press release

Jan. 19, 2021, 4:02 p.m. EST

Interactive Brokers Group Announces 4Q2020 Results

DILUTED EARNINGS PER SHARE OF $0.81, ADJUSTED DILUTED EARNINGS PER SHARE OF $0.69. PRETAX INCOME OF $392 MILLION ON $599 MILLION IN NET REVENUES. ADJUSTED PRETAX INCOME OF $375 MILLION ON $582 MILLION IN ADJUSTED NET REVENUES1. DECLARES QUARTERLY DIVIDEND OF $0.10 PER SHARE.

Interactive Brokers Group, Inc. /zigman2/quotes/208880397/composite IBKR -4.02% , an automated global electronic broker, reported diluted earnings per share of $0.81 for the quarter ended December 31, 2020 compared to $0.57 for the same period in 2019, and adjusted diluted earnings per share of $0.69 for this quarter compared to $0.58 for the year-ago quarter.

Net revenues were $599 million and income before income taxes was $392 million for this quarter, compared to net revenues of $500 million and income before income taxes of $312 million for the same period in 2019. Adjusted net revenues were $582 million and adjusted income before income taxes was $375 million for this quarter, compared to adjusted net revenues of $503 million and adjusted income before income taxes of $315 million for the same period in 2019.

Financial Highlights

  • Commission revenue showed strong growth, increasing $120 million, or 71%, from the year-ago quarter on higher customer trading volumes within an active trading environment worldwide.

  • Net interest income decreased $62 million, or 22%, from the year-ago quarter as the average Federal Funds effective rate decreased to 0.09% from 1.65% in the year-ago quarter.

  • Other income increased $25 million from the year-ago quarter. This increase was mainly comprised of $39 million related to our strategic investment in Up Fintech Holding Limited (“Tiger Brokers”), which swung to a $32 million mark-to-market gain this quarter from a $7 million mark-to-market loss in the same period in 2019; partially offset by $25 million related to our currency diversification strategy, which lost $13 million this quarter compared to a gain of $12 million in the same period in 2019.

  • 65% pretax profit margin for this quarter, up from 62% in the year-ago quarter. 64% adjusted pretax profit margin for this quarter, up from 63% in the year-ago quarter.

  • Total equity of $9.0 billion.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on March 12, 2021 to shareholders of record as of March 1, 2021.

Business Highlights

  • Customer accounts increased 56% from the year-ago quarter to 1.07 million.

  • Customer equity grew 66% from the year-ago quarter to $288.6 billion.

  • Total DARTs [2] increased 165% from the year-ago quarter to 2.11 million.

  • Cleared DARTs increased 160% from the year-ago quarter to 1.87 million.

  • Customer credits increased 34% from the year-ago quarter to $77.7 billion.

  • Customer margin loans increased 26% from the year-ago quarter to $39.0 billion.

COVID-19 Pandemic

In March 2020, the World Health Organization recognized the outbreak of Coronavirus Disease 2019 (COVID-19) caused by a novel strain of the coronavirus as a pandemic. The pandemic affects all countries in which we operate. The response of governments and societies to the COVID-19 pandemic, which includes temporary closures of certain businesses; social distancing; travel restrictions, “shelter in place” and other governmental regulations; and reduced consumer spending due to job losses, has significantly impacted market volatility and general economic conditions.

The COVID-19 pandemic has precipitated unprecedented market conditions with equally unprecedented social and community challenges. Amid these challenges:

  • The Company is committed to ensuring the highest levels of service to its customers so they can effectively manage their assets, portfolios and risks. The Company’s technical infrastructure has withstood the challenges presented by the extraordinary volatility and increased market volume.

  • The Company can run its business from alternate office locations and/or remotely if a Company office must temporarily close due to the spread of the COVID-19 pandemic.

  • As announced on April 9, 2020, during the second quarter of 2020 the Company donated $5 million to assist efforts to provide food and support for people affected by the COVID-19 pandemic in the United States as well as to advance medical solutions.

The initial effects of the COVID-19 pandemic on the Company’s financial results, which may have continued through the fourth quarter of 2020, can be summarized as follows: (1) higher commission revenue due to increased trading activity and a higher rate of customer accounts opened throughout 2020; and (2) lower net interest income resulting from lower benchmark interest rates.

The impact of the COVID-19 pandemic on the Company’s future financial results could be significant but currently cannot be quantified, as it depends on numerous evolving factors that currently cannot be accurately predicted, including, but not limited to the duration and spread of the pandemic; its impact on our customers, employees and vendors; governmental actions in response to the pandemic; and the overall impact of the pandemic in the economy and society; among other factors. Any of these events could have a materially adverse effect on the Company’s financial results.

Effects of Foreign Currency Diversification

In connection with our currency diversification strategy, we base our net worth in GLOBALs, a basket of 10 major currencies in which we hold our equity. In this quarter, our currency diversification strategy increased our comprehensive earnings by $82 million, as the U.S. dollar value of the GLOBAL increased by approximately 1.01%. The effects of the currency diversification strategy are reported as components of (1) Other Income (loss of $13 million) and (2) Other Comprehensive Income (gain of $95 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, January 19, 2021, 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 affiliates provide automated trade execution and custody of securities, commodities and foreign exchange around the clock on over 135 markets in numerous countries and currencies, from a single IBKR Integrated Investment Account to clients worldwide. We service individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation has enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Barron’s ranked Interactive Brokers #1 with 5 out of 5 stars in its February 24, 2020, Best Online Broker Review.

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.

[1] See the reconciliation of non-GAAP financial measures starting on page 10.
[2] Daily average revenue trades (DARTs) are based on customer orders.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
OPERATING DATA
TRADE VOLUMES:
(in 000's, except %)
  Cleared Non-Cleared Avg. Trades
  Customer % Customer % Principal % Total % per U.S.
Period Trades Change Trades Change Trades Change Trades Change Trading Day
2018 328,099 21,880 18,663 368,642 1,478
2019 302,289 (8%) 26,346 20% 17,136 (8%) 345,771 (6%) 1,380
2020 620,405 105% 56,834 116% 27,039 58% 704,278 104% 2,795
 
4Q2019 73,291 6,284 4,204 83,779 1,330
4Q2020 178,614 144% 17,008 171% 7,455 77% 203,077 142% 3,223
 
3Q2020 160,015 14,701 7,453 182,169 2,846
4Q2020 178,614 12% 17,008 16% 7,455 0% 203,077 11% 3,223
 
CONTRACT AND SHARE VOLUMES:
(in 000's, except %)
 
TOTAL Options % Futures1 % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2018 408,406 151,762 210,257,186
2019 390,739 (4%) 128,770 (15%) 176,752,967 (16%)
2020 624,035 60% 167,078 30% 338,513,068 92%
 
4Q2019 100,520 29,078 39,391,536
4Q2020 170,191 69% 35,295 21% 121,062,599 207%
 
3Q2020 163,972 39,186 87,514,614
4Q2020 170,191 4% 35,295 (10%) 121,062,599 38%
 
ALL CUSTOMERS Options % Futures1 % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2018 358,852 148,485 198,909,375
2019 349,287 (3%) 126,363 (15%) 167,826,490 (16%)
2020 584,195 67% 164,555 30% 331,263,604 97%
 
4Q2019 91,562 28,630 37,988,125
4Q2020 160,953 76% 34,851 22% 119,654,910 215%
 
3Q2020 153,612 38,685 85,893,357
4Q2020 160,953 5% 34,851 (10%) 119,654,910 39%
 
CLEARED CUSTOMERS Options % Futures1 % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2018 313,795 146,806 194,012,882
2019 302,068 (4%) 125,225 (15%) 163,030,500 (16%)
2020 518,965 72% 163,101 30% 320,376,365 97%
 
4Q2019 81,468 28,307 36,969,492
4Q2020 144,378 77% 34,459 22% 116,538,527 215%
 
3Q2020 137,660 38,405 83,246,086
4Q2020 144,378 5% 34,459 (10%) 116,538,527 40%
 
[1] Includes options on futures
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
OPERATING DATA, CONTINUED
 
PRINCIPAL TRANSACTIONS Options % Futures1 % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2018 49,554 3,277 11,347,811
2019 41,452 (16%) 2,407 (27%) 8,926,477 (21%)
2020 39,840 (4%) 2,523 5% 7,249,464 (19%)
 
4Q2019 8,958 448 1,403,411
4Q2020 9,238 3% 444 (1%) 1,407,689 0%
 
3Q2020 10,360 501 1,621,257
4Q2020 9,238 (11%) 444 (11%) 1,407,689 (13%)
 
[1] Includes options on futures
CUSTOMER STATISTICS
(in 000's, except % and where noted)
 
Year over Year 4Q2020   4Q2019 % Change
Total Accounts (in thousands)   1,073     690   56%
Customer Equity (in billions) [1] $ 288.6   $ 174.1   66%
         
Cleared DARTs (in thousands)   1,871     719   160%
Total Customer DARTs (in thousands)   2,109     797   165%
         
Cleared Customers          
Commission per Cleared Commissionable Order [2] $ 2.46   $ 3.63   (32%)
Cleared Avg. DART per Account (Annualized)   459     266   73%
Net Revenue per Avg. Account (Annualized) $ 2,151   $ 2,801   (23%)
 
Consecutive Quarters 4Q2020 3Q2020 % Change
Total Accounts (in thousands)   1,073     981   9%
Customer Equity (in billions) [1] $ 288.6   $ 232.7   24%
         
Cleared DARTs (in thousands)   1,871     1,629   15%
Total Customer DARTs (in thousands)   2,109     1,832   15%
         
Cleared Customers          
Commission per Cleared Commissionable Order [2] $ 2.46   $ 2.69   (9%)
Cleared Avg. DART per Account (Annualized)   459     442   4%
Net Revenue per Avg. Account (Annualized) $ 2,151   $ 2,154   (0%)
 
[1] Excludes non-Customers.
[2] Commissionable Order - a customer order that generates commissions.
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
 
Three Months Twelve Months
Ended December 31, Ended December 31,
2020 2019 2020 2019
(in millions)
Average interest-earning assets
Segregated cash and securities $ 43,128   $ 29,437   $ 41,898   $ 27,812  
Customer margin loans   32,775     27,529     28,960     26,483  
Securities borrowed   3,808     4,026     4,235     3,930  
Other interest-earning assets   5,799     5,887     5,593     5,407  
FDIC sweeps [1]   2,919     2,298     2,882     2,075  
$ 88,429   $ 69,177   $ 83,568   $ 65,707  
       
Average interest-bearing liabilities        
Customer credit balances $ 71,190   $ 55,185   $ 67,540   $ 52,625  
Securities loaned   6,499     4,292     5,702     4,088  
Other interest-bearing liabilities   17     495     215     211  
$ 77,706   $ 59,972   $ 73,457   $ 56,924  
       
Net interest income        
Segregated cash and securities, net $ 7   $ 126   $ 166   $ 560  
Customer margin loans [2]   93     157     380     694  
Securities borrowed and loaned, net   115     80     343     257  
Customer credit balances, net [2]   9     (94 )   (46 )   (515 )
Other net interest income [1/3]   8     27     55     121  
Net interest income [3] $ 232   $ 296   $ 898   $ 1,117  
       
Net interest margin ("NIM")   1.04 %   1.70 %   1.07 %   1.70 %
       
Annualized yields        
Segregated cash and securities   0.06 %   1.70 %   0.40 %   2.01 %
Customer margin loans   1.13 %   2.26 %   1.31 %   2.62 %
Customer credit balances   -0.05 %   0.68 %   0.07 %   0.98 %
____________________
[1]   Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program. This item is not recorded in the Company's consolidated statements of financial condition. Income derived from program deposits is reported in other net interest income in the table above.
     
[2]   Interest income and interest expense on customer margin loans and customer credit balances, respectively, are calculated on daily cash balances within each customer’s account on a net basis, which may result in an offset of balances across multiple account segments (e.g., between securities and commodities segments).
     
[3]   Includes income from financial instruments that has the same characteristics as interest, but is reported in other fees and services and other income in the Company’s consolidated statements of comprehensive income. For the three and twelve months ended December 31, 2020 and 2019, $7 million, $5 million, $21 million, and $15 million were reported in other fees and services, respectively. For the three and twelve months ended December 31, 2020 and 2019, $0 million, $4 million, $5 million, and $19 million were reported in other income, respectively.
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
 
Three Months   Twelve Months
Ended December 31,   Ended December 31,
2020   2019   2020   2019
(in millions, except share and per share data)
 
Revenues:
Commissions $ 288   $ 168   $ 1,112   $ 706  
Other fees and services [1/2]   52     36     175     141  
Other income [1/3]   34     9     59     7  
       
Total non-interest income   374     213     1,346     854  
       
Interest income   280     418     1,133     1,726  
Interest expense   (55 )   (131 )   (261 )   (643 )
       
Total net interest income   225     287     872     1,083  
       
Total net revenues   599     500     2,218     1,937  
       
Non-interest expenses:        
Execution, clearing and distribution fees   66     59     293     251  
Employee compensation and benefits   86     75     325     288  
Occupancy, depreciation and amortization   18     17     69     60  
Communications   7     6     26     25  
General and administrative   30     32     236     112  
Customer bad debt   -     (1 )   13     44  
       
Total non-interest expenses   207     188     962     780  
       
Income before income taxes   392     312     1,256     1,157  
       
Income tax expense   12     18     77     68  
       
Net income   380     294     1,179     1,089  
       
Net income attributable to noncontrolling interests   309     250     984     928  
       
Net income available for common stockholders $ 71   $ 44   $ 195   $ 161  
       
Earnings per share:        
Basic $ 0.82   $ 0.58   $ 2.44   $ 2.11  
Diluted $ 0.81   $ 0.57   $ 2.42   $ 2.10  
       
Weighted average common shares outstanding:        
Basic   87,076,038     76,749,142     79,939,289     76,121,570  
Diluted   87,772,443     77,357,093     80,638,908     76,825,863  
____________________
1   In the first quarter of 2020, we changed the presentation of our consolidated statements of income to better align with our business strategy. Previously reported amounts have been adjusted to conform with the new presentation.
     
2   Includes market data fees, account activity fees, risk exposure fees, order flow income from options exchange mandated programs, and revenues from other fees and services.
     
3   Includes gains (losses) from principal transactions; the impact of our currency diversification strategy; gains (losses) from our equity method investments, other revenue not directly attributable to our core business offerings.
     
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
 
Three Months Twelve Months
Ended December 31, Ended December 31,
2020 2019 2020 2019
(in millions, except share and per share data)
 
Comprehensive income:
Net income available for common stockholders $ 71 $ 44 $ 195 $ 161
Other comprehensive income:        
Cumulative translation adjustment, before income taxes   21   7   26   4
Income taxes related to items of other comprehensive income   -   -   -   -
Other comprehensive income, net of tax   21   7   26   4
Comprehensive income available for common stockholders $ 92 $ 51 $ 221 $ 165
       
Comprehensive earnings per share:        
Basic $ 1.05 $ 0.67 $ 2.77 $ 2.18
Diluted $ 1.05 $ 0.66 $ 2.74 $ 2.16
       
Weighted average common shares outstanding:        
Basic   87,076,038   76,749,142   79,939,289   76,121,570
Diluted   87,772,443   77,357,093   80,638,908   76,825,863
       
       
Comprehensive income attributable to noncontrolling interests:        
Net income attributable to noncontrolling interests $ 309 $ 250 $ 984 $ 928
Other comprehensive income - cumulative translation adjustment   74   31   98   20
Comprehensive income attributable to noncontrolling interests $ 383 $ 281 $ 1,082 $ 948
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
 
December 31,2020 December 31,2019
(in millions)
 
Assets
Cash and cash equivalents $ 4,292 $ 2,882
Cash - segregated for regulatory purposes   15,903   9,400
Securities - segregated for regulatory purposes   27,821   17,824
Securities borrowed   4,956   3,916
Securities purchased under agreements to resell   792   3,111
Financial instruments owned, at fair value   630   1,916
Receivables from customers, net of allowance for doubtful accounts   39,333   31,304
Receivables from brokers, dealers and clearing organizations   1,254   685
Other assets   698   638
   
Total assets $ 95,679 $ 71,676
   
Liabilities and equity    
   
Liabilities    
Short-term borrowings $ 118 $ 16
Securities loaned   9,838   4,410
Securities sold under agreements to repurchase   -   1,909
Financial instruments sold but not yet purchased, at fair value   153   457
Other payables:    
Customers   75,882   56,248
Brokers, dealers and clearing organizations   182   220
Other payables   503   476
  76,567   56,944
   
Total liabilities   86,676   63,736
   
Equity    
Stockholders' equity   1,951   1,452
Noncontrolling interests   7,052   6,488
Total equity   9,003   7,940
   
Total liabilities and equity $ 95,679 $ 71,676
 
 
December 31, 2020   December 31, 2019
Ownership of IBG LLC Membership Interests Interests   %   Interests   %
 
IBG, Inc. 90,780,444 21.8%   76,759,595   18.5%
Noncontrolling interests (IBG Holdings LLC) 325,960,034 78.2%   338,670,642   81.5%
       
Total IBG LLC membership interests 416,740,478 100.0%   415,430,237   100.0%
 
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
 
Three Months Twelve Months
Ended December 31, Ended December 31,
2020 2019 2020 2019
 
(in millions)
 
Adjusted net revenues1
 
Net revenues - GAAP $ 599   $ 500   $ 2,218   $ 1,937  
       
Non-GAAP adjustments        
Currency diversification strategy, net   13     (12 )   19     60  
Mark-to-market on investments [2]   (33 )   15     (36 )   (13 )
Remeasurement of TRA liability [3]   3     -     3     -  
       
Total non-GAAP adjustments   (17 )   3     (14 )   47  
       
Adjusted net revenues $ 582   $ 503   $ 2,204   $ 1,984  
       
Adjusted income before income taxes1        
       
Income before income taxes - GAAP $ 392   $ 312   $ 1,256   $ 1,157  
       
Non-GAAP adjustments        
Currency diversification strategy, net   13     (12 )   19     60  
Mark-to-market on investments [2]   (33 )   15     (36 )   (13 )
Remeasurement of TRA liability [3]   3     -     3     -  
Customer compensation expense [4]   -     -     103     -  
Bad debt expense [5]   -     -     1     42  
       
Total non-GAAP adjustments   (17 )   3     90     89  
       
       
Adjusted income before income taxes $ 375   $ 315   $ 1,346   $ 1,246  
       
Adjusted pre-tax profit margin   64 %   63 %   61 %   63 %
 
 
Three Months   Twelve Months
Ended December 31,   Ended December 31,
2020   2019   2020   2019
 
(in millions)
Adjusted net income available for common stockholders1
 
Net income available for common stockholders - GAAP $ 71   $ 44   $ 195   $ 161  
       
Non-GAAP adjustments        
Currency diversification strategy, net   3     (2 )   4     11  
Mark-to-market on investments [2]   (7 )   3     (7 )   (2 )
Remeasurement of TRA liability [3]   3     -     3     -  
Customer compensation expense [4]   -     -     20     -  
Bad debt expense [5]   -     -     0     8  
Income tax effect of above adjustments [6]   1     -     (3 )   (3 )
Remeasurement of deferred income taxes [7]   (11 )   -     (11 )   -  
       
Total non-GAAP adjustments   (11 )   1     6     13  
       
Adjusted net income available for common stockholders $ 60   $ 45   $ 201   $ 174  
 
Note: Amounts may not add due to rounding.
 
Three Months Twelve Months
Ended December 31, Ended December 31,
2020 2019 2020 2019
 
(in dollars)
Adjusted diluted EPS1
 
Diluted EPS - GAAP $ 0.81   $ 0.57   $ 2.42   $ 2.10  
       
Non-GAAP adjustments        
Currency diversification strategy, net   0.03     (0.03 )   0.05     0.14  
Mark-to-market on investments [2]   (0.08 )   0.03     (0.08 )   (0.03 )
Remeasurement of TRA liability [3]   0.04     0.00     0.04     0.00  
Customer compensation expense [4]   0.00     0.00     0.24     0.00  
Bad debt expense [5]   0.00     0.00     0.00     0.10  
Income tax effect of above adjustments [6]   0.01     0.00     (0.04 )   (0.04 )
Remeasurement of deferred income taxes [7]   (0.12 )   0.00     (0.14 )   0.00  
       
Total non-GAAP adjustments   (0.12 )   0.01     0.08     0.17  
       
Adjusted diluted EPS $ 0.69   $ 0.58   $ 2.49   $ 2.27  
       
Diluted weighted average common shares outstanding   87,772,443     77,357,093     80,638,908     76,825,863  
 
Note: Amounts may not add due to rounding.
 

Note: The term “GAAP” in the following explanation refers to generally accepted accounting principles in the United States.

[1 ] Adjusted net revenues, adjusted income before income taxes, adjusted net income available for common stockholders and adjusted diluted earnings per share (“EPS”) are non-GAAP financial measures as defined by SEC Regulation G.

  • We define adjusted net revenues as net revenues adjusted to remove the effect of our GLOBAL currency diversification strategy, our net mark-to-market gains (losses) on investments [2] , and the remeasurement of our Tax Receivable Agreement (“TRA”) liability [3] .

  • We define adjusted income before income taxes as income before income taxes adjusted to remove the effect of our GLOBAL currency diversification strategy, our net mark-to-market gains (losses) on investments, the remeasurement of our TRA liability, customer compensation expenses [4] , [] and unusual bad debt expense [5] .

  • We define adjusted net income available to common stockholders as net income available for common stockholders adjusted to remove the after-tax effects attributable to IBG, Inc. of our GLOBAL currency diversification strategy, the mark-to-market gains (losses) on investments, the remeasurement of our TRA liability, customer compensation expenses, unusual bad debt expense, and the remeasurement of certain deferred tax assets [7] .

Management believes these non-GAAP items are important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook and may be useful to investors and analysts in evaluating the operating performance of the business and facilitating a meaningful comparison of our results in the current period to those in prior and future periods. Our GLOBAL currency diversification strategy, our mark-to-market on investments, the remeasurement of our TRA liability, customer compensation expense, unusual bad debt expense, and the remeasurement of certain deferred tax assets are excluded because management does not believe they are indicative of our underlying core business performance. Adjusted net revenues, adjusted income before income taxes, adjusted net income available to common stockholders and adjusted diluted EPS should be considered in addition to, rather than as a substitute for, GAAP net revenues, income before income taxes, net income attributable to common stockholders and diluted EPS.

[2] Mark-to-market on investments represents the net mark-to-market gains (losses) on our U.S. government securities portfolio, which are typically held to maturity, investments in equity securities that do not qualify for equity method accounting which are measured at fair value, and equity securities taken over by the Company from customers related to losses on margin loans described below.

[3 ] Remeasurement of our TRA liability represents the change in the amount payable to IBG Holdings LLC under the TRA as a result of changes in the Company’s effective corporate tax rates. For further information refer to Note 4 – Equity and Earnings per Share under Part II, Item 8 – Financial Statements and Supplementary Data of the Company’s Annual Report on Form 10 K filed with the Securities Exchange Commission (“SEC”) on February 28, 2020.

[4] Customer compensation expenses were incurred to compensate certain affected customers in connection with their losses resulting from the West Texas Intermediate Crude Oil event. On April 20, 2020, the energy markets exhibited extraordinary price activity in the New York Mercantile Exchange (“NYMEX”) West Texas Intermediate Crude Oil contract. The price of the May 2020 physically-settled contract dropped to an unprecedented negative price of $37.63.

[5] Unusual bad debt expense includes material losses on margin loans resulting from unusual events that occur in the marketplace. For the twelve months ending December 31, 2019, unusual bad debt expense reflects losses recognized on margin lending to a small number of our brokerage customers that had taken relatively large positions in a security listed on a major U.S. exchange, which lost a substantial amount of its value in a very short timeframe. For the twelve months ended December 31, 2020, unusual bad debt expense reflects losses incurred by futures customers in excess of the equity in their accounts related to the West Texas Intermediate Crude Oil event described above.

[6 ] The income tax effect is estimated using the corporate income tax rates applicable to the Company.

[7 ] Remeasurement of certain deferred tax assets represents the change in the unamortized balance of deferred tax assets related to the step-up in basis arising from the acquisition of interests in IBG LLC as a result of changes in the Company’s effective corporate tax rates. For further information refer to Note 4 – Equity and Earnings per Share under Part II, Item 8 – Financial Statements and Supplementary Data of the Company’s Annual Report on Form 10 K filed with the Securities Exchange Commission (“SEC”) on February 28, 2020.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210119006037/en/

SOURCE: Interactive Brokers Group, Inc.

For Interactive Brokers Group, Inc. Investors: Nancy Stuebe, 203-618-4070
or
Media: Kalen Holliday, 203-618-4069

COMTEX_377922298/2456/2021-01-19T16:02:00

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/zigman2/quotes/208880397/composite
US : U.S.: Nasdaq
$ 74.25
-3.11 -4.02%
Volume: 815,565
April 20, 2021 4:00p
P/E Ratio
31.02
Dividend Yield
0.54%
Market Cap
$31.95 billion
Rev. per Employee
$1.23M
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