Reports Comprehensive Earnings Per Share of
$0.51, Income before Taxes of $506 Million on $1,043 Million in Net
Revenues, and Earnings Per Share on Net Income of $0.77.
Declares Quarterly Dividend of $0.10 Per
Share.
Interactive Brokers Group, Inc. (NASDAQ GS: IBKR) an automated
global electronic broker and market maker, today reported diluted
earnings per share on a comprehensive basis of $0.51 for the year
ended December 31, 2014, compared to diluted earnings per share on
a comprehensive basis of $0.67 for 2013.
Excluding the effect of changes in the U.S. dollar value of the
Company’s non-U.S. subsidiaries, the Company reported diluted
earnings per share on net income of $0.77 for the year ended
December 31, 2014, compared to diluted earnings per share of $0.73
for the same period in 2013.
Net revenues were $1,043 million and income before income taxes
was $506 million for the year, compared to net revenues of $1,076
million and income before income taxes of $451 million for
2013.
The Interactive Brokers Group, Inc. Board of Directors declared
a quarterly cash dividend of $0.10 per share. This dividend is
payable on March 13, 2015 to shareholders of record as of February
27, 2015.
Business Highlights
- 49% pretax profit margin for 2014.
- 62% Electronic Brokerage pretax profit
margin for 2014.
- 40% Market Making pretax profit margin
for 2014.
- Customer equity grew 24% from 2013 to
$56.7 billion.
- Customer accounts increased 18% in 2014
to 281 thousand.
- Total DARTs increased 16% from 2013 to
566 thousand.
- Brokerage segment equity was $3.0
billion. Total equity was $5.2 billion.
Segment Overview
Electronic Brokerage
Electronic Brokerage segment income before income taxes grew
49%, to $589 million, in 2014. Customer accounts grew 18% from the
prior year and customer equity increased 24% during 2014.
Commissions and execution fees increased 9%. Net interest income
grew 44% from the prior year, to $333 million. Pretax profit margin
was 62% in 2014, up from 48% in 2013. Excluding $64.3 million in
expense related to an unusual item, pretax profit margin was 56% in
2013.
Total DARTs(1), for cleared and execution-only customers,
increased 16% to 566 thousand in 2014, compared to 486 thousand
during 2013. Cleared DARTs were 515 thousand in 2014, 17% higher
than in 2013.
Market Making
Market Making segment income before income taxes decreased 28%,
to $115 million, in 2014. This decrease was driven by a market
making environment with persistent low volatility and intensive
competition. Pretax profit margin decreased to 40% in 2014 from 44%
in 2013. Market Making options contract volume decreased 15% in
2014.
Effects of Foreign Currency Diversification
In connection with our currency strategy, we have determined to
base our net worth in GLOBALs, a basket of 16 major currencies in
which we hold our equity. In 2014, our currency diversification
program decreased our comprehensive earnings by $293 million, as
the U.S. dollar value of the GLOBAL decreased by approximately
6.0%. The effects of currency diversification are reported as
components of (1) Other Income in the Corporate segment (described
below) and (2) Other Comprehensive Income (“OCI”).
Presentation of Foreign Currency Effects
The Company has taken several steps to improve the transparency
of its currency strategy, as a result of which nearly all currency
translation gains and losses related to the GLOBAL are reported as
Other Income instead of Trading Gains and these gains and losses
are reported in the Corporate segment instead of the Market Making
segment.
These actions isolate the income statement effects of our
currency diversification in the Corporate segment, thereby leaving
a clearer picture of the core operating results in the Market
Making segment. The new reporting method is also reflected in the
comparative historical periods contained in our financial
statements.
(1) Daily average revenue trades (DARTs) are based on customer
orders.
_______________________________
Conference Call Information:
Interactive Brokers Group will hold a conference call with
investors today, January 20, 2015, at 4:30 p.m. ET to discuss its
quarterly results. Investors who would like to listen to the
conference call live should dial 877-324-1965 (U.S. domestic) and
631-291-4512 (international). The number should be dialed
approximately ten minutes prior to the start of the conference
call. Ask for the “Interactive Brokers Conference Call.”
The conference call will also be accessible simultaneously, and
through replays, as an audio webcast through the Investor Relations
section of the Interactive Brokers web site,
www.interactivebrokers.com/ir.
About Interactive Brokers Group, Inc.:
Interactive Brokers Group, Inc., together with its subsidiaries,
is an automated global electronic broker that specializes in
catering to financial professionals by offering state-of-the-art
trading technology, superior execution capabilities, worldwide
electronic access, and sophisticated risk management tools at
exceptionally low costs. The brokerage trading platform utilizes
the same innovative technology as the Company’s market making
business, which specializes in routing orders and executing and
processing trades in securities, futures, foreign exchange
instruments, bonds and funds on more than 100 electronic exchanges
and trading venues around the world. As a market maker, we provide
liquidity at these marketplaces and, as a broker, we provide
professional traders and investors with electronic access to
stocks, options, futures, forex, bonds and mutual funds from a
single IB Universal AccountSM. Employing proprietary software on a
global communications network, Interactive Brokers is continuously
integrating its software with a growing number of exchanges and
trading venues into one automatically functioning, computerized
platform that requires minimal human intervention.
Cautionary Note Regarding Forward-Looking Statements:
The foregoing information contains certain forward-looking
statements that reflect the company's current views with respect to
certain current and future events and financial performance. These
forward-looking statements are and will be, as the case may be,
subject to many risks, uncertainties and factors relating to the
company's operations and business environment which may cause the
company's actual results to be materially different from any future
results, expressed or implied, in these forward-looking statements.
Any forward-looking statements in this release are based upon
information available to the company on the date of this release.
The company does not undertake to publicly update or revise its
forward-looking statements even if experience or future changes
make it clear that any statements expressed or implied therein will
not be realized. Additional information on risk factors that could
potentially affect the company's financial results may be found in
the company's filings with the Securities and Exchange
Commission.
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
OPERATING DATA
TRADE VOLUMES:
(in 000's, except %)
Brokerage
Market Brokerage Non Avg. Trades
Making % Cleared % Cleared
% Total % per U.S.
Period
Trades Change
Trades Change
Trades Change
Trades Change
Trading Day 2012 60,421 150,000 16,118 226,540
904 2013 65,320 8% 173,849 16% 18,489 15% 257,658 14% 1,029 2014
64,530 -1% 206,759 19% 18,055 -2% 289,344 12% 1,155 4Q2013
14,437 45,167 4,585 64,189 1,019 4Q2014 16,126 12% 57,773 28% 4,621
1% 78,520 22% 1,246 3Q2014 17,864 49,636 4,282 71,782 1,130
4Q2014 16,126 -10% 57,773 16% 4,621 8% 78,520 9% 1,246
CONTRACT AND SHARE
VOLUMES: (in 000's, except %) TOTAL
Options % Futures* % Stocks
%
Period
(contracts) Change
(contracts) Change
(shares) Change 2012
698,140 98,801 65,872,960 2013 659,673 -6% 121,776 23% 95,479,739
45% 2014 631,265 -4% 123,048 1% 153,613,174 61% 4Q2013
155,216 28,724 27,042,356 4Q2014 173,284 12% 34,259 19% 36,973,639
37% 3Q2014 151,768 29,352 36,040,255 4Q2014 173,284 14%
34,259 17% 36,973,639 3%
MARKET MAKING
Options % Futures* % Stocks
%
Period
(contracts) Change
(contracts) Change
(shares) Change 2012
457,384 12,660 9,339,465 2013 404,490 -12% 18,184 44% 12,849,729
38% 2014 344,741 -15% 15,668 -14% 12,025,822 -6% 4Q2013
87,498 4,245 2,776,564 4Q2014 95,625 9% 3,462 -18% 3,093,170 11%
3Q2014 81,395 3,542 3,137,329 4Q2014 95,625 17% 3,462 -2%
3,093,170 -1%
BROKERAGE TOTAL Options
% Futures* % Stocks %
Period
(contracts) Change
(contracts) Change
(shares) Change 2012
240,756 86,141 56,533,495 2013 255,183 6% 103,592 20% 82,630,010
46% 2014 286,524 12% 107,380 4% 141,587,352 71% 4Q2013
67,718 24,479 24,265,792 4Q2014 77,659 15% 30,797 26% 33,880,469
40% 3Q2014 70,373 25,810 32,902,926 4Q2014 77,659 10% 30,797
19% 33,880,469 3% * Includes options on futures
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
OPERATING DATA, CONTINUED
BROKERAGE CLEARED Options
% Futures* %
Stocks %
Period
(contracts) Change
(contracts) Change
(shares) Change 2012
144,539 84,794 54,371,351 2013 180,660 25% 101,732 20% 78,829,785
45% 2014 225,662 25% 106,074 4% 137,153,132 74% 4Q2013
49,181 24,020 23,208,208 4Q2014 63,739 30% 30,559 27% 32,720,100
41% 3Q2014 56,824 25,559 31,814,664 4Q2014 63,739 12% 30,559
20% 32,720,100 3% * Includes options on futures
BROKERAGE STATISTICS (in 000's,
except % and where noted)
Year over Year
4Q2014
4Q2013
%
Change
Total Accounts 281 239 18% Customer Equity (in billions)* $56.7
$45.7 24% Cleared DARTs 564 453 25% Total Customer DARTs 619
499 24%
Cleared Customers (in $'s, except DART per
account) Commission per DART $4.28 $4.23 1% DART per Avg.
Account (Annualized) 511 483 6% Net Revenue per Avg. Account
(Annualized) $3,700 $3,375 10%
Consecutive
Quarters
4Q2014
3Q2014
%
Change
Total Accounts 281 272 3% Customer Equity (in billions)* $56.7
$54.9 3% Cleared DARTs 564 485 16% Total Customer DARTs 619
534 16%
Cleared Customers (in $'s, except DART per
account) Commission per DART $4.28 $4.21 2% DART per Avg.
Account (Annualized) 511 455 12% Net Revenue per Avg. Account
(Annualized) $3,700 $3,532 5% * Excludes non-customers.
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(UNAUDITED)
Three Months
Twelve Months Ended December 31, Ended December
31, 2014 2013 2014 2013
(in millions)
Electronic Brokerage Net revenues (1) $261.5 $212.1
$952.3 $818.8 Non-interest expenses
94.6
162.9 363.8 422.7
Income before income taxes
$166.9 $49.2
$588.5 $396.1 Pre-tax profit
margin 64% 23% 62% 48%
Market Making Net revenues(1)
$53.6 $76.2 $284.8 $362.1 Non-interest expenses
38.5
46.8 170.3 202.6
Income before income taxes
$15.1 $29.4
$114.5 $159.5 Pre-tax profit
margin 28% 39% 40% 44%
Corporate(2) Net
revenues(1) ($107.0) ($38.3) ($193.7) ($104.7) Non-interest
expenses
0.7 1.4 3.1
(0.4) Loss before income taxes
($107.7) ($39.7) ($196.8)
($104.3) Total Net revenues(1)
$208.1 $249.9 $1,043.3 $1,076.2 Non-interest expenses
133.8 211.1 537.2
624.9 Income before income taxes
$74.3 $38.8 $506.1
$451.3 Pre-tax profit margin 36% 16% 49% 42%
(1) To provide meaningful comparisons,
prior period amounts have been revised for changes in the
presentation of currency translation classifications.
(2) Corporate includes corporate related activities as well as
inter-segment eliminations.
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
(UNAUDITED)
Three Months Twelve
Months Ended December 31, Ended December 31,
2014 2013 2014
2013 (in millions, except share and per
share data) Revenues: Trading gains(1) $50.5
$67.3 $261.5 $331.9 Commissions and execution fees 155.2 124.1
548.8 502.1 Interest income(1) 121.3 79.9 426.9 303.7 Other income
(loss)(1)
(97.0 ) (8.3
) (121.6 ) (9.8
) Total revenues 229.9 262.9 1,115.5 1,127.9
Interest expense
21.8 13.0
72.2 51.7
Total net revenues 208.1
249.9 1,043.3
1,076.2 Non-interest expenses:
Execution and clearing 53.5 62.2 211.5 242.5 Employee compensation
and benefits 48.3 56.7 204.8 205.3 Occupancy, depreciation and
amortization 10.5 10.3 39.4 38.9 Communications 6.0 5.7 24.2 23.1
General and administrative
15.5
76.2 57.3
115.1 Total non-interest expenses
133.8 211.1
537.2 624.9
Income before income taxes 74.3 38.8 506.1 451.3
Income tax expense
9.1 2.5
47.3 33.7 Net
income 65.2 36.3 458.8 417.6 Net income attributable to
noncontrolling interests
58.1 32.7
414.3 380.6
Net income available for common stockholders
$7.1 $3.6
$44.5 $37.0
Earnings per share:
Basic
$0.12 $0.07
$0.79 $0.74 Diluted
$0.12 $0.07
$0.77 $0.73
Weighted average common shares outstanding: Basic 58,124,119
52,517,259 56,492,381 49,742,428 Diluted 59,274,773 53,729,140
57,709,668 50,924,736
Comprehensive income: Net
income available for common stockholders $7.1 $3.6 $44.5 $37.0
Other comprehensive income: Cumulative translation adjustment,
before income taxes (6.3 ) 0.8 (15.3 ) (3.2 ) Income taxes related
to items of other comprehensive income
(0.2
) (0.2 ) (0.3
) (0.5 ) Other comprehensive
income (loss), net of tax
(6.1 )
1.0 (15.0 )
(2.7 ) Comprehensive income available
for common stockholders $1.0
$4.6 $29.5
$34.3 Comprehensive income
attributable to noncontrolling interests: Net income
attributable to noncontrolling interests $58.1 $32.7 $414.3 $380.6
Other comprehensive income (loss) - cumulative translation
adjustment
(37.5 ) 4.9
(92.0 ) (24.7
) Comprehensive income attributable to
noncontrolling interests $20.6
$37.6 $322.3
$355.9
(1) To provide meaningful comparisons,
prior period amounts have been revised for changes in the
presentation of currency translation classifications.
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31,
2014
December 31,
2013
(in millions) Assets Cash and cash equivalents
$1,269.3 $1,213.2 Cash and securities - segregated for regulatory
purposes 15,403.5 13,991.7
Securities borrowed
3,659.8
2,751.5
Securities purchased under agreements to resell 386.2 386.3 Trading
assets, at fair value
3,934.1
4,448.8
Receivables from customers, net of allowance 17,051.5 13,596.7
Receivables from brokers, dealers and clearing organizations
1,131.2 858.2 Other assets 549.4 624.3
Total assets
$43,385.0 $37,870.7
Liabilities and equity
Liabilities Trading liabilities - financial instruments sold
but not yet purchased, at fair value $2,560.8 $3,153.7 Securities
loaned 3,199.1 2,563.7 Short-term borrowings 33.8 24.6 Other
payables: Customers 31,797.4 26,319.4 Brokers, dealers and clearing
organizations 234.1 331.0 Other payables 375.2 386.2 32,406.7
27,036.6
Equity Stockholders' equity 766.3 707.3
Noncontrolling interests 4,418.3 4,384.8 Total equity 5,184.6
5,092.1
Total liabilities and equity $43,385.0
$37,870.7
December 31, 2014 December 31,
2013 Ownership of IBG LLC Membership Interests
Interests
%
Interests
%
Public (IBG, Inc.) 58,473,286 14.5% 54,663,604 13.6%
Noncontrolling interests (IBG Holdings LLC) 346,062,282 85.5%
347,648,001 86.4% Total IBG LLC membership interests
404,535,568 100.0% 402,311,605 100.0%
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
EARNINGS PER SHARE ON COMPREHENSIVE
INCOME
(UNAUDITED)
Three Months Twelve
Months Ended December 31, Ended December 31,
2014 2013 2014 2013
(in millions, except share and per share
data)
Comprehensive income available for common
stockholders, net of tax $1.0 $4.6
$29.5 $34.3 Comprehensive
income per share: Basic
$0.02 $0.09
$0.52 $0.69 Diluted
$0.02
$0.09 $0.51 $0.67
Weighted average common shares outstanding: Basic
58,124,119 52,517,259 56,492,381 49,742,428 Diluted 59,274,773
53,729,140 57,709,668 50,924,736
For Interactive Brokers Group,
Inc.Media:Caitlin Duffy,
203-913-1369orInvestors:Deborah Liston,
203-618-4070
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