eTrade 2010 Annual Report Download - page 48

Trading and Investing
The following table summarizes trading and investing financial information and key metrics as of and for
the periods ended December 31, 2010, 2009, and 2008 (dollars in millions, except for key metrics):
Variance
Year Ended December 31, 2010 vs. 2009
2010 2009 2008 Amount %
Net operating interest income $ 763.0 $ 699.6 $ 800.3 $ 63.4 9%
Commissions 431.0 548.0 514.7 (117.0) (21)%
Fees and service charges 139.1 185.6 191.6 (46.5) (25)%
Principal transactions 103.4 88.1 84.8 15.3 17%
Other revenues 37.9 35.5 38.5 2.4 7%
Total net revenue 1,474.4 1,556.8 1,629.9 (82.4) (5)%
Total operating expense 752.6 796.6 926.6 (44.0) (6)%
Trading and investing segment income $ 721.8 $ 760.2 $ 703.3 $ (38.4) (5)%
Key Metrics:(1)
DARTs 150,532 179,183 169,075 (28,651) (16)%
Average commission per trade $ 11.21 $ 11.33 $ 10.98 $ (0.12) (1)%
Margin receivables (dollars in billions) $ 5.1 $ 3.7 $ 2.7 $ 1.4 38%
End of period brokerage accounts 2,684,311 2,630,079 2,515,806 54,232 2%
Net new brokerage accounts 54,232 114,273 142,541 (60,041) *
Customer assets (dollars in billions) $ 176.2 $ 150.5 $ 110.1 $ 25.7 17%
Net new brokerage assets (dollars in billions) $ 8.1 $ 7.2 $ 3.9 $ 0.9 *
Brokerage related cash (dollars in billions) $ 24.5 $ 20.4 $ 15.8 $ 4.1 20%
* Percentage not meaningful.
(1) The prior periods presented have been updated to exclude international local market trading.
Our trading and investing segment generates revenue from brokerage and banking relationships with
investors and from market making and corporate services activities. This segment generates five main sources of
revenue: net operating interest income; commissions; fees and service charges; principal transactions; and other
revenues. Other revenues include results from our software and services for managing equity compensation plans
from our corporate customers, as we ultimately service retail investors through these corporate relationships.
2010 Compared to 2009
Trading and investing segment income decreased 5% to $721.8 million for the year ended December 31,
2010 compared to 2009. We continued to generate new brokerage accounts, ending the year with 2.7 million
accounts. Our brokerage related cash, which is one of our most profitable sources of funding, increased by $4.1
billion when compared to 2009.
Trading and investing net operating interest income increased 9% to $763.0 million for the year ended
December 31, 2010 compared to 2009. This increase was driven primarily by a decrease in yields paid on
customer deposits and an increase in the average balance of margin receivables during the period.
Trading and investing commissions decreased 21% to $431.0 million for the year ended December 31, 2010
compared to 2009. The decrease in commissions was primarily the result of a decrease in DARTs of 16% to
150,532 and a decrease in the average commission per trade of 1% to $11.21 for the year ended December 31,
2010 compared to 2009. The slight decrease in the average commission per trade was due primarily to the
elimination of the $12.99 commission tier and the per share commission applied to market trades larger than
2,000 shares, which became effective in the second quarter of 2010, partially offset by an improvement in the
product and customer mix when compared to the same period in 2009.
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