the condensed consolidated statements of comprehensive income was $0.1 million and $0.1 million for the three months ended March 31, 2014 and 2013, respectively. | |||||
2007 ROI Unit Stock Plan | |||||
In connection with the IPO, IBG, Inc. adopted the Interactive Brokers Group, Inc. 2007 ROI Unit Stock Plan (the “ROI Unit Stock Plan”). Under this plan, certain employees of the Group who held ROI Dollar Units, at the employee’s option, elected to invest their ROI Dollar Unit accumulated earnings as of December 31, 2006 in shares of Common Stock. An aggregate of 1,271,009 shares of Common Stock (consisting of 1,250,000 shares issued under the ROI Unit Stock Plan and 21,009 shares under the 2007 Stock Incentive Plan, as described below), with a fair value at the date of grant of $38.1 million were issued to IBG LLC and held as treasury stock, to be distributed to employees in accordance with the following schedule and subject to the conditions below: | |||||
• | 10% on the date of the IPO (or on the first anniversary of the IPO, in the case of U.S. ROI Unit holders who made the above-referenced elections after December 31, 2006); and | ||||
• | an additional 15% on each of the first six anniversaries of the date of the IPO, assuming continued employment with IBG, Inc. and compliance with other applicable covenants. | ||||
Of the fair value at the date of grant, $17.8 million represented the accumulated ROI Dollar Unit value elected to be invested by employees in Common Stock and such amount was accrued for as of December 31, 2006. The remainder is being ratably accrued as compensation expense by the Company from the date of the IPO over the requisite service period represented by the aforementioned distribution schedule | |||||
As of December 31, 2012, compensation costs for the ROI Unit Stock Plan had been fully accrued and as of December 31, 2013, all shares issued to current employees under the ROI Unit Stock Plan had been distributed. | |||||
2007 Stock Incentive Plan | |||||
Under the Interactive Brokers Group, Inc. 2007 Stock Incentive Plan (the “Stock Incentive Plan” or “SIP”), up to 30.0 million shares (20.0 million shares at March 31, 2014 and December 31, 2013) of common stock may be granted and issued to directors, officers, employees, contractors and consultants of IBG, Inc. and its subsidiaries. The 10.0 million increase in shares allocated to the SIP was approved by the Company’s Compensation Committee and Board of Directors in February 2014, and was approved by the stockholders at the Company’s 2014 Annual Meeting on April 24, 2014. The purpose of the Stock Incentive Plan is to promote IBG, Inc.’s long-term financial success by attracting, retaining and rewarding eligible participants. | |||||
As a result of the Company’s organizational structure, a description of which can be found on page 4 of the Company’s 2013 Annual Report on Form 10-K, filed with the SEC, there is no dilutive effect upon ownership of minority shareholders of issuing shares under the Stock Incentive Plan. The issuances do not dilute the book value the ownership of minority shareholders because a) the restricted stock units are granted at market value and b) upon their vesting and the related issuance of shares of Common Stock, the ownership of the Company in its operating subsidiary, IBG LLC, increases proportionately to the shares issued. As a result of such proportionate increase in share ownership, the dilution upon issuance of Common Stock is borne by IBG LLC’s majority shareholder (i.e., noncontrolling interest), IBG Holdings LLC, and not by the Company or its minority shareholders. Additionally, dilution of earnings that may take place after issuance of Common Stock is reflected in the earnings per share (“EPS”) reported in the Company’s financial statements. The EPS dilution can be neither estimated nor projected, but historically it has not been material. | |||||
The Stock Incentive Plan is administered by the Compensation Committee of IBG, Inc.’s Board of Directors. The Compensation Committee has discretionary authority to determine which employees are eligible to participate in the Stock Incentive Plan and establishes the terms and conditions of the stock awards, including the number of awards granted to each employee and all other terms and conditions applicable to such awards in individual grant agreements. Awards are expected to be made primarily through grants of restricted Common Stock. Stock Incentive Plan awards are subject to issuance over time and may be forfeited upon an employee’s termination of employment or violation of certain applicable covenants prior to issuance, unless determined otherwise by the Compensation Committee. | |||||
The Stock Incentive Plan provides that, upon a change in control, the Compensation Committee may, at its discretion, fully vest any granted but not yet earned awards under the Stock Incentive Plan, or provide that any such granted but not yet earned awards will be honored or assumed, or new rights substituted therefore by the new employer on a substantially similar basis and on terms and conditions substantially comparable to those of the Stock Incentive Plan. | |||||
IBG, Inc. granted awards under the Stock Incentive Plan in connection with the IPO and is expected to continue to grant awards on or about December 31 of each year following the IPO, to eligible employees as part of an overall plan of equity compensation. Shares of common stock vest, and become distributable to employees in accordance with the following schedule: | |||||
• | 10% on the first vesting date, which approximates the anniversary of the IPO; and | ||||
• | an additional 15% on each of the following six anniversaries of the first vesting, assuming continued employment with IBG, Inc. and compliance with non-competition and other applicable covenants. | ||||
Awards granted to external directors vest, and are distributed, over a five-year period (20% per year) commencing one year after the date of grant. A total of 20,423 shares have been granted to the external directors cumulatively since the IPO. | |||||
Stock Incentive Plan share grants (excluding 21,009 shares issued pursuant to the 2007 ROI Unit Stock Plan above) and the related fair values at the date of grant were: | |||||
Fair Value at | |||||
Date of Grant | |||||
Shares | ($ millions) | ||||
In connection with IPO | 927,943 | $ | 27.8 | ||
31-Jul-07 | 16,665 | 0.4 | |||
31-Dec-07 | 1,055,206 | 32.9 | |||
31-Dec-08 | 2,065,432 | 35.6 | |||
31-Dec-09 | 2,448,031 | 42.8 | |||
31-Dec-10 | 2,513,738 | 43.2 | |||
31-Dec-11 | 3,411,613 | 50.8 | |||
6-Jan-12 | 1,215,866 | 18.4 | |||
31-Dec-12 | 3,629,960 | 50.5 | |||
31-Dec-13 | 1,894,046 | 46.2 | |||
19,178,500 | $ | 348.6 | |||
Estimated future grants under the Stock Incentive Plan are accrued for ratably during each year under the ASC 718 “Graded Vesting” method. In accordance with the vesting schedule, outstanding awards vest and are distributed to participants once each year on or about the Company’s IPO anniversary. At the end of each year, there are no vested awards that remain undistributed. | |||||
Compensation expense recognized in the condensed consolidated statements of comprehensive income was $10.0 million and $8.7 million for the three months ended March 31, 2014 and 2013, respectively. Estimated future compensation costs for unvested awards at March 31, 2014 are $36.7 million. | |||||
The following is a summary of stock plan activity for the three months ended March 31, 2014: | |||||
Shares | |||||
2007 Stock | |||||
Incentive Plan | |||||
Balance, December 31, 2013 | 11,647,117 | ||||
Granted | - | ||||
Forfeited | - | ||||
Distributed (1) | (2,730 | ) | |||
Balance, March 31, 2014 | 11,644,387 | ||||
-1 | Shares cumulatively distributed under the 2007 Stock Incentive Plan include 14,843 shares from Treasury representing shares acquired at the IPO to satisfy obligations under the 2007 ROI Unit Stock Plan. | ||||
Awards granted under the stock plans are subject to forfeiture in the event an employee ceases employment with the Company. The stock plans provide that employees who discontinue employment with the Company without cause and continue to meet the terms of the plans’ post-employment provisions will forfeit 50% of unvested previously granted awards unless the employee is over the age of 59, in which case the employee would be eligible to receive 100% of unvested awards previously granted. Distributions of remaining awards granted on or before January 1, 2009 to former employees will occur within 90 days of the anniversary of the termination of employment date over a five (5) year vesting schedule, 12.5% in each of the first four years and 50% in the fifth year. Distributions of remaining awards granted on or after January 1, 2010 to former employees will occur over the remaining vesting schedule applicable to each grant. Through March 31, 2014, a total of 93,496 shares have been distributed under these post-employment provisions. These distributions are included in the Stock Plans activity tables above. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Consolidated Financial Statements | ' |
Income taxes | ' |
10. Income Taxes | |
Income tax expense for the three months ended March 31, 2014 and 2013 differs from the U.S. federal statutory rate primarily due to the taxation treatment of income attributable to noncontrolling interests in IBG LLC. These noncontrolling interests are subject to U.S. taxation as partnerships. Accordingly, the income attributable to these noncontrolling interests is reported in the condensed consolidated statements of comprehensive income, but the related U.S. income tax expense attributable to these noncontrolling interests is not reported by the Company as it is the obligation of the individual partners. Income tax expense is also affected by the differing effective tax rates in foreign, state and local jurisdictions where certain of the Company’s subsidiaries are subject to corporate taxation. | |
Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the Common Stock offerings (Note 4), differences in the valuation of financial assets and liabilities, and for other temporary differences arising from the deductibility of compensation and depreciation expenses in different time periods for book and income tax return purposes. | |
As of and for the three months ended March 31, 2014 and 2013, the Company had no unrecognized tax liabilities as defined under ASC 740, Income Taxes and no valuation allowances on deferred tax assets were required. The Company is subject to taxation in the United States and various states and foreign jurisdictions. As of March 31, 2014, the Company’s tax returns for 2010 through 2013 are subject to examination by the respective tax authorities. As of March 31, 2014, the Company is open to U.S. Federal income tax examinations for the tax years 2010 through 2012, and to non U.S. income tax examinations for the tax years 2006 through 2012. In addition, the Company is open to state and local income tax examinations in various jurisdictions for the tax years 2009 through 2012. | |
At March 31, 2014, accumulated earnings held by non-U.S. subsidiaries totaled $1,078.6 million (at December 31, 2013 $1,072.9 million). Of this amount, approximately $398.5 million (at December 31, 2013 $422.3 million) is attributable to earnings of the Company’s foreign subsidiaries that are considered “pass-through” entities for U.S. income tax purposes. Since the Company accounts for U.S. income taxes on these earnings on a current basis, no additional U.S. tax consequences would result from the repatriation of these earnings other than that which would be due arising from currency fluctuations between the time the earnings are reported for U.S. tax purposes and when they are remitted. With respect to certain of these subsidiaries’ accumulated earnings (approximately $300.4 million and $318.7 million as of March 31, 2014 and December 31, 2013, respectively), repatriation would result in additional foreign taxes in the form of dividend withholding tax imposed on the recipient of the distribution or dividend distribution tax imposed on the payor of the distribution. The Company has not provided for its proportionate share of these additional foreign taxes as it does not intend to repatriate these earnings in the foreseeable future. For the same reason, the Company has not provided deferred U.S. tax on cumulative translation adjustments associated with these earnings. | |
The remainder of the accumulated earnings are attributable to non-U.S. subsidiaries that are not considered “pass-through” entities for U.S. tax purposes. The Company’s U.S. tax basis in the stock of most of these entities exceeds its book basis. Establishing a deferred tax asset pursuant to ASC 740 is not permitted as this difference will not reverse in the foreseeable future. In the instances in which the Company’s book basis exceeds its U.S. tax basis, no deferred tax liability has been established as the Company considers the earnings of those entities to be indefinitely reinvested. |
Commitments_Contingencies_and_
Commitments, Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Consolidated Financial Statements | ' |
Commitments, Contingencies and Guarantees | ' |
11. Commitments, Contingencies and Guarantees | |
In October 2013, a small number of the Company’s brokerage customers had taken relatively large positions in four stocks listed on the Singapore Exchange. In early October, within a very short timeframe, these securities lost over 90% of their value. The customer accounts were margined and fell into deficits totaling $64 million prior to the time the Company took possession of their securities positions. Through March 31, 2014, the Company has recognized a cumulative loss of approximately $77 million. The maximum aggregate loss, which would occur if the securities’ prices all fell to zero and none of the debts were collected, would be approximately $84 million. The Company is currently pursuing the collection of the debts. The ultimate effect of this incident on the Company’s results will depend upon market conditions and the outcome of the Company’s debt collection efforts. | |
Litigation | |
The Company is subject to certain pending and threatened legal actions which arise out of the normal course of business. Litigation is inherently unpredictable, particularly in proceedings where claimants seek substantial or indeterminate damages, or which are in their early stages. IBG, Inc. has not been able to quantify the actual loss or range of loss related to such legal proceedings, the manner in which they will be resolved, the timing of final resolution or the ultimate settlement. Management believes that the resolution of these actions will not have a material effect, if any, on the Company’s business or financial condition, but may have a material impact on the results of operations for a given period. | |
On February 3, 2010, Trading Technologies International, Inc. (“Trading Technologies”) filed a complaint in the United States District Court for the Northern District of Illinois, Eastern Division, against Interactive Brokers Group, Inc., IBG LLC, Holdings, and Interactive Brokers LLC. Thereafter, Trading Technologies dismissed Interactive Brokers Group, Inc. and Holdings from the case, leaving only IBG LLC and Interactive Brokers LLC as defendants (“Defendants”). The operative complaint, as amended, alleges that the Defendants have infringed and continue to infringe twelve U.S. patents held by Trading Technologies. Trading Technologies is seeking, among other things, unspecified damages and injunctive relief. The case is in the early stages and discovery has yet to begin. While it is too early to predict the outcome of the matter, we believe we have meritorious defenses to the allegations made in the complaint and intend to defend ourselves vigorously against them. However, litigation is inherently uncertain and there can be no guarantee that the Company will prevail or that the litigation can be settled on favorable terms. | |
IBG, Inc. accounts for potential losses related to litigation in accordance with ASC 450, Contingencies. As of March 31, 2014 and December 31, 2013, reserves provided for potential losses related to litigation matters were not material. | |
Guarantees | |
Certain of the Operating Companies provide guarantees to securities clearing houses and exchanges which meet the accounting definition of a guarantee under ASC 460, Guarantees. Under standard membership agreements, clearing house and exchange members are required to guarantee collectively the performance of other members. Under the agreements, if a member becomes unable to satisfy its obligations, other members would be required to meet shortfalls. In the opinion of management, the Operating Companies’ liability under these arrangements is not quantifiable and could exceed the cash and securities they have posted as collateral. However, the potential for these Operating Companies to be required to make payments under these arrangements is remote. Accordingly, no contingent liability is carried in the condensed consolidated statements of financial condition for these arrangements. | |
In connection with its retail brokerage business, IB LLC or other electronic brokerage Operating Companies perform securities and commodities execution, clearance and settlement on behalf of their customers for whom they commit to settle trades submitted by such customers with the respective clearing houses. If a customer fails to fulfill its settlement obligations, the respective Operating Company must fulfill those settlement obligations. No contingent liability is carried on the condensed consolidated statements of financial condition for such customer obligations. | |
Other Commitments | |
Certain clearing houses and clearing banks and firms used by certain Operating Companies are given a security interest in certain assets of those Operating Companies held by those clearing organizations. These assets may be applied to satisfy the obligations of those Operating Companies to the respective clearing organizations. |
Segment_and_Geographic_Informa
Segment and Geographic Information | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Notes to Consolidated Financial Statements | ' | |||||||
Segment and Geographic Information | ' | |||||||
12. Segment and Geographic Information | ||||||||
IBG, Inc. operates in two business segments: electronic brokerage and market making. IBG, Inc. conducts its electronic brokerage business through its Interactive Brokers subsidiaries, which provide electronic execution and clearing services to customers worldwide. The Company conducts its market making business principally through its Timber Hill subsidiaries on the world’s leading exchanges and market centers, primarily in exchange-traded equities, equity options and equity-index options and futures. | ||||||||
Significant transactions and balances between the Operating Companies occur, primarily as a result of certain Operating Companies holding exchange or clearing organization memberships, which are utilized to provide execution and clearing services to affiliates. Charges for transactions between segments are designed to approximate full costs. Intra-segment and intra-region income and expenses and related balances have been eliminated in this segment and geographic information to reflect the external business conducted in each segment or geographical region. Corporate items include non-allocated corporate income and expenses that are not attributed to segments for performance measurement, corporate assets and eliminations. | ||||||||
Management believes that the following information by business segment provides a reasonable representation of each segment’s contribution to total net revenues and income before income taxes for the three months ended March 31, 2014 and 2013, and to total assets as of March 31, 2014 and December 31, 2013 (millions): | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues: | ||||||||
Electronic brokerage | $ | 223.7 | $ | 195.3 | ||||
Market making | 133.1 | 23.6 | ||||||
Corporate and eliminations | (1.9 | ) | (2.8 | ) | ||||
Total net revenues | $ | 354.9 | $ | 216.1 | ||||
Income before income taxes: | ||||||||
Electronic brokerage | $ | 134.3 | $ | 111.0 | ||||
Market making | 88.1 | (29.0 | ) | |||||
Corporate and eliminations | (4.3 | ) | 0.2 | |||||
Total income before income taxes | $ | 218.1 | $ | 82.2 | ||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Assets: | ||||||||
Electronic brokerage | $ | 33,021.1 | $ | 31,333.5 | ||||
Market making | 12,330.4 | 12,139.5 | ||||||
Corporate and eliminations | (6,371.1 | ) | (5,602.3 | ) | ||||
Total assets | $ | 38,980.4 | $ | 37,870.7 | ||||
The Company operates its automated global business in U.S. and international markets on more than 100 exchanges and market centers. A significant portion of IBG, Inc.’s net revenues are generated by subsidiaries operating outside the United States. International operations are comprised of electronic brokerage and market making activities in 24 countries in Europe, Asia and the Americas (outside the United States). The following table presents total net revenues and income before income taxes by geographic area for the three months ended March 31, 2014 and 2013 (millions): | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues: | ||||||||
United States | $ | 282.8 | $ | 138.6 | ||||
International | 74.3 | 80.2 | ||||||
Corporate and eliminations | (2.2 | ) | (2.7 | ) | ||||
Total net revenues | $ | 354.9 | $ | 216.1 | ||||
Income before income taxes: | ||||||||
United States | $ | 197.0 | $ | 51.9 | ||||
International | 25.7 | 29.9 | ||||||
Corporate and eliminations | (4.6 | ) | 0.4 | |||||
Total income before income taxes | $ | 218.1 | $ | 82.2 |
Regulatory_Requirements
Regulatory Requirements | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Consolidated Financial Statements | ' | ||||||||
Regulatory Requirements | ' | ||||||||
13. Regulatory Requirements | |||||||||
At March 31, 2014, aggregate excess regulatory capital for all of the Operating Companies was $3.26 billion. | |||||||||
TH LLC and IB LLC are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act and the CFTC’s minimum financial requirements (Regulation 1.17), and THE is subject to the Swiss Financial Market Supervisory Authority eligible equity requirement. Additionally, THSHK is subject to the Hong Kong Securities Futures Commission liquid capital requirement, THA is subject to the Australian Stock Exchange liquid capital requirement, THC and IBC are subject to the Investment Industry Regulatory Organization of Canada risk adjusted capital requirement, IBUK is subject to the U.K. Financial Conduct Authority Capital Requirements Directive, IBI is subject to the National Stock Exchange of India net capital requirements and IBSJ is subject to the Japanese Financial Supervisory Agency capital requirements. The following table summarizes capital, capital requirements and excess regulatory capital (millions): | |||||||||
Net Capital/ | |||||||||
Eligible Equity | Requirement | Excess | |||||||
IB LLC | $ | 2,085.7 | $ | 313.1 | $ | 1,772.6 | |||
TH LLC | 560.6 | 56.2 | 504.4 | ||||||
THE | 708.5 | 191.6 | 516.9 | ||||||
Other regulated Operating Companies | 502.7 | 41.0 | 461.7 | ||||||
$ | 3,857.5 | $ | 601.9 | $ | 3,255.6 | ||||
Regulatory capital requirements could restrict the Operating Companies from expanding their business and declaring dividends if their net capital does not meet regulatory requirements. Also, certain entities within IBG, Inc. are subject to other regulatory restrictions and requirements. | |||||||||
At March 31, 2014, all of the regulated Operating Companies were in compliance with their respective regulatory capital requirements. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Consolidated Financial Statements | ' |
Related Party Transactions | ' |
14. Related Party Transactions | |
Receivable from affiliate represents amounts advanced to Holdings and payable to affiliate represents amounts payable to Holdings under the Tax Receivable Agreement (Note 4). | |
Included in receivables from and payables to customers in the accompanying condensed consolidated statements of financial condition as of March 31, 2014 and December 31, 2013 were accounts receivable from directors, officers and their affiliates of $0.5 million and $0.4 million and payables of $383.0 million and $815.5 million, respectively. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Consolidated Financial Statements | ' |
Subsequent events | ' |
15. Subsequent Events | |
As required by ASC 855, Subsequent Events, the Company has evaluated subsequent events for adjustment to or disclosure in its condensed consolidated financial statements through the date the condensed consolidated financial statements were issued. | |
No recordable or disclosable events, not otherwise reported in these financial statements or the notes thereto, occurred. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Significant accounting policies | ' | ||||
Basis of Presentation | ' | ||||
Basis of Presentation | |||||
These condensed consolidated financial statements are presented in U.S. dollars and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding financial reporting with respect to Form 10-Q and accounting standards generally accepted in the United States of America (“U.S. GAAP”) promulgated in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or the “Codification”). These condensed consolidated financial statements include the accounts of the Company and its subsidiaries and include all adjustments of a normal, recurring nature necessary to present fairly the financial condition as of March 31, 2014 and December 31, 2013, the results of operations and comprehensive income for the three months ended March 31, 2014 and 2013 and cash flows for the three months ended March 31, 2014 and 2013. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in IBG, Inc.’s 2013 Annual Report on Form 10-K filed with the SEC on March 3, 2014. The condensed consolidated financial statement information as of December 31, 2013 has been derived from the 2013 audited consolidated financial statements. The results of operations for interim periods are not necessarily indicative of results for the entire year. | |||||
Principles of Consolidation | ' | ||||
Principles of Consolidation, including Noncontrolling Interests | |||||
The condensed consolidated financial statements include the accounts of IBG, Inc. and its majority and wholly owned subsidiaries. As sole managing member of IBG LLC, IBG, Inc. exerts control over the Group’s operations. In accordance with ASC 810, Consolidation, the Company consolidates the Group’s financial statements and records the interests in the Group that IBG, Inc. does not own as noncontrolling interests. | |||||
The Company’s policy is to consolidate all other entities in which it owns more than 50% unless it does not have control. All inter-company balances and transactions have been eliminated. | |||||
Use of Estimates | ' | ||||
Use of Estimates | |||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the condensed consolidated financial statements and accompanying notes. Estimates, by their nature, are based on judgment and available information. Therefore, actual results could differ materially from those estimates. Such estimates include the allowance for doubtful accounts, compensation accruals, current and deferred income taxes, and estimated contingency reserves. | |||||
Fair Value | ' | ||||
Fair Value | |||||
At March 31, 2014 and December 31, 2013, substantially all of IBG, Inc.’s assets and liabilities, including financial instruments, were carried at fair value based on published market prices and were marked to market, or were assets and liabilities which are short-term in nature and were carried at amounts that approximate fair value. | |||||
IBG, Inc. applies the fair value hierarchy of ASC 820, Fair Value Measurement, to prioritize the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are: | |||||
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; | ||||
Level 2 | Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; and | ||||
Level 3 | Prices or valuations that require inputs that are both significant to fair value measurement and unobservable. | ||||
Financial instruments owned and financial instruments sold, not yet purchased are generally classified as Level 1 financial instruments. The Company’s Level 1 financial instruments, which are valued using quoted market prices as published by exchanges and clearing houses or otherwise broadly distributed in active markets, include U.S. government and sovereign obligations, active listed securities, options, futures, options on futures and corporate and municipal debt securities. IBG, Inc. does not adjust quoted prices for Level 1 financial instruments, even in the event that the Company may hold a large position whereby a purchase or sale could reasonably impact quoted prices. | |||||
Currency forward contracts are valued using broadly distributed bank and broker prices, and are classified as Level 2 financial instruments as such instruments are not exchange-traded. Other securities that are not traded in active markets are also classified in Level 2. Level 3 financial instruments are comprised of securities that have been delisted or otherwise are no longer tradable and have been valued by the Company based on internal estimates. | |||||
Other fair value investments, reported in other assets in the accompanying condensed consolidated statement of financial condition and in Note 6—Financial Assets and Financial Liabilities, are comprised of financial instruments that the Company does not carry in its market making business, which were comprised of listed stocks and options, and corporate debt securities. These investments are generally reported as Level 2 financial instruments, except for unrestricted listed equities, which are classified as Level 1 financial instruments. Other fair value liabilities are comprised of unrestricted listed equities which are classified as Level 1 financial instruments. | |||||
Earnings Per Share | ' | ||||
Earnings per Share | |||||
Earnings per share (“EPS”) are computed in accordance with ASC 260, Earnings per Share. Shares of Class A and Class B common stock share proportionately in the earnings of IBG, Inc. Basic earnings per share are calculated utilizing net income available for common stockholders divided by the weighted average number of shares of Class A and Class B common stock outstanding for that period. Diluted earnings per share are calculated utilizing the Company’s basic net income available for common stockholders divided by diluted weighted average shares outstanding with no adjustments to net income available to common stockholders for dilutive potential common shares. | |||||
Stock-Based Compensation | ' | ||||
Stock-Based Compensation | |||||
IBG, Inc. follows ASC 718, Compensation—Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires all share-based payments to employees to be recognized in the condensed consolidated financial statements using a fair value-based method. Grants, which are denominated in U.S. dollars, are communicated to employees in the year of grant, thereby establishing the fair value of each grant. The fair value of awards granted to employees are generally expensed as follows—50% in the year of grant in recognition of plan forfeiture provisions (described below) and the remaining 50% over the related vesting period utilizing the “graded vesting” method permitted under ASC 718-10. In the case of “retirement eligible” employees (those employees older than 59), 100% of awards are expensed when granted. | |||||
Awards granted under stock-based compensation plans are subject to forfeiture in the event an employee ceases employment with the Company. The plans provide that employees who discontinue employment with the Company without cause and continue to meet the terms of the plans’ post-employment provisions will forfeit 50% of unvested previously granted awards unless the employee is over the age of 59, in which case the employee would be eligible to receive 100% of unvested awards previously granted. | |||||
Cash and Cash Equivalents | ' | ||||
Cash and Cash Equivalents | |||||
The Company considers all highly liquid investments, with maturities of three months or less, that are not segregated and deposited for regulatory purposes or to meet margin requirements at clearing houses to be cash equivalents. | |||||
Cash and Securities - Segregated for Regulatory Purposes | ' | ||||
Cash and Securities—Segregated for Regulatory Purposes | |||||
As a result of customer activities, certain Operating Companies are obligated by rules mandated by their primary regulators to segregate or set aside cash or qualified securities to satisfy such regulations, which regulations have been promulgated to protect customer assets. In addition, substantially all of the Operating Companies are members of various clearing organizations at which cash or securities are deposited as required to conduct day-to-day clearance activities. Securities segregated for regulatory purposes consisted of U.S. Treasury Bills of $3.43 billion and $1.30 billion at March 31, 2014 and December 31, 2013, respectively, which are recorded as Level 1 financial assets and securities purchased under agreements to resell in the amount of $6.44 billion and $6.73 billion as of March 31, 2014 and December 31, 2013, respectively, which amounts approximate fair value. | |||||
Securities Borrowed and Securities Loaned | ' | ||||
Securities Borrowed and Securities Loaned | |||||
Securities borrowed and securities loaned are recorded at the amount of collateral advanced or received. Securities borrowed transactions require the Company to provide counterparties with collateral, which may be in the form of cash, letters of credit or other securities. With respect to securities loaned, IBG, Inc. receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. IBG, Inc. monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Receivables and payables with the same counterparty are not offset in the condensed consolidated statements of financial condition. | |||||
Securities lending fees received or paid by IBG, Inc. are recorded as interest income or interest expense in the condensed consolidated statements of comprehensive income. | |||||
Securities Purchased Under Agreements to Resell | ' | ||||
Securities Purchased Under Agreements to Resell | |||||
Securities purchased under agreements to resell, which are reported as collateralized financing transactions, are recorded at contract value, plus accrued interest, which approximates fair value. To ensure that the fair value of the underlying collateral remains sufficient, this collateral is valued daily with additional collateral obtained or excess collateral returned, as permitted under contractual provisions. The Company does not net securities purchased under agreements to resell transactions with securities sold under agreements to repurchase transactions entered into with the same counterparty. | |||||
Financial Instruments Owned and Sold But Not Yet Purchased | ' | ||||
Financial Instruments Owned and Sold But Not Yet Purchased | |||||
Financial instrument transactions are accounted for on a trade date basis. Financial instruments owned and financial instruments sold but not yet purchased are recorded at fair value based upon quoted market prices. All firm-owned financial instruments pledged to counterparties where the counterparty has the right, by contract or custom, to sell or repledge the financial instruments are classified as financial instruments owned and pledged as collateral in the condensed consolidated statements of financial condition. | |||||
IBG, Inc. also enters into currency forward contracts. These transactions, which are also accounted for on a trade date basis, are agreements to exchange a fixed amount of one currency for a specified amount of a second currency at completion of the currency forward contract term. Unrealized mark-to-market gains and losses on currency forward contracts are reported as components of financial instruments owned or financial instruments sold but not yet purchased in the condensed consolidated statements of financial condition. | |||||
Customer Receivables and Payables | ' | ||||
Customer Receivables and Payables | |||||
Customer securities transactions are recorded on a settlement date basis and customer commodities transactions are recorded on a trade date basis. Receivables from and payables to customers include amounts due on cash and margin transactions, including futures contracts transacted on behalf of customers. Securities owned by customers, including those that collateralize margin loans or other similar transactions, are not reported in the condensed consolidated statements of financial condition. Amounts receivable from customers that are determined by management to be uncollectible are expensed as a component of general and administrative expense. | |||||
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | ' | ||||
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | |||||
Receivables and payables to brokers, dealers and clearing organizations include net receivables and payables from unsettled trades, including amounts related to futures and options on futures contracts executed on behalf of customers, amounts receivable for securities not delivered by IBG, Inc. to the purchaser by the settlement date (“fails to deliver”) and cash margin deposits. Payables to brokers, dealers and clearing organizations also include amounts payable for securities not received by IBG, Inc. from a seller by the settlement date (“fails to receive”). | |||||
Investments Policy | ' | ||||
Investments | |||||
IBG, Inc. makes certain strategic investments related to financial services and accounts for these investments under the cost method of accounting or under the equity method of accounting as required under ASC 323, Investments—Equity Method and Joint Ventures. Investments accounted for under the equity method, including where the investee is a limited partnership or limited liability company, are recorded at the fair value amount of IBG, Inc.’s initial investment and adjusted each period for IBG, Inc.’s share of the investee’s income or loss. IBG, Inc.’s share of the income or losses from equity investments is reported as a component of other income in the condensed consolidated statements of comprehensive income. The recorded amounts of IBG, Inc.’s equity method investments, $27.0 million at March 31, 2014 ($27.5 million at December 31, 2013), which are reported as a component of other assets in the condensed consolidated statements of financial condition, increase or decrease accordingly. Contributions paid to and distributions received from equity investees are recorded as additions or reductions, respectively, to the respective investment balance. | |||||
A judgmental aspect of accounting for investments is evaluating whether an other-than-temporary decline in the value of an investment has occurred. The evaluation of an other-than-temporary impairment is dependent on specific quantitative and qualitative factors and circumstances surrounding an investment, including recurring operating losses, credit defaults and subsequent rounds of financing. IBG, Inc.’s equity investments do not have readily determinable market values. All investments are reviewed for changes in circumstances or occurrence of events that suggest IBG, Inc.’s investment may not be recoverable. If an unrealized loss on any investment is considered to be other-than-temporary, the loss is recognized in the period the determination is made. | |||||
IBG, Inc. also holds exchange memberships and investments in equity securities of certain exchanges as required to qualify as a clearing member, and strategic investments in corporate stock that do not qualify for equity method accounting. Such investments, $27.2 million at March 31, 2014 ($27.6 million at December 31, 2013), are recorded at cost or, if an other-than-temporary impairment in value has occurred, at a value that reflects management’s estimate of the impairment, and are also components of other assets in the condensed consolidated statements of financial condition. Dividends received from cost basis investments are recognized as a component of other income when such dividends are received. | |||||
The Company also makes other fair value investments (which are not considered core business activities) that are accounted for at fair value (Note 6), with gains and losses recorded as a component of other income. | |||||
Property and Equipment | ' | ||||
Property and Equipment | |||||
Property and equipment, which is a component of other assets, consists of purchased technology hardware and software, internally developed software, leasehold improvements and office furniture and equipment. Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Additions and improvements that extend the lives of assets are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation and amortization are computed using the straight-line method. Equipment is depreciated over the estimated useful lives of the assets, while leasehold improvements are amortized over the lesser of the estimated economic useful life of the asset or the term of the lease. Computer equipment is depreciated over three to five years and office furniture and equipment are depreciated over five to seven years. Qualifying costs for internally developed software are capitalized and amortized over the expected useful life of the developed software, not to exceed three years. | |||||
Comprehensive Income and Foreign Currency Translation | ' | ||||
Comprehensive Income and Foreign Currency Translation | |||||
The Company’s operating results are reported in the condensed consolidated statement of comprehensive income pursuant to Accounting Standards Update 2011-05, Comprehensive Income. | |||||
Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). OCI is comprised of revenues, expenses, gains and losses that are reported in the comprehensive income section of the statement of comprehensive income, but are excluded from reported net income. IBG, Inc.’s OCI is comprised of foreign currency translation adjustments, net of related income taxes, where applicable. In general, the practice and intention of the Company is to reinvest the earnings of its non-U.S. subsidiaries in those operations. | |||||
IBG, Inc.’s non-U.S. domiciled subsidiaries have a functional currency that is other than the U.S. dollar. Such subsidiaries’ assets and liabilities are translated into U.S. dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of accumulated OCI. | |||||
Revenue Recognition | ' | ||||
Revenue Recognition | |||||
—Trading Gains | |||||
Trading gains and losses are recorded on trade date and are reported on a net basis. Trading gains are comprised of changes in the fair value of financial instruments owned and financial instruments sold but not yet purchased (i.e., unrealized gains and losses) and realized gains and losses. Included in trading gains are net gains and losses on exchange traded options, futures and other derivative instruments. Dividends are integral to the valuation of stocks and interest is integral to the valuation of fixed income instruments. Accordingly, both dividends and interest income and expense attributable to financial instruments owned and financial instruments sold but not yet purchased are reported on a net basis as a component of trading gains in the accompanying condensed consolidated statements of comprehensive income. | |||||
—Commissions and Execution Fees | |||||
Commissions charged for executing and clearing customer transactions are recorded on a trade date basis and are reported as commissions and execution fees in the condensed consolidated statements of comprehensive income, and the related expenses are reported as execution and clearing expenses. | |||||
—Interest Income and Expense | |||||
The Company earns interest income and incurs interest expense primarily in connection with its electronic brokerage customer business and its securities lending activities. Such interest is recorded on the accrual basis. | |||||
—Foreign Currency Transaction Gains and Losses | |||||
Foreign currency transaction gains and losses from market making are reported as a component of trading gains in the condensed consolidated statements of comprehensive income. Electronic brokerage foreign currency transaction gains and losses are included in interest (if arising from currency swap transactions) or other income. | |||||
Income Taxes | ' | ||||
Income Taxes | |||||
IBG, Inc. accounts for income taxes in accordance with ASC 740, Income Taxes. The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits are based on enacted tax laws (Note 10) and reflect management’s best assessment of estimated future taxes to be paid. The Company is subject to income taxes in both the United States and numerous foreign jurisdictions. Determining income tax expense requires significant judgments and estimates. | |||||
IBG, Inc. recognizes interest related to income tax matters as interest income or expense and penalties related to income tax matters as income tax expense. | |||||
Deferred income tax assets and liabilities arise from temporary differences between the tax and financial statement recognition of the underlying assets and liabilities. In evaluating the ability to recover deferred tax assets within the jurisdictions from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, historical results are adjusted for changes in accounting policies and incorporate assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, three years of cumulative operating income (loss) are considered. Deferred income taxes have not been provided for U.S. tax liabilities or for additional foreign taxes on the unremitted earnings of foreign subsidiaries that have been indefinitely reinvested. | |||||
The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company’s global operations. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows, or financial position. | |||||
ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. | |||||
The Company records tax liabilities in accordance with ASC 740 and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in payments that are different from the current estimates of these tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information becomes available. | |||||
Recently Issued Accounting Pronouncements | ' | ||||
Recently Issued Accounting Pronouncements | |||||
Subsequent to the adoption of the ASC, the FASB will issue Accounting Standards Updates (“ASUs”) as the means to add to or delete from, or otherwise amend the ASC. In 2014, prior to the issuance of the Company’s condensed consolidated financial statements, ASUs 2014-01 through 2014-08 have been issued. Following is a summary of recently issued ASUs that have affected or may affect the Company’s condensed consolidated financial statements: | |||||
Affects | Status | ||||
ASU 2013-05 | Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity | Effective for fiscal periods beginning on or after December 15, 2013. | |||
ASU 2014-06 | Technical Corrections and Improvements Related to Glossary Terms | Effective on issuance in March 2014. | |||
Adoption of those ASUs that became effective during 2014, prior to the issuance of the Company’s condensed consolidated financial statements, did not have a material effect on those financial statements. |
Equity_and_Earnings_Per_Share_
Equity and Earnings Per Share (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Notes to Consolidated Financial Statements | ' | |||||
Earnings per Share Basic and Diluted | ' | |||||
Three months ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Basic earnings per share: | ||||||
Net income available for common stockholders | $ | 19,089 | $ | 6,557 | ||
Weighted average shares of common stock outstanding: | ||||||
Class A | 54,664,125 | 47,499,798 | ||||
Class B | 100 | 100 | ||||
54,664,225 | 47,499,898 | |||||
Basic earnings per share | $ | 0.35 | $ | 0.14 | ||
Three months ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Diluted earnings per share: | ||||||
Net income available for common stockholders | $ | 19,089 | $ | 6,557 | ||
Weighted average shares of common stock outstanding: | ||||||
Class A: | ||||||
Issued and outstanding | 54,664,125 | 47,499,798 | ||||
Potentially dilutive common shares issuable pursuant toemployee incentive plans | 1,377,057 | 188,416 | ||||
Class B | 100 | 100 | ||||
56,041,282 | 47,688,314 | |||||
Diluted earnings per share | $ | 0.34 | $ | 0.14 |
Comprehensive_Income_Tables
Comprehensive Income (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Notes to Consolidated Financial Statements | ' | |||||
Comprehensive Income Table | ' | |||||
Three months ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Comprehensive income available for common stockholders, net of tax | $ | 19,457 | $ | 2,815 | ||
Earnings per share on comprehensive income: | ||||||
Basic | $ | 0.36 | $ | 0.06 | ||
Diluted | $ | 0.35 | $ | 0.06 | ||
Weighted average common shares outstanding: | ||||||
Basic | 54,664,225 | 47,499,898 | ||||
Diluted | 56,041,282 | 47,688,314 |
Financial_Assets_and_Financial1
Financial Assets and Financial Liabilities (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Notes to Consolidated Financial Statements | ' | ||||||||||||||||||
Fair Value Table | ' | ||||||||||||||||||
Financial Assets At Fair Value as of March 31, 2014 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Securities segregated for regulatory purposes | $ | 3,428,577 | $ | - | $ | - | $ | 3,428,577 | |||||||||||
Financial instruments owned: | |||||||||||||||||||
Stocks | 990,435 | - | 119 | 990,554 | |||||||||||||||
Options | 1,418,104 | - | - | 1,418,104 | |||||||||||||||
Warrants and discount certificates | 74,891 | - | - | 74,891 | |||||||||||||||
U.S. and foreign government securities | 15,740 | 2,074 | - | 17,814 | |||||||||||||||
Corporate and municipal bonds | 77,647 | 22,998 | - | 100,645 | |||||||||||||||
Currency forward contracts | - | 3,758 | - | 3,758 | |||||||||||||||
Total financial instruments owned | 2,576,817 | 28,830 | 119 | 2,605,766 | |||||||||||||||
Financial instruments owned and pledged as collateral: | |||||||||||||||||||
Stocks | 762,857 | - | - | 762,857 | |||||||||||||||
Warrants | 205 | - | - | 205 | |||||||||||||||
U.S. and foreign government securities | 58,470 | - | - | 58,470 | |||||||||||||||
Corporate and municipal bonds | 902 | - | - | 902 | |||||||||||||||
Total financial instruments owned and pledged as collateral | 822,434 | - | - | 822,434 | |||||||||||||||
Total financial insturments owned | 3,399,251 | 28,830 | 119 | 3,428,200 | |||||||||||||||
Other fair value investments, included in other assets: | |||||||||||||||||||
Stocks and options | 33,642 | - | 112 | 33,754 | |||||||||||||||
Corporate and municipal bonds | - | 1,869 | - | 1,869 | |||||||||||||||
Total other fair value investments, included in other assets | 33,642 | 1,869 | 112 | 35,623 | |||||||||||||||
Total Financial Assets at Fair Value | $ | 68,614,470 | $ | 30,699 | $ | 231 | $ | 6,892,400 | |||||||||||
Financial Liabilities At Fair Value as of March 31, 2014 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Stocks | $ | 1,612,564 | $ | - | $ | 1 | $ | 1,612,565 | |||||||||||
Options | 1,467,109 | - | - | 1,467,109 | |||||||||||||||
Warrants and discount certificates | 1,051 | - | - | 1,051 | |||||||||||||||
U.S. and foreign government securities | 693 | 1,279 | - | 1,972 | |||||||||||||||
Corporate bonds | 75,039 | 12,213 | - | 87,252 | |||||||||||||||
Currency forward contracts | - | 603 | - | 603 | |||||||||||||||
Total financial instruments sold, not yet purchased | 3,156,456 | 14,095 | 1 | 3,170,552 | |||||||||||||||
Other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | |||||||||||||||||||
Stock | 305 | - | - | 305 | |||||||||||||||
Total other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | 305 | - | - | 305 | |||||||||||||||
Total Financial Liabilities at Fair Value | $ | 3,156,761 | $ | 14,095 | $ | 1 | $ | 3,170,857 | |||||||||||
Financial Assets At Fair Value as of December 31, 2013 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Securities segregated for regulatory purposes | $ | 1,300,016 | $ | - | $ | - | $ | 1,300,016 | |||||||||||
Financial instruments owned: | |||||||||||||||||||
Stocks | 1,243,914 | - | 57 | 1,243,971 | |||||||||||||||
Options | 1,880,481 | - | - | 1,880,481 | |||||||||||||||
Warrants and discount certificates | 57,144 | - | - | 57,144 | |||||||||||||||
U.S. and foreign government securities | 4,641 | 2,102 | - | 6,743 | |||||||||||||||
Corporate and municipal bonds | 72,750 | 18,476 | - | 91,226 | |||||||||||||||
Currency forward contracts | - | 5,748 | - | 5,748 | |||||||||||||||
Total financial instruments owned | 3,258,930 | 26,326 | 57 | 3,285,313 | |||||||||||||||
Financial instruments owned and pledged as collateral: | |||||||||||||||||||
Stocks | 1,097,734 | - | - | 1,097,734 | |||||||||||||||
Warrants | 233 | - | - | 233 | |||||||||||||||
U.S. and foreign government securities | 64,439 | - | - | 64,439 | |||||||||||||||
Corporate and municipal bonds | 1,125 | - | - | 1,125 | |||||||||||||||
Total financial instruments owned and pledged as collateral | 1,163,531 | - | - | 1,163,531 | |||||||||||||||
Total financial insturments owned | 4,422,461 | 26,326 | 57 | 4,448,844 | |||||||||||||||
Other fair value investments, included in other assets: | |||||||||||||||||||
Stocks | 25,604 | 419 | 101 | 26,124 | |||||||||||||||
Corporate and municipal bonds | 1,776 | 47,896 | - | 49,672 | |||||||||||||||
Mortgage backed securities | - | 26,892 | - | 26,892 | |||||||||||||||
Other asset backed securities | - | 22,734 | - | 22,734 | |||||||||||||||
Other | - | 5,328 | - | 5,328 | |||||||||||||||
Total other fair value assets | 27,380 | 103,269 | 101 | 130,750 | |||||||||||||||
Total Financial Assets at Fair Value | $ | 5,749,857 | $ | 129,595 | $ | 158 | $ | 5,879,610 | |||||||||||
Financial Liabilities At Fair Value as of December 31, 2013 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Stocks | $ | 1,266,429 | $ | - | $ | 3 | $ | 1,266,432 | |||||||||||
Options | 1,793,248 | - | - | 1,793,248 | |||||||||||||||
Warrants and discount certificates | 1,215 | - | - | 1,215 | |||||||||||||||
U.S. and foreign government securities | - | 4,412 | - | 4,412 | |||||||||||||||
Corporate bonds | 77,936 | 9,628 | - | 87,564 | |||||||||||||||
Currency forward contracts | - | 802 | - | 802 | |||||||||||||||
Total financial instruments sold, not yet purchased | $ | 3,138,828 | $ | 14,842 | $ | 3 | $ | 3,153,673 | |||||||||||
Level 3 Financial Assets and Financial Liabilities | ' | ||||||||||||||||||
Balance, January 1, 2014 | $ | 158 | |||||||||||||||||
Total gains or losses (realized/unrealized) | |||||||||||||||||||
- Included in earnings | 30 | ||||||||||||||||||
Purchases, issuances and settlements | (22 | ) | |||||||||||||||||
Transfers in and/or out of Level 3 | 65 | ||||||||||||||||||
Balance, March 31, 2014 | $ | 231 | |||||||||||||||||
Financial liabilities—Level 3 activities: | |||||||||||||||||||
Balance, January 1, 2014 | $ | 3 | |||||||||||||||||
Total gains or losses (realized/unrealized) | |||||||||||||||||||
- Included in earnings | - | ||||||||||||||||||
Purchases, issuances and settlements | (2 | ) | |||||||||||||||||
Transfers in and/or out of Level 3 | - | ||||||||||||||||||
Balance, March 31, 2014 | $ | 1 | |||||||||||||||||
Trading Gains from Market Making Transactions | ' | ||||||||||||||||||
Three months ended | |||||||||||||||||||
March 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Equities | $ | 95,145 | $ | 68,524 | |||||||||||||||
Fixed Income | 5,730 | 7,768 | |||||||||||||||||
Foreign Exchange | 26,637 | (57,325 | ) | ||||||||||||||||
Commodities | - | 27 | |||||||||||||||||
Total Trading Gains | $ | 127,512 | $ | 18,994 | |||||||||||||||
Netting of Financial Assets and Financial Liabilities | ' | ||||||||||||||||||
31-Mar-14 | |||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Assets Presented in | ||||||||||||||||||
Condensed | the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Assets | Financial Condition | Financial Condition | Instruments | Pledged | Net Amount | ||||||||||||||
Offsetting of Financial Assets: | |||||||||||||||||||
Securities segregated for regulatory purposes - purchased under agreements to resell | $ | 6,438.70 | (1) | $ | - | $ | 6,438.7 | $ | (6,438.7 | ) | $ | - | $ | - | |||||
Securities borrowed | 2,846.5 | - | 2,846.5 | (2,793.3 | ) | - | 53.2 | ||||||||||||
Securities purchased under agreements to resell | 282.7 | - | 282.7 | (282.7 | ) | - | - | ||||||||||||
Financial Instruments owned: | |||||||||||||||||||
Options | 1,418.1 | - | 1,418.1 | (1,350.8 | ) | - | 67.3 | ||||||||||||
Warrants and discount certificates | 75.1 | - | 75.1 | (1.1 | ) | - | 74.0 | ||||||||||||
Currency forward contracts | 3.8 | - | 3.8 | - | - | 3.8 | |||||||||||||
Total | $ | 11,064.9 | $ | - | $ | 11,064.9 | $ | (10,866.6 | ) | $ | - | $ | 198.3 | ||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Liabilities Presented | ||||||||||||||||||
Condensed | in the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Liabilities | Financial Condition | Financial Condition | Instruments | Received | Net Amount | ||||||||||||||
Offsetting of Financial Liabilities: | |||||||||||||||||||
Securities loaned | $ | 2,931.2 | $ | - | $ | 2,931.2 | $ | (2,918.2 | ) | $ | - | $ | 13.0 | ||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Options | 1,467.1 | - | 1,467.1 | (1,350.8 | ) | - | 116.3 | ||||||||||||
Warrants and discount certificates | 1.1 | - | 1.1 | (1.1 | ) | - | - | ||||||||||||
Currency forward contracts | 0.6 | - | 0.6 | - | 0.6 | ||||||||||||||
Total | $ | 4,400.0 | $ | - | $ | 4,400.0 | $ | (4,270.1 | ) | $ | - | $ | 129.9 | ||||||
31-Dec-13 | |||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Assets Presented in | ||||||||||||||||||
Condensed | the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Assets | Financial Condition | Financial Condition | Instruments | Pledged | Net Amount | ||||||||||||||
Offsetting of Financial Assets: | |||||||||||||||||||
Securities segregated for regulatory purposes - purchased under agreements to resell | $ | 6,734.20 | -1 | $ | $ | 6,734.20 | $ | (6,734.2 | ) | $ | $ | - | |||||||
Securities borrowed | 2,751.5 | - | 2,751.5 | (2,694.6 | ) | - | 56.9 | ||||||||||||
Securities purchased under agreements to resell | 386.3 | - | 386.3 | (386.3 | ) | - | - | ||||||||||||
Financial Instruments owned: | |||||||||||||||||||
Options | 1,880.5 | - | 1,880.5 | (1,652.8 | ) | - | 227.7 | ||||||||||||
Warrants and discount certificates | 57.4 | - | 57.4 | (1.2 | ) | - | 56.2 | ||||||||||||
Currency forward contracts | 5.7 | - | 5.7 | - | - | 5.7 | |||||||||||||
Total | $ | 11,815.6 | $ | - | $ | 11,815.6 | $ | (11,469.1 | ) | $ | - | $ | 346.5 | ||||||
Gross Amounts Not Offset in the | |||||||||||||||||||
Condensed Consolidated Statement of | |||||||||||||||||||
Financial Condition | |||||||||||||||||||
Gross Amounts | Net Amounts of | ||||||||||||||||||
Offset in the | Liabilities Presented | ||||||||||||||||||
Condensed | in the Condensed | ||||||||||||||||||
Gross Amounts of | Consolidated | Consolidated | |||||||||||||||||
Recognized | Statement of | Statement of | Financial | Cash Collateral | |||||||||||||||
Liabilities | Financial Condition | Financial Condition | Instruments | Received | Net Amount | ||||||||||||||
Offsetting of Financial Liabilities: | |||||||||||||||||||
Securities loaned | $ | 2,563.7 | $ | - | $ | 2,563.7 | $ | (2,544.6 | ) | $ | - | $ | 19.1 | ||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Options | 1,793.2 | - | 1,793.2 | (1,652.8 | ) | - | 140.4 | ||||||||||||
Warrants and discount certificates | 1.2 | - | 1.2 | (1.2 | ) | - | - | ||||||||||||
Currency forward contracts | 0.8 | - | 0.8 | - | - | 0.8 | |||||||||||||
Total | $ | 4,358.9 | $ | - | $ | 4,358.9 | $ | (4,198.6 | ) | $ | - | $ | 160.3 | ||||||
-1 | As of March 31, 2014 and December 31, 2013, the Company had $6.44 billion and $6.73 billion, respectively, of securities purchased under agreements to resell that were segregated to satisfy regulatory requirements. These securities are included in “Cash and securities—segregated for regulatory purposes” in the condensed consolidated statements of financial condition. |
Collateralized_Transactions_Ta
Collateralized Transactions (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Notes to Consolidated Financial Statements | ' | |||||||||||
Amounts Related to Collateralized Transactions | ' | |||||||||||
31-Mar-14 | 31-Dec-13 | |||||||||||
Permitted | Sold or | Permitted | Sold or | |||||||||
to Repledge | Repledged | to Repledge | Repledged | |||||||||
Securities lending transactions | $ | 8,834.5 | $ | 2,492.7 | $ | 9,331.9 | $ | 2,504.3 | ||||
Agreements to resell (1) | 6,725.5 | 6,694.9 | 7,116.1 | 7,099.6 | ||||||||
Customer margin assets | 13,061.4 | 5,721.9 | 11,753.3 | 4,602.9 | ||||||||
$ | 28,621.4 | $ | 14,909.5 | $ | 28,201.3 | $ | 14,206.8 | |||||
-1 | At March 31, 2014, $6.44 billion or 96% (at December 31, 2013, $6.73 billion, or 95%), of securities acquired through agreements to resell that are shown as repledged have been deposited in a separate bank account for the exclusive benefit of customers in accordance with SEC Rule 15c3-3. | |||||||||||
Financial instruments owned and pledged where the counterparty has the right to repledge | ' | |||||||||||
March 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Stocks | $ | 762.8 | $ | 1,097.8 | ||||||||
Warrants | 0.2 | 0.2 | ||||||||||
U.S. and foreign government obligations | 58.5 | 64.4 | ||||||||||
Corporate and municipal bonds | 0.9 | 1.1 | ||||||||||
$ | 822.4 | $ | 1,163.5 |
Defined_Contribution_and_Emplo1
Defined Contribution and Employee Incentive Plans (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Notes to Consolidated Financial Statements | ' | ||||
Share grants and Fair Value | ' | ||||
Fair Value at | |||||
Date of Grant | |||||
Shares | ($ millions) | ||||
In connection with IPO | 927,943 | $ | 27.8 | ||
31-Jul-07 | 16,665 | 0.4 | |||
31-Dec-07 | 1,055,206 | 32.9 | |||
31-Dec-08 | 2,065,432 | 35.6 | |||
31-Dec-09 | 2,448,031 | 42.8 | |||
31-Dec-10 | 2,513,738 | 43.2 | |||
31-Dec-11 | 3,411,613 | 50.8 | |||
6-Jan-12 | 1,215,866 | 18.4 | |||
31-Dec-12 | 3,629,960 | 50.5 | |||
31-Dec-13 | 1,894,046 | 46.2 | |||
19,178,500 | $ | 348.6 | |||
2007 Stock Incentive Plan, ROI Summary | ' | ||||
Shares | |||||
2007 Stock | |||||
Incentive Plan | |||||
Balance, December 31, 2013 | 11,647,117 | ||||
Granted | - | ||||
Forfeited | - | ||||
Distributed (1) | (2,730 | ) | |||
Balance, March 31, 2014 | 11,644,387 | ||||
-1 | Shares cumulatively distributed under the 2007 Stock Incentive Plan include 14,843 shares from Treasury representing shares acquired at the IPO to satisfy obligations under the 2007 ROI Unit Stock Plan. |
Segment_and_Geographic_Informa1
Segment and Geographic Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Notes to Consolidated Financial Statements | ' | |||||||
Segment and geographic information | ' | |||||||
Three months ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues: | ||||||||
Electronic brokerage | $ | 223.7 | $ | 195.3 | ||||
Market making | 133.1 | 23.6 | ||||||
Corporate and eliminations | (1.9 | ) | (2.8 | ) | ||||
Total net revenues | $ | 354.9 | $ | 216.1 | ||||
Income before income taxes: | ||||||||
Electronic brokerage | $ | 134.3 | $ | 111.0 | ||||
Market making | 88.1 | (29.0 | ) | |||||
Corporate and eliminations | (4.3 | ) | 0.2 | |||||
Total income before income taxes | $ | 218.1 | $ | 82.2 | ||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Assets: | ||||||||
Electronic brokerage | $ | 33,021.1 | $ | 31,333.5 | ||||
Market making | 12,330.4 | 12,139.5 | ||||||
Corporate and eliminations | (6,371.1 | ) | (5,602.3 | ) | ||||
Total assets | $ | 38,980.4 | $ | 37,870.7 | ||||
Three months ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues: | ||||||||
United States | $ | 282.8 | $ | 138.6 | ||||
International | 74.3 | 80.2 | ||||||
Corporate and eliminations | (2.2 | ) | (2.7 | ) | ||||
Total net revenues | $ | 354.9 | $ | 216.1 | ||||
Income before income taxes: | ||||||||
United States | $ | 197.0 | $ | 51.9 | ||||
International | 25.7 | 29.9 | ||||||
Corporate and eliminations | (4.6 | ) | 0.4 | |||||
Total income before income taxes | $ | 218.1 | $ | 82.2 |
Regulatory_Requirements_Tables
Regulatory Requirements (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Consolidated Financial Statements | ' | ||||||||
Regulatory requirements [table] | ' | ||||||||
Net Capital/ | |||||||||
Eligible Equity | Requirement | Excess | |||||||
IB LLC | $ | 2,085.7 | $ | 313.1 | $ | 1,772.6 | |||
TH LLC | 560.6 | 56.2 | 504.4 | ||||||
THE | 708.5 | 191.6 | 516.9 | ||||||
Other regulated Operating Companies | 502.7 | 41.0 | 461.7 | ||||||
$ | 3,857.5 | $ | 601.9 | $ | 3,255.6 |
Recovered_Sheet1
Organization and Nature of Business (Detail) | Mar. 31, 2014 | 3-May-07 |
Organization and Nature of Business | ' | ' |
IBG Inc. ownership % of IBG LLC | 13.60% | 10.00% |
Significant_Accounting_Policie2
Significant Accounting Policies (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | 3-May-07 |
Significant accounting policies | ' | ' | ' |
SIP expense - Year of grant | ' | ' | 50.00% |
SIP expense - Remaining vesting period | ' | ' | 50.00% |
SIP expense - Employees over fifty nine in year of grant | ' | ' | 100.00% |
Over 59 percent of shares eligible | ' | ' | 100.00% |
Percent of shares forfeited post employment | ' | ' | 50.00% |
U.S. Treasury Bills | $3,430,000 | $1,300,000 | ' |
Securities Purchased Under Agreement to Resell Segregated for Regulatory Purposes | 6,440,000 | 6,730,000 | ' |
Equity method investments | 27,000 | 27,500 | ' |
Cost method investments | $27,200 | $27,600 | ' |
Property and equipment useful lives | 'Computer equipment is depreciated over three to five years and office furniture and equipment are depreciated over five to seven years. Qualifying costs for internally developed software are capitalized and amortized over the expected useful life of the developed software, not to exceed three years. | ' | ' |
Equity_and_Earnings_Per_Share_1
Equity and Earnings Per Share Basic Table (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Basic earnings per share: | ' | ' |
Net income available for common stockholders | $19,089 | $6,557 |
Weighted average shares of common stock outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 54,664,225 | 47,499,898 |
Basic earnings per share | $0.35 | $0.14 |
Common Class A | ' | ' |
Weighted average shares of common stock outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 54,664,125 | 47,499,798 |
Common Class B | ' | ' |
Weighted average shares of common stock outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 100 | 100 |
Equity_and_Earnings_Per_Share_2
Equity and Earnings Per Share Diluted Table (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Diluted earnings per share: | ' | ' |
Net income available for common stockholders | $19,089 | $6,557 |
Weighted average shares of common stock outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 54,664,225 | 47,499,898 |
Potentially dilutive common shares: | ' | ' |
Issuable pursuant to 2007 ROI Unit Stock Plan | 1,377,057 | 188,416 |
Weighted Average Number of Shares Outstanding, Diluted | 56,041,282 | 47,688,314 |
Earnings Per Share, Diluted | $0.34 | $0.14 |
Common Class A | ' | ' |
Weighted average shares of common stock outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 54,664,125 | 47,499,798 |
Common Class B | ' | ' |
Weighted average shares of common stock outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 100 | 100 |
Equity_and_Earnings_Per_Share_3
Equity and Earnings Per Share Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 36 Months Ended | 83 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Mar. 31, 2014 | 3-May-07 |
Equity and earnings per share | ' | ' | ' | ' | ' | ' | ' |
IBG Inc. ownership % of IBG LLC | 13.60% | ' | ' | ' | ' | 13.60% | 10.00% |
IBG Holdings ownership % of IBG LLC | 86.40% | ' | ' | ' | ' | 86.40% | 90.00% |
IBG Holdings Redemption of IBG LLC | ' | ' | ' | ' | ' | ' | 10.00% |
IBG Holdings LLC Ownership Percentage of Class B Common Stock | ' | ' | ' | ' | ' | ' | 100.00% |
Preferred stock shares authorized | 10,000 | ' | 10,000 | ' | ' | 10,000 | ' |
Preferred stock shares issued | 0 | ' | 0 | ' | ' | 0 | ' |
Preferred stock shares outstanding | 0 | ' | 0 | ' | ' | 0 | ' |
Deferred tax asset from common stock offerings | $420,400 | ' | $420,400 | ' | ' | $420,400 | ' |
Percent of Tax Savings Owed to IBG Holdings LLC | 85.00% | ' | 85.00% | ' | ' | 85.00% | ' |
Percentage of tax savings retained by IBG Inc. | 15.00% | ' | 15.00% | ' | ' | 15.00% | ' |
Tax savings owed to IBG Holdings LLC | 357,400 | ' | ' | ' | ' | 357,400 | ' |
Tax savings retained by IBG Inc. | 63,100 | ' | ' | ' | ' | 63,100 | ' |
Tax savings paid to IBG Holdings LLC | ' | ' | ' | ' | ' | 70,400 | ' |
Exchange Agreement Future Redemption Schedule | ' | ' | ' | ' | ' | '12.5% annually for seven (7) years and 2.5% in the eighth year. | ' |
Shares reserved for future issuance | ' | ' | ' | ' | ' | ' | 360,000,000 |
Shares redeemed by IBG Holdings from IBG LLC | ' | ' | ' | ' | 5,013,259 | ' | ' |
Cash Redemptions IBG Holdings | ' | ' | ' | ' | 114,000 | ' | ' |
Shares Issued | ' | ' | 4,863,415 | 1,983,624 | ' | ' | ' |
Thomas Peterffy and Affiliates Ownership | 87.60% | ' | ' | ' | ' | 87.60% | 84.60% |
Dividends paid by IBG LLC | 66,200 | ' | ' | ' | ' | ' | ' |
Cash dividend paid to IBG, Inc. | 9,000 | ' | ' | ' | ' | ' | ' |
Dividend per share | $0.10 | ' | ' | ' | ' | ' | ' |
Dividends paid to common shareholders | $5,466 | $4,750 | ' | ' | ' | ' | ' |
Declaration Date | 15-Apr-14 | ' | ' | ' | ' | ' | ' |
Record Date | 30-May-14 | ' | ' | ' | ' | ' | ' |
Payment Date | 13-Jun-14 | ' | ' | ' | ' | ' | ' |
Common Class A | ' | ' | ' | ' | ' | ' | ' |
Equity and earnings per share | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | $0.01 | ' | $0.01 | ' | ' | $0.01 | ' |
Shares authorized | 1,000,000,000 | ' | 1,000,000,000 | ' | ' | 1,000,000,000 | ' |
Common stock, shares issued | 54,789,790 | ' | 54,788,049 | ' | ' | 54,789,790 | ' |
Common stock, shares outstanding | 54,666,825 | ' | 54,664,095 | ' | ' | 54,666,825 | ' |
Common Class B | ' | ' | ' | ' | ' | ' | ' |
Equity and earnings per share | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | $0.01 | ' | $0.01 | ' | ' | $0.01 | ' |
Shares authorized | 100 | ' | 100 | ' | ' | 100 | ' |
Common stock, shares issued | 100 | ' | 100 | ' | ' | 100 | ' |
Common stock, shares outstanding | 100 | ' | 100 | ' | ' | 100 | ' |
Comprehensive_Income_Table_Det
Comprehensive Income Table (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Comprehensive income | ' | ' |
Comprehensive income available for common stockholders | $19,457 | $2,815 |
Earnings per share on comprehensive income: | ' | ' |
Basic | $0.36 | $0.06 |
Diluted | $0.35 | $0.06 |
Weighted average common shares outstanding: | ' | ' |
Weighted Average Number of Shares Outstanding, Basic | 54,664,225 | 47,499,898 |
Weighted Average Number of Shares Outstanding, Diluted | 56,041,282 | 47,688,314 |
Fair_Value_Table_Detail
Fair Value Table (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | |||
Securities segregated for regulatory purposes | $3,428,577 | $1,300,016 | ' |
Financial instruments owned | 2,605,766 | 3,285,313 | ' |
Financial instruments owned and pledged as collateral | 822,434 | 1,163,531 | ' |
Total financial instruments owned | 3,428,200 | 4,448,844 | ' |
Other fair value investments, included in other assets | 35,623 | 130,750 | ' |
Total financial assets, at fair value | 6,892,400 | 5,879,610 | ' |
Financial instruments sold but not yet purchased, at fair value | 3,170,552 | 3,153,673 | ' |
Other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | 305 | 0 | ' |
Total Financial Liabilities at Fair Value | 3,170,857 | 3,153,673 | ' |
Common Stock [Member] | ' | ' | ' |
Financial instruments owned | 990,554 | 1,243,971 | ' |
Financial instruments owned and pledged as collateral | 762,857 | 1,097,734 | ' |
Other fair value investments, included in other assets | 0 | 26,124 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,612,564 | 1,266,432 | ' |
Other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | 305 | 0 | ' |
Stocks and options [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 33,754 | 0 | ' |
Options [Member] | ' | ' | ' |
Financial instruments owned | 1,418,104 | 1,880,481 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,467,109 | 1,793,248 | ' |
Warrants and discount certificates [Member] | ' | ' | ' |
Financial instruments owned | 74,891 | 57,144 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,051 | 1,215 | ' |
U.S. and Foreign Government Obligations [Member] | ' | ' | ' |
Financial instruments owned | 17,814 | 6,743 | ' |
Financial instruments owned and pledged as collateral | 58,470 | 64,439 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,972 | 4,412 | ' |
Warrants [Member] | ' | ' | ' |
Financial instruments owned and pledged as collateral | 205 | 233 | ' |
Corporate and municipal bonds [Member] | ' | ' | ' |
Financial instruments owned | 100,645 | 91,226 | ' |
Financial instruments owned and pledged as collateral | 902 | 1,125 | ' |
Other fair value investments, included in other assets | 1,869 | 49,672 | ' |
Financial instruments sold but not yet purchased, at fair value | 87,252 | 87,564 | ' |
Mortgage Backed Securities [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 0 | 26,892 | ' |
Other Asset Backed Securities [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 0 | 22,734 | ' |
Currency forward contracts [Member] | ' | ' | ' |
Financial instruments owned | 3,758 | 5,748 | ' |
Financial instruments sold but not yet purchased, at fair value | 603 | 802 | ' |
Other assets - investments [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 0 | 5,328 | ' |
Level 1 | ' | ' | ' |
Securities segregated for regulatory purposes | 3,428,577 | 1,300,016 | ' |
Financial instruments owned | 2,576,817 | 3,258,930 | ' |
Financial instruments owned and pledged as collateral | 822,434 | 1,163,531 | ' |
Total financial instruments owned | 3,399,251 | 4,422,461 | ' |
Other fair value investments, included in other assets | 33,642 | 27,380 | ' |
Total financial assets, at fair value | 6,861,470 | 5,749,857 | ' |
Financial instruments sold but not yet purchased, at fair value | 3,156,456 | 3,138,828 | ' |
Other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | 305 | 0 | ' |
Total Financial Liabilities at Fair Value | 3,156,761 | 3,138,828 | ' |
Level 1 | Common Stock [Member] | ' | ' | ' |
Financial instruments owned | 990,435 | 1,243,914 | ' |
Financial instruments owned and pledged as collateral | 762,857 | 1,097,734 | ' |
Other fair value investments, included in other assets | 0 | 25,604 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,612,564 | 1,266,429 | ' |
Other fair value liabilities, included in accounts payable, accrued expenses and other liabilities | 305 | 0 | ' |
Level 1 | Stocks and options [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 33,642 | 0 | ' |
Level 1 | Options [Member] | ' | ' | ' |
Financial instruments owned | 1,418,104 | 1,880,481 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,467,109 | 1,793,248 | ' |
Level 1 | Warrants and discount certificates [Member] | ' | ' | ' |
Financial instruments owned | 74,891 | 57,144 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,051 | 1,215 | ' |
Level 1 | U.S. and Foreign Government Obligations [Member] | ' | ' | ' |
Financial instruments owned | 15,740 | 4,641 | ' |
Financial instruments owned and pledged as collateral | 58,470 | 64,439 | ' |
Financial instruments sold but not yet purchased, at fair value | 693 | 0 | ' |
Level 1 | Warrants [Member] | ' | ' | ' |
Financial instruments owned and pledged as collateral | 205 | 233 | ' |
Level 1 | Corporate and municipal bonds [Member] | ' | ' | ' |
Financial instruments owned | 77,647 | 72,750 | ' |
Financial instruments owned and pledged as collateral | 902 | 1,125 | ' |
Other fair value investments, included in other assets | 0 | 1,776 | ' |
Financial instruments sold but not yet purchased, at fair value | 75,039 | 77,936 | ' |
Level 2 | ' | ' | ' |
Financial instruments owned | 28,830 | 26,326 | ' |
Total financial instruments owned | 28,830 | 26,326 | ' |
Other fair value investments, included in other assets | 1,869 | 103,269 | ' |
Total financial assets, at fair value | 30,699 | 129,595 | ' |
Financial instruments sold but not yet purchased, at fair value | 14,095 | 14,842 | ' |
Total Financial Liabilities at Fair Value | 14,095 | 14,842 | ' |
Level 2 | Common Stock [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 0 | 419 | ' |
Level 2 | U.S. and Foreign Government Obligations [Member] | ' | ' | ' |
Financial instruments owned | 2,074 | 2,102 | ' |
Financial instruments sold but not yet purchased, at fair value | 1,279 | 4,412 | ' |
Level 2 | Corporate and municipal bonds [Member] | ' | ' | ' |
Financial instruments owned | 22,998 | 18,476 | ' |
Other fair value investments, included in other assets | 1,869 | 47,896 | ' |
Financial instruments sold but not yet purchased, at fair value | 12,213 | 9,628 | ' |
Level 2 | Mortgage Backed Securities [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 0 | 26,892 | ' |
Level 2 | Other Asset Backed Securities [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 0 | 22,734 | ' |
Level 2 | Currency forward contracts [Member] | ' | ' | ' |
Financial instruments owned | 3,758 | 5,748 | ' |
Financial instruments sold but not yet purchased, at fair value | 603 | 802 | ' |
Level 2 | Other assets - investments [Member] | ' | ' | ' |
Other fair value investments, included in other assets | 0 | 5,328 | ' |
Level 3 | ' | ' | ' |
Financial instruments owned | 119 | 57 | ' |
Total financial instruments owned | 119 | 57 | ' |
Other fair value investments, included in other assets | 112 | 101 | ' |
Total financial assets, at fair value | 231 | 158 | 0 |
Financial instruments sold but not yet purchased, at fair value | 1 | 3 | 0 |
Total Financial Liabilities at Fair Value | 1 | 3 | ' |
Level 3 | Common Stock [Member] | ' | ' | ' |
Financial instruments owned | 119 | 57 | ' |
Other fair value investments, included in other assets | 0 | 101 | ' |
Financial instruments sold but not yet purchased, at fair value | 1 | 3 | ' |
Level 3 | Stocks and options [Member] | ' | ' | ' |
Other fair value investments, included in other assets | $112 | $0 | ' |
Netting_Financial_Assets_Detai
Netting Financial Assets (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Total [Domain] | ' | ' | ||
Gross Amounts of Recognized Assets | $11,064,900 | $11,815,600 | ||
Gross Amounts Assets Offset in the Consolidated Statement of Financial Condition | 0 | 0 | ||
Net Amounts of Assets Presented in the Statement of Financial Condition | 11,064,900 | 11,815,600 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Financial Instruments) | -10,866,600 | -11,469,100 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Received) | 0 | 0 | ||
Net Amount of Assets | 198,300 | 346,500 | ||
Securities segregated for regulatory purposes - purchased under agreements to resell [Member] | ' | ' | ||
Gross Amounts of Recognized Assets | 6,438,700 | [1] | 6,734,200 | [1] |
Gross Amounts Assets Offset in the Consolidated Statement of Financial Condition | 0 | 0 | ||
Net Amounts of Assets Presented in the Statement of Financial Condition | 6,438,700 | 6,734,200 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Financial Instruments) | -6,438,700 | -6,734,200 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Received) | 0 | 0 | ||
Net Amount of Assets | 0 | 0 | ||
Securities Borrowed [Member] | ' | ' | ||
Gross Amounts of Recognized Assets | 2,846,500 | 2,751,500 | ||
Gross Amounts Assets Offset in the Consolidated Statement of Financial Condition | 0 | 0 | ||
Net Amounts of Assets Presented in the Statement of Financial Condition | 2,846,500 | 2,751,500 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Financial Instruments) | -2,793,300 | -2,694,600 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Received) | 0 | 0 | ||
Net Amount of Assets | 53,200 | 56,900 | ||
Securities Purchased Under Agreement to Resell [Member] | ' | ' | ||
Gross Amounts of Recognized Assets | 282,700 | 386,300 | ||
Gross Amounts Assets Offset in the Consolidated Statement of Financial Condition | 0 | 0 | ||
Net Amounts of Assets Presented in the Statement of Financial Condition | 282,700 | 386,300 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Financial Instruments) | -282,700 | -386,300 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Received) | 0 | 0 | ||
Net Amount of Assets | 0 | 0 | ||
Options owned [Member] | ' | ' | ||
Gross Amounts of Recognized Assets | 1,418,100 | 1,880,500 | ||
Gross Amounts Assets Offset in the Consolidated Statement of Financial Condition | 0 | 0 | ||
Net Amounts of Assets Presented in the Statement of Financial Condition | 1,418,100 | 1,880,500 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Financial Instruments) | -1,350,800 | -1,652,800 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Received) | 0 | 0 | ||
Net Amount of Assets | 67,300 | 227,700 | ||
Warrants and discount certificates owned [Member] | ' | ' | ||
Gross Amounts of Recognized Assets | 75,100 | 57,400 | ||
Gross Amounts Assets Offset in the Consolidated Statement of Financial Condition | 0 | 0 | ||
Net Amounts of Assets Presented in the Statement of Financial Condition | 75,100 | 57,400 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Financial Instruments) | -1,100 | -1,200 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Received) | 0 | 0 | ||
Net Amount of Assets | 74,000 | 56,200 | ||
Currency forward contracts owned [Member] | ' | ' | ||
Gross Amounts of Recognized Assets | 3,800 | 5,700 | ||
Gross Amounts Assets Offset in the Consolidated Statement of Financial Condition | 0 | 0 | ||
Net Amounts of Assets Presented in the Statement of Financial Condition | 3,800 | 5,700 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Financial Instruments) | 0 | 0 | ||
Gross Amounts of Assets Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Received) | 0 | 0 | ||
Net Amount of Assets | $3,800 | $5,700 | ||
[1] | At March 31, 2014, $6.44 billion or 96% (at December 31, 2013, $6.73 billion , or 95%), of securities acquired through agreements to resell that are shown as repledged have been deposited in a separate bank account for the exclusive benefit of customers in accordance with SEC Rule 15c3-3. |
Netting_Financial_Liabilities_
Netting Financial Liabilities (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Total [Domain] | ' | ' |
Gross Amounts of Recognized Liabilities | $4,400,000 | $4,358,900 |
Gross Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Condition | 4,400,000 | 4,358,900 |
Gross Amounts of Liabilities Not Offset in the Consolidated Satement of Financial Position (Financial Instruments) | -4,270,100 | -4,198,600 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Pledged) | 0 | 0 |
Net Amount of Liabilities | 129,900 | 160,300 |
Securities Loaned [Member] | ' | ' |
Gross Amounts of Recognized Liabilities | 2,931,200 | 2,563,700 |
Gross Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Condition | 2,931,200 | 2,563,700 |
Gross Amounts of Liabilities Not Offset in the Consolidated Satement of Financial Position (Financial Instruments) | -2,918,200 | -2,544,600 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Pledged) | 0 | 0 |
Net Amount of Liabilities | 13,000 | 19,100 |
Options Sold, Not Yet Purchased [Member] | ' | ' |
Gross Amounts of Recognized Liabilities | 1,467,100 | 1,793,200 |
Gross Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Condition | 1,467,100 | 1,793,200 |
Gross Amounts of Liabilities Not Offset in the Consolidated Satement of Financial Position (Financial Instruments) | -1,350,800 | -1,652,800 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Pledged) | 0 | 0 |
Net Amount of Liabilities | 116,300 | 140,400 |
Warrants and discount certificates sold, not yet purchased [Member] | ' | ' |
Gross Amounts of Recognized Liabilities | 1,100 | 1,200 |
Gross Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Condition | 1,100 | 1,200 |
Gross Amounts of Liabilities Not Offset in the Consolidated Satement of Financial Position (Financial Instruments) | -1,100 | -1,200 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Pledged) | 0 | 0 |
Net Amount of Liabilities | 0 | 0 |
Currency forward contracts sold, not yet purchased [Member] | ' | ' |
Gross Amounts of Recognized Liabilities | 600 | 800 |
Gross Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Condition | 600 | 800 |
Gross Amounts of Liabilities Not Offset in the Consolidated Satement of Financial Position (Financial Instruments) | 0 | 0 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Position (Cash Collateral Pledged) | 0 | 0 |
Net Amount of Liabilities | $600 | $800 |
Level_3_Financial_Assets_Detai
Level 3 Financial Assets (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Financial Assets - Level 3 activities | ' |
Beginning balance | $158 |
Total gains or losses (realized/unrealized) - Included in earnings (Assets) | 30 |
Purchases, issuances and settlements (Assets) | -22 |
Transfers in and/or out of Level 3 (Assets) | 65 |
Ending balance | $231 |
Level_3_Financial_Liabilities_
Level 3 Financial Liabilities (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Financial liabilities - Level 3 | ' |
Beginning balance | $3 |
Total gains or losses (realized/unrealized) - Included in earnings (Liabilities) | 0 |
Purchases, issuances and settlements (Liabilities) | -2 |
Transfers in and/or out of Level 3 (Liabilities) | 0 |
Ending balance | $1 |
Fair_Value_Additional_Informat
Fair Value Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
[FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisTable] | ' | ' | ' |
Transfers of financial instruments owned from level 1 to level 2 | $2,100 | $1,100 | ' |
Transfers of financial instruments owned from level 2 to level 1 | 1,800 | 3,400 | ' |
Transfers of financial instruments sold, but not yet purchased from level 1 to level 2 | 1,400 | 2,000 | ' |
Transfers of financial instruments sold, but not yet purchased from level 2 to level 1 | 1,100 | 3,100 | ' |
Total financial assets, at fair value | 6,892,400 | ' | 5,879,610 |
Financial instruments sold but not yet purchased, at fair value | 3,170,552 | ' | 3,153,673 |
Securities Purchased Under Agreement to Resell Segregated for Regulatory Purposes | 6,440,000 | ' | 6,730,000 |
Level 3 | ' | ' | ' |
[FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisTable] | ' | ' | ' |
Total financial assets, at fair value | 231 | 0 | 158 |
Financial instruments sold but not yet purchased, at fair value | $1 | $0 | $3 |
Trading_Gains_from_Market_Maki
Trading Gains from Market Making Transactions (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Trading Gains from Market Making Transactions [Abstract] | ' | ' |
Equities | $95,145 | $68,524 |
Fixed Income | 5,730 | 7,768 |
Foreign Exchange | 26,637 | -57,325 |
Commodities | 0 | 27 |
Total Trading Gains | $127,512 | $18,994 |
Collateralized_Transactions_Ad
Collateralized Transactions Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Collateralized transactions [Abstract] | ' | ' |
Customer margin loans outstanding | $14,413,560 | $13,596,650 |
Securities repledged and deposited for customers | $6,440,000 | $6,730,000 |
Percentage of securities repledged and deposited for customers | 96.00% | 95.00% |
Collateralized_Transactions_Co
Collateralized Transactions Collateralized Table (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Permitted to Repledge | ' | ' | ||
Securities lending transactions | $8,834,500 | $9,331,900 | ||
Agreements to resell | 6,725,500 | 7,116,100 | ||
Customer margin assets | 13,061,400 | 11,753,300 | ||
Total collateralized transactions | 28,621,400 | [1] | 28,201,300 | [1] |
Sold or Repledged | ' | ' | ||
Securities lending transactions | 2,492,700 | 2,504,300 | ||
Agreements to resell | 6,694,900 | 7,099,600 | ||
Customer margin assets | 5,721,900 | 4,602,900 | ||
Total collateralized transactions | $14,909,500 | $14,206,800 | ||
[1] | At March 31, 2014, $6.44 billion or 96% (at December 31, 2013, $6.73 billion , or 95%), of securities acquired through agreements to resell that are shown as repledged have been deposited in a separate bank account for the exclusive benefit of customers in accordance with SEC Rule 15c3-3. |
Collateralized_Transactions_Ri
Collateralized Transactions Right to Repledge Table (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financial instruments owned and pledged where the counterparty has the right to repledge [Abstract] | ' | ' |
Stocks | $762,800 | $1,097,800 |
Warrants | 200 | 200 |
U.S. and foreign government securities | 58,500 | 64,400 |
Corporate and municipal bonds | 900 | 1,100 |
Financial Instruments Owned and Pledged as Collateral - Eligible to be Repledged by Counterparty | $822,400 | $1,163,500 |
Senior_Secured_Revolving_Credi1
Senior Secured Revolving Credit Facility (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | 17-May-12 |
Senior Secured Revolving Credit Facility [Abstract] | ' | ' | ' |
Senior secured revolving credit facility maximum capacity | $100,000 | $100,000 | $100,000 |
Minimum consolidated shareholders' equity | 3,600,000 | 3,600,000 | ' |
Quarterly Increases % of Positive Consolidated Net Income | 25.00% | 25.00% | ' |
Maximum debt to capitalization ratio | 30.00% | 30.00% | ' |
Minimum liquidity ratio | ' | ' | ' |
minimum liquidity ratio of 1.0 to 1.0 | |||
Maximum debt to net regulatory capital ratio | 35.00% | 35.00% | ' |
Outstanding debt under credit facility | $0 | $0 | ' |
Defined_Contribution_and_Emplo2
Defined Contribution and Employee Incentive Plan Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 83 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Apr. 24, 2014 | 3-May-07 | Dec. 31, 2006 | ||
Defined contribution and employee incentive plan additional information | ' | ' | ' | ' | ' | ' | ' | ||
ROI Dollar Unit Payable | $3,900 | $7,700 | $5,600 | $3,900 | ' | ' | ' | ||
Vested balance of ROI payable | 3,900 | 7,700 | 5,600 | 3,900 | ' | ' | ' | ||
ROI dollar compensation expense | 100 | 100 | ' | ' | ' | ' | ' | ||
Common Stock Shares issued under ROI Unit Stock Plan | ' | ' | ' | ' | ' | 1,271,009 | ' | ||
ROI Shares issued to IBG LLC | ' | ' | ' | ' | ' | 1,250,000 | ' | ||
2007 SIP shares issued under ROI Unit Stock Plan | ' | ' | ' | ' | ' | 21,009 | ' | ||
Fair value ROI Treasury Stock | ' | ' | ' | ' | ' | 38,143 | ' | ||
Vesting Percentage | ' | ' | ' | ' | ' | ' | ' | ||
· | 10% on the date of the IPO (or on the first anniversary of the IPO, in the case of U.S. ROI Unit holders who made the above referenced elections after December 31, 2006); and | ||||||||
· | an additional 15% on each of the following six anniversaries of the first vesting, assuming continued employment with IBG, Inc. and compliance with non-competition and other applicable covenants. | ||||||||
Fair Value ROI Accrual | ' | ' | ' | ' | ' | ' | 17,806 | ||
Compensation expense, ROI Unit Stock Plan | ' | ' | 0 | ' | ' | ' | ' | ||
Maximum shares of stock distributable under 2007 Stock Incentive Plan | 20,000,000 | ' | 20,000,000 | 20,000,000 | 30,000,000 | ' | ' | ||
Shares granted to external directors | ' | ' | ' | 20,423 | ' | ' | ' | ||
Increase in 2007 Stock Incentive Plan shares | ' | ' | ' | ' | 10,000,000 | ' | ' | ||
2007 Stock Incentive Plan Compensation Expense | 10,000 | 8,700 | ' | ' | ' | ' | ' | ||
Estimated Future 2007 Stock Incentive Plan Compensation Expense | $36,700 | ' | ' | $36,700 | ' | ' | ' | ||
Over 59 percent of shares eligible | ' | ' | ' | ' | ' | 100.00% | ' | ||
Percent of shares forfeited post employment | ' | ' | ' | ' | ' | 50.00% | ' | ||
Former employees vesting schedule (Years) | ' | ' | ' | ' | ' | 5 | ' | ||
Post employment vesting percentage (Years 1 - 4) | ' | ' | ' | ' | ' | 12.50% | ' | ||
Post employment vesting percentage (Year 5) | ' | ' | ' | ' | ' | 50.00% | ' | ||
Post employment shares distribution | ' | ' | ' | 93,496 | ' | ' | ' |
Recovered_Sheet2
Defined Contribution And Employee Incentive Plan Stock Plan Activity Table (Detail) (2007 Stock Incentive Plan (Shares)) | 3 Months Ended | |
Mar. 31, 2014 | ||
2007 Stock Incentive Plan (Shares) | ' | |
Beginning Balance | 11,647,117 | |
Shares Granted | 0 | |
Shares Forfeited | 0 | |
Shares Distributed | -2,730 | [1] |
Ending Balance | 11,644,387 | |
[1] | Shares cumulatively distributed under the 2007 Stock Incentive Plan include 14,843 shares from Threasury representing shares acquired at the IPO to satisfy obligations under the 2007 ROI Unit Stock Plan. |
Defined_Contribution_and_Emplo3
Defined Contribution and Employee Incentive Plan SIP Grants Table (Detail) (USD $) | 83 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 06, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2007 | Jul. 31, 2007 | 3-May-07 |
SIP Share Grants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares granted | ' | 1,894,046 | 3,629,960 | 1,215,866 | 3,411,613 | 2,513,738 | 2,448,031 | 2,065,432 | 1,055,206 | 16,665 | 927,943 |
Fair Value - Date of Grant ($000's) | ' | $46,200 | $50,500 | $18,400 | $50,800 | $43,200 | $42,800 | $35,600 | $32,900 | $400 | $27,800 |
Shares Granted IPO to Date | 19,178,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value - Date of Grant ($000's) IPO to Date | $348,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Additional_Inform
Income Taxes Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Taxes [Abstract] | ' | ' |
Undistributed accumulated earnings of foreign subsidiaries | $1,078,600 | $1,072,900 |
Accumulated earnings of foreign pass through subsidiaries | 398,500 | 422,300 |
Accumulated earnings subject to additional foreign tax | $300,400 | $318,700 |
Segment_and_Geographic_Informa2
Segment and Geographic Information Segment Table (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Net revenues | $354,908 | $216,074 | ' |
Income before income taxes | 218,144 | 82,223 | ' |
Assets | 38,980,376 | ' | 37,870,700 |
Electronic brokerage | ' | ' | ' |
Net revenues | 223,670 | 195,185 | ' |
Income before income taxes | 134,383 | 110,883 | ' |
Assets | 33,021,064 | ' | 33,333,466 |
Market making | ' | ' | ' |
Net revenues | 133,067 | 23,555 | ' |
Income before income taxes | 88,062 | -29,028 | ' |
Assets | 12,330,434 | ' | 12,139,487 |
Corporate and eliminations | ' | ' | ' |
Net revenues | -1,839 | -2,666 | ' |
Income before income taxes | -4,301 | 368 | ' |
Assets | ($6,371,122) | ' | ($5,602,253) |
Segment_and_Geographic_Informa3
Segment and Geographic Information Geographic Table (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net revenues | $354,908 | $216,074 |
Income before income taxes | 218,144 | 82,223 |
United States | ' | ' |
Net revenues | 282,795 | 138,561 |
Income before income taxes | 197,024 | 51,932 |
International | ' | ' |
Net revenues | 74,302 | 80,248 |
Income before income taxes | 25,704 | 29,930 |
Geographic corporate and eliminations | ' | ' |
Net revenues | -2,189 | -2,735 |
Income before income taxes | ($4,584) | $361 |
Regulatory_Requirements_Table_
Regulatory Requirements Table (Detail) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
All Operating Companies | ' |
Excess regulatory capital | $3,255,600 |
Net Capital / Eligible Equity | 3,857,500 |
Required net capital | 601,900 |
IB LLC | ' |
Excess regulatory capital | 1,772,600 |
Net Capital / Eligible Equity | 2,085,700 |
Required net capital | 313,100 |
TH LLC | ' |
Excess regulatory capital | 504,400 |
Net Capital / Eligible Equity | 560,600 |
Required net capital | 56,200 |
THE | ' |
Excess regulatory capital | 516,900 |
Net Capital / Eligible Equity | 708,500 |
Required net capital | 191,600 |
Other regulated operating companies | ' |
Excess regulatory capital | 461,700 |
Net Capital / Eligible Equity | 502,700 |
Required net capital | $41,000 |
Regulatory_Requirements_Additi
Regulatory Requirements Additional Information (Detail) (All Operating Companies, USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
All Operating Companies | ' |
Excess regulatory capital | $3,255,600 |
Related_Party_Transactions_Det
Related Party Transactions (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Related Party | ' | ' |
Due from Related Parties - Customers | $500 | $400 |
Due to Related Parties - Customers | $383,000 | $815,500 |