eTrade 2009 Annual Report Download - page 49

Trading and Investing
The following table summarizes trading and investing financial information and key metrics for the periods
ended December 31, 2009, 2008 and 2007 (dollars in millions, except for key metrics):
Year Ended December 31,
Variance
2009 vs. 2008
2009 2008 2007 Amount %
Trading and investing segment income:
Net operating interest income $ 793.4 $ 830.4 $ 962.8 $ (37.0) (4)%
Commissions 548.0 514.7 520.2 33.3 6%
Fees and service charges 185.6 191.6 209.0 (6.0) (3)%
Principal transactions 88.1 84.8 101.1 3.3 4%
Gains (losses) on loans and securities, net (0.1) (0.1) 0.2 — — %
Other revenues 35.5 38.6 41.1 (3.1) (8)%
Net segment revenue 1,650.5 1,660.0 1,834.4 (9.5) (1)%
Total segment expense 991.4 1,036.8 1,045.3 (45.4) (4)%
Total trading and investing segment income $ 659.1 $ 623.2 $ 789.1 $ 35.9 6%
Key Metrics:
U.S. DARTs(1) 179,183 169,075 161,219 10,108 6%
U.S. average commission per trade $ 11.33 $ 10.98 $ 11.57 $ 0.35 3%
End of period brokerage accounts(2) 2,630,079 2,515,806 2,373,265 114,273 5%
Net new brokerage accounts(2) 114,273 142,541 4,688 (28,268) (20)%
Customer assets (dollars in billions) $ 153.2 $ 112.2 $ 185.0 $ 41.0 37%
Net new brokerage assets (dollars in billions)(2) $ 7.2 $ 3.9 $ (13.3) * *
Brokerage related cash (dollars in billions)(2) $ 20.4 $ 15.8 $ 17.5 $ 4.6 29%
* Percentage not meaningful.
(1) U.S. DARTs are defined as transactions executed on our domestic platforms.
(2) References to “brokerage” in these metrics refer to activity on our domestic platforms and do not include brokerage activity from our
international local brokerage accounts.
Our trading and investing segment generates revenue from brokerage and banking relationships with
investors and from market-making activities. This segment generates six main sources of revenue: net operating
interest income; commissions; fees and service charges; principal transactions; gains (losses) on loans and
securities, net; and other revenues. Other revenues include results from our employee stock option management
software and services from our corporate customers, as we ultimately service retail investors through these
corporate relationships.
2009 Compared to 2008
Trading and investing segment income increased 6% to $659.1 million for the year ended December 31,
2009 compared to 2008. Trading activity was strong during 2009 resulting in total DARTs of 196,521 and an
average commission per trade of $11.11. We also continued to generate new brokerage accounts, ending the year
with 2.6 million accounts. Our brokerage related cash, which is one of our most profitable sources of funding,
increased by $4.6 billion when compared to 2008. We believe these metrics are indicators of a brokerage
business that is able to compete effectively in a volatile environment and we believe we are positioned for
continued growth in our trading and investing segment.
Trading and investing net operating interest income decreased 4% to $793.4 million for the year ended
December 31, 2009 compared to 2008. This decrease was driven primarily by a decrease in the average balance
of our margin receivables during the comparable periods, which was partially offset by a decrease in yields paid
on our deposits.
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