eTrade 2011 Annual Report Download - page 45

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The following sections describe in detail the changes in key operating factors and other changes and events
that affected net revenue, provision for loan losses, operating expense, other income (expense) and income tax
expense (benefit).
Revenue
The components of revenue and the resulting variances are as follows (dollars in millions):
Variance
Year Ended December 31, 2010 vs. 2009
2010 2009 Amount %
Net operating interest income $1,226.3 $1,260.6 $ (34.3) (3)%
Commissions 431.0 548.0 (117.0) (21)%
Fees and service charges 142.4 192.5 (50.1) (26)%
Principal transactions 103.4 88.1 15.3 17%
Gains on loans and securities, net 166.2 169.1 (2.9) (2)%
Net impairment (37.7) (89.1) * *
Other revenues 46.3 47.8 (1.5) (3)%
Total non-interest income 851.6 956.4 (104.8) (11)%
Total net revenue $2,077.9 $2,217.0 $(139.1) (6)%
* Percentage not meaningful.
Net Operating Interest Income
Net operating interest income decreased 3% to $1.2 billion for the year ended December 31, 2010 compared
to 2009. The slight decrease in net operating interest income was due primarily to a decrease in our average
interest earning assets of $3.4 billion during the year ended December 31, 2010, which was offset by an increase
in our net operating interest spread during the same period.
Average enterprise interest-earning assets decreased 8% to $41.1 billion for the year ended December 31,
2010 compared to 2009. This decrease was primarily a result of the decrease in our average loans portfolio,
average available-for-sale mortgage-backed securities and average cash and equivalents, partially offset by an
increase in average margin receivables, average available-for-sale and held-to-maturity securities.
Average enterprise interest-bearing liabilities decreased 8% to $38.6 billion for the year ended
December 31, 2010 compared to 2009. The decrease in average enterprise interest-bearing liabilities was
primarily due to decreases in average complete savings deposits and average certificates of deposit offset by an
increase in average sweep deposits.
Enterprise net interest spread increased by 19 basis points to 2.91% for the year ended December 31, 2010
compared to 2009. This increase was largely driven by a decrease in the yields paid on our deposits and lower
wholesale borrowing costs, partially offset by a decrease in higher yielding enterprise interest-earning assets.
Commissions
Commissions decreased 21% to $431.0 million for the year ended December 31, 2010 compared to 2009.
Our DART volume decreased 16% to 150,532 for the year ended December 31, 2010 compared 2009. Option-
related DARTs as a percentage of our total DARTs represented 17% of trading volume for the year ended
December 31, 2010 compared to 13% in 2009. Exchange-traded funds-related DARTs as a percentage of total
DARTs represented 10% of trading volume for the year ended December 31, 2010 compared to 14% in 2009.
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