EXHIBIT 99.1


INTERACTIVE BROKERS GROUP ANNOUNCES 2Q2020 RESULTS

— — —

DILUTED EARNINGS PER SHARE OF $0.40, ADJUSTED DILUTED EARNINGS PER SHARE OF $0.57.
PRETAX INCOME OF $222 MILLION ON $539 MILLION IN NET REVENUES.
ADJUSTED PRETAX INCOME OF $310 MILLION ON $523 MILLION IN ADJUSTED NET REVENUES1.
DECLARES QUARTERLY DIVIDEND OF $0.10 PER SHARE.

GREENWICH, CONN, July 21, 2020 — Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, reported diluted earnings per share of $0.40 for the quarter ended June 30, 2020 compared to $0.43 for the same period in 2019, and adjusted diluted earnings per share of $0.57 for both this quarter and for the year-ago quarter.

Net revenues were $539 million and income before income taxes was $222 million this quarter, compared to net revenues of $413 million and income before income taxes of $225 million for the same period in 2019. Adjusted net revenues were $523 million and adjusted income before income taxes was $310 million this quarter, compared to adjusted net revenues of $488 million and adjusted income before income taxes of $300 million for the same period in 2019.

Financial Highlights

•
Commission revenue showed strong growth, increasing $98 million, or 55%, from the year-ago quarter on higher customer trading volumes within an active trading environment worldwide.

•
Net interest income decreased $63 million, or 24%, from the year-ago quarter as the average Federal Funds effective rate decreased to 0.06% from 2.40% in the year-ago quarter.

•
Other income increased $86 million from the year-ago quarter. This increase was mainly comprised of (1) $88 million related to our strategic investment in Up Fintech Holding Limited (“Tiger Brokers”), which swung to a $14 million mark-to-market gain this quarter from a $74 million mark-to-market loss in the same period in 2019; and (2) $22 million related to our currency diversification strategy, which gained $16 million this quarter compared to a loss of $6 million in the same period in 2019; partially offset by (3) $18 million related to our U.S. government securities portfolio, which swung to a $13 million mark-to-market loss this quarter from a $5 million mark-to-market gain in the same period in 2019.

•
General and administrative expenses increased $106 million from the year-ago quarter, primarily due to $103 million in expenses incurred to compensate certain affected customers in connection with their losses resulting from the West Texas Intermediate Crude Oil contracts settling at a price below zero on April 20, 2020, as described below.

•
41% pretax profit margin for this quarter, down from 54% in the year-ago quarter. 59% adjusted pretax profit margin for this quarter, down from 61% in the year-ago quarter.

•
Total equity of $8.3 billion.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on September 14, 2020 to shareholders of record as of September 1, 2020.
1 See the reconciliation of non-GAAP financial measures starting on page 11.
1
Business Highlights

•
Customer equity grew 33% from the year-ago quarter to $203.2 billion.
•
Customer credits increased 30% from the year-ago quarter to $71 billion.
•
Customer margin loans decreased 3% from the year-ago quarter to $24.9 billion.
•
Customer accounts increased 36% from the year-ago quarter to 876 thousand.
•
Total DARTs2 increased 111% from the year-ago quarter to 1.75 million.
•
Cleared DARTs increased 111% from the year-ago quarter to 1.56 million.

West Texas Intermediate Crude Oil Event

On April 20, 2020 the energy markets exhibited extraordinary price activity in the New York Mercantile Exchange (“NYMEX”) West Texas Intermediate Crude Oil contract. The price of the May 2020 physically-settled contract dropped to an unprecedented negative price of $37.63. This price was the basis for determining the settlement price for cash-settled contracts traded on the CME Globex and also for a separate, expiring cash-settled futures contract listed on the Intercontinental Exchange Europe (“ICE Europe”). Several of the Company’s customers held long positions in these CME and ICE Europe contracts, and as a result they incurred losses, including losses in excess of the equity in their accounts. The Company fulfilled the required variation margin settlements with the respective clearinghouses on behalf of its customers. The Company subsequently compensated certain affected customers in connection with their losses resulting from the contracts settling at a price below zero. As a result, the Company recognized an aggregate loss of approximately $104 million.

COVID-19 Pandemic

In March 2020, the World Health Organization recognized the outbreak of Coronavirus Disease 2019 (COVID-19) caused by a novel strain of the coronavirus as a pandemic. The pandemic affects all countries in which we operate. The response of governments and societies to the COVID-19 pandemic, which includes temporary closures of certain businesses; social distancing; travel restrictions, “shelter in place” and other governmental regulations; and reduced consumer spending due to job losses, has significantly impacted market volatility and general economic conditions.

The COVID-19 pandemic has precipitated unprecedented market conditions with equally unprecedented social and community challenges. Amid these challenges:

•
The Company is committed to ensuring the highest levels of service to its customers so they can effectively manage their assets, portfolios and risks. The Company’s technical infrastructure has withstood the challenges presented by the extraordinary volatility and increased market volume.

•
The Company can run its business from alternate office locations and/or remotely if a Company office must temporarily close due to the spread of the COVID-19 pandemic.

•
As announced on April 9, 2020, the Company donated $5 million to assist efforts to provide food and support for people affected by the COVID-19 pandemic in the United States as well as to advance medical solutions.

The effects of the COVID-19 pandemic on the Company’s financial results for the second quarter of 2020 can be summarized as follows: (1) higher commission revenue due to increased trading activity and a higher rate of customer accounts opened during this period; and (2) lower net interest income resulting from lower benchmark interest rates and smaller aggregate margin loans extended to customers as they de-leveraged their exposures.

The impact of the COVID-19 pandemic on the Company’s future financial results could be significant but currently cannot be quantified, as it depends on numerous evolving factors that currently cannot be accurately predicted, including, but not limited to the duration and spread of the pandemic; its impact on our customers, employees and vendors; governmental actions in response to the pandemic; and the overall impact of the pandemic in the economy and society; among other factors. Any of these events could have a materially adverse effect on the Company’s financial results.
2 Daily average revenue trades (DARTs) are based on customer orders.

2
Effects of Foreign Currency Diversification

In connection with our currency diversification strategy, we base our net worth in GLOBALs, a basket of 14 major currencies in which we hold our equity. In this quarter, our currency diversification strategy increased our comprehensive earnings by $38 million, as the U.S. dollar value of the GLOBAL increased by approximately 0.50%. The effects of the currency diversification strategy are reported as components of (1) Other Income ($16 million) and (2) Other Comprehensive Income ($22 million).

As a result of a periodic assessment, we have decided to reduce the number of currencies in the GLOBAL and realign the relative weights of each component to better reflect the global diversification of our business going forward. We removed the Danish krone (DKK), the Mexican peso (MXN), the Norwegian krone (NOK) and the Swedish krona (SEK). The new composition contains 10 currencies, down from 14 in the prior composition. The new composition took effect as of the close of business on June 30, 2020 and the conversion to the new targeted currency holdings took place over a short time period. The detailed component changes were disclosed with the June Monthly Brokerage Metrics on July 1, 2020. A copy of that press release is available through the Investor Relations section of the Interactive Brokers website at www.interactivebrokers.com/ir.

Regulatory Matters

The Company has provided information to FINRA, the SEC, and the CFTC concerning its historical anti-money laundering and Bank Secrecy Act practices and procedures, and these agencies have indicated that they believe that these historical practices and procedures were inadequate. The Company periodically reviews these practices and procedures to make them more robust and to respond to changing regulatory standards; and we have been enhancing and augmenting them, including hiring additional personnel, over the past several years. 

We are in discussions with these agencies to settle matters arising from their reviews, and while no agreements have been finalized, we believe that such settlements will entail monetary payments and the retention of an independent consultant to review the implementation of the Company’s enhanced practices and procedures. The Company has established a reserve that it deems adequate for such settlements. The Company is also cooperating with a Department of Justice inquiry concerning these matters, and while its outcome cannot be predicted, we do not believe that this inquiry is likely to have a materially adverse effect on the Company’s financial results.

3

Conference Call Information:
Interactive Brokers Group, Inc. will hold a conference call with investors today, July 21, 2020, 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 affiliates provide automated trade execution and custody of securities, commodities and foreign exchange around the clock on over 135 markets in numerous countries and currencies, from a single IBKR Integrated Investment Account to clients worldwide. We service individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation has enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Barron’s ranked Interactive Brokers #1 with 5 out of 5 stars in its February 24, 2020, Best Online Broker Review.

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.


For Interactive Brokers Group, Inc. Investors: Nancy Stuebe, 203-618-4070 or Media: Kalen Holliday, 203-913-1369.
4
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
OPERATING DATA
TRADE VOLUMES:
(in 000's, except %)
   
Cleared
      
Non-Cleared
                      
Avg. Trades
   
Customer
  
%
  
Customer
  
%
  
Principal
  
%
  
Total
  
%
  
per U.S.
Period
  
Trades
  
Change
  
Trades
  
Change
  
Trades
  
Change
  
Trades
  
Change
  
Trading Day
2017
  
              265,501
      
       14,835
      
       31,282
      
     311,618
      
            1,246
2018
  
              328,099
  
24%
  
       21,880
  
47%
  
       18,663
  
 (40%)
  
     368,642
  
18%
  
            1,478
2019
  
              302,289
  
 (8%)
  
       26,346
  
20%
  
       17,136
  
 (8%)
  
     345,771
  
 (6%)
  
            1,380
                                     
2Q2019
  
                74,269
      
         6,827
      
         3,853
      
       84,949
      
            1,348
2Q2020
  
              153,212
  
106%
  
       13,752
  
101%
  
         7,252
  
88%
  
     174,216
  
105%
  
            2,765
                                     
1Q2020
  
              128,564
      
       11,373
      
         4,879
      
     144,816
      
            2,336
2Q2020
  
              153,212
  
19%
  
       13,752
  
21%
  
         7,252
  
49%
  
     174,216
  
20%
  
            2,765
CONTRACT AND SHARE VOLUMES:
(in 000's, except %)
 
TOTAL
   
Options
  
%
  
Futures1
  
%
  
Stocks
  
%
Period
  
(contracts)
  
Change
  
(contracts)
  
Change
  
(shares)
  
Change
2017
  
     395,885
      
     124,123
      
   220,247,921
    
2018
  
     408,406
  
3%
  
     151,762
  
22%
  
   210,257,186
  
 (5%)
2019
  
     390,739
  
 (4%)
  
     128,770
  
 (15%)
  
   176,752,967
  
 (16%)
                         
2Q2019
  
       96,007
      
       32,424
      
     42,995,205
    
2Q2020
  
     151,665
  
58%
  
       43,393
  
34%
  
     67,637,445
  
57%
                         
1Q2020
  
     138,206
      
       49,204
      
     62,298,036
    
2Q2020
  
     151,665
  
10%
  
       43,393
  
 (12%)
  
     67,637,445
  
9%
ALL CUSTOMERS
   
Options
  
%
  
Futures1
  
%
  
Stocks
  
%
Period
  
(contracts)
  
Change
  
(contracts)
  
Change
  
(shares)
  
Change
2017
  
     293,860
      
     118,427
      
   213,108,299
    
2018
  
     358,852
  
22%
  
     148,485
  
25%
  
   198,909,375
  
 (7%)
2019
  
     349,287
  
 (3%)
  
     126,363
  
 (15%)
  
   167,826,490
  
 (16%)
                         
2Q2019
  
       85,999
      
       31,803
      
     40,396,674
    
2Q2020
  
     140,787
  
64%
  
       42,582
  
34%
  
     65,818,295
  
63%
                         
1Q2020
  
     128,842
      
       48,437
      
     59,897,045
    
2Q2020
  
     140,787
  
9%
  
       42,582
  
 (12%)
  
     65,818,295
  
10%
CLEARED CUSTOMERS
   
Options
  
%
  
Futures1
  
%
  
Stocks
  
%
Period
  
(contracts)
  
Change
  
(contracts)
  
Change
  
(shares)
  
Change
2017
  
     253,304
      
     116,858
      
   209,435,662
    
2018
  
     313,795
  
24%
  
     146,806
  
26%
  
   194,012,882
  
 (7%)
2019
  
     302,068
  
 (4%)
  
     125,225
  
 (15%)
  
   163,030,500
  
 (16%)
                         
2Q2019
  
       71,524
      
       31,564
      
     39,086,399
    
2Q2020
  
     124,010
  
73%
  
       42,259
  
34%
  
     62,937,898
  
61%
                         
1Q2020
  
     112,916
      
       47,979
      
     57,653,853
    
2Q2020
  
     124,010
  
10%
  
       42,259
  
 (12%)
  
     62,937,898
  
9%

1
Includes options on futures.

5
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
OPERATING DATA, CONTINUED

PRINCIPAL TRANSACTIONS
   
Options
  
%
  
Futures1
  
%
  
Stocks
  
%
Period
  
(contracts)
  
Change
  
(contracts)
  
Change
  
(shares)
  
Change
2017
  
     102,025
      
         5,696
      
       7,139,622
    
2018
  
       49,554
  
 (51%)
  
         3,277
  
 (42%)
  
     11,347,811
  
59%
2019
  
       41,452
  
 (16%)
  
         2,407
  
 (27%)
  
       8,926,477
  
 (21%)
                         
2Q2019
  
       10,008
      
           621
      
       2,598,531
    
2Q2020
  
       10,878
  
9%
  
           811
  
31%
  
       1,819,150
  
 (30%)
                         
1Q2020
  
         9,364
      
           767
      
       2,400,991
    
2Q2020
  
       10,878
  
16%
  
           811
  
6%
  
       1,819,150
  
 (24%)

1
Includes options on futures.

CUSTOMER STATISTICS
Year over Year
    
2Q2020
    
2Q2019
  
% Change
   Total Accounts (in thousands)
  
              876
    
              645
  
36%
   Customer Equity (in billions)1
$
            203.2
  
$
            153.1
  
33%
                 
   Cleared DARTs (in thousands)
  
            1,558
    
              740
  
111%
   Total Customer DARTs (in thousands)
  
            1,746
    
              828
  
111%
                 
Cleared Customers
                
   Commission per Cleared Commissionable Order2
$
             2.81
  
$
             3.68
  
 (24%)
   Cleared Avg. DARTs per Account (Annualized)
              480
    
              293
  
64%
   Net Revenue per Avg. Account (Annualized)
$
            2,442
  
$
            2,863
  
 (15%)
                 
Consecutive Quarters
  
2Q2020
    
1Q2020
  
% Change
   Total Accounts (in thousands)
  
              876
    
              760
  
15%
   Customer Equity (in billions)1
$
            203.2
  
$
            160.7
  
26%
                 
   Cleared DARTs (in thousands)
  
            1,558
    
            1,301
  
20%
   Total Customer DARTs (in thousands)
  
            1,746
    
            1,454
  
20%
                 
Cleared Customers
                
   Commission per Cleared Commissionable Order2
$
             2.81
  
$
             3.30
  
 (15%)
   Cleared Avg. DARTs per Account (Annualized)
              480
    
              453
  
6%
   Net Revenue per Avg. Account (Annualized)
$
            2,442
  
$
            3,069
  
 (20%)
 
1
Excludes non-customers.
   
2
Commissionable Order - a customer order that generates commissions.
 
6
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
NET INTEREST MARGIN
(UNAUDITED)

       
Three Months
  
Six Months
       
Ended June 30,
  
Ended June 30,
       
2020
  
2019
  
2020
  
2019
       
(in millions)
Average interest-earning assets
                        
 
Segregated cash and securities
  
$
                  45,463
  
$
                  27,313
  
$
                  38,978
  
$
                  26,452
 
Customer margin loans
    
                  22,751
    
                  26,184
    
                  25,614
    
                  25,929
 
Securities borrowed
    
                    4,911
    
                    3,991
    
                    4,420
    
                    3,840
 
Other interest-earning assets
    
                    5,157
    
                    5,105
    
                    5,501
    
                    5,095
 
FDIC sweeps1
    
                    2,990
    
                    2,012
    
                    2,745
    
                    1,924
       
$
                  81,272
  
$
                  64,605
  
$
                  77,258
  
$
                  63,240
                             
Average interest-bearing liabilities
                        
 
Customer credit balances
  
$
                  66,673
  
$
                  51,777
  
$
                  62,564
  
$
                  50,838
 
Securities loaned
    
                    4,972
    
                    4,131
    
                    4,852
    
                    3,913
 
Other interest-bearing liabilities
    
                         43
    
                         19
    
                       375
    
                         15
       
$
                  71,688
  
$
                  55,927
  
$
                  67,791
  
$
                  54,766
                             
Net interest income
                        
 
Segregated cash and securities, net
  
$
                         39
  
$
                       145
  
$
                       145
  
$
                       281
 
Customer margin loans2
    
                         65
    
                       188
    
                       204
    
                       362
 
Securities borrowed and loaned, net
    
                         80
    
                         48
    
                       142
    
                       100
 
Customer credit balances, net2
    
                           6
    
                     (147)
    
                       (63)
    
                     (284)
 
Other net interest income1/3
    
                         11
    
                         33
    
                         37
    
                         63
   
Net interest income3
  
$
                       201
  
$
                       267
  
$
                       465
  
$
                       522
                             
Net interest margin ("NIM")
    
0.99%
    
1.66%
    
1.21%
    
1.66%
                             
Annualized yields
                        
 
Segregated cash and securities
    
0.34%
    
2.13%
    
0.75%
    
2.14%
 
Customer margin loans
    
1.15%
    
2.88%
    
1.60%
    
2.82%
 
Customer credit balances
    
-0.04%
    
1.14%
    
0.20%
    
1.13%
 
1
Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program. This item is not recorded in the Company's consolidated statements of financial condition. Income derived from program deposits is reported in other net interest income in the table above.
                             
2
Interest income and interest expense on customer margin loans and customer credit balances, respectively, are calculated on daily cash balances within each customer’s account on a net basis, which may result in an offset of balances across multiple account segments (e.g., between securities and commodities segments).   
                             
3
Includes income from financial instruments that has the same characteristics as interest, but is reported in other fees and services and other income in the Company’s consolidated statements of comprehensive income.  For the three and six months ended June 30, 2020 and 2019, $4 million, $3 million, $8 million, and $6 million were reported in other fees and services, respectively. For the three and six months ended June 30, 2020 and 2019, $1 million, $5 million, $5 million, and $11 million were reported in other income, respectively.

7
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

       
Three Months
  
Six Months
       
Ended June 30,
  
Ended June 30,
       
2020
  
2019
  
2020
  
2019
       
 (in millions, except share and per share data)
Revenues:
                        
 
Commissions
  
$
276
  
$
178
  
$
545
  
$
351
 
Other fees and services1/2
    
40
    
35
    
78
    
70
 
Other income (loss)1/3
    
27
    
(59)
    
(4)
    
45
   
Total non-interest income
    
343
    
154
    
619
    
466
                             
 
Interest income
    
244
    
432
    
613
    
840
 
Interest expense
    
(48)
    
(173)
    
(161)
    
(335)
   
Total net interest income
    
196
    
259
    
452
    
505
                             
   
Total net revenues
    
539
    
413
    
1,071
    
971
                             
Non-interest expenses:
                        
 
Execution, clearing and distribution fees
76
    
63
    
153
    
124
 
Employee compensation and benefits
82
    
75
    
162
    
146
 
Occupancy, depreciation and amortization
17
    
14
    
34
    
28
 
Communications
    
7
    
6
    
13
    
12
 
General and administrative
    
132
    
26
    
169
    
50
 
Customer bad debt
    
3
    
4
    
10
    
47
   
Total non-interest expenses
    
317
    
188
    
541
    
407
                             
Income before income taxes
    
222
    
225
    
530
    
564
Income tax expense
    
15
    
15
    
33
    
30
                             
Net income
    
207
    
210
    
497
    
534
Net income attributable to noncontrolling interests
  
175
    
178
    
419
    
453
                             
Net income available for common stockholders
$
32
  
$
32
  
$
78
  
$
81
                             
Earnings per share:
                        
 
Basic
  
$
0.41
  
$
0.43
  
$
1.01
  
$
1.08
 
Diluted
  
$
0.40
  
$
0.43
  
$
1.00
  
$
1.07
                             
Weighted average common shares outstanding:
                  
 
Basic
    
77,357,609
    
75,868,349
    
77,054,388
    
75,486,825
 
Diluted
    
78,031,462
    
76,594,934
    
77,799,963
    
76,288,342

1
In the first quarter of 2020, we changed the presentation of our consolidated statements of income to better align with our business strategy. Previously reported amounts have been adjusted to conform with the new presentation.
                       
2
Includes market data fees, account activity fees, risk exposure fees, order flow income from options exchange mandated programs, and revenues from other fees and services.
                       
3
Includes gains (losses) from principal transactions; the impact of our currency diversification strategy; gains (losses) from our equity method investments, other revenue not directly attributable to our core business offerings.

8
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

       
Three Months
  
Six Months
       
Ended June 30,
  
Ended June 30,
       
2020
  
2019
  
2020
  
2019
         (in millions, except share and per share data) 
                             
Comprehensive income:
                        
 
Net income available for common stockholders
$
32
  
$
32
  
$
78
  
$
81
 
Other comprehensive income:
                        
   
Cumulative translation adjustment, before income taxes
                             4
    
                             4
    
                     (3)
    
                      3
   
Income taxes related to items of other comprehensive income
  
                              -
    
                              -
    
                       -
    
                       -
 
Other comprehensive income (loss), net of tax
  
                             4
    
                             4
    
                     (3)
    
                      3
Comprehensive income available for common stockholders
$
36
  
$
36
  
$
75
  
$
84
                             
Comprehensive earnings per share:
                        
 
Basic
  
$
0.46
  
$
0.47
  
$
0.97
  
$
1.11
 
Diluted
  
$
0.46
  
$
0.46
  
$
0.96
  
$
1.10
                             
Weighted average common shares outstanding:
                        
 
Basic
    
77,357,609
    
75,868,349
    
77,054,388
    
75,486,825
 
Diluted
    
78,031,462
    
76,594,934
    
77,799,963
    
76,288,342
                             
                             
Comprehensive income attributable to noncontrolling interests:
                  

Net income attributable to noncontrolling interests
  
$
175
  
$
178
  
$
419
  
$
453

Other comprehensive income - cumulative translation adjustment
    
18
    
12
    
(13)
    
11
Comprehensive income attributable to noncontrolling interests
$
193
  
$
190
  
$
406
  
$
464


9
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)

           
June 30,
2020
  
December 31,
2019
           
(in millions)
Assets
                  
Cash and cash equivalents
        
$
                 3,115
  
$
2,882
Cash - segregated for regulatory purposes
          
               12,684
    
                 9,400
Securities - segregated for regulatory purposes
        
               33,450
    
               17,824
Securities borrowed
          
                 4,836
    
                 3,916
Securities purchased under agreements to resell
        
                 1,367
    
                 3,111
Financial instruments owned, at fair value
          
                    889
    
                 1,916
Receivables from customers, net of allowance for doubtful accounts
    
               25,678
    
               31,304
Receivables from brokers, dealers and clearing organizations
    
                 1,395
    
                    685
Other assets
          
                    551
    
                    638
                     
 
Total assets
        
$
83,965
  
$
71,676
                     
Liabilities and equity
                  
                     
Liabilities
                  
Short-term borrowings
        
$
                    139
  
$
16
Securities loaned
          
                 5,856
    
                 4,410
Securities sold under agreements to repurchase
        
                      -
    
                 1,909
Financial instruments sold but not yet purchased, at fair value
    
                    234
    
                    457
Other payables:
                  
 
Customers
          
               68,796
    
               56,248
 
Brokers, dealers and clearing organizations
        
                    218
    
                    220
 
Other payables
          
                    468
    
                    476
             
               69,482
    
               56,944
                     
 
Total liabilities
          
               75,711
    
               63,736
                     
Equity
                  
Stockholders' equity
          
                 1,538
    
                 1,452
Noncontrolling interests
          
                 6,716
    
                 6,488
 
Total equity
          
                 8,254
    
                 7,940
                     
 
Total liabilities and equity
        
$
83,965
  
$
71,676
                     
   
June 30, 2020
    
December 31, 2019
Ownership of IBG LLC Membership Interests
Interests
  
 %
    
Interests
    
 %
                     
IBG, Inc.
78,057,622
  
18.7%
    
76,759,595
    
18.5%
Noncontrolling interests (IBG Holdings LLC)
338,670,642
  
81.3%
    
338,670,642
    
81.5%
                     
Total IBG LLC membership interests
416,728,264
  
100.0%
    
415,430,237
    
100.0%
10
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)

     
Three Months
  
Six Months
     
Ended June 30,
  
Ended June 30,
     
2020
  
2019
  
2020
  
2019
     
(in millions)
Adjusted net revenues1
                        
Net revenues - GAAP
  
$
539
  
$
413
  
$
1,071
  
$
971
                           
Non-GAAP adjustments
                        
 
Currency diversification strategy, net
    
(16)
    
6
    
33
    
25
 
Mark-to-market on investments2
    
                         -
    
                       69
    
                         -
    
                     (40)
Total non-GAAP adjustments
    
(16)
    
75
    
33
    
(15)
Adjusted net revenues
  
$
523
  
$
488
  
$
1,104
  
$
956
                           
Adjusted income before income taxes1
                        
Income before income taxes - GAAP
  
$
222
  
$
225
  
$
530
  
$
564
                           
Non-GAAP adjustments
                        
 
Currency diversification strategy, net
    
(16)
    
6
    
33
    
25
 
Mark-to-market on investments2
    
                         -
    
                       69
    
                         -
    
                     (40)
 
Customer compensation expense3
    
                     103
    
                         -
    
                     103
    
                         -
 
Bad debt expense4
    
                         1
    
                         -
    
                         1
    
                       42
Total non-GAAP adjustments
    
                       88
    
                       75
    
                     137
    
                       27
Adjusted income before income taxes
  
$
310
  
$
300
  
$
667
  
$
591
                           
Adjusted pre-tax profit margin
    
59%
    
61%
    
60%
    
62%

     
Three Months
  
Six Months
     
Ended June 30,
  
Ended June 30,
     
2020
  
2019
  
2020
  
2019
     
(in millions)
Adjusted net income available for common stockholders1
                  
Net income available for common stockholders - GAAP
$
32
  
$
32
  
$
78
  
$
81
                           
Non-GAAP adjustments
                        
 
Currency diversification strategy, net
    
(3)
    
1
    
6
    
5
 
Mark-to-market on investments2
    
                       (0)
    
                       13
    
                         0
    
                       (7)
 
Customer compensation expense3
    
                       19
    
                         -
    
                       19
    
                         -
 
Bad debt expense4
    
                         0
    
                       (0)
    
                         0
    
                         8
 
Income tax effect of above adjustments5
    
                       (4)
    
                       (3)
    
                       (5)
    
                       (1)
Total non-GAAP adjustments
    
                       12
    
                       11
    
                       20
    
                         4
Adjusted net income available for common stockholders
$
44
  
$
43
  
$
98
  
$
85
Note: Amounts may not add due to rounding.

11
     
Three Months
  
Six Months
     
Ended June 30,
  
Ended June 30,
     
2020
  
2019
  
2020
  
2019
     
(in dollars)
Adjusted diluted EPS1
                        
Diluted EPS - GAAP
  
$
0.40
  
$
0.43
  
$
1.00
  
$
1.07
                           
Non-GAAP adjustments
                        
 
Currency diversification strategy, net
    
(0.04)
    
0.01
    
0.08
    
0.06
 
Mark-to-market on investments2
    
(0.00)
    
0.16
    
0.00
    
(0.10)
 
Customer compensation expense3
    
0.25
    
0.00
    
0.24
    
0.00
 
Bad debt expense4
    
0.00
    
(0.00)
    
0.00
    
0.10
 
Income tax effect of above adjustments
    
(0.05)
    
(0.04)
    
(0.07)
    
(0.01)
Total non-GAAP adjustments
    
0.16
    
0.14
    
0.26
    
0.05
Adjusted diluted EPS
  
$
0.57
  
$
0.57
  
$
1.26
  
$
1.12
                           
Diluted weighted average common shares outstanding
78,031,462
    
76,594,934
    
77,799,963
    
76,288,342
Note: Amounts may not add due to rounding.

Note: The term “GAAP” in the following explanation refers to generally accepted accounting principles in the United States.
1 Adjusted net revenues, adjusted income before income taxes, adjusted net income available for common stockholders and adjusted diluted earnings per share (“EPS”) are non-GAAP financial measures as defined by SEC Regulation G.
•
We define adjusted net revenues as net revenues adjusted to remove the effect of our GLOBAL currency diversification strategy and our net mark-to-market gains (losses) on investments2.
•
We define adjusted income before income taxes as income before income taxes adjusted to remove the effect of our GLOBAL currency diversification strategy, our net mark-to-market gains (losses) on investments, customer compensation expenses3 and unusual bad debt expense4.
•
We define adjusted net income available to common stockholders as net income available for common stockholders adjusted to remove the after-tax effects of our GLOBAL currency diversification strategy, the mark-to-market on investments, customer compensation expenses, and unusual bad debt expense attributable to IBG, Inc.
Management believes these non-GAAP items are important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook and may be useful to investors and analysts in evaluating the operating performance of the business and facilitating a meaningful comparison of our results in the current period to those in prior and future periods. Our GLOBAL currency diversification strategy, our mark-to-market on investments and unusual bad debt expense are excluded because management does not believe they are indicative of our underlying core business performance. Adjusted net revenues, adjusted income before income taxes, adjusted net income available to common stockholders and adjusted diluted EPS should be considered in addition to, rather than as a substitute for, GAAP net revenues, income before income taxes, net income attributable to common stockholders and diluted EPS.
 2 Mark-to-market on investments represents the net mark-to-market gains (losses) on our U.S. government securities portfolio, which are typically held to maturity, investments in equity securities that do not qualify for equity method accounting which are measured at fair value, and equity securities taken over by the Company from customers related to losses on margin loans described below.
12
 3 Customer compensation expenses were incurred to compensate certain affected customers in connection with their losses resulting from the West Texas Intermediate Crude Oil contracts settling at a price below zero on April 20, 2020, as described above.
 4 Unusual bad debt expense includes material losses on margin loans resulting from unusual events that occur in the marketplace. For the six months ending June 30, 2019, unusual bad debt expense reflects losses recognized on margin lending to a small number of our brokerage customers that had taken relatively large positions in a security listed on a major U.S. exchange, which lost a substantial amount of its value in a very short timeframe. For the three and six months ended June 30, 2020, unusual bad debt expense reflects losses incurred by futures customers in excess of the equity in their accounts, related the West Texas Intermediate Crude Oil event described above.
 5 The income tax effect is estimated using the corporate income tax rates applicable to the Company.

13