eTrade 2011 Annual Report Download - page 49

SEGMENT RESULTS REVIEW
We report operating results in two segments: 1) trading and investing; and 2) balance sheet management.
Trading and investing includes retail brokerage products and services; investor-focused banking products; market
making; and corporate services. Balance sheet management includes the management of asset allocation and
credit, liquidity and interest rate risk; loans previously originated or purchased from third parties; and customer
cash and deposits. Costs associated with certain functions that are centrally-managed are separately reported in a
corporate/other category. For more information on our segments, see Note 22—Segment Information in Item 8.
Financial Statements and Supplementary Data beginning on page 161.
Trading and Investing
The following table summarizes trading and investing financial information and key metrics as of and for
the years ended December 31, 2011, 2010 and 2009 (dollars in millions, except for key metrics):
Variance
Year Ended December 31, 2011 vs. 2010
2011 2010 2009 Amount %
Net operating interest income $ 746.1 $ 763.0 $ 699.6 $ (16.9) (2)%
Commissions 436.2 431.0 548.0 5.2 1%
Fees and service charges 128.0 139.1 185.6 (11.1) (8)%
Principal transactions 105.4 103.4 88.1 2.0 2%
Other revenues 31.2 37.9 35.5 (6.7) (18)%
Total net revenue 1,446.9 1,474.4 1,556.8 (27.5) (2)%
Total operating expense 825.9 752.6 796.6 73.3 10%
Trading and investing income $ 621.0 $ 721.8 $ 760.2 $ (100.8) (14)%
Key Metrics:
DARTs 157,475 150,532 179,183 6,943 5%
Average commission per trade $ 11.01 $ 11.21 $ 11.33 $ (0.20) (2)%
Margin receivables (dollars in billions) $ 4.8 $ 5.1 $ 3.7 $ (0.3) (6)%
End of period brokerage accounts 2,783,012 2,684,311 2,630,079 98,701 4%
Net new brokerage accounts 98,701 54,232 114,273 44,469 *
Customer assets (dollars in billions) $ 172.4 $ 176.2 $ 150.5 $ (3.8) (2)%
Net new brokerage assets (dollars in billions) $ 9.7 $ 8.1 $ 7.2 $ 1.6 *
Brokerage related cash (dollars in billions) $ 27.7 $ 24.5 $ 20.4 $ 3.2 13%
* Percentage not meaningful.
The 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 providing software and services for managing equity
compensation plans from corporate customers, as we ultimately service retail investors through these corporate
relationships.
2011 Compared to 2010
Trading and investing income decreased 14% to $621.0 million for the year ended December 31, 2011
compared to 2010. We continued to generate net new brokerage accounts, ending the year with 2.8 million
accounts. Our brokerage related cash, which is one of our most profitable sources of funding, increased by $3.2
billion when compared to 2010.
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