EX-99.1 2 a07-15961_2ex99d1.htm EX-99.1

Exhibit 99.1

INTERACTIVE BROKERS GROUP, INC.

— — —

QUARTERLY FINANCIAL AND OPERATING DATA

FOR 2006 AND THE FIRST QUARTER OF 2007

1




 

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA

TRADE VOLUMES:

(in 000’s, except %)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Trades

 

 

 

Market Making

 

% change over

 

Brokerage

 

% change over

 

Total

 

% change over

 

per US

 

Period

 

Trades

 

prior period

 

trades

 

prior period

 

Trades

 

prior period

 

Trading Day

 

1Q2006

 

15,185

 

 

 

15,434

 

 

 

30,619

 

 

 

494

 

2Q2006

 

16,497

 

9

%

16,861

 

9

%

33,358

 

9

%

529

 

3Q2006

 

16,952

 

3

%

15,095

 

-10

%

32,047

 

-4

%

509

 

4Q2006

 

17,409

 

3

%

16,677

 

10

%

34,086

 

6

%

541

 

1Q2007

 

22,844

 

31

%

20,010

 

20

%

42,854

 

26

%

703

 

 

CONTRACT AND SHARE VOLUMES:

(in 000’s, except %)

 

TOTAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

% change over

 

Futures*

 

% change over

 

Stocks

 

% change over

 

Period

 

(contracts)

 

prior period

 

(contracts)

 

prior period

 

(shares)

 

prior period

 

1Q2006

 

136,272

 

 

 

13,217

 

 

 

7,814,068

 

 

 

2Q2006

 

154,777

 

14

%

16,673

 

26

%

9,286,784

 

19

%

3Q2006

 

130,966

 

-15

%

16,112

 

-3

%

8,697,086

 

-6

%

4Q2006

 

141,609

 

8

%

16,419

 

2

%

8,695,471

 

0

%

1Q2007

 

159,056

 

12

%

18,643

 

14

%

10,422,130

 

20

%

 

MARKET MAKING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

% change over

 

Futures*

 

% change over

 

Stocks

 

% change over

 

Period

 

(contracts)

 

prior period

 

(contracts)

 

prior period

 

(shares)

 

prior period

 

1Q2006

 

89,704

 

 

 

3,097

 

 

 

4,645,467

 

 

 

2Q2006

 

104,348

 

16

%

4,233

 

37

%

6,059,452

 

30

%

3Q2006

 

85,760

 

-18

%

3,949

 

-7

%

5,268,608

 

-13

%

4Q2006

 

92,118

 

7

%

3,540

 

-10

%

5,206,850

 

-1

%

1Q2007

 

99,603

 

8

%

3,586

 

1

%

5,978,287

 

15

%

 

BROKERAGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

% change over

 

Futures*

 

% change over

 

Stocks

 

% change over

 

Period

 

(contracts)

 

prior period

 

(contracts)

 

prior period

 

(shares)

 

prior period

 

1Q2006

 

46,568

 

 

 

10,120

 

 

 

3,168,601

 

 

 

2Q2006

 

50,429

 

8

%

12,440

 

23

%

3,227,332

 

2

%

3Q2006

 

45,206

 

-10

%

12,163

 

-2

%

3,428,478

 

6

%

4Q2006

 

49,491

 

9

%

12,879

 

6

%

3,488,621

 

2

%

1Q2007

 

59,453

 

20

%

15,057

 

17

%

4,443,843

 

27

%


*                    Includes options on futures

2




 

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA

ELECTRONIC BROKERAGE STATISTICS:

(in 000’s)

 

Period

 

Total
Accounts

 

Customer
Equity*

 

Cleared
DARTs

 

Total Customer
DARTs

 

1Q2006

 

67

 

$4,600,000

 

151

 

192

 

2Q2006

 

72

 

$5,100,000

 

167

 

207

 

3Q2006

 

74

 

$5,400,000

 

151

 

185

 

4Q2006

 

77

 

$6,100,000

 

158

 

199

 

1Q2007

 

82

 

$6,900,000

 

190

 

245

 


*                    End of period data

 

MARKET SHARE DATA

For exchange traded equity options

 

Period

 

U.S. Market Share

 

Global Market Share

 

 

 

 

 

 

 

1Q2006

 

21.7

%

15.6

%

2Q2006

 

22.6

%

16.7

%

3Q2006

 

21.1

%

15.8

%

4Q2006

 

20.2

%

15.5

%

1Q2007

 

19.9

%

14.8

%

 

 

3




 

IBG LLC AND SUBSIDIARIES

SEGMENT FINANCIAL DATA

(UNAUDITED)

 

 

 

 

1Q2006

 

2Q2006

 

3Q2006

 

4Q2006

 

1Q2007

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Making

 

Net revenues

 

$263.1

 

$211.8

 

$264.6

 

$215.2

 

$233.3

 

 

 

Non-interest expenses

 

68.5

 

77.3

 

71.3

 

74.8

 

79.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$194.6

 

$134.5

 

$193.3

 

$140.4

 

$154.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Brokerage

 

Net revenues

 

$65.2

 

$76.2

 

$75.4

 

$81.6

 

$94.5

 

 

 

Non-interest expenses

 

43.4

 

46.7

 

49.2

 

60.5

 

59.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$21.8

 

$29.5

 

$26.2

 

$21.1

 

$34.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

Net revenues

 

$0.3

 

$2.8

 

$(0.2

)

$(3.6

)

$3.0

 

 

 

Non-interest expenses

 

1.3

 

2.4

 

(0.8

)

(3.8

)

1.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$(1.0

)

$0.4

 

$0.6

 

$0.2

 

$1.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

Net revenues

 

$328.6

 

$290.8

 

$339.8

 

$293.2

 

$330.8

 

 

 

Non-interest expenses

 

113.2

 

126.4

 

119.7

 

131.5

 

140.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$215.4

 

$164.4

 

$220.1

 

$161.7

 

$190.3

 

 

Note:  Presentation of Financial Data

On May 3, 2007, Interactive Brokers Group, Inc. (“IBG, Inc.”) priced its initial public offering (“IPO”) and purchased a 10.0% interest in IBG LLC.  The historical financial statements for March 31, 2007 and prior periods set forth herein reflect the results of operations for IBG LLC and its subsidiaries, without giving effect to the IPO and related transactions.  The pro forma effects of the IPO for the quarters in the period from January 1, 2006 through March 31, 2007 are separately set forth herein.

 

4




 

IBG LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

1Q2006

 

2Q2006

 

3Q2006

 

4Q2006

 

1Q2007

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Trading gains

 

$

225.4

 

$

176.2

 

$

229.5

 

$

174.0

 

$

198.8

 

Commissions and execution fees

 

39.4

 

45.8

 

42.8

 

46.4

 

56.3

 

Interest income

 

132.1

 

160.5

 

183.3

 

196.2

 

184.5

 

Other income

 

25.5

 

21.0

 

18.7

 

20.0

 

24.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

422.4

 

403.5

 

474.3

 

436.6

 

464.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

93.8

 

112.7

 

134.5

 

143.4

 

133.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenues

 

328.6

 

290.8

 

339.8

 

293.2

 

330.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

Execution and clearing

 

71.3

 

82.8

 

76.7

 

82.5

 

90.2

 

Employee compensation and benefits

 

28.7

 

27.1

 

28.3

 

26.0

 

32.8

 

Occupancy, depreciation and amortization

 

5.5

 

6.2

 

5.1

 

5.9

 

6.0

 

Communications

 

2.7

 

3.2

 

3.2

 

3.5

 

3.4

 

General and administrative

 

5.0

 

7.1

 

6.4

 

13.6

 

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expenses

 

113.2

 

126.4

 

119.7

 

131.5

 

140.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

215.4

 

164.4

 

220.1

 

161.7

 

190.3

 

Income tax expense

 

9.2

 

6.6

 

5.8

 

5.8

 

6.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

206.2

 

$

157.8

 

$

214.3

 

$

155.9

 

$

184.2

 

 

5




 

IBG LLC AND SUBSIDIARIES

MARKET MAKING STATEMENTS OF INCOME

(UNAUDITED)

 

 

1Q2006

 

2Q2006

 

3Q2006

 

4Q2006

 

1Q2007

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Trading gains

 

$

225.7

 

$

173.8

 

$

229.8

 

$

178.4

 

$

193.5

 

Interest income

 

103.2

 

122.8

 

138.7

 

143.5

 

130.7

 

Other income

 

9.6

 

3.9

 

2.2

 

2.9

 

6.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

338.5

 

300.5

 

370.7

 

324.8

 

330.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

75.4

 

88.7

 

106.1

 

109.6

 

97.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenues

 

263.1

 

211.8

 

264.6

 

215.2

 

233.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

Execution and clearing

 

45.1

 

54.4

 

47.1

 

51.5

 

53.1

 

Employee compensation and benefits

 

13.7

 

12.4

 

13.4

 

7.8

 

13.7

 

Occupancy, depreciation and amortization

 

2.7

 

3.0

 

2.1

 

2.8

 

2.7

 

Communications

 

1.5

 

1.6

 

1.7

 

1.8

 

1.7

 

General and administrative

 

5.5

 

5.9

 

7.0

 

10.9

 

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expenses

 

68.5

 

77.3

 

71.3

 

74.8

 

79.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

194.6

 

134.5

 

193.3

 

140.4

 

154.0

 

Income tax expense

 

8.5

 

5.9

 

5.4

 

5.1

 

5.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

186.1

 

$

128.6

 

$

187.9

 

$

135.3

 

$

148.5

 

 

6




 

IBG LLC AND SUBSIDIARIES

ELECTRONIC BROKERAGE STATEMENTS OF INCOME

(UNAUDITED)

 

 

1Q2006

 

2Q2006

 

3Q2006

 

4Q2006

 

1Q2007

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Commissions and execution fees

 

$

39.4

 

$

45.8

 

$

42.8

 

$

46.5

 

$

56.3

 

Interest income

 

29.7

 

38.5

 

45.8

 

53.3

 

59.8

 

Other income

 

16.2

 

17.7

 

17.9

 

18.2

 

20.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

85.3

 

102.0

 

106.5

 

118.0

 

136.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

20.1

 

25.8

 

31.1

 

36.4

 

41.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenues

 

65.2

 

76.2

 

75.4

 

81.6

 

94.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

Execution and clearing

 

26.2

 

28.4

 

29.7

 

31.1

 

37.1

 

Employee compensation and benefits

 

7.0

 

6.7

 

7.1

 

8.0

 

9.2

 

Occupancy, depreciation and amortization

 

1.3

 

1.6

 

1.4

 

1.5

 

1.4

 

Communications

 

1.2

 

1.5

 

1.6

 

1.7

 

1.7

 

General and administrative

 

7.7

 

8.5

 

9.4

 

18.2

 

10.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expenses

 

43.4

 

46.7

 

49.2

 

60.5

 

59.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

21.8

 

29.5

 

26.2

 

21.1

 

34.7

 

Income tax expense

 

0.5

 

0.5

 

0.2

 

0.5

 

0.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

21.3

 

$

29.0

 

$

26.0

 

$

20.6

 

$

34.3

 

 

7





INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

 

 

1Q2006

 

2Q2006

 

3Q2006

 

4Q2006

 

1Q2007

 

 

 

 

 

(dollars in millions, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading gains

 

 

 

$225.4

 

$176.2

 

$229.5

 

$174.0

 

$198.8

 

Commissions and execution fees

 

 

 

39.4

 

45.8

 

42.8

 

46.4

 

56.3

 

Interest income

 

 

 

132.1

 

160.5

 

183.3

 

196.2

 

184.5

 

Other income

 

 

 

25.5

 

21.0

 

18.7

 

20.0

 

24.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 

 

422.4

 

403.5

 

474.3

 

436.6

 

464.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

93.8

 

112.7

 

134.5

 

143.4

 

133.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenues

 

 

 

328.6

 

290.8

 

339.8

 

293.2

 

330.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Execution and clearing

 

 

 

71.3

 

82.8

 

76.7

 

82.5

 

90.2

 

Employee compensation and benefits

 

 

 

28.7

 

27.1

 

28.3

 

26.0

 

32.8

 

Occupancy, depreciation and amortization

 

 

 

5.5

 

6.2

 

5.1

 

5.9

 

6.0

 

Communications

 

 

 

2.7

 

3.2

 

3.2

 

3.5

 

3.4

 

General and administrative (1)

 

 

 

5.0

 

7.1

 

6.4

 

13.8

 

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expenses

 

 

 

113.2

 

126.4

 

119.7

 

131.7

 

140.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

 

 

215.4

 

164.4

 

220.1

 

161.5

 

190.3

 

Income tax expense (2),(3)

 

 

 

16.0

 

12.4

 

12.8

 

11.0

 

12.0

 

Less — Minority interest (4)

 

 

 

(185.6

)

(142.0

)

(192.8

)

(140.4

)

(165.9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

$13.8

 

$10.0

 

$14.5

 

$10.1

 

$12.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (5):

 

Shares

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,000,100

 

$0.34

 

$0.25

 

$0.36

 

$0.26

 

$0.31

 

Diluted

 

401,240,827

 

$0.34

 

$0.25

 

$0.36

 

$0.26

 

$0.31

 

 

See accompanying notes to unaudited pro forma consolidated statements of income.

8




INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

The pro forma consolidated statements of income of IBG, Inc. and subsidiaries are comprised of the historical consolidated statements of income of IBG LLC and subsidiaries adjusted to reflect the following items and transactions, as if such transactions had occurred as of January 1, 2006:

 

(1)                                  Gives effect to Delaware franchise taxes that will be payable, estimated at $0.165 million annually.

 

(2)                                  Pro forma income tax expense includes income tax expense adjustments comprised of  the sum of current income tax expense adjustments for these periods (referenced in this footnote 2) and deferred income tax expense adjustments for these periods (referenced in footnote 3 below). Additional current income tax expense on our 10.0% investment in IBG LLC would have been $2.7, $1.6, $2.8, $1.1 and $1.8 million, respectively, for each of the three months from the period ended March 31, 2006 through the period ended March 31, 2007. In addition to increased currently payable income taxes, we would have incurred increased deferred income tax expense (see footnote 3).

 

(3)                                  Pro forma income tax expense includes additional deferred income tax expense of $4.1 million for each of the three month periods reported, which expense is the result of the straight-line amortization of the deferred tax asset of $249.3 million arising from the acquisition of the 10.0% member interest in IBG LLC (see footnote 2 above).  This deferred tax asset will be amortized over 15 years.

 

(4)                                  Gives effect to the 90.0% interest in IBG LLC that IBG Holdings LLC has after the IPO and the Recapitalization transactions consummated in connection with the IPO. The adjustments are equal to 90.0% of IBG LLC’s total net income for each of the periods reported.

 

(5)                                  Basic pro forma earnings per share are calculated based on the estimated 40.0 million shares of Class A common stock and 100 shares of Class B common stock being outstanding. Diluted earnings per share are calculated based on an assumed purchase of all remaining IBG LLC membership interests held by IBG Holdings LLC and the issuance of a corresponding number of shares of Class A common stock, resulting in a total of 400.0 million shares deemed outstanding as of the beginning of each period. There is no impact on earnings per share for such purchase and issuance because 100% of net income before minority interest would be available to common stockholders as IBG Holdings LLC would no longer hold a minority interest, and the full difference between the book and tax basis of IBG LLC's assets would also be available for reducing income tax expense. Net income utilized to calculate diluted earnings per share would have been  $138, $100, $145, $104 and $124 million, respectively, for each of the three months from the period ended March 31, 2006 through the period ended March 31, 2007.

 

In addition, diluted weighted average common shares outstanding include 1.2 million shares of Class A common stock to be issued upon investment of accumulated earnings on return on investment dollar units in connection with the Recapitalization transactions consummated in connection with the IPO.  Shares of Class A common stock to be issued in connection with the employee incentive plan have been excluded from diluted weighted average common shares outstanding because such shares are non-dilutive.

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