eTrade 2012 Annual Report Download - page 49

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Fees and Service Charges
Fees and service charges decreased 8% to $130.4 million for the year ended December 31, 2011 compared
to 2010. The table below shows the components of fees and service charges and the resulting variances (dollars
in millions):
Variance
Year Ended December 31, 2011 vs. 2010
2011 2010 Amount %
Order flow revenue $ 59.1 $ 60.8 $ (1.7) (3)%
Mutual fund service fees 15.7 13.2 2.5 19%
Foreign exchange revenue 11.0 10.3 0.7 7%
Reorganization fees 13.4 9.2 4.2 46%
Advisor management fees 4.4 12.2 (7.8) (64)%
Account activity fees — 8.0 (8.0) (100)%
Other fees and service charges 26.8 28.7 (1.9) (7)%
Total fees and service charges $130.4 $142.4 $(12.0) (8)%
The decrease in fees and services charges for the year ended December 31, 2011 was primarily due to the
elimination of all account activity fees, which became effective in the second quarter of 2010, and due to a
decrease in advisor management fees. These decreases were partially offset by an increase in reorganization fee
revenue related to a large public company reorganization in the second quarter of 2011.
Principal Transactions
Principal transactions increased 2% to $105.4 million for the year ended December 31, 2011 compared to
2010. The increase in principal transactions revenue was driven by a favorable mix of trading volume and
revenue earned per share, as well as a continued focus on expanding our external customer base, when compared
to 2010.
Gains on Loans and Securities, Net
Gains on loans and securities, net were $120.2 million for the year ended December 31, 2011 compared to
$166.2 million in 2010 as shown in the following table (dollars in millions):
Variance
Year Ended December 31, 2011 vs. 2010
2011 2010 Amount %
Gains on loans, net $ 0.1 $ 6.3 $ (6.2) *
Gains on available-for-sale securities, net 124.4 160.7 (36.3) (23)%
Gains (losses) on trading securities, net (1.9) 0.2 (2.1) *
Hedge ineffectiveness (2.4) (1.0) (1.4) *
Gains on securities, net 120.1 159.9 (39.8) (25)%
Gains on loans and securities, net $120.2 $166.2 $(46.0) (28)%
* Percentage not meaningful.
Net Impairment
We recognized $14.9 million and $37.7 million of net impairment during the years ended December 31,
2011 and 2010, respectively, on certain securities in our non-agency CMO portfolio due to continued
46