eTrade 2012 Annual Report Download - page 48

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, 2011 vs. 2010
2011 2010 Amount %
Net operating interest income $1,220.0 $1,226.3 $ (6.3) (1)%
Commissions 436.2 431.0 5.2 1%
Fees and service charges 130.4 142.4 (12.0) (8)%
Principal transactions 105.4 103.4 2.0 2%
Gains on loans and securities, net 120.2 166.2 (46.0) (28)%
Net impairment (14.9) (37.7) 22.8 (60)%
Other revenues 39.3 46.3 (7.0) (15)%
Total non-interest income 816.6 851.6 (35.0) (4)%
Total net revenue $2,036.6 $2,077.9 $(41.3) (2)%
Net Operating Interest Income
Net operating interest income decreased 1% to $1.2 billion for the year ended December 31, 2011 compared
to 2010. Average enterprise interest-earning assets increased 4% to $42.7 billion for the year ended
December 31, 2011 compared to 2010. This was primarily a result of the increases in average margin receivables
and average available-for-sale and held-to-maturity securities, offset by decreases in average loans and average
cash and equivalents.
Average enterprise interest-bearing liabilities increased 4% to $40.1 billion for the year ended December 31,
2011 compared to 2010. The increase in average enterprise interest-bearing liabilities was primarily due to
increases in average sweep deposits and average customer payables, offset by a decrease in average securities
sold under agreements to repurchase.
Enterprise net interest spread decreased by 12 basis points to 2.79% for the year ended December 31, 2011
compared to 2010, reflecting yields on average enterprise interest-earning assets and the interest rate
environment.
Commissions
Commissions revenue increased 1% to $436.2 million for the year ended December 31, 2011 compared to
2010. DART volume increased 5% to 157,475 for the year ended December 31, 2011 compared 2010. Option-
related DARTs as a percentage of total DARTs represented 20% of trading volume for the year ended
December 31, 2011 compared to 17% in 2010. Exchange-traded funds-related DARTs as a percentage of total
DARTs represented 11% of trading volume for the year ended December 31, 2011 compared to 10% in 2010.
Average commission per trade decreased 2% to $11.01 for the year ended December 31, 2011 compared to
2010. The decrease was driven by a change in customer mix; specifically customers who have a higher
commission per trade traded less during the year compared to active trader customers, who generally have lower
commissions per trade, when compared to 2010.
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