Documentation and Entity Inform
Documentation and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 04, 2015 | |
Entity Registrant Name | Interactive Brokers Group, Inc. | |
Entity Central Index Key | 1,381,197 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Fiscal Year Focus | 2,015 | |
Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Common Class A | ||
Common Stock Shares Outstanding | 63,676,315 | |
Common Class B | ||
Common Stock Shares Outstanding | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 1,588 | $ 1,269 |
Cash and securities segregated for regulatory purposes | 20,911 | 15,404 |
Securities borrowed | 3,384 | 3,660 |
Securities purchased under agreements to resell | 215 | 386 |
Financial instruments owned, at fair value: | ||
Financial instruments owned | 2,708 | 2,042 |
Financial instruments owned and pledged as collateral | 1,133 | 1,936 |
Total financial instruments owned, at fair value | 3,841 | 3,978 |
Receivables: | ||
Customers receivables | 15,879 | 17,051 |
Receivables from brokers, dealers and clearing organizations | 859 | 1,131 |
Interest receivable | 65 | 37 |
Total receivables | 16,803 | 18,219 |
Other assets | 484 | 469 |
Total assets | 47,226 | 43,385 |
Liabilities and equity | ||
Short-term borrowings | 4 | 34 |
Securities loaned | 2,724 | 3,199 |
Financial instruments sold, not yet purchased, at fair value | 3,052 | 2,569 |
Payables: | ||
Payables to customer | 35,315 | 31,796 |
Payables to brokers, dealers and clearing organizations | 454 | 234 |
Payable to affiliate | 287 | 277 |
Accounts payable, accrued expenses and other liabilities | 104 | 87 |
Interest payable | 4 | 4 |
Total payables | 36,164 | 32,398 |
Total liabilities | 41,944 | 38,200 |
Stockholders' equity: | ||
Additional paid-in capital | 711 | 635 |
Retained earnings | 135 | 121 |
Accumulated other comprehensive income, net of income taxes of $0 and $1 as of September 30, 2015 and December 31, 2014 | 7 | 12 |
Treasury stock, at cost, 421,001 and 139,059 shares as of September 30, 2015 and December 31, 2014 | (13) | (3) |
Total stockholders' equity | 841 | 766 |
Noncontrolling interests | 4,441 | 4,419 |
Total equity | 5,282 | 5,185 |
Total liabilities and stockholders' equity | 47,226 | 43,385 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | $ 1 | $ 1 |
Common Class B | ||
Stockholders' equity: | ||
Common stock |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts | $ 132 | $ 7 |
Common stock, par value | $ 0.01 | $ 0.01 |
Accumulated Other Comprehensive Income, Tax | $ 0 | $ 1 |
Treasury stock shares | 421,001 | 139,059 |
Common Class A | ||
Shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 63,868,716 | 58,612,245 |
Common stock, shares outstanding | 63,447,715 | 58,473,186 |
Common Class B | ||
Shares authorized | 100 | 100 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Trading gains | $ 87 | $ 42 | $ 216 | $ 211 |
Commissions and execution fees | 167 | 133 | 473 | 394 |
Interest income | 122 | 123 | 356 | 306 |
Other income (loss) | (1) | (102) | (78) | (25) |
Total revenues | 375 | 196 | 967 | 886 |
Interest expense | 16 | 25 | 49 | 51 |
Total net revenues | 359 | 171 | 918 | 835 |
Non-interest expenses: | ||||
Execution and clearing | 63 | 52 | 177 | 158 |
Employee compensation and benefits | 56 | 49 | 171 | 156 |
Occupancy, depreciation and amortization | 12 | 9 | 33 | 29 |
Communications | 6 | 6 | 19 | 18 |
General and administrative | 13 | 14 | 42 | 40 |
Customer bad debt | 7 | 1 | 145 | 2 |
Total non-interest expenses | 157 | 131 | 587 | 403 |
Income before income taxes | 202 | 40 | 331 | 432 |
Income tax expense | 20 | 9 | 37 | 39 |
Net income | 182 | 31 | 294 | 393 |
Less net income attributable to noncontrolling interests | 160 | 28 | 262 | 356 |
Net income available for common stockholders | $ 22 | $ 3 | $ 32 | $ 37 |
Earnings per share: | ||||
Basic | $ 0.35 | $ 0.06 | $ 0.53 | $ 0.67 |
Diluted | $ 0.35 | $ 0.05 | $ 0.52 | $ 0.65 |
Weighted average common shares outstanding: | ||||
Weighted Average Number of Shares Outstanding, Basic | 62,458,655 | 57,099,052 | 60,152,525 | 55,956,615 |
Weighted Average Number of Shares Outstanding, Diluted | 64,028,731 | 58,220,070 | 61,646,928 | 57,196,113 |
Comprehensive income: | ||||
Net income available for common stockholders | $ 22 | $ 3 | $ 32 | $ 37 |
Other comprehensive income: | ||||
Cumulative translation adjustment, before income taxes | (8) | (11) | (5) | (9) |
Other comprehensive income (loss), net of tax | (8) | (11) | (5) | (9) |
Comprehensive income (loss) available for common stockholders | 14 | (8) | 27 | 28 |
Comprehensive income attributable to noncontrolling interests: | ||||
Net income attributable to noncontrolling interests | 160 | 28 | 262 | 356 |
Other comprehensive income - cumulative translation adjustment | (44) | (66) | (29) | (54) |
Comprehensive income (loss) attributable to noncontrolling interests | $ 116 | $ (38) | $ 233 | $ 302 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||||
Net income | $ 294 | $ 393 | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Deferred income taxes | 11 | 15 | ||
Depreciation and amortization | 16 | 14 | ||
Employee stock incentive plans compensation | 38 | 32 | ||
Unrealized losses on other investments, net | 6 | 9 | ||
Bad debt expense | 145 | 2 | ||
Change in operating assets and liabilities: | ||||
Cash and securities - segregated for regulatory purposes | (5,507) | (1,301) | ||
Securities borrowed | 276 | (204) | ||
Securities purchased under agreements to resell | 171 | 113 | ||
Financial instruments owned, at fair value | 136 | 1,053 | ||
Receivables from customers | 1,027 | (3,667) | ||
Other receivables | 244 | (47) | ||
Other assets | 13 | 6 | ||
Securities loaned | (475) | (504) | ||
Financial instruments sold but not yet purchased, at fair value | 480 | 553 | ||
Payable to customers | 3,519 | 3,646 | ||
Other payables | 233 | (74) | ||
Net cash provided by operating activities | 627 | 39 | ||
Cash flows from investing activities: | ||||
Purchases of other investments | (9) | (421) | ||
Distributions received and proceeds from sales of other investments | 6 | 499 | ||
Purchase of property and equipment | (23) | (14) | ||
Net cash (used in) provided by investing activities | (26) | 64 | ||
Cash flows from financing activities: | ||||
Short-term borrowings, net | (30) | 35 | ||
Dividends paid to stockholders | (18) | (17) | ||
Distributions to noncontrolling interests | (181) | (244) | ||
Excess tax benefit on stock incentive plans | 2 | |||
Repurchases of common stock for employee tax withholding under stock incentive plans | (25) | |||
Proceeds from sales of treasury stock | 17 | |||
Payments made under the Tax Receivable Agreement | (13) | (16) | ||
Net cash used in financing activities | (248) | (242) | ||
Effect of exchange rate changes on cash and cash equivalents | (34) | (63) | ||
Net increase (decrease) in cash and cash equivalents | $ 319 | $ (202) | ||
Cash and cash equivalents at beginning of period | 1,269 | 1,213 | 1,213 | |
Cash and cash equivalents at end of period | 1,588 | 1,011 | $ 1,269 | $ 1,213 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | 50 | 48 | ||
Cash paid for taxes | 22 | 27 | ||
Non-cash financing activities: | ||||
Issuance of Common Stock in exchange of member interests in IBG LLC | 121 | |||
Redemption of member interests from IBG Holdings LLC | (121) | |||
Adjustments to additional paid-in capital for changes in proportionate ownership in IBG LLC | 26 | 28 | ||
Adjustments to noncontrolling interests for changes in proportionate ownership in IBG LLC | $ (26) | $ (28) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Equity - USD ($) | Common stocks [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Total Stockholders' Equity [Member] | Non-controlling Interests [Member] | Total |
Balance at Dec. 31, 2013 | $ 1,000,000 | $ 583,000,000 | $ (3,000,000) | $ 99,000,000 | $ 27,000,000 | $ 707,000,000 | $ 4,385,000,000 | $ 5,092,000,000 |
Common stock, shares issued at Dec. 31, 2013 | 54,788,049 | |||||||
Common Stock distributed pursuant to stock incentive plans (in shares) | 2,438,091 | |||||||
Compensation for stock grants vesting in the future | 5,000,000 | 5,000,000 | 27,000,000 | 32,000,000 | ||||
Stock incentive plan adjustment (in shares) | 21,109 | |||||||
Dividends paid to stockholders | (17,000,000) | (17,000,000) | (17,000,000) | |||||
Distributions from IBG LLC to noncontrolling interests | (244,000,000) | (244,000,000) | ||||||
Adjustments for changes in proportionate ownership in IBG LLC | 28,000,000 | 28,000,000 | (28,000,000) | |||||
Comprehensive Income | 37,000,000 | (9,000,000) | 28,000,000 | 302,000,000 | 330,000,000 | |||
Balance at Sep. 30, 2014 | $ 1,000,000 | 616,000,000 | (3,000,000) | 119,000,000 | 18,000,000 | 751,000,000 | 4,442,000,000 | 5,193,000,000 |
Common stock, shares issued at Sep. 30, 2014 | 57,247,249 | |||||||
Balance at Dec. 31, 2014 | $ 1,000,000 | 635,000,000 | (3,000,000) | 121,000,000 | 12,000,000 | 766,000,000 | 4,419,000,000 | 5,185,000,000 |
Common stock, shares issued at Dec. 31, 2014 | 58,612,245 | |||||||
Issuance of common stock in follow-on offering | $ 2,771,778 | 36,000,000 | 36,000,000 | (36,000,000) | ||||
Common Stock distributed pursuant to stock incentive plans (in shares) | 2,484,693 | |||||||
Compensation for stock grants vesting in the future | 6,000,000 | 6,000,000 | 32,000,000 | 38,000,000 | ||||
Deferred tax benefit retained - follow-on offering | 4,000,000 | 4,000,000 | 4,000,000 | |||||
Excess Tax Benefit On Stock Incentive Plan | 2,000,000 | 2,000,000 | 2,000,000 | |||||
Repurchase of common stock for employee tax withholding under stock incentive plans | (25,000,000) | (25,000,000) | (25,000,000) | |||||
Sales of treasury stock | 2,000,000 | 15,000,000 | 17,000,000 | 17,000,000 | ||||
Dividends paid to stockholders | (18,000,000) | (18,000,000) | (18,000,000) | |||||
Distributions from IBG LLC to noncontrolling interests | (181,000,000) | (181,000,000) | ||||||
Adjustments for changes in proportionate ownership in IBG LLC | 26,000,000 | 26,000,000 | (26,000,000) | |||||
Comprehensive Income | 32,000,000 | (5,000,000) | 27,000,000 | 233,000,000 | 260,000,000 | |||
Balance at Sep. 30, 2015 | $ 1,000,000 | $ 711,000,000 | $ (13,000,000) | $ 135,000,000 | $ 7,000,000 | $ 841,000,000 | $ 4,441,000,000 | $ 5,282,000,000 |
Common stock, shares issued at Sep. 30, 2015 | 63,868,716 |
Organization And Nature Of Busi
Organization And Nature Of Business | 9 Months Ended |
Sep. 30, 2015 | |
Organization And Nature Of Business [Abstract] | |
Organization And Nature Of Business | 1. Organization and Nature of Business Interactive Brokers Group, Inc. (“IBG, Inc.”) is a Delaware holding company whose primary asset is its ownership of approximately 15.7% of the membership interests of IBG LLC, which, in turn, owns operating subsidiaries (collectively, “IBG LLC”). IBG, Inc. together with IBG LLC and its consolidated subsidiaries (collectively, “the Company”), is an automated global electronic broker and market maker specializing in executing and clearing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on more than 100 electronic exchanges and market centers around the world and offering custody, prime brokerage, securities and margin lending services to customers. In the United States of America (“U.S.”), the Company’s business is conducted from its headquarters in Greenwich, Connecticut, from Chicago, Illinois and from Jersey City, New Jersey. Abroad, business is conducted through offices located in Canada, England, Switzerland, Liechtenstein, China (Hong Kong and Shanghai), Japan, India, and Australia. As of September 30, 2015 , the Company had 1,052 employees worldwide. IBG LLC is a Connecticut limited liability company that conducts its business through its operating subsidiaries (collectively, the “Operating Companies”): Interactive Brokers LLC (“IB LLC”); Interactive Brokers Canada Inc. (“IBC”); Interactive Brokers (U.K.) Limited and its subsidiary, Interactive Brokers (U.K.) Nominee Limited (collectively, “IBUK”); Interactive Brokers Securities Japan, Inc. (“IBSJ”); Interactive Brokers Hong Kong Limited (“IBHK”); Interactive Brokers (India) Private Limited (“IBI”); Interactive Brokers Australia Pty Limited and its subsidiary, Interactive Brokers Australia Nominees Pty Limited (collectively, “IBA”); Timber Hill LLC (“TH LLC”); Timber Hill Europe AG and its subsidiary, Timber Hill (Liechtenstein) AG (collectively, “THE”); Timber Hill Australia Pty Limited (“THA”); Timber Hill Canada Company (“THC”); Interactive Brokers Financial Products S.A. (“IBFP”); Interactive Brokers Hungary KFT (“IBH”); Interactive Brokers Software Services Estonia OU (“IBEST”); Interactive Brokers Software Services Russia (“IBRUS”); and IB Exchange Corp. (“IBEC”) and its subsidiaries, Interactive Brokers Corp. (“IB Corp”), and Covestor, Inc. and its subsidiary, Covestor Limited (collectively, “Covestor”). The Company operates in two business segments: electronic brokerage and market making, both supported by corporate. The Company 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. Corporate enables the Company to operate cohesively and effectively by providing support via control functions to the business segments and also by executing the Company’s currency diversification strategy. 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 (see Note 13). IB LLC, IBUK, IBC, IBI, IBHK and IBSJ carry securities accounts for customers or perform custodial functions relating to customer securities. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Significant Accounting Policies [Abstract] | |
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 in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ( “ SEC ” ) regarding financial reporting with respect to Form 10 ‑ Q . These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2014 Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 2, 2015. The condensed consolidated financial information as of December 31, 2014 has been derived from the audited consolidated financial statements not included herein. These condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries and reflect all adjustments of a normal and recurring nature that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods presented. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. In connection with the Company’s currency diversification strategy, the Company’s net worth is held in a basket of 16 currencies (referred to by management as the “GLOBAL”). In the fourth quarter of 2014 , t he Company improved the transparency of its currency diversification strategy results by (1) reporting nearly all translation gains and losses from this strategy as other income (previously reported as a component of trading gains) in the condensed consolidated statements of comprehensive income, and (2) reporting these gains and losses in the corporate segment instead of the market making segment. These changes in presentation resulted in certain reclassifications to previously reported amounts. In the third quarter of 2015, the Company changed the presentation of its non-market making financial instruments carried at fair value from other assets and accounts payable, accrued expenses and other liabilities to financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value, respectively, in the condensed consolidated statements of financial condition, in order to consistently present all of the financial instruments held for trading under the same caption. For comparison purposes, as of December 31, 2014, $44 million was reclassified from other assets to financial instruments owned, at fair value, and $8 million was reclassified from accounts payable, accrued expenses and other liabilities to financial instruments sold, but not yet purchased, at fair value. Principles of Consolidation, including Noncontrolling Interests The se 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 IBG LLC’ s operations. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “ Consolidation ” , the Company consolidates IBG LLC’ s financial statements and records the interests in IBG LLC that it 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 these condensed consolidated financial statements and accompanying notes. These estimates and assumptions are based on judgment and the best available information at the time. Therefore, actual results could differ materially from those estimates. Such estimates include the allowance for doubtful accounts, valuation of certain investments, compensation accruals, current and deferred income taxes, and estimated contingency reserves. Fair Value Substantially all of the Company’s assets and liabilities, including financial instruments are carried at fair value based on published market prices and are marked to market, or are assets and liabilities which are short ‑term in nature and are carried at amounts that approximate fair value. The Company applies the fair value hierarchy in accordance with FASB ASC Topic 820, “ Fair Value Measurement” (“ASC Topic 820”) , 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. Level 3 Prices or valuations that require inputs that are both significant to fair value measurement and unobservable. Financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value are generally classified as Level 1 of the fair value hierarchy. 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 active listed stocks, options, warrants and discount certificates and U.S. and foreign government securities. The Company does not adjust quoted prices for financial instruments classified as Level 1 of the fair value hierarchy, 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 of the fair value hierarchy as such instruments are not exchange ‑traded. Other securities that are not traded in active markets are also classified in Level 2 of the fair value hierarchy. 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. Earnings Per Share Earnings per share (“EPS”) is computed in accordance with FASB ASC Topic 260, “ Earnings per Share .” Basic EPS is computed by dividing the net income available for common stockholders by the weighted average number of shares outstanding for that period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period. Diluted EPS includes the determinants of the basic EPS and, in addition, reflects the dilutive effect of shares of common stock estimated to be distributed in the future under the Company’s stock-based compensation plans, with no adjustments to net income available for common stockholders for dilutive potential common shares. Stock ‑Based Compensation The Company follows FASB ASC Topic 718, “ Compensation - Stock Compensation” (“ASC Topic 718”) , to account for its stock ‑based compensation plans. ASC Topic 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 (as described below) and the remaining 50% over the related vesting period utilizing the “graded vesting” method permitted under ASC Topic 718. 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 p reviously 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 have been promulgated to protect customer assets. Securities segregated for regulatory purposes consisted of U.S. government securities of $14.6 billion and $6.7 billion as of September 30, 2015 and December 31, 2014 , respectively, and securities purchased under agreements to resell in the amount of $1.6 billion and $3.9 billion as of September 30, 2015 and December 31, 2014 , respectively, which amounts approximate fair value. Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded at the amount of the cash 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, the Company 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. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. The Company does not net, in the condensed consolidated statements of financial condition, securities borrowed and securities loaned entered into with the same counterparty. Securities lending fees received and paid by the Company are included in interest income and interest expense, respectively, in the condensed consolidated statements of comprehensive income. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell, which are reported as collateralized financing transactions, are recorded at contract value, which approximates fair value. To ensure that the fair value of the underlying collateral remains sufficient, the collateral is valued daily with additional collateral obtained or excess collateral returned, as permitted under contractual provisions. The Company does not net, in the condensed consolidated statements of financial condition, securities purchased under agreements to resell transactions and securities sold under agreements to repurchase transactions entered into with the same counterparty. Financial Instruments Owned and Financial Instruments Sold , But Not Yet Purchased , at Fair Value Financial instrument transactions are accounted for on a trade date basis. Financial instruments owned and financial instruments sold, but not yet purchased are stated at fair value based upon quoted market prices. The Company’s financial instruments pledged to counterparties where the counterparty has the right, by contract or custom, to sell or repledge the financial instruments are reported as financial instruments owned and pledged as collateral in the condensed consolidated statements of financial condition. The Company 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 included in financial instruments owned, at fair value or financial instruments sold, but not yet purchased, at fair value 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 and included in customer bad debt expense in the condensed consolidated statements of comprehensive income. Receivables from and Payables to Brokers, Dealers and Clearing Organizations Receivables from 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 the Company 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 the Company from a seller by the settlement date (“fails to receive”). Investments The Company makes certain strategic investments related to its business and accounts for these investments under the cost method of accounting or under the equity method of accounting as required under FASB ASC Topic 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 the Company’s initial investment and are adjusted each period for the Company’s share of the investee’s income or loss. The Company’s share of the income or losses from equity method investments is included in other income in the condensed consolidated statements of comprehensive income. The recorded amounts of the Company’s equity method investments, $35 million as of September 30, 2015 ($37 million as of December 31, 2014 ), which are included in other assets in the condensed consolidated statements of financial condition, increase or decrease accordingly. Contributions paid to and distributions received from equity method investees are recorded as additions or reductions, respectively, to the respective investment balance. The Company 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, $34 million as of September 30, 2015 ( $31 million as of December 31, 2014 ), 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 included in other assets in the condensed consolidated statements of financial condition. Dividends received from cost basis investments are included in other income in the condensed consolidated statements of comprehensive income when such dividends are received. 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. The Company’s equity investments do not have readily determinable market values. All investments are reviewed for changes in circumstances or occurrence of events that suggest the Company’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 . Property and Equipment Property and equipment, which is included in other assets in the condensed consolidated statements of financial condition, 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 statements of comprehensive income pursuant to FASB ASC Topic 220, “ 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 statements of comprehensive income, but are excluded from reported net income. The Company’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of non-U.S. subsidiaries , 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, therefore tax is usually not accrued. The Company’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 to the U.S. dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the condensed consolidated statements of financial condition. Revenue Recognition Trading Gains Trading gains and losses are recorded on trade date and are reported on a net basis. Trading gains and losses are comprised of changes in the fair value of financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value (i.e., unrealized gains and losses) and realized gains and losses related to the Company’s market making business segment. Included in trading gains are net gains and losses on stocks, U.S. and foreign government securities, corporate and municipal bonds, options, futures, foreign exchange 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, at fair value and financial instruments sold, but not yet purchased, at fair value are reported on a net basis in trading gains in the condensed consolidated statements of comprehensive income. Commissions and Execution Fees Commissions earned for executing and clearing transactions are accrued on a trade date basis and are reported as commissions and execution fees in the condensed consolidated statements of comprehensive income. 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, which are recorded on the accrual basis and are included in interest income and interest expense, respectively, in the condensed consolidated statements of comprehensive income. Foreign Currency Gains and Losses Currency translation refers to the gains and losses resulting from foreign currency transactions. Foreign currency translation gains and losses related to the Company’s currency diversification strategy are included in other income in the condensed consolidated statements of comprehensive income. Foreign currency translation gains and losses related to the market making core-business activities are included in trading gains in the condensed consolidated statements of comprehensive income. Electronic brokerage foreign currency translation gains and losses, arising from currency swap transactions, are included in interest income in the condensed consolidated statements of comprehensive income. Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, “ Income Taxes” (“ASC Topic 740”) . The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits are based on enacted tax laws (see 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 U.S. and numerous foreign jurisdictions. Determining income tax expense requires significant judgments and estimates. The Company recognizes interest related to income tax matters as interest income or interest 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 statements 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 pre-tax 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. The Company recognizes that a tax benefit from an uncertain tax position only 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. A tax position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. The Company records tax liabilities in accordance with ASC Topic 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 Following is a summary of recently issued FASB Accounting Standards Updates (“ASUs”) that have affected or may affect the Company’s condensed consolidated financial statements : Affects Status ASU 2015-02 Consolidation (Topic 810): Amendments to the Consolidation Analysis. Effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. ASU 2015-08 Business Combinations (Topic 805): Pushdown Accounting. Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. Measurement of Certain Transfers Between Entities Under Common Control in the Separate Financial Statements of Each Entity. The amendments are effective immediately. ASU 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. Effective for annual reporting periods beginning after December 15, 2017. ASU 2015-16 Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. Effective for fiscal years beginning after December 15, 2015. Adoption of those ASUs that became effective during 201 4 and 201 5 , prior to the issuance of the Company’s condensed consolidated financial statements, did not have a material effect on th e se financial statements. |
Trading Activities And Related
Trading Activities And Related Risks | 9 Months Ended |
Sep. 30, 2015 | |
Trading Activities And Related Risks [Abstract] | |
Trading Activities And Related Risks | 3. Trading Activities and Related Risks The Company’s trading activities include providing securities market making and brokerage services. Trading activities expose the Company 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 the Company’s risk ‑taking is consistent with its business strategy, capital structure, and current and anticipated market conditions. Market Risk The Company 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. The Company 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. The Company uses a combination of cash instruments and exchange traded derivatives to hedge its market exposures. The Company does not apply hedge accounting. 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. The Company is subject to equity price risk primarily in financial instruments held. The Company 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. As a global market maker trading on exchanges around the world in multiple currencies, the Company is exposed to foreign currency risk. The Company actively manages its currency exposure using hedging strategies that are based on a defined basket of 16 currencies internally referred to as the “GLOBAL.” These strategies minimize the fluctuation of the Company’s net worth as expressed in GLOBALs, thereby diversifying its risk in alignment with these global currencies, weighted by the Company’s view of their importance. As the Company’s financial results are reported in U.S. dollars, the change in the value of the GLOBAL as expressed in U.S. dollars affects the Company’s earnings. The impact of this currency diversification strategy in the Company’s earnings is included in other income in the condensed consolidated statements of comprehensive income. Interest Rate Risk Interest rate risk arises from the possibility that changes in interest rates will affect the value of financial instruments. The Company 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 The Company 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 the Company to default risk. The Company 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. The Company 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, the Company executes, settles, and finances various customer securities transactions. Execution of these transactions includes the purchase and sale of securities which exposes the Company to default risk arising from the potential that customers or counterparties may fail to satisfy their obligations. In these situations, the Company 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, the Company may purchase the underlying security in the market and seek reimbursement for any losses from the counterparty. For cash management purposes, the Company 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 lending agreements are collateralized by deposits of cash or securities. The Company 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 the Company as permitted under contractual provisions. Concentrations of Credit Risk The Company’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 September 30, 2015, the Company did not have any material concentrations of credit risk outside the ordinary course of business. Off ‑Balance Sheet Risks The Company 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 the Company’s cost to liquidate such contracts may exceed the amounts reported in the Company’s condensed consolidated statements of financial condition. |
Equity And Earnings Per Share
Equity And Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Equity And Earnings Per Share [Abstract] | |
Equity And Earnings Per Share | 4. Equity and Earnings Per Share In connection with IBG, Inc.’s initial public offering of Class A common stock (“IPO”) in May 2007, it purchased 10.0% of the membership interests in IBG LLC from IBG Holdings LLC (“Holdings”), became the sole managing member of IBG LLC and began to consolidate IBG LLC’s financial results into its financial statements. Holdings owns all of IBG, Inc.’s Class B common stock, which has voting rights in proportion to its ownership interests in IBG LLC, approximately 84.3% as of September 30, 2015 . The condensed consolidated financial statements reflect the results of operations and financial position of IBG, Inc., including consolidation of its investment in IBG LLC and its subsidiaries. The noncontrolling interests in IBG LLC attributable to Holdings are reported as a component of total equity in the condensed consolidated statements of financial condition, 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. As of September 30 , 2015 and December 31, 2014, 1,000,000,000 shares of Class A common stock were authorized, of which 63,868,716 and 58,612,245 shares have been issued; and 63,447,715 and 58,473,186 shares were outstanding, respectively. Class B common stock is comprised of 100 authorized shares , of which 100 shares were issued and outstanding as of September 30 , 2015 and December 31, 2014, respectively. In addition, 10,000 shares of preferred stock have been authorized, of which no shares are issued or outstanding as of September 30 , 2015 and December 31, 2014 , 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 subsequent redemptions of Holdings member interests in exchange for common stock. These deferred tax assets are included in other assets in the Company’s condensed consolidated statements of financial condition and are being amortized as additional deferred income tax expense over 15 years from the IPO date and from the additional redemption dates, respectively, as allowable under current tax law. As of September 30, 2015 and December 31, 2014 , the unamortized balance of these deferred tax assets was $289 million and $279 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 Company’s condensed consolidated statements of financial condition. The remaining 15% is accounted for as a permanent increase to additional paid ‑in capital in the Company’s condensed consolidated statements of financial condition. The cumulative amounts of deferred tax assets, payables to Holdings and additional paid ‑in capital arising from stock offerings from the date of the IPO through September 30, 2015 were $454 million, $386 million and $68 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 $99 million through September 30, 2015 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. On July 23, 2015, the Exchange Agreement was amended to extend the redemption period past eight (8) years. At the time of IBG, Inc.’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 million, which redemptions were funded using cash on hand at IBG LLC. Upon cash redemption these IBG LLC shares were retired . From 2011 through 2014, IBG, Inc. issued 8,025,517 shares of c ommon stock directly to Holdings in exchange for an equivalent number of shares of member interests in IBG LLC. On July 24, 2015, the Company filed a Supplemental Prospectus on Form 424B5 (File Number 333-192275 ) with the SEC to issue 2,771,778 shares of common stock in exchange for an equivalent number of shares of member interests in IBG LLC. This issuance of shares increased the Company’s ownership in IBG LLC from 15.0% to 15.7% . As a consequence of these redemption transactions, and distribution of shares to employees (see Note 9 ), IBG, Inc. ’ s interest in IBG LLC has increased to approximately 15.7% , with Holdings owning the remaining 84.3% as of September 30, 2015 . The redemptions also resulted in an increase in the Holdings interest held by Mr. Thomas Peterffy and his affiliates from approximately 84.6% at the IPO to approximately 88.7% as of September 30, 2015. 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 September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions, except for shares or per share amounts) Basic earnings per share Net income available for common stockholders $ $ $ $ Weighted average shares of common stock outstanding: Class A Class B Basic earnings per share $ $ $ $ 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 September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions, except for shares or per share amounts) Diluted earnings per share Net income available for common stockholders $ $ $ $ Weighted average shares of common stock outstanding Class A Issued and outstanding Potentially dilutive common shares issuable pursuant to employee stock incentive plans Class B Diluted earnings per share $ $ $ $ Member Distributions and Stockholder Dividends During the nine months ended September 30, 2015 , IBG LLC made distributions totaling $212 million to its members, of which IBG, Inc. ’ s proportionate share was $32 million. In March, June and September 2015, t he Company paid cash dividends of $0.10 per share of c ommon s tock, $6 million, $6 million and $6 million, respectively. On October 20, 2015 , the Company declared a cash dividend of $0.10 per common share, payable on December 14, 2015 to stockholders of record as of December 1, 2015 . |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 30, 2015 | |
Comprehensive Income Detail [Abstract] | |
Comprehensive Income | 5. Comprehensive Income The following table presents comprehensive income and earnings per share on comprehensive income . Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions, except for shares or per share amounts) Comprehensive income (loss) available for common stockholders $ $ $ $ Earnings (loss) per share on comprehensive income: Basic $ $ $ $ Diluted $ $ $ $ Weighted average common shares outstanding Basic Diluted |
Financial Assets And Financial
Financial Assets And Financial Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Financial Assets And Financial Liabilities [Abstract] | |
Financial Assets And Financial Liabilities | 6. Financial Assets and Financial Liabilities Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables set forth, by level within the fair value hierarchy (see Note 2), financial assets and liabilities, measured at fair value on a recurring basis as of September 30 , 2015 and December 31, 2014 . As required by ASC Topic 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. As described in Note 2, the Company reclassified its other fair value investments of $44 million from other assets and $8 million from accounts payable, accrued expenses and other liabilities to financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value, respectively, as of December 31, 2014. Financial Assets At Fair Value as of September 30, 2015 Level 1 Level 2 Level 3 Total (in millions) Securities segregated for regulatory purposes $ $ — $ — $ Financial instruments owned, at fair value Stocks — — Options — — Warrants and discount certificates — — U.S. and foreign government securities — — Corporate and municipal bonds — — Currency forward contracts — — Total financial instruments owned, at fair value — Total financial assets at fair value $ $ $ — $ Financial Liabilities At Fair Value as of September 30, 2015 Level 1 Level 2 Level 3 Total (in millions) Financial instruments sold, but not yet purchased, at fair value Stocks $ $ — $ — $ Options — — Warrants and discount certificates — — Currency forward contracts — — Total financial instruments sold, but not yet purchased, at fair value — Total financial liabilities at fair value $ $ $ — $ Financial Assets At Fair Value as of December 31, 2014 Level 1 Level 2 Level 3 Total (in millions) Securities segregated for regulatory purposes $ $ — $ — $ Financial instruments owned, at fair value Stocks — — Options — — Warrants and discount certificates — — U.S. and foreign government securities — — Corporate and municipal bonds — Currency forward contracts — — Total financial instruments owned, at fair value — Total financial assets at fair value $ $ $ — $ Financial Liabilities At Fair Value as of December 31, 2014 Level 1 Level 2 Level 3 Total (in millions) Financial instruments sold, but not yet purchased, at fair value Stocks $ $ — $ $ Options — — Warrants and discount certificates — — Currency forward contracts — — Total financial instruments sold, but not yet purchased, at fair value Total financial liabilities at fair value $ $ $ $ Transfers between Level 1 and Level 2 Transfers of financial assets and financial liabilities at fair value to or from Levels 1 and 2 arise where the market for a specific financial instrument 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 quarter ended December 31, 2014, the Company stopped trading fixed-income securities and liquidated all its fixed-income positions. As a result, there were no transfers between levels for financial instruments owned and sold, but not yet purchased, at fair value during the nine months ended September 30 , 2015. During the nine months ended September 30 , 2014, the Company reclassified approximately $3 million of financial instruments owned, at fair value from Level 1 to Level 2 and reclassified approximately $5 million from Level 2 to Level 1. Financial instruments sold, but not yet purchased, at fair value of approximately $1 million were reclassified from Level 1 to Level 2 and approximately $1 million were reclassified from Level 2 to Level 1. Trading Gains from Market Making Transactions As described in Note 2, in the fourth quarter of 2014, nearly all of the currency translation gains and losses related to the Company’s currency diversification strategy were reclassified from trading gains to other income. Prior period amounts have been reclassified to conform to the current presentation. Trading gains and losses from market making transactions reported in the condensed consolidated statements of comprehensive income, by major product type, are comprised of : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Equities $ $ $ $ Fixed income — — Foreign exchange Total trading gains, net $ $ $ $ These transactions are related to the Company’s financial instruments owned and financial instruments sold, but not yet purchased, 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 related interest income and expense. The gains in the above table are not representative of the integrated trading strategies applied by the Company, which utilizes financial instruments across various product types. Gains and losses in one product type frequently offset gains and losses in other product types. Financial Assets and Liabilities Not Measured at Fair Value The following table represents the carrying value, fair value, and fair value hierarchy category of certain financial assets and liabilities that are not recorded at fair value in the Company's condensed consolidated statements of financial condition. The following table excludes certain financial instruments such as equity investments and all non-financial assets and liabilities. September 30, 2015 Carrying Value Fair Value Level 1 Level 2 Level 3 (in millions) Financial assets, not measured at fair value Cash and cash equivalents $ $ $ $ - $ - Cash and securities segregated for regulatory purposes - Securities borrowed - - Securities purchased under agreements to resell - - Receivables from customer - - Receivables from broker, dealers, and clearing organizations - - Interest receivables - - Other assets - - Total financial assets, not measured at fair value $ $ $ $ $ — Financial liabilities, not measured at fair value Short-term borrowings $ $ $ - $ $ - Securities loaned - - Payables to customer - - Payables to brokers, dealers and clearing organizations - - Interest payable - - Total financial liabilities, not measured at fair value $ $ $ — $ $ — December 31, 2014 Carrying Value Fair Value Level 1 Level 2 Level 3 (in millions) Financial assets, not measured at fair value Cash and cash equivalents $ $ $ $ - $ - Cash and securities segregated for regulatory purposes - Securities borrowed - - Securities purchased under agreements to resell - - Receivables from customer - Receivables from broker, dealers, and clearing organizations - - Interest receivable - - Other assets - - Total financial assets, not measured at fair value $ $ $ $ $ — Financial liabilities, not measured at fair value Short-term borrowings $ $ $ - $ $ - Securities loaned - - Payables to customer - - Payables to brokers, dealers and clearing organizations - - Interest payable - - Total financial liabilities, not measured at fair value $ $ $ — $ $ — Netting of Financial Assets and Financial Liabilities The Company does not net securities borrowed and securities loaned, and securities purchased under agreements to resell and securities sold under agreements to repurchase, which are presented on a gross basis in the condensed consolidated statements of financial condition. In the tables below, the amounts of financial instruments that are not offset in the condensed consolidated statements of financial condition, but could be netted against cash or financial instruments with specific counterparties under master netting agreements, according to the terms of the 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 net payable or receivable with counterparties for these financial instruments. The following tables sets forth the netting of financial assets and of financial liabilities as of September 30 , 2015 and December 31, 2014. September 30, 2015 Amounts Offset Net Amounts Amounts Not Offset in in the Condensed Presented in the Condensed Consolidated the Condensed Consolidated Statement Statement of Consolidated of Financial Condition Gross Amounts Financial Statement of Cash or Financial of Recognized Condition Financial Condition Instruments Net Amount (in millions) Offsetting of Financial Assets Securities segregated for regulatory purposes—purchased under agreements to resell $ 1 $ — $ $ $ — Securities borrowed — Securities purchased under agreements to resell — — Financial Instruments owned, at fair value Options — Warrants and discount certificates — Currency forward contracts — — Total $ $ — $ $ $ (in millions) Offsetting of Financial Liabilities Securities loaned $ $ — $ $ $ Financial instruments sold, but not yet purchased, at fair value Options — Warrants and discount certificates — — Currency forward contracts — — Total $ $ — $ $ $ December 31, 2014 Amounts Offset Net Amounts Amounts Not Offset in in the Condensed Presented in the Condensed Consolidated the Condensed Consolidated Statement Statement of Consolidated of Financial Condition Gross Amounts Financial Statement of Cash or Financial of Recognized Condition Financial Condition Instruments Net Amount (in millions) Offsetting of Financial Assets Securities segregated for regulatory purposes—purchased under agreements to resell $ 1 $ — $ $ $ — Securities borrowed — Securities purchased under agreements to resell — — Financial Instruments owned, at fair value Options — Warrants and discount certificates — Currency forward contracts — — Total $ $ — $ $ $ (in millions) Offsetting of Financial Liabilities Securities loaned $ $ — $ $ $ Financial instruments sold, but not yet purchased, at fair value Options — Warrants and discount certificates — — Currency forward contracts — — Total $ $ — $ $ $ (1) As of September 30 , 2015 and December 31, 2014, the Company had $1.6 billion and $3.9 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. Secured Financing Transactions—Maturities and Collateral Pledged The following table presents gross obligations for securities loaned transactions by remaining contractual maturity and class of collateral pledged. September 30, 2015 Remaining Contractual Maturity Overnight Less than 30 – 90 Over 90 and Open 30 days days days Total (in millions) Securities Loaned Stocks $ $ - $ - $ - $ Corporate bonds - - - Total $ $ - $ - $ - $ |
Collateralized Transactions
Collateralized Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Collateralized Transactions [Abstract] | |
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 securities purchased under agreements to resell, 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 the Company’s 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. As of September 30, 2015 and December 31, 2014 , approximately $15.9 billion and $17.1 billion, respectively, of customer margin loans were outstanding. The following table summarizes the amounts related to collateralized transactions as of September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 Permitted Sold or Permitted Sold or to Repledge Repledged to Repledge Repledged (in millions) Securities lending transactions $ $ $ $ Securities purchased under agreements to resell transactions (1) Customer margin assets $ $ $ $ (1) As of September 30, 2015 , $1.6 billion or 88% (as of December 31, 2014, $3.9 billion, or 91%) , 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 customer s 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. As of September 30, 2015 and December 31, 2014, the majority of the Company’s U.S. and foreign government securities owned were pledged to clearing organizations. Financial instruments owned and pledged as collateral, including amounts pledged to affiliates, where the counterparty has the right to repledge, as of September 30, 2015 and December 31, 2014 are presented in the following table : September 30, December 31, 2015 2014 (in millions) Stocks $ $ U.S. and foreign government securities $ $ |
Other Income
Other Income | 9 Months Ended |
Sep. 30, 2015 | |
Other Income [Abstract] | |
Other Income | 8 . Other Income As described in Note 2, in the fourth quarter of 2014, nearly all of the currency translation gains and losses related to the Company’s currency diversification strategy were reclassified from trading gains to other income. Prior period amounts have been reclassified to conform to the current presentation. The components of other income for the three and nine months ended September 30, 2015 and 2014 were: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Payments for order flow $ $ $ $ Market data fees Account activity fees Risk exposure fees Gains (losses) on financial instruments, at fair value and other investments, net Gains (losses) from currency diversification strategy, net Other, net $ $ $ $ Payments for order flow are earned from various options exchanges based upon options trading volume originated by the Operating Companies. Market data fees are charged to customers based upon market data services provided and are largely offset by the related cost to obtain the underlying market data from third party vendors. Risk exposure fees are earned from a small minority of customers’ accounts with positions on which market risk exceeds certain thresholds. Gains and losses on financial instruments, at fair value and other investments include realized and unrealized gains and losses on financial instruments that are not held for the Company’s market making operations or from securities that are subject to restrictions, and the Company’s interests in the earnings of equity method investees and dividends received on cost ‑basis investments. |
Employee Incentive Plans
Employee Incentive Plans | 9 Months Ended |
Sep. 30, 2015 | |
Employee Incentive Plans [Abstract] | |
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 restricted common stock as described below under “2007 Stock Incentive Plan.” During the second quarter of 2015 , this plan was terminated as the Company fully paid its remaining obligation to employees. Therefore, at September 30, 2015 , the Company had no payable to employees for ROI Dollar Units. As of December 31, 2014 , payable to employees for ROI Dollar Units was $3 million and is included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. 2007 ROI Unit Stock Plan In connection with the IPO, the Company adopted the IBG , Inc. 2007 ROI Unit Stock Plan (“ ROI Unit Stock Plan”). Under this plan, certain employees of IBG LLC 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 restricted common stock. An aggregate of 1,271,009 shares of restricted 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 m illion 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 the Company and compliance with other applicable covenants. Of the fair value at the date of grant, $18 million represented the accumulated ROI Dollar Unit value elected to be invested by employees in restricted common stock and such amount was accrued for as of December 31, 2006. The remainder was 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. As of September 30, 2015 , the Company has 6,377 shares of common stock remaining to be distributed to former employees under the ROI Unit Stock Plan. 2007 Stock Incentive Plan Under the Company’s 2007 Stock Incentive Plan (the “Stock Incentive Plan”), up to 30 million shares of the Company’s common stock may be granted and issued to directors, officers, employees, contractors and consultants of the Company. The purpose of the Stock Incentive Plan is to promote the Company’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 2014 Annual Report on Form 10-K, filed with the SEC, in Part I Item 1, there is no dilutive effect upon ownership of common stockholders of issuing shares under the Stock Incentive Plan. The issuances do not dilute the book value of the ownership of common stockholders since the restricted stock units are granted at market value , and upon their vesting and the related issuance of shares of c ommon stock, the ownership of the IBG, Inc. in 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 member (i.e., noncontrolling interest), Holdings, and not by IBG, Inc. or its common stock holders. Additionally, dilution of earnings that may take place after issuance of common stock is reflected in 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 the Company’s Board of Directors. The Compensation Committee has discretionary authority to determine the eligibility 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 participant 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 the participant ’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 by the new employer on a substantially similar basis and on terms and conditions substantially comparable to those of the Stock Incentive Plan. The Company expect s to continue to grant awards on or about December 31 of each year to eligible participants as part of an overall plan of equity compensation. Shares of common stock vest, and become distributable to participants in accordance with the following schedule: • 10% on the first vesting date, which is on or about May 9 of each year; and • an additional 15% on each of the following six anniversaries of the first vesting, assuming continued employment with the Company 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 22,996 shares have been granted to the external directors cumulatively since the plan inception . Stock Incentive Plan share grants (excluding 21,009 shares issued pursuant to the ROI Unit Stock Plan described above) and the related fair values since the plan inception are presented in the table below: Fair Value at Date of Grant Shares ($ millions) Prior periods (since inception) $ December 31, 2012 December 31, 2013 December 31, 2014 $ Estimated future grants under the Stock Incentive Plan are accrued for ratably during each year (see Note 2). In accordance with the vesting schedule, outstanding awards vest and are distributed to participants yearly on or about May 9 of each year . At the end of each year, there are no vested awards that remain undistributed. Compensation expense related to the Stock Incentive Plan recognized in the condensed consolidated statements of comprehensive income was $38 millio n and $ 32 million for the nine months ended September 30, 2015 and 2014 , respectively. Estimated future compensation costs for unvested awards, net of forfeiture credits, as of September 30, 2015 are $25 million. The following summarizes the Stock Incentive Plan and ROI Unit Stock Plan activities for the nine months ended September 30, 2015 : Stock Incentive Plan ROI Unit ("SIP") Stock Plan Shares Shares Balance, December 31, 2014 Granted — — Forfeited — Distributed Balance, September 30, 2015 Awards granted under the stock plans are subject to forfeiture in the event a participant ceases employment with the Company. The stock plans provide that participants 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 participant is over the age of 59, in which case the participant would be eligible to receive 100% of unvested awards previously granted. Distributions of remaining awards granted on or before January 1, 2009 to former participants 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 participants will occur over the remaining vesting schedule applicable to each grant. Through September 30, 2015 , a total of 305,838 shares have been distributed under these post ‑employment provisions. These distributions are included in the table above. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | 10 . Income Taxes Income tax expense for the nine months ended September 30, 2015 and 2014 differs from the U.S. federal statutory rate due primarily 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 due primarily to the amortization of the deferred tax assets recognized in connection with the common stock offerings (see 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 nine months ended September 30, 2015 and 2014 , the Company had no unrecognized tax and no valuation allowances on deferred tax assets were required. The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. As of September 30, 2015, the Company is no longer subject to U.S. Federal and State income tax examinations for tax years prior to 2010, and to non-U.S. income tax examinations for tax years prior to 2006. As of September 30 , 2015, accumulated earnings held by non ‑U.S. subsidiaries totaled $1.0 billion (as of December 31, 2014 $1.0 billion ). Of this amount, approximately $0.4 billion (as of December 31, 2014 $0.4 billion ) 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 $0.3 billion as of September 30, 2015 and December 31, 2014 , 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 Topic 740 is not permitted as this difference will not reverse in the foreseeable future. In the instances in which the Company’s book basis were to exceed its U.S. tax basis, no deferred tax liability would be established as the Company would consider the earnings of those entities to be indefinitely reinvested. |
Commitments, Contingencies And
Commitments, Contingencies And Guarantees | 9 Months Ended |
Sep. 30, 2015 | |
Commitments, Contingencies And Guarantees [Abstract] | |
Commitments, Contingencies And Guarantees | 11 . Commitments, Contingencies and Guarantees Claims Against Customers On January 15, 2015, due to the sudden move in the value of the Swiss franc that followed an unprecedented action by the Swiss National Bank, several of the Company's customers who held currency futures and spot positions suffered losses in excess of their deposits with the Company. The Company took immediate action to hedge its exposure to the foreign currency receivables from these customers. The Company estimates the losses related to this event, net of hedging activity, to be approximately $ 119 million. The Company is actively pursuing collection of the debts. The ultimate effect of this incident on the Company's results will depend upon 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. The Company 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. The Company accounts for potential losses related to litigation in accordance with FASB ASC Topic 450, “ Contingencies .” As of September 30, 2015 and 2014, reserves provided for potential losses related to litigation matters were not material. Trading Technologies Matter On February 3, 2010, Trading Technologies International, Inc. (“Trading Technologies”) filed a complaint in the U.S. District Court for the Northern District of Illinois, Eastern Division, against IBG, Inc., IBG LLC, Holdings, and IB LLC. Thereafter, Trading Technologies dismissed IBG, Inc. and Holdings from the case, leaving only IBG LLC and IB LLC as defendants (the “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 Litigation”). The Defendants filed an answer to Trading Technologies’ amended complaint, as well as related counterclaims. The defendants deny Trading Technologies’ claims, assert that the asserted patents are not infringed and are invalid, and assert several other defenses as well. Trading Technologies also filed patent infringement lawsuits against approximately a dozen other companies in the same court, many of which are still pending. The Litigation was consolidated with the other lawsuits filed by Trading Technologies. In the second quarter of 2015, the District Court for the Northern District of Illinois, Eastern Division granted the motion request filed by IBG LLC and IB LLC to stay the Litigation pursuant to Section 18(b) of the America Invents Act in light of petitions for Covered Business Method (“CBM”) Review on five asserted patents filed with the U.S. Patent and Trademark Office (“USPTO”). The CBM petitions were terminated in July 2015. On July 24, 2015, the District Court granted Trading Technologies motion to lift the stay of the Litigation. The case has now moved into the discovery phase. While it is too early to predict the outcome of the matter, t he Company believes it has meritorious defenses to the allegations made in the complaint and intends to defend itself 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. Guarantees Certain of the Operating Companies provide guarantees to securities clearing houses and exchanges which meet the accounting definition of a guarantee under FASB ASC Topic 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, 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 Informat
Segment And Geographic Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment And Geographic Information [Abstract] | |
Segment And Geographic Information | 12. Segment and Geographic Information The Company has two operating business segments: electronic brokerage and market making. These segments are supported by the corporate segment which provides centralized services and executes the Company’s currency diversification strategy. The Company 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. As described in Note 2, d uring the fourth quarter of 2014, t he Company had taken several steps to improve the transparency of its currency diversification strategy. The Company reclassified gains and losses from its currency diversification strategy in the corporate segment instead of the market making segment. To provide meaningful comparisons, prior period amounts have been reclassified for changes in the presentation of currency translation effects. Corporate items include non ‑allocated corporate income and expenses that are not attributed to segments for performance measurement, net gains and losses on positions held as part of our overall currency diversification strategy, 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 September 30, 2015 and 2014 , and to total assets as of September 30, 2015 and December 31, 2014 . Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Net revenues Electronic brokerage $ $ $ $ Market making Corporate and eliminations Total net revenues $ $ $ $ Income before taxes Electronic brokerage $ $ $ $ Market making Corporate and eliminations Total income before income taxes $ $ $ $ September 30, December 31, 2015 2014 (in millions) Segment Assets Electronic brokerage $ $ Market making Corporate Total assets $ $ The Company operates its automated global business in the U.S. and international markets on more than 100 electronic exchanges and market centers. A significant portion of the Company’s net revenues are generated by subsidiaries operating outside the U.S. International operations are comprised of electronic brokerage and market making activities in 25 countries in Europe, Asia and the Americas (outside the U.S.). In the first quarter of this year, the Company changed the presentation of its geographic segments, moving the companies and eliminations that were in the corporate segment to their respective geographic region. To provide meaningful comparison, prior period amounts have been reclassified for this change in presentation. The following table presents total net revenues and income before income taxes by geographic area for the three month s ended September 30, 2015 and 2014 . Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Net revenues United States $ $ $ $ International Total net revenues $ $ $ $ Income before income taxes United States $ $ $ $ International Total income before income taxes $ $ $ $ |
Regulatory Requirements
Regulatory Requirements | 9 Months Ended |
Sep. 30, 2015 | |
Regulatory Requirements [Abstract] | |
Regulatory Requirements | 13 . Regulatory Requirements As of September 30, 2015 , aggregate excess regulatory capital for all of the Operating Companies was $3.4 billion. IB LLC and TH LLC are subject to the Uniform Net Capital Rule (Rule 15c3 ‑1) under the Exchange Act and the Commodities and Futures Trading Commission’s minimum financial requirements (Regulation 1.17), and THE is subject to the Swiss Financial Market Supervisory Authority eligible equity requirement. Additionally, IBHK is subject to the Hong Kong Securities Futures Commission liquid capital requirement, THA is subject to the Australian Stock Exchange liquid capital requirement, THLI is subject to the Financial Market Authority Liechtenstein eligible capital requirements, 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. Net Capital/ Eligible Equity Requirement Excess (in millions) IB LLC $ $ $ TH LLC THE Other regulated Operating Companies $ $ $ 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 the Company are subject to other regulatory restrictions and requirements. As of September 30, 2015 , all of the regulated Operating Companies were in compliance with their respective regulatory capital requirements. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14 . Related Party Transactions Receivable from affiliate, reported in other assets in the condensed consolidated statement of financial condition, represents amounts advanced to Holdings and payable to affiliate represents amounts payable to Holdings under the Tax Receivable Agreement (see Note 4). Included in receivables from and payables to customers in the condensed consolidated statements of financial condition as of September 30, 2015 and December 31, 2014 were accounts receivable from directors, officers and their affiliates of $58 million and $152 million and payables of $1,113 million and $274 million, respectively. The Company may extend credit to these related parties in connection with margin loans. Such loans are (i) made in the ordinary course of business, (ii) are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company, and (iii) do not involve more than the normal risk of collectability or present other unfavorable features. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15 . Subsequent Events As required by FASB ASC Topic 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. Except as disclosed in Note 4, no recordable or disclosable events occurred. **** |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Significant Accounting Policies [Abstract] | |
Basis Of Presentation | Basis of Presentation These condensed consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ( “ SEC ” ) regarding financial reporting with respect to Form 10 ‑ Q . These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2014 Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 2, 2015. The condensed consolidated financial information as of December 31, 2014 has been derived from the audited consolidated financial statements not included herein. These condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries and reflect all adjustments of a normal and recurring nature that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods presented. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. In connection with the Company’s currency diversification strategy, the Company’s net worth is held in a basket of 16 currencies (referred to by management as the “GLOBAL”). In the fourth quarter of 2014 , t he Company improved the transparency of its currency diversification strategy results by (1) reporting nearly all translation gains and losses from this strategy as other income (previously reported as a component of trading gains) in the condensed consolidated statements of comprehensive income, and (2) reporting these gains and losses in the corporate segment instead of the market making segment. These changes in presentation resulted in certain reclassifications to previously reported amounts. In the third quarter of 2015, the Company changed the presentation of its non-market making financial instruments carried at fair value from other assets and accounts payable, accrued expenses and other liabilities to financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value, respectively, in the condensed consolidated statements of financial condition, in order to consistently present all of the financial instruments held for trading under the same caption. For comparison purposes, as of December 31, 2014, $44 million was reclassified from other assets to financial instruments owned, at fair value, and $8 million was reclassified from accounts payable, accrued expenses and other liabilities to financial instruments sold, but not yet purchased, at fair value. |
Principles Of Consolidation, Including Noncontrolling Interests | Principles of Consolidation, including Noncontrolling Interests The se 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 IBG LLC’ s operations. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “ Consolidation ” , the Company consolidates IBG LLC’ s financial statements and records the interests in IBG LLC that it 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 these condensed consolidated financial statements and accompanying notes. These estimates and assumptions are based on judgment and the best available information at the time. Therefore, actual results could differ materially from those estimates. Such estimates include the allowance for doubtful accounts, valuation of certain investments, compensation accruals, current and deferred income taxes, and estimated contingency reserves. |
Fair Value | Fair Value Substantially all of the Company’s assets and liabilities, including financial instruments are carried at fair value based on published market prices and are marked to market, or are assets and liabilities which are short ‑term in nature and are carried at amounts that approximate fair value. The Company applies the fair value hierarchy in accordance with FASB ASC Topic 820, “ Fair Value Measurement” (“ASC Topic 820”) , 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. Level 3 Prices or valuations that require inputs that are both significant to fair value measurement and unobservable. Financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value are generally classified as Level 1 of the fair value hierarchy. 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 active listed stocks, options, warrants and discount certificates and U.S. and foreign government securities. The Company does not adjust quoted prices for financial instruments classified as Level 1 of the fair value hierarchy, 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 of the fair value hierarchy as such instruments are not exchange ‑traded. Other securities that are not traded in active markets are also classified in Level 2 of the fair value hierarchy. 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. |
Earnings Per Share | Earnings Per Share Earnings per share (“EPS”) is computed in accordance with FASB ASC Topic 260, “ Earnings per Share .” Basic EPS is computed by dividing the net income available for common stockholders by the weighted average number of shares outstanding for that period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period. Diluted EPS includes the determinants of the basic EPS and, in addition, reflects the dilutive effect of shares of common stock estimated to be distributed in the future under the Company’s stock-based compensation plans, with no adjustments to net income available for common stockholders for dilutive potential common shares. |
Stock-Based Compensation | Stock ‑Based Compensation The Company follows FASB ASC Topic 718, “ Compensation - Stock Compensation” (“ASC Topic 718”) , to account for its stock ‑based compensation plans. ASC Topic 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 (as described below) and the remaining 50% over the related vesting period utilizing the “graded vesting” method permitted under ASC Topic 718. 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 p reviously 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 have been promulgated to protect customer assets. Securities segregated for regulatory purposes consisted of U.S. government securities of $14.6 billion and $6.7 billion as of September 30, 2015 and December 31, 2014 , respectively, and securities purchased under agreements to resell in the amount of $1.6 billion and $3.9 billion as of September 30, 2015 and December 31, 2014 , 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 the cash 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, the Company 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. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. The Company does not net, in the condensed consolidated statements of financial condition, securities borrowed and securities loaned entered into with the same counterparty. Securities lending fees received and paid by the Company are included in interest income and interest expense, respectively, in the condensed consolidated statements of comprehensive income. |
Securities Purchased Under Agreements To Resell and Secruities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell, which are reported as collateralized financing transactions, are recorded at contract value, which approximates fair value. To ensure that the fair value of the underlying collateral remains sufficient, the collateral is valued daily with additional collateral obtained or excess collateral returned, as permitted under contractual provisions. The Company does not net, in the condensed consolidated statements of financial condition, securities purchased under agreements to resell transactions and 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 Financial Instruments Sold , But Not Yet Purchased , at Fair Value Financial instrument transactions are accounted for on a trade date basis. Financial instruments owned and financial instruments sold, but not yet purchased are stated at fair value based upon quoted market prices. The Company’s financial instruments pledged to counterparties where the counterparty has the right, by contract or custom, to sell or repledge the financial instruments are reported as financial instruments owned and pledged as collateral in the condensed consolidated statements of financial condition. The Company 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 included in financial instruments owned, at fair value or financial instruments sold, but not yet purchased, at fair value 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 and included in customer bad debt expense in the condensed consolidated statements of comprehensive income. |
Receivables From And Payables To Brokers, Dealers And Clearing Organizations | Receivables from and Payables to Brokers, Dealers and Clearing Organizations Receivables from 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 the Company 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 the Company from a seller by the settlement date (“fails to receive”). |
Investments | Investments The Company makes certain strategic investments related to its business and accounts for these investments under the cost method of accounting or under the equity method of accounting as required under FASB ASC Topic 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 the Company’s initial investment and are adjusted each period for the Company’s share of the investee’s income or loss. The Company’s share of the income or losses from equity method investments is included in other income in the condensed consolidated statements of comprehensive income. The recorded amounts of the Company’s equity method investments, $35 million as of September 30, 2015 ($37 million as of December 31, 2014 ), which are included in other assets in the condensed consolidated statements of financial condition, increase or decrease accordingly. Contributions paid to and distributions received from equity method investees are recorded as additions or reductions, respectively, to the respective investment balance. The Company 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, $34 million as of September 30, 2015 ( $31 million as of December 31, 2014 ), 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 included in other assets in the condensed consolidated statements of financial condition. Dividends received from cost basis investments are included in other income in the condensed consolidated statements of comprehensive income when such dividends are received. 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. The Company’s equity investments do not have readily determinable market values. All investments are reviewed for changes in circumstances or occurrence of events that suggest the Company’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 . |
Property And Equipment | Property and Equipment Property and equipment, which is included in other assets in the condensed consolidated statements of financial condition, 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 statements of comprehensive income pursuant to FASB ASC Topic 220, “ 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 statements of comprehensive income, but are excluded from reported net income. The Company’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of non-U.S. subsidiaries , 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, therefore tax is usually not accrued. The Company’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 to the U.S. dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the condensed consolidated statements of financial condition. |
Revenue Recognition | Revenue Recognition Trading Gains Trading gains and losses are recorded on trade date and are reported on a net basis. Trading gains and losses are comprised of changes in the fair value of financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value (i.e., unrealized gains and losses) and realized gains and losses related to the Company’s market making business segment. Included in trading gains are net gains and losses on stocks, U.S. and foreign government securities, corporate and municipal bonds, options, futures, foreign exchange 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, at fair value and financial instruments sold, but not yet purchased, at fair value are reported on a net basis in trading gains in the condensed consolidated statements of comprehensive income. Commissions and Execution Fees Commissions earned for executing and clearing transactions are accrued on a trade date basis and are reported as commissions and execution fees in the condensed consolidated statements of comprehensive income. 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, which are recorded on the accrual basis and are included in interest income and interest expense, respectively, in the condensed consolidated statements of comprehensive income. Foreign Currency Gains and Losses Currency translation refers to the gains and losses resulting from foreign currency transactions. Foreign currency translation gains and losses related to the Company’s currency diversification strategy are included in other income in the condensed consolidated statements of comprehensive income. Foreign currency translation gains and losses related to the market making core-business activities are included in trading gains in the condensed consolidated statements of comprehensive income. Electronic brokerage foreign currency translation gains and losses, arising from currency swap transactions, are included in interest income in the condensed consolidated statements of comprehensive income. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, “ Income Taxes” (“ASC Topic 740”) . The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits are based on enacted tax laws (see 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 U.S. and numerous foreign jurisdictions. Determining income tax expense requires significant judgments and estimates. The Company recognizes interest related to income tax matters as interest income or interest 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 statements 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 pre-tax 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. The Company recognizes that a tax benefit from an uncertain tax position only 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. A tax position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. The Company records tax liabilities in accordance with ASC Topic 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 Following is a summary of recently issued FASB Accounting Standards Updates (“ASUs”) that have affected or may affect the Company’s condensed consolidated financial statements : Affects Status ASU 2015-02 Consolidation (Topic 810): Amendments to the Consolidation Analysis. Effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. ASU 2015-08 Business Combinations (Topic 805): Pushdown Accounting. Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. Measurement of Certain Transfers Between Entities Under Common Control in the Separate Financial Statements of Each Entity. The amendments are effective immediately. ASU 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. Effective for annual reporting periods beginning after December 15, 2017. ASU 2015-16 Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. Effective for fiscal years beginning after December 15, 2015. Adoption of those ASUs that became effective during 201 4 and 201 5 , prior to the issuance of the Company’s condensed consolidated financial statements, did not have a material effect on th e se financial statements. |
Equity And Earnings Per Share (
Equity And Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity And Earnings Per Share [Abstract] | |
Earnings Per Share Basic And Diluted | 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 September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions, except for shares or per share amounts) Basic earnings per share Net income available for common stockholders $ $ $ $ Weighted average shares of common stock outstanding: Class A Class B Basic earnings per share $ $ $ $ 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 September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions, except for shares or per share amounts) Diluted earnings per share Net income available for common stockholders $ $ $ $ Weighted average shares of common stock outstanding Class A Issued and outstanding Potentially dilutive common shares issuable pursuant to employee stock incentive plans Class B Diluted earnings per share $ $ $ $ |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Comprehensive Income Detail [Abstract] | |
Comprehensive Income Table | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions, except for shares or per share amounts) Comprehensive income (loss) available for common stockholders $ $ $ $ Earnings (loss) per share on comprehensive income: Basic $ $ $ $ Diluted $ $ $ $ Weighted average common shares outstanding Basic Diluted |
Financial Assets And Financia25
Financial Assets And Financial Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Financial Assets And Financial Liabilities [Abstract] | |
Fair Value Table | Financial Assets At Fair Value as of September 30, 2015 Level 1 Level 2 Level 3 Total (in millions) Securities segregated for regulatory purposes $ $ — $ — $ Financial instruments owned, at fair value Stocks — — Options — — Warrants and discount certificates — — U.S. and foreign government securities — — Corporate and municipal bonds — — Currency forward contracts — — Total financial instruments owned, at fair value — Total financial assets at fair value $ $ $ — $ Financial Liabilities At Fair Value as of September 30, 2015 Level 1 Level 2 Level 3 Total (in millions) Financial instruments sold, but not yet purchased, at fair value Stocks $ $ — $ — $ Options — — Warrants and discount certificates — — Currency forward contracts — — Total financial instruments sold, but not yet purchased, at fair value — Total financial liabilities at fair value $ $ $ — $ Financial Assets At Fair Value as of December 31, 2014 Level 1 Level 2 Level 3 Total (in millions) Securities segregated for regulatory purposes $ $ — $ — $ Financial instruments owned, at fair value Stocks — — Options — — Warrants and discount certificates — — U.S. and foreign government securities — — Corporate and municipal bonds — Currency forward contracts — — Total financial instruments owned, at fair value — Total financial assets at fair value $ $ $ — $ Financial Liabilities At Fair Value as of December 31, 2014 Level 1 Level 2 Level 3 Total (in millions) Financial instruments sold, but not yet purchased, at fair value Stocks $ $ — $ $ Options — — Warrants and discount certificates — — Currency forward contracts — — Total financial instruments sold, but not yet purchased, at fair value Total financial liabilities at fair value $ $ $ $ |
Trading Gains From Market Making Transactions | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Equities $ $ $ $ Fixed income — — Foreign exchange Total trading gains, net $ $ $ $ |
Financial Assets and Liabilities Not Measured at Fair Value | September 30, 2015 Carrying Value Fair Value Level 1 Level 2 Level 3 (in millions) Financial assets, not measured at fair value Cash and cash equivalents $ $ $ $ - $ - Cash and securities segregated for regulatory purposes - Securities borrowed - - Securities purchased under agreements to resell - - Receivables from customer - - Receivables from broker, dealers, and clearing organizations - - Interest receivables - - Other assets - - Total financial assets, not measured at fair value $ $ $ $ $ — Financial liabilities, not measured at fair value Short-term borrowings $ $ $ - $ $ - Securities loaned - - Payables to customer - - Payables to brokers, dealers and clearing organizations - - Interest payable - - Total financial liabilities, not measured at fair value $ $ $ — $ $ — December 31, 2014 Carrying Value Fair Value Level 1 Level 2 Level 3 (in millions) Financial assets, not measured at fair value Cash and cash equivalents $ $ $ $ - $ - Cash and securities segregated for regulatory purposes - Securities borrowed - - Securities purchased under agreements to resell - - Receivables from customer - Receivables from broker, dealers, and clearing organizations - - Interest receivable - - Other assets - - Total financial assets, not measured at fair value $ $ $ $ $ — Financial liabilities, not measured at fair value Short-term borrowings $ $ $ - $ $ - Securities loaned - - Payables to customer - - Payables to brokers, dealers and clearing organizations - - Interest payable - - Total financial liabilities, not measured at fair value $ $ $ — $ $ — |
Netting Of Financial Assets And Financial Liabilities | September 30, 2015 Amounts Offset Net Amounts Amounts Not Offset in in the Condensed Presented in the Condensed Consolidated the Condensed Consolidated Statement Statement of Consolidated of Financial Condition Gross Amounts Financial Statement of Cash or Financial of Recognized Condition Financial Condition Instruments Net Amount (in millions) Offsetting of Financial Assets Securities segregated for regulatory purposes—purchased under agreements to resell $ 1 $ — $ $ $ — Securities borrowed — Securities purchased under agreements to resell — — Financial Instruments owned, at fair value Options — Warrants and discount certificates — Currency forward contracts — — Total $ $ — $ $ $ (in millions) Offsetting of Financial Liabilities Securities loaned $ $ — $ $ $ Financial instruments sold, but not yet purchased, at fair value Options — Warrants and discount certificates — — Currency forward contracts — — Total $ $ — $ $ $ December 31, 2014 Amounts Offset Net Amounts Amounts Not Offset in in the Condensed Presented in the Condensed Consolidated the Condensed Consolidated Statement Statement of Consolidated of Financial Condition Gross Amounts Financial Statement of Cash or Financial of Recognized Condition Financial Condition Instruments Net Amount (in millions) Offsetting of Financial Assets Securities segregated for regulatory purposes—purchased under agreements to resell $ 1 $ — $ $ $ — Securities borrowed — Securities purchased under agreements to resell — — Financial Instruments owned, at fair value Options — Warrants and discount certificates — Currency forward contracts — — Total $ $ — $ $ $ (in millions) Offsetting of Financial Liabilities Securities loaned $ $ — $ $ $ Financial instruments sold, but not yet purchased, at fair value Options — Warrants and discount certificates — — Currency forward contracts — — Total $ $ — $ $ $ As of September 30 , 2015 and December 31, 2014, the Company had $1.6 billion and $3.9 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. |
Schedule of Securities Financing Transactions [Table Text Block] | Secured Financing Transactions—Maturities and Collateral Pledged The following table presents gross obligations for securities loaned transactions by remaining contractual maturity and class of collateral pledged. September 30, 2015 Remaining Contractual Maturity Overnight Less than 30 – 90 Over 90 and Open 30 days days days Total (in millions) Securities Loaned Stocks $ $ - $ - $ - $ Corporate bonds - - - Total $ $ - $ - $ - $ |
Collateralized Transactions (Ta
Collateralized Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Collateralized Transactions [Abstract] | |
Amounts Related To Collateralized Transactions | September 30, 2015 December 31, 2014 Permitted Sold or Permitted Sold or to Repledge Repledged to Repledge Repledged (in millions) Securities lending transactions $ $ $ $ Securities purchased under agreements to resell transactions (1) Customer margin assets $ $ $ $ (1) As of September 30, 2015 , $1.6 billion or 88% (as of December 31, 2014, $3.9 billion, or 91%) , 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 customer s in accordance with SEC Rule 15c3-3. |
Financial Instruments Owned And Pledged Where The Counterparty Has The Right To Repledge | September 30, December 31, 2015 2014 (in millions) Stocks $ $ U.S. and foreign government securities $ $ |
Other Income (Tables)
Other Income (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Income [Abstract] | |
Schedule Of Components Of Other Income | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Payments for order flow $ $ $ $ Market data fees Account activity fees Risk exposure fees Gains (losses) on financial instruments, at fair value and other investments, net Gains (losses) from currency diversification strategy, net Other, net $ $ $ $ |
Employee Incentive Plans (Table
Employee Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Employee Incentive Plans [Abstract] | |
Share Grants And Fair Value | Fair Value at Date of Grant Shares ($ millions) Prior periods (since inception) $ December 31, 2012 December 31, 2013 December 31, 2014 $ |
2007 Stock Incentive Plan, ROI Summary | Stock Incentive Plan ROI Unit ("SIP") Stock Plan Shares Shares Balance, December 31, 2014 Granted — — Forfeited — Distributed Balance, September 30, 2015 |
Segment And Geographic Inform29
Segment And Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment And Geographic Information [Abstract] | |
Segment And Geographic Information | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Net revenues Electronic brokerage $ $ $ $ Market making Corporate and eliminations Total net revenues $ $ $ $ Income before taxes Electronic brokerage $ $ $ $ Market making Corporate and eliminations Total income before income taxes $ $ $ $ September 30, December 31, 2015 2014 (in millions) Segment Assets Electronic brokerage $ $ Market making Corporate Total assets $ $ |
Schedule Of Total Net Revenues And Income Before Income Taxes By Geographic Area | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in millions) Net revenues United States $ $ $ $ International Total net revenues $ $ $ $ Income before income taxes United States $ $ $ $ International Total income before income taxes $ $ $ $ |
Regulatory Requirements (Tables
Regulatory Requirements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Regulatory Requirements [Abstract] | |
Summary Of Capital, Capital Requirements And Excess Capital | Net Capital/ Eligible Equity Requirement Excess (in millions) IB LLC $ $ $ TH LLC THE Other regulated Operating Companies $ $ $ |
Organization and Nature of Bu31
Organization and Nature of Business (Details) | 9 Months Ended | |
Sep. 30, 2015employeesegment | May. 03, 2007 | |
Organization And Nature Of Business [Abstract] | ||
IBG Inc. ownership % of IBG LLC | 15.70% | 10.00% |
Number of employees | 1,052 | |
Number of operating segments | segment | 2 |
Significant Accounting Polici32
Significant Accounting Policies (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | May. 03, 2007 | |
Other assets reclass | $ 44 | ||
Other liabilities reclass | 8 | ||
SIP expense - Year of grant | 50.00% | ||
SIP expense - Remaining vesting period | 50.00% | ||
SIP expense - Employees over 59 in year of grant | 100.00% | ||
Percent of shares forfeited post employment | 50.00% | ||
Over 59 percent of shares eligible | 100.00% | ||
U.S. Treasury Securities | $ 14,600 | 6,700 | |
Securities Purchased Under Agreement to Resell Segregated for Regulatory Purposes | 1,600 | 3,900 | |
Equity method investments | 35 | 37 | |
Cost method investments | $ 34 | $ 31 | |
Property and equipment useful lives, description | 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. | ||
Maximum [Member] | Computer Equipment [Member] | |||
Property and equipment useful lives | 5 years | ||
Maximum [Member] | Office Furniture And Equipment [Member] | |||
Property and equipment useful lives | 7 years | ||
Maximum [Member] | Internally Developed Software [Member] | |||
Property and equipment useful lives | 3 years | ||
Minimum [Member] | Computer Equipment [Member] | |||
Property and equipment useful lives | 3 years | ||
Minimum [Member] | Office Furniture And Equipment [Member] | |||
Property and equipment useful lives | 5 years |
Equity And Earnings Per Share33
Equity And Earnings Per Share (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 36 Months Ended | 48 Months Ended | 101 Months Ended | |||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2010 | Dec. 31, 2014 | Sep. 30, 2015 | Jul. 24, 2015 | May. 03, 2007 | |
Equity And Earnings Per Share [Line Items] | ||||||||||
IBG Inc. ownership % of IBG LLC | 15.70% | 15.70% | 15.70% | 10.00% | ||||||
IBG Holdings ownership % of IBG LLC | 84.30% | 84.30% | 84.30% | 90.00% | ||||||
IBG Holdings Redemption of IBG LLC | 10.00% | |||||||||
IBG Holdings LLC Ownership Percentage of Class B Common Stock | 100.00% | |||||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Common stock, shares issued | 2,771,778 | |||||||||
Preferred stock shares authorized | 10,000 | 10,000 | 10,000 | 10,000 | ||||||
Preferred stock shares issued | 0 | 0 | 0 | 0 | ||||||
Preferred stock shares outstanding | 0 | 0 | 0 | 0 | ||||||
Amortization period DTA (years) | 15 years | |||||||||
Unamortized deferred tax asset arising from equity offerings | $ 289 | $ 289 | $ 279 | $ 289 | ||||||
Percent of tax savings owed to IBG Holdings LLC | 85.00% | |||||||||
Percentage of tax savings retained by IBG Inc. | 15.00% | |||||||||
Deferred tax asset from common stock offerings | 454 | $ 454 | 454 | |||||||
Tax savings owed to IBG Holdings LLC | 386 | 386 | 386 | |||||||
Tax savings retained by IBG Inc. | $ 68 | $ 68 | 68 | |||||||
Tax savings paid to IBG Holdings LLC | $ 99 | |||||||||
Exchange Agreement Future Redemption Schedule | 12.5% annually for seven (7) years and 2.5% in the eighth year. On July 23, 2015, the Exchange Agreement was amended to extend the redemption period past eight (8) years. | |||||||||
Shares reserved for future issuance | 360,000,000 | |||||||||
Shares redeemed by IBG Holdings from IBG LLC | 5,013,259 | 8,025,517 | ||||||||
Cash Redemptions IBG Holdings | $ 114 | |||||||||
Thomas Peterffy and Affiliates Ownership | 88.70% | 88.70% | 88.70% | 84.60% | ||||||
Dividends paid by IBG LLC | $ 212 | |||||||||
Cash dividend paid to IBG, Inc. | $ 32 | |||||||||
Dividend per share | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | ||||||
Dividends paid to common shareholders | $ 6 | $ 6 | $ 6 | $ 18 | $ 17 | |||||
Declaration Date | Oct. 20, 2015 | |||||||||
Payment Date | Dec. 14, 2015 | |||||||||
Record Date | Dec. 1, 2015 | |||||||||
Common Class A | ||||||||||
Equity And Earnings Per Share [Line Items] | ||||||||||
Shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||||
Common stock, shares issued | 63,868,716 | 63,868,716 | 58,612,245 | 63,868,716 | ||||||
Common stock, shares outstanding | 63,447,715 | 63,447,715 | 58,473,186 | 63,447,715 | ||||||
Common Class B | ||||||||||
Equity And Earnings Per Share [Line Items] | ||||||||||
Shares authorized | 100 | 100 | 100 | 100 | ||||||
Common stock, shares issued | 100 | 100 | 100 | 100 | ||||||
Common stock, shares outstanding | 100 | 100 | 100 | 100 |
Equity And Earnings Per Share34
Equity And Earnings Per Share (Basic Table) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic earnings per share: | ||||
Net income available for common stockholders | $ 22 | $ 3 | $ 32 | $ 37 |
Weighted average shares of common stock outstanding: | ||||
Weighted Average Number of Shares Outstanding, Basic | 62,458,655 | 57,099,052 | 60,152,525 | 55,956,615 |
Basic earnings per share | $ 0.35 | $ 0.06 | $ 0.53 | $ 0.67 |
Common Class A | ||||
Weighted average shares of common stock outstanding: | ||||
Weighted Average Number of Shares Outstanding, Basic | 62,458,555 | 57,098,952 | 60,152,425 | 55,956,515 |
Common Class B | ||||
Weighted average shares of common stock outstanding: | ||||
Weighted Average Number of Shares Outstanding, Basic | 100 | 100 | 100 | 100 |
Equity And Earnings Per Share35
Equity And Earnings Per Share (Diluted Table) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Diluted earnings per share: | ||||
Net income available for common stockholders | $ 22 | $ 3 | $ 32 | $ 37 |
Weighted Average Shares Outstanding [Abstract] | ||||
Weighted Average Number of Shares Outstanding, Basic | 62,458,655 | 57,099,052 | 60,152,525 | 55,956,615 |
Potentially dilutive common shares: | ||||
Issuable pursuant to employee incentive plans | 1,570,076 | 1,121,018 | 1,494,403 | 1,239,498 |
Weighted Average Number of Shares Outstanding, Diluted | 64,028,731 | 58,220,070 | 61,646,928 | 57,196,113 |
Earnings Per Share, Diluted | $ 0.35 | $ 0.05 | $ 0.52 | $ 0.65 |
Common Class A | ||||
Weighted Average Shares Outstanding [Abstract] | ||||
Weighted Average Number of Shares Outstanding, Basic | 62,458,555 | 57,098,952 | 60,152,425 | 55,956,515 |
Common Class B | ||||
Weighted Average Shares Outstanding [Abstract] | ||||
Weighted Average Number of Shares Outstanding, Basic | 100 | 100 | 100 | 100 |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Comprehensive Income Detail [Abstract] | ||||
Comprehensive income (loss) available for common stockholders | $ 14 | $ (8) | $ 27 | $ 28 |
Earnings (loss) per share on comprehensive income: | ||||
Basic | $ 0.23 | $ (0.13) | $ 0.45 | $ 0.51 |
Diluted | $ 0.23 | $ (0.13) | $ 0.44 | $ 0.50 |
Weighted average common shares outstanding: | ||||
Weighted Average Number of Shares Outstanding, Basic | 62,458,655 | 57,099,052 | 60,152,525 | 55,956,615 |
Weighted Average Number of Shares Outstanding, Diluted | 64,028,731 | 58,220,070 | 61,646,928 | 57,196,113 |
Financial Assets And Financia37
Financial Assets And Financial Liabilities (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2014 | Sep. 30, 2015 | |
Financial Assets And Financial Liabilities [Abstract] | |||
Other assets reclass | $ 44 | ||
Other liabilities reclass | 8 | ||
Transfers of financial instruments owned from level 1 to level 2 | $ 3 | ||
Transfers of financial instruments owned from level 2 to level 1 | 5 | ||
Transfers of financial instruments sold, but not yet purchased from level 1 to level 2 | 1 | ||
Transfers of financial instruments sold, but not yet purchased from level 2 to level 1 | $ 1 | ||
Securities Purchased Under Agreement to Resell Segregated for Regulatory Purposes | $ 3,900 | $ 1,600 |
Financial Assets And Financia38
Financial Assets And Financial Liabilities (Fair Value Table) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities segregated for regulatory purposes | $ 14,586 | $ 6,681 |
Total financial instruments owned, at fair value | 3,841 | 3,978 |
Total Financial Assets at Fair Value | 18,427 | 10,659 |
Financial instruments sold, not yet purchased, at fair value | 3,052 | 2,569 |
Total Financial Liabilities at Fair Value | 3,052 | 2,569 |
Common stocks [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 1,571 | 2,592 |
Financial instruments sold, not yet purchased, at fair value | 1,312 | 1,361 |
Options [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 1,784 | 1,209 |
Financial instruments sold, not yet purchased, at fair value | 1,736 | 1,197 |
Warrants And Discount Certificates [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 55 | 72 |
Financial instruments sold, not yet purchased, at fair value | 2 | 1 |
U.S. And Foreign Government Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 425 | 98 |
Corporate And Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 3 | 3 |
Currency Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 3 | 4 |
Financial instruments sold, not yet purchased, at fair value | 2 | 10 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities segregated for regulatory purposes | 14,586 | 6,681 |
Total financial instruments owned, at fair value | 3,835 | 3,971 |
Total Financial Assets at Fair Value | 18,421 | 10,652 |
Financial instruments sold, not yet purchased, at fair value | 3,050 | 2,558 |
Total Financial Liabilities at Fair Value | 3,050 | 2,558 |
Level 1 | Common stocks [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 1,571 | 2,592 |
Financial instruments sold, not yet purchased, at fair value | 1,312 | 1,360 |
Level 1 | Options [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 1,784 | 1,209 |
Financial instruments sold, not yet purchased, at fair value | 1,736 | 1,197 |
Level 1 | Warrants And Discount Certificates [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 55 | 72 |
Financial instruments sold, not yet purchased, at fair value | 2 | 1 |
Level 1 | U.S. And Foreign Government Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | $ 425 | 98 |
Level 1 | Currency Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instruments sold, not yet purchased, at fair value | ||
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | $ 6 | 7 |
Total Financial Assets at Fair Value | 6 | 7 |
Financial instruments sold, not yet purchased, at fair value | 2 | 10 |
Total Financial Liabilities at Fair Value | 2 | 10 |
Level 2 | Corporate And Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 3 | 3 |
Level 2 | Currency Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial instruments owned, at fair value | 3 | 4 |
Financial instruments sold, not yet purchased, at fair value | $ 2 | 10 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instruments sold, not yet purchased, at fair value | 1 | |
Total Financial Liabilities at Fair Value | 1 | |
Level 3 | Common stocks [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instruments sold, not yet purchased, at fair value | $ 1 | |
Level 3 | Currency Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instruments sold, not yet purchased, at fair value |
Financial Assets And Financia39
Financial Assets And Financial Liabilities (Trading Gains from Market Making Transactions) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Financial Assets And Financial Liabilities [Abstract] | ||||
Equities | $ 83 | $ 45 | $ 204 | $ 196 |
Fixed Income | 5 | 18 | ||
Foreign Exchange | 4 | (8) | 12 | (3) |
Trading gains | $ 87 | $ 42 | $ 216 | $ 211 |
Financial Assets And Financia40
Financial Assets And Financial Liabilities (Financial Assets and Liabilities Not Measured at Fair Value) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Cash and cash equivalents | $ 1,588 | $ 1,269 | $ 1,011 | $ 1,213 |
Cash and securities segregated for regulatory purposes | 20,911 | 15,404 | ||
Securities borrowed | 3,384 | 3,660 | ||
Securities purchased under agreements to resell | 215 | 386 | ||
Receivables from customer | 15,879 | 17,051 | ||
Receivables from brokers, dealers and clearing organizations | 859 | 1,131 | ||
Interest receivable | 65 | 37 | ||
Other assets | 484 | 469 | ||
Short-term borrowings | 4 | 34 | ||
Securities loaned | 2,724 | 3,199 | ||
Payables to customer | 35,315 | 31,796 | ||
Payables to brokers, dealers and clearing organizations | 454 | 234 | ||
Interest payable | 4 | 4 | ||
at Fair Value | ||||
Cash and cash equivalents | 1,588 | 1,269 | ||
Cash and securities segregated for regulatory purposes | 6,325 | 8,723 | ||
Securities borrowed | 3,384 | 3,660 | ||
Securities purchased under agreements to resell | 215 | 386 | ||
Receivables from customer | 15,879 | 17,051 | ||
Receivables from brokers, dealers and clearing organizations | 859 | 1,131 | ||
Interest receivable | 65 | 37 | ||
Other assets | 51 | 55 | ||
Total financial assets, not measured at fair value | 28,366 | 32,312 | ||
Short-term borrowings | 4 | 34 | ||
Securities loaned | 2,724 | 3,199 | ||
Payables to customer | 35,315 | 31,796 | ||
Payables to brokers, dealers and clearing organizations | 454 | 234 | ||
Interest payable | 4 | 4 | ||
Total financial liabilities, not measured at fair value | 38,501 | 35,267 | ||
Carrying Value | ||||
Cash and cash equivalents | 1,588 | 1,269 | ||
Cash and securities segregated for regulatory purposes | 6,325 | 8,723 | ||
Securities borrowed | 3,384 | 3,660 | ||
Securities purchased under agreements to resell | 215 | 386 | ||
Receivables from customer | 15,879 | 17,051 | ||
Receivables from brokers, dealers and clearing organizations | 859 | 1,131 | ||
Interest receivable | 65 | 37 | ||
Other assets | 29 | 30 | ||
Total financial assets, not measured at fair value | 28,344 | 32,287 | ||
Short-term borrowings | 4 | 34 | ||
Securities loaned | 2,724 | 3,199 | ||
Payables to customer | 35,315 | 31,796 | ||
Payables to brokers, dealers and clearing organizations | 454 | 234 | ||
Interest payable | 4 | 4 | ||
Total financial liabilities, not measured at fair value | 38,501 | 35,267 | ||
Level 1 | ||||
Cash and cash equivalents | 1,588 | 1,269 | ||
Cash and securities segregated for regulatory purposes | 4,695 | 4,849 | ||
Total financial assets, not measured at fair value | $ 6,283 | $ 6,118 | ||
Short-term borrowings | ||||
Securities loaned | ||||
Payables to customer | ||||
Payables to brokers, dealers and clearing organizations | ||||
Interest payable | ||||
Total financial liabilities, not measured at fair value | ||||
Level 2 | ||||
Cash and securities segregated for regulatory purposes | $ 1,630 | $ 3,874 | ||
Securities borrowed | 3,384 | 3,660 | ||
Securities purchased under agreements to resell | 215 | 386 | ||
Receivables from customer | 15,879 | 17,051 | ||
Receivables from brokers, dealers and clearing organizations | 859 | 1,131 | ||
Interest receivable | 65 | 37 | ||
Other assets | 51 | 55 | ||
Total financial assets, not measured at fair value | 22,083 | 26,194 | ||
Short-term borrowings | 4 | 34 | ||
Securities loaned | 2,724 | 3,199 | ||
Payables to customer | 35,315 | 31,796 | ||
Payables to brokers, dealers and clearing organizations | 454 | 234 | ||
Interest payable | 4 | 4 | ||
Total financial liabilities, not measured at fair value | $ 38,501 | $ 35,267 | ||
Level 3 | ||||
Cash and cash equivalents | ||||
Cash and securities segregated for regulatory purposes | ||||
Securities borrowed | ||||
Securities purchased under agreements to resell | ||||
Receivables from customer | ||||
Receivables from brokers, dealers and clearing organizations | ||||
Interest receivable | ||||
Other assets | ||||
Total financial assets, not measured at fair value | ||||
Short-term borrowings | ||||
Securities loaned | ||||
Payables to customer | ||||
Payables to brokers, dealers and clearing organizations | ||||
Interest payable | ||||
Total financial liabilities, not measured at fair value |
Financial Assets And Financia41
Financial Assets And Financial Liabilities (Netting of Financial Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | $ 7,071 | $ 9,205 | |
Amounts Assets Offset in the Consolidated Statement of Financial Condition | |||
Net Amounts of Assets Presented in the Statement of Financial Condition | $ 7,071 | $ 9,205 | |
Amounts of Assets Not Offset in the Condensed Consolidated Statement of Financial Condition | (6,802) | (8,975) | |
Net Exposure of Assets | 269 | 230 | |
Securities Segregated For Regulatory Purposes - Purchased Under Agreements To Resell [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | [1] | $ 1,630 | $ 3,874 |
Amounts Assets Offset in the Consolidated Statement of Financial Condition | |||
Net Amounts of Assets Presented in the Statement of Financial Condition | $ 1,630 | $ 3,874 | |
Amounts of Assets Not Offset in the Condensed Consolidated Statement of Financial Condition | (1,630) | (3,874) | |
Securities Borrowed [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | $ 3,384 | $ 3,660 | |
Amounts Assets Offset in the Consolidated Statement of Financial Condition | |||
Net Amounts of Assets Presented in the Statement of Financial Condition | $ 3,384 | $ 3,660 | |
Amounts of Assets Not Offset in the Condensed Consolidated Statement of Financial Condition | (3,312) | (3,564) | |
Net Exposure of Assets | 72 | 96 | |
Securities Purchased Under Agreement to Resell [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | $ 215 | $ 386 | |
Amounts Assets Offset in the Consolidated Statement of Financial Condition | |||
Net Amounts of Assets Presented in the Statement of Financial Condition | $ 215 | $ 386 | |
Amounts of Assets Not Offset in the Condensed Consolidated Statement of Financial Condition | (215) | (386) | |
Options [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | $ 1,784 | $ 1,209 | |
Amounts Assets Offset in the Consolidated Statement of Financial Condition | |||
Net Amounts of Assets Presented in the Statement of Financial Condition | $ 1,784 | $ 1,209 | |
Amounts of Assets Not Offset in the Condensed Consolidated Statement of Financial Condition | (1,643) | (1,150) | |
Net Exposure of Assets | 141 | 59 | |
Warrants And Discount Certificates [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | $ 55 | $ 72 | |
Amounts Assets Offset in the Consolidated Statement of Financial Condition | |||
Net Amounts of Assets Presented in the Statement of Financial Condition | $ 55 | $ 72 | |
Amounts of Assets Not Offset in the Condensed Consolidated Statement of Financial Condition | (2) | (1) | |
Net Exposure of Assets | 53 | 71 | |
Currency Forward Contracts [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | $ 3 | $ 4 | |
Amounts Assets Offset in the Consolidated Statement of Financial Condition | |||
Net Amounts of Assets Presented in the Statement of Financial Condition | $ 3 | $ 4 | |
Net Exposure of Assets | $ 3 | $ 4 | |
[1] | As of September 30, 2015 and December 31, 2014, the Company had $1.6 billion and $3.9 billion, respectively, of securities purchased under agreements to resell that were segregated to satisfy regulatory requirements. These securities are included in "Cash and securities-segregated for regulatory purposes" in the condensed consolidated statements of financial condition. |
Financial Assets And Financia42
Financial Assets And Financial Liabilities (Netting of Financial Liabilities) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 4,464 | $ 4,407 |
Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | ||
Net Amounts of Liabilities Presented in the Statement of Financial Condition | $ 4,464 | $ 4,407 |
Amounts of Liabilities Not Offset in the Consolidated Statement of Financial Condition (Cash or Financial Instruments) | (4,277) | (4,334) |
Net Exposure of Liabilities | 187 | 73 |
Securities Loaned [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 2,724 | $ 3,199 |
Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | ||
Net Amounts of Liabilities Presented in the Statement of Financial Condition | $ 2,724 | $ 3,199 |
Amounts of Liabilities Not Offset in the Consolidated Statement of Financial Condition (Cash or Financial Instruments) | (2,632) | (3,183) |
Net Exposure of Liabilities | 92 | 16 |
Options Sold, Not Yet Purchased [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 1,736 | $ 1,197 |
Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | ||
Net Amounts of Liabilities Presented in the Statement of Financial Condition | $ 1,736 | $ 1,197 |
Amounts of Liabilities Not Offset in the Consolidated Statement of Financial Condition (Cash or Financial Instruments) | (1,643) | (1,150) |
Net Exposure of Liabilities | 93 | 47 |
Warrants And Discount Certificates Sold, Not Yet Purchased [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 2 | $ 1 |
Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | ||
Net Amounts of Liabilities Presented in the Statement of Financial Condition | $ 2 | $ 1 |
Amounts of Liabilities Not Offset in the Consolidated Statement of Financial Condition (Cash or Financial Instruments) | (2) | (1) |
Currency Forward Contracts Sold, Not Yet Purchased [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 2 | $ 10 |
Amounts Liabilities Offset in the Consolidated Statement of Financial Condition | ||
Net Amounts of Liabilities Presented in the Statement of Financial Condition | $ 2 | $ 10 |
Net Exposure of Liabilities | $ 2 | $ 10 |
Financial Assets And Financia43
Financial Assets And Financial Liabilities (Secured Financing Transactions) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | $ 2,724 | $ 3,199 |
Overnight and Open [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | $ 2,724 | |
Maturity up to 30 days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Maturity 30 to 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Maturity over 90 days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Common stocks [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | $ 2,708 | |
Common stocks [Member] | Overnight and Open [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | $ 2,708 | |
Common stocks [Member] | Maturity up to 30 days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Common stocks [Member] | Maturity 30 to 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Common stocks [Member] | Maturity over 90 days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | $ 16 | |
Corporate Bonds [Member] | Overnight and Open [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | $ 16 | |
Corporate Bonds [Member] | Maturity up to 30 days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Corporate Bonds [Member] | Maturity 30 to 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned | ||
Corporate Bonds [Member] | Maturity over 90 days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities loaned |
Collateralized Transactions (Na
Collateralized Transactions (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Disclosure Collateralized Transactions [Abstract] | ||
Customers receivables | $ 15,879 | $ 17,051 |
Securities repledged and deposited for customers | $ 1,600 | $ 3,900 |
Percentage of securities repledged and deposited for customers | 88.00% | 91.00% |
Collateralized Transactions (Am
Collateralized Transactions (Amounts Related to Collateralized Transactions) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Permitted To Repledge [Member] | |||
Collateralized Transactions [Line Items] | |||
Securities lending transactions | $ 10,334 | $ 10,907 | |
Agreements to resell | [1] | 1,848 | 4,260 |
Customer margin assets | 13,850 | 14,933 | |
Total collateralized transactions | 26,032 | 30,100 | |
Sold Or Repledged [Member] | |||
Collateralized Transactions [Line Items] | |||
Securities lending transactions | 1,966 | 2,366 | |
Agreements to resell | [1] | 1,848 | 4,260 |
Customer margin assets | 6,598 | 5,740 | |
Total collateralized transactions | $ 10,412 | $ 12,366 | |
[1] | As of September 30, 2015, $1.6 billion or 88% (as of December 31, 2014, $3.9 billion, or 91%), of securities acquired through agreements to resell that are shown as repledged have been deposited in a separate bank account for the exclusive benefit of customers in accordance with SEC Rule 15c3-3. |
Collateralized Transactions (Fi
Collateralized Transactions (Financial instruments owned and pledged where the counterparty has the right to repledge) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Disclosure Collateralized Transactions [Abstract] | ||
Stocks | $ 719 | $ 1,860 |
U.S. and foreign government securities | 414 | 76 |
Financial Instruments Owned and Pledged as Collateral - Eligible to be Repledged by Counterparty | $ 1,133 | $ 1,936 |
Other Income (Schedule Of Compo
Other Income (Schedule Of Components Of Other Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Other Income [Abstract] | ||||
Payments for order flow | $ 5 | $ 6 | $ 13 | $ 20 |
Market data fees | 8 | 7 | 21 | 21 |
Account activity fees | 4 | 4 | 12 | 11 |
Risk exposure fees | 6 | 3 | 17 | 3 |
Gains (losses) on other investments, net | (4) | (5) | 31 | (7) |
Gains (losses) from currency Diversification Strategy Net | (24) | (120) | (186) | (79) |
Other, net | 4 | 3 | 14 | 6 |
Other income | $ (1) | $ (102) | $ (78) | $ (25) |
Employee Incentive Plans (Narra
Employee Incentive Plans (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 101 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | May. 03, 2007 | Dec. 31, 2006 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
ROI Dollar Unit Payable | $ 0 | $ 0 | $ 3 | |||
Vested balance of ROI payable | 0 | $ 0 | $ 3 | |||
ROI dollar compensation expense | $ 0 | |||||
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 | |||||
Fair Value ROI Accrual | $ 18 | |||||
Common stock to be distributed to former employees under the ROI Unit Stock Plan | 6,377 | |||||
Maximum shares of stock distributable under 2007 Stock Incentive Plan | 30,000,000 | 30,000,000 | ||||
Shares granted to external directors | 22,996 | |||||
2007 Stock Incentive Plan Compensation Expense | $ 38 | $ 32 | ||||
Estimated Future 2007 Stock Incentive Plan Compensation Expense | $ 25 | $ 25 | ||||
Percent Shares Forfeited Post Employment | 50.00% | |||||
Over Fifty Nine Percent Unvested Shares Eligible | 100.00% | |||||
Former employees vesting schedule (Years) | 5 years | |||||
Post employment vesting percentage (Years 1 - 4) | 12.50% | |||||
Post employment vesting percentage (Year 5) | 50.00% | |||||
Post employment shares distribution | 305,838 | |||||
2007 ROI Unit Stock Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
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 first six anniversaries of the date of the IPO, assuming continued employment with the Company and compliance with other applicable covenants. | |||||
2007 Stock Incentive Plan (Shares) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting Percentage | • 10% on the first vesting date, which is on or about May 9 of each year; and• an additional 15% on each of the following six anniversaries of the first vesting, assuming continued employment with the Company and compliance with non-competition and other applicable covenants. |
Employee Incentive Plans (Share
Employee Incentive Plans (Share Grants And Fair Value) (Details) - USD ($) $ in Millions | 12 Months Ended | 56 Months Ended | 101 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2015 | |
Employee Incentive Plans [Abstract] | |||||
Shares granted | 1,709,968 | 1,894,046 | 3,629,960 | 13,654,494 | |
Fair Value - Date of Grant | $ 49 | $ 46 | $ 50 | $ 252 | |
Shares Granted IPO to Date | 20,888,468 | ||||
Fair Value - Date of Grant IPO to Date | $ 397 |
Employee Incentive Plans (2007
Employee Incentive Plans (2007 Stock Incentive Plan, ROI Summary) (Details) | 9 Months Ended |
Sep. 30, 2015shares | |
2007 Stock Incentive Plan (Shares) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning Balance | 10,376,800 |
Shares Forfeited | (148,008) |
Shares Distributed | (2,484,693) |
Ending Balance | 7,744,099 |
2007 ROI Unit Stock Plan (Shares) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning Balance | 9,614 |
Shares Distributed | (3,237) |
Ending Balance | 6,377 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Billions | Sep. 30, 2015 | Dec. 31, 2014 |
Income Taxes [Abstract] | ||
Undistributed accumulated earnings of foreign subsidiaries | $ 1 | $ 1 |
Accumulated earnings of foreign pass through subsidiaries | 0.4 | 0.4 |
Accumulated earnings subject to additional foreign tax | $ 0.3 | $ 0.3 |
Commitments, Contingencies an52
Commitments, Contingencies and Guarantees (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Commitments, Contingencies And Guarantees [Abstract] | |
Net Loss from Unsecured Customer Receivables | $ 119 |
Segment And Geographic Inform53
Segment And Geographic Information (Segment Table) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Net revenues | $ 359 | $ 171 | $ 918 | $ 835 | |
Income before income taxes | 202 | 40 | 331 | 432 | |
Assets | 47,226 | 47,226 | $ 43,385 | ||
Electronic Brokerage [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 300 | 245 | 878 | 691 | |
Income before income taxes | 184 | 155 | 423 | 422 | |
Assets | 42,323 | 42,323 | 38,280 | ||
Market Making [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 90 | 49 | 229 | 231 | |
Income before income taxes | 46 | 7 | 103 | 99 | |
Assets | 10,691 | 10,691 | 12,173 | ||
Corporate And Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | (31) | (123) | (189) | (87) | |
Income before income taxes | (28) | $ (122) | (195) | $ (89) | |
Assets | $ (5,788) | $ (5,788) | $ (7,068) |
Segment And Geographic Inform54
Segment And Geographic Information (Geographic Table) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 359 | $ 171 | $ 918 | $ 835 |
Income before income taxes | 202 | 40 | 331 | 432 |
United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 261 | 121 | 640 | 650 |
Income before income taxes | 155 | 36 | 198 | 389 |
International [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 98 | 50 | 278 | 185 |
Income before income taxes | $ 47 | $ 4 | $ 133 | $ 43 |
Regulatory Requirements (Narrat
Regulatory Requirements (Narrative) (Details) $ in Millions | Sep. 30, 2015USD ($) |
Regulatory Requirements [Abstract] | |
Excess regulatory capital | $ 3,363 |
Regulatory Requirements (Summar
Regulatory Requirements (Summary Of Capital, Capital Requirements And Excess Capital) (Details) $ in Millions | Sep. 30, 2015USD ($) |
Net Capital / Eligible Equity | $ 3,835 |
Required net capital | 472 |
Excess regulatory capital | 3,363 |
IB LLC [Member] | |
Net Capital / Eligible Equity | 2,322 |
Required net capital | 246 |
Excess regulatory capital | 2,076 |
TH LLC [Member] | |
Net Capital / Eligible Equity | 373 |
Required net capital | 1 |
Excess regulatory capital | 372 |
THE [Member] | |
Net Capital / Eligible Equity | 614 |
Required net capital | 201 |
Excess regulatory capital | 413 |
Other Regulated Operating Companies [Member] | |
Net Capital / Eligible Equity | 526 |
Required net capital | 24 |
Excess regulatory capital | $ 502 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Related Party Transactions [Abstract] | ||
Due from Related Parties - Customers | $ 58 | $ 152 |
Due to Related Parties - Customers | $ 1,113 | $ 274 |