Interactive Brokers Group Announces 2012 Results

  Interactive Brokers Group Announces 2012 Results

Reports Comprehensive Earnings Per Share of $0.92, Income before Taxes of $527
   Million on $1,131 Million in Net Revenues, and Earnings Per Share on Net
                               Income of $0.89

                Declares Quarterly Dividend of $0.10 Per Share

Business Wire

GREENWICH, Conn. -- January 15, 2013

Interactive Brokers Group, Inc. (NASDAQ GS: IBKR) an automated global
electronic broker and market maker, today reported diluted earnings per share
on a comprehensive basis of $0.92 for the year ended December 31, 2012,
compared to diluted earnings per share on a comprehensive basis of $1.31 for
2011.

Reported results on a comprehensive basis reflect the GAAP convention adopted
in 2011 that requires the reporting of currency translation results contained
in Other Comprehensive Income as part of reportable earnings.

On a non-comprehensive basis, which excludes the effect of changes in the U.S.
dollar value of the Company’s non-U.S. subsidiaries, the Company reported
diluted earnings per share on net income of $0.89 for the year ended December
31, 2012, compared to diluted earnings per share on net income of $1.37 for
2011.

Net revenues were $1,131 million and income before income taxes was $527
million for the year, compared to net revenues of $1,358 million and income
before income taxes of $741 million for 2011.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly
cash dividend of $0.10 per share. This dividend is payable on March 14, 2013
to shareholders of record as of March 1, 2013.

                             Business Highlights

  *47% pretax profit margin for 2012.
  *51% Electronic Brokerage pretax profit margin for 2012.
  *41% Market Making pretax profit margin for 2012.
  *Customer equity grew 31% from 2011 to $32.9 billion and customer accounts
    increased 11%.
  *Cleared DARTs decreased 6% from 2011 to 384,000.

                               Segment Overview

Electronic Brokerage

Electronic Brokerage segment income before income taxes decreased 8%, to $342
million, in 2012. Customer accounts grew 11% from the prior year and customer
equity increased 31% during 2012. Commissions and execution fees decreased
10%, consistent with the subdued trading environment. Net interest income grew
9% from the prior year. Pretax profit margin was 51% in 2012, down from 54% in
2011. Total DARTs^(1) for cleared and execution-only customers decreased 7% to
413,000 in 2012, compared to 444,000 during 2011. Cleared DARTs were 384,000
in 2012, 6% lower than in 2011.

Market Making

Market Making segment income before income taxes decreased 54%, to $189
million, in 2012. This decrease was driven by lower exchange volumes, lower
actual-to-implied volatility and a swing in currency translation gains. In
2012, our currency diversification strategy negatively impacted the income
statement by $39 million, compared to an $11 million gain in 2011. Including
balance sheet effects, our currency strategy resulted in a slightly smaller
loss than last year. Currency translation effects are reported as part of
Trading Gains in the Market Making segment. Pretax profit margin decreased to
41% in 2012 from 59% in 2011. Market Making options contract volume decreased
9% in 2012.

Effects of Foreign Currency Diversification

As a global broker and market maker trading on exchanges around the world and
transacting in multiple currencies, we are exposed to fluctuations in foreign
exchange rates. We actively manage this exposure by maintaining our net worth
in GLOBALs, a basket of 16 currencies in which we hold our equity. In 2012,
this currency strategy decreased our profits, as measured in U.S. dollars, as
the U.S. dollar value of the GLOBAL decreased by approximately 0.4%. The
effects of our currency strategy are reported as components of (1) Market
Making Trading Gains and (2) Other Comprehensive Income, described below.

Comprehensive Income

Reported results on a comprehensive basis reflect the Company’s adoption of
U.S. GAAP guidance ^(2) issued in June 2011 that requires the presentation of
a Statement of Comprehensive Income, replacing the former Statement of Income.
The Statement of Comprehensive Income reports currency translation results
that are a component of Other Comprehensive Income (“OCI”) directly in this
statement. Previously, OCI was reported as a component of changes in Total
Equity in the Statement of Financial Condition.

^(1) Daily average revenue trades (DARTs) are based on customer orders.

^(2) Accounting Standards Update 2011-05, Comprehensive Income.

Conference Call Information:

Interactive Brokers Group will hold a conference call with investors today,
January 15, 2013, at 4:30 p.m. ET to discuss its quarterly results. Investors
who would like to listen to the conference call live should dial 877-324-1965
(U.S. domestic) and 631-291-4512 (international). The number should be dialed
approximately ten minutes prior to the start of the conference call. Ask for
the “Interactive Brokers Conference Call.”

The conference call will also be accessible simultaneously, and through
replays, as an audio webcast through the Investor Relations section of the
Interactive Brokers web site, www.interactivebrokers.com/ir.

About Interactive Brokers Group, Inc.:

Interactive Brokers Group, Inc., together with its subsidiaries, is an
automated global electronic broker that specializes in catering to financial
professionals by offering state-of-the-art trading technology, superior
execution capabilities, worldwide electronic access, and sophisticated risk
management tools at exceptionally low costs. The brokerage trading platform
utilizes the same innovative technology as the Company’s market making
business, which specializes in routing orders and executing and processing
trades in securities, futures, foreign exchange instruments, bonds and funds
on more than 100 electronic exchanges and trading venues around the world. As
a market maker, we provide liquidity at these marketplaces and, as a broker,
we provide professional traders and investors with electronic access to
stocks, options, futures, forex, bonds and mutual funds from a single IB
Universal Account^SM. Employing proprietary software on a global
communications network, Interactive Brokers is continuously integrating its
software with a growing number of exchanges and trading venues into one
automatically functioning, computerized platform that requires minimal human
intervention.

Cautionary Note Regarding Forward-Looking Statements:

The foregoing information contains certain forward-looking statements that
reflect the company's current views with respect to certain current and future
events and financial performance. These forward-looking statements are and
will be, as the case may be, subject to many risks, uncertainties and factors
relating to the company's operations and business environment which may cause
the company's actual results to be materially different from any future
results, expressed or implied, in these forward-looking statements. Any
forward-looking statements in this release are based upon information
available to the company on the date of this release. The company does not
undertake to publicly update or revise its forward-looking statements even if
experience or future changes make it clear that any statements expressed or
implied therein will not be realized. Additional information on risk factors
that could potentially affect the company's financial results may be found in
the company's filings with the Securities and Exchange Commission.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES                                                         
OPERATING DATA
                                                                                         
TRADE VOLUMES:
(in 000's, except %)
                                                          Brokerage                                       
         Market                  Brokerage                 Non                                             Avg.
                                                                                                           Trades
         Making    %             Cleared     %             Cleared     %              Total       %        per
                                                                                                           U.S.
Period   Trades    Change        Trades      Change        Trades      Change         Trades      Change   Trading
                                                                                                           Day
2008     101,672                 120,195                   16,966                     238,833              944
2009     93,550    -8       %    127,338     6        %    13,636      -20        %   234,524     -2  %    934
2010     75,169    -20      %    133,658     5        %    18,732      37         %   227,559     -3  %    905
2011     63,602    -15      %    160,567     20       %    19,187      2          %   243,356     7   %    968
2012     60,421    -5       %    150,000     -7       %    16,118      -16        %   226,540     -7  %    904
                                                                                                           
4Q2011   15,093                  39,554                    5,432                      60,079               961
4Q2012   14,477    -4       %    37,300      -6       %    3,532       -35        %   55,309      -8  %    878
                                                                                                           
CONTRACT AND SHARE VOLUMES:
(in 000's,
except %)
                                                                                                           
TOTAL              Options       %           Futures*      %           Stocks         %
Period             (contracts)   Change      (contracts)   Change      (shares)       Change
2008               757,732                   108,984                   55,845,428
2009               643,380       -15     %   82,345        -24     %   75,449,891     35      %
2010               678,856       6       %   96,193        17      %   84,469,874     12      %
2011               789,370       16      %   106,640       11      %   77,730,974     -8      %
2012               698,140       -12     %   98,801        -7      %   65,872,960     -15     %
                                                                                                           
4Q2011             203,566                   26,655                    16,012,605
4Q2012             159,048       -22     %   25,591        -4      %   17,278,459     8       %
                                                                                                           
MARKET MAKING      Options       %           Futures*      %           Stocks         %
Period             (contracts)   Change      (contracts)   Change      (shares)       Change
2008               514,629                   21,544                    26,008,433
**
2009               428,810       -17     %   15,122        -30     %   26,205,229     1       %
**
2010               435,184       1       %   15,371        2       %   19,165,000     -27     %
**
2011               503,053       16      %   15,519        1       %   11,788,769     -38     %
**
2012               457,384       -9      %   12,660        -18     %   9,339,465      -21     %
**
                                                                                                           
4Q2011             135,559                   3,672                     2,687,537
**
4Q2012             102,703       -24     %   3,203         -13     %   2,361,442      -12     %
**
                                                                                                           
BROKERAGE TOTAL    Options       %           Futures*      %           Stocks         %
Period             (contracts)   Change      (contracts)   Change      (shares)       Change
2008               243,103                   87,440                    29,836,995
2009               214,570       -12     %   67,223        -23     %   49,244,662     65      %
2010               243,672       14      %   80,822        20      %   65,304,874     33      %
2011               286,317       18      %   91,121        13      %   65,942,205     1       %
2012               240,756       -16     %   86,141        -5      %   56,533,495     -14     %
                                                                                                           
4Q2011             68,007                    22,983                    13,325,068
4Q2012             56,345        -17     %   22,388        -3      %   14,917,017     12      %

*   Includes options on futures
     In Brazil, an equity option contract typically represents 1 share of the
     underlying stock; however, the typical minimum trading quantity is 100
**   contracts. To make a fair comparison to volume at other exchanges, we
     have adopted a policy of reporting Brazilian equity options contracts
     divided by their trading quantity of 100.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
OPERATING DATA, CONTINUED
                                                                 
BROKERAGE    Options       %        Futures*      %        Stocks       %
CLEARED
Period       (contracts)   Change   (contracts)   Change   (shares)     Change
2008         77,207                 85,599                 26,334,752
2009         93,868        22  %    66,241        -23  %   46,627,344   77   %
2010         103,054       10  %    79,144        19   %   62,077,741   33   %
2011         145,993       42  %    89,610        13   %   63,098,072   2    %
2012         144,539       -1  %    84,794        -5   %   54,371,351   -14  %
                                                                        
4Q2011       32,960                 22,587                 12,556,217
4Q2012       36,602        11  %    21,952        -3   %   14,348,785   14   %
                                                                        
* Includes options on futures

BROKERAGE STATISTICS                                              
(in 000's, except % and where noted)
                                                    4Q2012   4Q2011   % Change
Total Accounts                                      210      189      11    %
Customer Equity (in billions) *                     $32.9    $25.1    31    %
                                                                      
Cleared DARTs                                       378      412      -8    %
Total Customer DARTs                                407      447      -9    %
                                                                      
                                                                      
Cleared Customers (in $'s, except DART per
account)
Commission per DART                                 $4.24    $4.07    4     %
DART per Avg. Account (Annualized)                  457      556      -18   %
Net Revenue per Avg. Account (Annualized)           $3,233   $3,435   -6    %
                                                                      
* Excludes non-customers
                                                                      

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(UNAUDITED)
                                                              
                                 Three Months          Twelve Months
                                 Ended December 31,    Ended December 31,
                                 2012       2011       2012         2011
                                 (in millions)
                                                                    
Electronic      Net revenues     $172.1     $166.4     $670.4       $691.5
Brokerage
                Non-interest     84.8      80.7      328.7       321.2    
                expenses
                                                                    
                Income (loss)
                before income    $87.3     $85.7     $341.7      $370.3   
                taxes
                                                                    
                Pre-tax profit   51     %   52     %   51       %   54       %
                margin
                                                                    
Market Making   Net revenues     $71.8      $166.1     $459.6       $698.5
                Non-interest     63.4      75.3      271.0       285.3    
                expenses
                                                                    
                Income (loss)
                before income    $8.4      $90.8     $188.6      $413.2   
                taxes
                                                                    
                Pre-tax profit   12     %   55     %   41       %   59       %
                margin
                                                                    
Corporate*      Net revenues     $3.2       ($24.6 )   $0.5         ($31.7   )
                Non-interest     2.7       (0.3   )   3.8         10.7     
                expenses
                                                                    
                Income (loss)
                before income    $0.5      ($24.3 )   ($3.3    )   ($42.4   )
                taxes
                                                                    
                                                                    
Total           Net revenues     $247.1     $307.9     $1,130.5     $1,358.3
                Non-interest     150.9     155.7     603.5       617.2    
                expenses
                                                                    
                Income (loss)
                before income    $96.2     $152.2    $527.0      $741.1   
                taxes
                                                                    
                Pre-tax profit   39     %   49     %   47       %   55       %
                margin
                                                                    
* Corporate includes corporate related activities as well as inter-segment
eliminations.


INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
                                                
                       Three Months                  Twelve Months
                       Ended December 31,            Ended December 31,
                       2012          2011           2012        2011
                       (in millions, except share and per share data)
                                                                  
Revenues:
   Trading gains       $63.1          $150.5         $435.1       $665.2
   Commissions and     103.1          109.9          412.6        456.2
   execution fees
   Interest income     67.8           68.4           268.4        280.2
   Other income        25.6          (0.1       )   76.4         43.0       
                                                                  
      Total revenues   259.6          328.7          1,192.5      1,444.6
                                                                  
   Interest expense    12.5          20.8          62.0         86.3       
                                                                  
      Total net        247.1         307.9         1,130.5      1,358.3    
      revenues
                                                                  
Non-interest
expenses:
   Execution and       58.5           66.9           251.0        281.3
   clearing
   Employee
   compensation and    64.3           55.1           244.5        216.3
   benefits
   Occupancy,
   depreciation and    9.9            9.8            38.8         37.1
   amortization
   Communications      6.1            5.8            23.3         23.6
   General and         12.1          18.1          45.9         58.9       
   administrative
                                                                  
      Total
      non-interest     150.9         155.7         603.5        617.2      
      expenses
                                                                  
Income before income   96.2           152.2          527.0        741.1
taxes
                                                                  
Income tax expense     (4.4       )   7.4           30.0         53.9       
                                                                  
Net income             100.6          144.8          497.0        687.2
                                                                  
Net income
attributable to        91.5          131.2         456.3        625.3      
noncontrolling
interests
                                                                  
Net income (loss)
attributable to        $9.1          $13.6         $40.7        $61.9      
common stockholders
                                                                  
                                                                  
Earnings (loss) per
share :
   Basic               $0.19         $0.29         $0.89        $1.39      
   Diluted             $0.19         $0.29         $0.89        $1.37      
                                                                  
Weighted average
common shares
outstanding:
   Basic               47,489,141     45,569,269     46,814,676   43,924,554
   Diluted             47,680,329     45,944,562     47,070,522   44,364,902
                                                                  
Comprehensive
income:
   Net income (loss)
   attributable to     $9.1           $13.6          $40.7        $61.9
   common
   stockholders
   Other
   comprehensive
   income:
      Cumulative
      translation
      adjustment,      0.9            (2.4       )   2.2          (4.5       )
      before income
      taxes
      Income taxes
      related to
      items of other   0.3           (1.0       )   0.8          (1.8       )
      comprehensive
      income
   Other
   comprehensive       0.6           (1.4       )   1.4          (2.7       )
   income (loss),
   net of tax
Comprehensive income
(loss) attributable    $9.7          $12.2         $42.1        $59.2      
to common
stockholders
                                                                  
Comprehensive income
attributable to
noncontrolling
interests:
Net income
attributable to        91.5           $131.2         $456.3       $625.3
noncontrolling
interests
Other comprehensive
income (loss) -
cumulative             7.1           (18.6      )   17.0         (27.8      )
translation
adjustment
Comprehensive income
attributable to        $98.6         $112.6        $473.3       $597.5     
noncontrolling
interests
                                                                             

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
                                                         
                                              December 31,   December 31, 2011
                                              2012
                                              (in millions)
                                                             
Assets
Cash and cash equivalents                     $1,614.6       $1,695.5
Cash and securities - segregated for          12,482.4       10,069.9
regulatory purposes
Securities purchased under agreements to      428.9          375.4
resell
Securities borrowed                           2,837.3        2,661.7
Trading assets, at fair value                 4,518.3        6,615.1
Receivables from customers, net of            9,851.0        7,024.8
allowance
Receivables from brokers, dealers and         872.3          1,397.8
clearing organizations
Other assets                                  596.1          564.2        
                                                             
        Total assets                          $33,200.9      $30,404.4    
                                                             
Liabilities and equity
                                                             
Liabilities
Trading liabilities - financial instruments   $4,286.3       $6,156.1
sold but not yet purchased, at fair value
Securities loaned                             1,840.6        1,386.1
Short-term borrowings                         110.4          6.5
Other payables:
        Customers                             21,422.0       17,300.1
        Brokers, dealers and clearing         361.8          247.4
        organizations
        Other payables                        376.5          394.9        
                                              22,160.3       17,942.4     
                                                             
Senior notes payable and senior secured       0.0            101.4
credit facility
                                                             
Redeemable noncontrolling interests           0.0            5,269.6
                                                             
Equity
Stockholders' equity                          588.7          (457.7       )
Noncontrolling interests                      4,214.6        0.0          
        Total equity                          4,803.3        (457.7       )
                                                             
        Total liabilities and equity          $33,200.9      $30,404.4    
                                                                          

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
EARNINGS PER SHARE ON COMPREHENSIVE INCOME
(UNAUDITED)
                                                           
                         Three Months                Twelve Months
                         Ended December 31,          Ended December 31,
                         2012         2011           2012         2011
                         (in millions, except share and per share data)
                                                                  
                                                                  
Net income (loss)
attributable to common   $9.1         $13.6          $40.7        $61.9
stockholders
Add (deduct) net
income attributable to   0.0          (0.4       )   1.1          (0.9       )
non-fair value
redemption rights
                                                                  
Net income (loss)
available for common     $9.1         $13.2          $41.8        $61.0
stockholders
                                                                  
Other comprehensive
income:
    Cumulative
    translation          0.9          (2.4       )   2.2          (4.5       )
    adjustment, before
    income taxes
    Income taxes
    related to items
    of other             0.3          (1.0       )   0.8          (1.8       )
    comprehensive
    income
Other comprehensive
income (loss), net of    0.6          (1.4       )   1.4          (2.7       )
tax
                                                                  
Comprehensive income
(loss) available for     $9.7         $11.8         $43.2        $58.3      
common stockholders
                                                                  
                                                                  
Comprehensive income
(loss) per share:
    Basic                $0.20        $0.26         $0.92        $1.33      
    Diluted              $0.20        $0.26         $0.92        $1.31      
                                                                  
                                                                  
Weighted average
common shares
outstanding:
    Basic                47,489,141   45,569,269     46,814,676   43,924,554
    Diluted              47,680,329   45,944,562     47,070,522   44,364,902

Contact:

Interactive Brokers Group, Inc.
Media:
Caitlin Duffy, 203-913-1369
or
Investors:
Deborah Liston, 203-618-4070
 
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