Operator: Good day, everyone and welcome to the Interactive Brokers' Second Quarter 2013 Earnings Results Conference Call. This call is being recorded.
At this time, for opening remarks and introductions, I would like to turn the call over to Ms. Deborah Liston, Director of Investor Relations. Please go ahead.
Deborah Liston - IR: Thank you, operator. Welcome everyone. Hopefully, by now you've seen our second quarter earnings release which was released today after market close and is also available on our website.
Our speakers today are Thomas Peterffy, our Chairman and CEO; and Paul Brody, our Group CFO. They'll start the call with some prepared remarks about the quarter and then we'll take Q&A.
Today's call may include forward-looking statements which represent the Company's belief regarding future events and by their nature are not certain and outside the Company's control. Our actual results and financial condition may differ possibly materially from what's indicated in these forward looking statements. We just ask that you refer to disclaimer in our press release and you should also review a description of the risk factors contained in our financial reports filed with the SEC.
And now I'd like to turn the call over to Thomas Peterffy.
Thomas Peterffy - Chairman, CEO and President: Good afternoon and thank you for joining us to review our second quarter results. Before I get into other complexities I want to simply state operating results without any currency impacts, for the quarter our pre-tax income excluding currency effects was $176 million. This is composed of $123 million in Brokerage, $51 million in Market Making, and $2 in corporate. Our currency losses are $75 million which corresponds to 1.5% decrease in the volume of the global relative to the U.S. dollar on our capital of $4.8 billion.
And now to the details. I'm pleased to report that this was another record breaking quarter for our Brokerage segment which achieved pre-tax profits of $123 million, a 37% increase from a year ago and our pre-tax profit margin climbed to a new high of 58%. This performance is obscured in our consolidated results due to the lackluster performance of the Market Making unit which earned only $7.6 million. However, after removing currency effect, which I'll explain shortly, Market Making still earned a respectable $51 million in pre-tax earnings.
Our results in this segment have suffered for the past several quarters due to competitive pressures to such extent that the future of this segment has become quite a hot topic of discussion among our investors and we continue to evaluate what is in the best interest of our business as a whole and shareholder volumes. I will discuss more on this later.
But first, I would like to highlight our achievements in the Brokerage segment. In addition to record profits, we also achieved a record DART or daily average revenue trade of 506,000 this quarter, a 9% increase over the first quarter and a 19% increase over the prior year quarter.
Total customer equity grew 31% to $37.4 billion year-on-year, while this is partly attributable to the increase in market values as illustrated by the 18% year-over-year rise in the S&P. It is also the result or ability to continue attracting larger institution like (ours), which is demonstrated by the average equity per customer account, which grew by 17% to $167,000. Customers are taking advantage of our extremely low margin rates. In the first half of this year, we lent over $11 billion to our customers, at an average rate of 1.14%. In total, margin loans have growth 32% year-over-year boosting net interest income by 27%.
We are seeing similar momentum in the rate of new account openings. Our average monthly account growth for the first six months of this year, over this year -- 2,400 outpacing last year's monthly average of 1,700. Our growing number of certified customers are spreading the word about their positive experience and referring us to friends and colleagues. Word of mouth is still our largest source of new accounts, and this effect is magnified by our customer base that continues to expand which now totals over 224,000 accounts.
To give you some perspective on the size of our business today, on the average day in the first half of 2013, our customers traded over 300 million shares, 1 million options, 460,000 futures and $11 billion of forex. Our commissions are among the lowest in the industry of those products. During the second quarter our average stock trade contained nearly 1,400 shares at the commission of $2.25. The average option trade contained 10 contracts of $6.80 commission and there were 3.5 half contracts to the average futures trade at the commission of $6.29. Please keep in mind that these numbers include exchange fees and our average (lowers) from 100 exchanges which have – some of which we have very different fee structure.
Our average account holder who trades over 500 times a year understands the value of exceptional pricing reduction, industrial commission and financing rates, superior technologies and sophisticated trading tools. These differentiators have not only earned IB number of awards, but have also contributed to an ever-increasing awareness on financial professional that IB is rapidly becoming a strong contender amongst brokers that serve financial advisors and provide prime Brokerage services.
We remain true to our growth strategy of focusing on semi active traders and investors as opposed to the masses and still our customer base has become quite diversified with respect to geography and segment. Only 44% of our customers live in the U.S. and less than 60% are individual customers. We are making great headway in attracting institutional accounts, with introducing brokers, financial advisers, proprietary traders and hedge funds being our fastest growing segment in that order looking at it from a point of view of account growth.
All these account types require specialized tools, which we have been developing and refining over time. For instance, financial advisors value the use of having automated trade allocation and position rebalancing over many client accounts, as well as our Model Portfolios technology and our Money Manager Marketplace. Hedge funds take advantage of advanced tools like our BookTrader, Market Scanner, BasketTrader and OptionTrader to name a few in addition to over (50 holder types and algos). While we have not introduced any critical new product this quarter, we have been working on enhancements to our client technology, which we believe can be a significant growth for the right customer segment.
For example, EmployeeTrack is our turnkey solution for compliance officers of financial organizations that are required to monitor their employee's productivity. We have recently added more features that make this an even more robust tool. Compliance officers can now screen for certain outliers such as number of trades greater than a certain amount, profit or loss outside of a given range and they can also restrict or apply trading in certain symbols.
In addition, our EmployeeTrack technology allows us to consolidate account data for clients that have accounts of other brokers. We also have a number of other important technology developments in the pipeline which will be announced in the quarters to come.
Now, turning to the Market Making segment; Market Making conditions improved from the first quarter. Although, the improvement in our trading gains was hampered by currency fluctuations that moved against us. As a result of our currency hedging strategy, in which we diversify our equity of nearly $5 billion across a basket of 16 currencies, that we call the GLOBAL, we record a transaction loss when we report our results in U.S. dollars if the dollar has strengthened against the GLOBAL.
This was again the case at the end of the quarter as the U.S. dollar continued to rally, pulled up by rising rates, in wake of the Fed Chairman's comment past month that the Central Bank would begin to pair back monetary stimulus.
In the second quarter, we saw modest improvement in certain trends that benefit our trading gains. Operative rose in June, dropping 20 for the first time this year, through mostly -- most recently by investor concerns over the aforementioned Fed comments, regarding the currency parity easing program.
The average week for the quarter totaled 15, which was 9% higher than the first quarter. The ratio actual to imply volatility which is directly correlated to trading gains also rose from 76 in the first quarter to 95 in the second.
This volatile environment also drove an increase in training volumes across the globe. Exchange traded option volumes increased 13% in the U.S. and increased 11% globally for the second quarter. By comparison our firms total option volume increased by 10%. As a result our firms market share decreased from 12% to 11.8% in the U.S. and was unchanged at 9.4% GLOBAL.
In the Market Making segment our option volumes increased only 9% during the second quarter which drove our market share in that segment from 6.4% to 6.2% in the U.S. and from 6% to 5.9% GLOBAL.
As I mentioned earlier the positive trends in volatility and volumes were partially offset by unfavorable currency movements, which resulted in $75 million translation loss. $43 million of this loss is net of the trading gains and the remaining $32 million is reported below the line in comprehensive income. Yet in the regard of currency effects trading gains totaled $102 million, 19% lower than the year-ago quarter.
Overall, we did not achieve our target 10% pre-tax return on equity this quarter, even though we continued to pay, that is our market maker equity this quarter, even though we continued to pay the recurring 10% dividend from Market Making capital. As a result, we have slowly been reducing capital in this segment.
Due to the competitive pressures I have been discussing on the last several calls, we are continuing to diminish our footprint in Market Making. We have been scaling back our participation in certain products and certain exchanges and in the second quarter, I have been reallocating headcount to our growing Brokerage business, but this is a slow gradual process and we are not rushing to exit this business. We do not know where the increase in regulatory capital requirements for banks and brokers will end up and if that will generate any opportunities for us.
In addition, our Brokerage segment benefits from the cost savings and operational efficiencies shared between these highly complementary businesses and it is important to note that this synergy allows our customers to enjoy lower commissions, superior price execution, grow global access and greater depth of securities lending inventory to name just a few.
Now, Paul Brody will give you a more thorough review of the financials.
Paul J. Brody - CFO, Treasurer, and Secretary: Thank you, Thomas. Thanks everyone for joining the call today, and as usual, I'll first review our summary results and then talk about segment highlights before we take questions. In the second quarter, we saw the continuing trend of robust growth in our Brokerage business and tepid results in the Market Making segment. Net revenues this quarter were driven by rising Brokerage commissions and net interest income, partially offset by declines in trading gains, which were exacerbated by translation losses on the strength of the U.S. dollar relative to other currencies. As a reminder, our financial statements include the GAAP accounting presentation known as comprehensive income. Comprehensive income reports all currency translation gains and losses including those that reflect changes in the U.S. dollar value of the Company's non-U.S. subsidiaries known as other comprehensive income or OCI, and these are reported in the statement of comprehensive income.
In light of the strengthening of the U.S. dollar against a number of other currencies, adding OCI to net income decreased our reported earnings per share by $0.07 for the quarter. Overall, operating metrics for the latest quarter were somewhat mixed. Volumes were up in futures and stocks and down in options, versus a year-ago quarter. Average overall daily trade volume was just shy of 1.1 million trades per day, up 16% from the second quarter of 2012. Electronic Brokerage metrics showed a healthy increase in the number of customer accounts and a strong increase in customer equity. Total and cleared customer DARTs were both up from the year-ago quarter and sequentially. Orders from cleared customers who clear and carry their positions and cash with us and contribute more revenue, accounted for 92% of total DARTs holding fairly steady with the recent quarters.
Market Making trading volume was up, although contract and share volumes were mixed across the product types. Other process of metrics such as the increase in actual to implied volatility ratio that Thomas mentioned was largely offset by losses on our currency strategy.
Net revenues were $284 million for the second quarter, up 9% from the year ago quarter. Trading gains were $59 million got the quarter negatively impacted by currency translation effects, while trading gains compared to the year ago quarter decreased by 30% excluding the currency translation trading gains would have dropped 19% from the year ago results.
Commissions and execution fees were $138 million, up 28%. Net interest income was $63 million, up 19% from the second quarter of 2012, and within that Brokerage produced $58 million and Market Making $5 million. Other income was $24 million, up 59%.
Noninterest expenses were $150 million, down 2% from the year ago quarter. Within the noninterest expense category, execution and clearing expenses totaled $65 million, down 2% from the year ago quarter as significantly lower Market Making fees largely offset increases in Brokerage fees.
Compensation expenses were $58 million, a 3% decrease from the year ago quarter. At June 30, our total headcount was 892, although consistent with both the year ago quarter and the prior year end count. However within the operating segments, we added staff in Brokerage and cut back in Market Making.
As a percentage of net revenues, total noninterest expenses were 53% and out of this number, execution and clearing expense accounted for 23% and compensation expense accounted for 20%. Our fixed expenses were 30% of net revenues.
Free cash income was $134 million, up 23% from the same quarter last year. For the quarter Brokerage accounted for 94% and Market Making accounted for 6% of the combined pre-tax income. Ex-currency effect, the contributions were 71% for Brokerage and 29% for Market Making.
In the second quarter, our overall pre-tax profit margin was 47%, that's compared to 42% in the second quarter of 2012. Brokerage pre-tax profit margin was 58%, up from 53% in the year ago quarter. The market making pre-tax profit margin was 11%, down from 26% in the year ago quarter. However, excluding translation effects, profit making pre-tax profit margin was 46% in the latest quarter.
Comprehensive diluted earnings per share were $0.14 for the quarter as compared to $0.09 for the second quarter of 2012. On a non-comprehensive basis, which excludes OCI, diluted earnings per share on net income were $0.21 for the quarter as compared to $0.17 for the same period last year.
Turning to the balance sheet, as a result of the growth in our Brokerage business and the withdrawal of capital from our Market Making operations, regular and special dividends, Brokerage continues to account for over two-thirds of our balance sheet assets. From the year ago quarter, cash and securities segregated for customers, rose 11% and secured margin lending to customers rose 33%, while positions in securities held by our Market Maker units were (paired) back by 28%.
According to our announced policy, regular quarterly dividends will continue to reduce the capital employ in the Market Making segment unless higher profitability returns. Nevertheless, our balance sheet remains highly liquid with low leverage. We actively managed our excess liquidity and we maintained significant borrowing facilities through the securities lending market and with banks. As a general practice, we hold an amount of cash on hand that provides us with a buffer, should we need immediately available funds for any reason. We also continue to maintain well over $2 billion in excess regulatory capital in our broker dealer companies around the world. Our long-term debt at June 30 remained at zero, and at June 30, our consolidated equity capital was $4.90 billion.
Segment operating results are summarized in the earnings release and of course will be more fully detailed in our quarterly 10-Q report. So, I will just highlight the noteworthy items, beginning with Electronic Brokerage. Customer trade volumes were up across all product types. Credit customer options and futures contracts volumes were up 26% and 23% respectively and stock share volume was up 54% from the year-ago quarter.
Customer accounts grew by 12%, over the total at June 30, 2012 and by 3% in the latest quarter. Total customer DARTs were 506,000, up 19% from the year-ago quarter and 9% from the first quarter of 2013. Our cleared customer DART, which generate direct revenues for the Brokerage business were 463,000, up 16% on the year-ago quarter and 10% sequentially. The average number of DARTs per account on an annualized basis was 526, up 4% from the 2012 period and 6% sequentially.
Commission revenue rose on a product mix that featured larger average trade sizes in futures and stocks and slightly smaller in options. This resulted in an overall average cleared commission of $4.50 for the quarter, 8% higher than the year ago and down 2% sequentially. These numbers reflect our success in attracting institutional customers and tend to trade in larger size.
Customer equity grew to $37.4 billion, up 31% from June 30, 2012, and up 5% sequentially. These changes took place during periods in which the S&P 500 Index rose 18% over the past year and 2% over the last quarter. Source of this growth continues to be a steady inflow of new accounts and customer deposits. In addition, our favorable financing rates have allowed us to attract customer margin borrowings.
After falling to lows in the fourth quarter of 2011, margin debits have been building steadily to $11.2 billion, 32% over the quarter end level a year ago. Customer credit balances, which increased 23% over the year ago quarter, also continued to grow progressively. So spread compression, especially in certain foreign currencies persists in restraining interest income.
Higher options and futures trade volume resulted in top line revenue from commissions and execution fees of $138 million, an increase 28% from the year ago quarter and 15% sequentially. These revenues are spread mainly across options, futures, stocks and foreign exchange. Net interest income rose to $58 million, up 27% from the second quarter of 2012 and 8% sequentially.
Low benchmark interest rates which continue to compress the spreads earned by our Brokerage unit have been offset by steadily higher customer credit allowance in each successive period and our aggressive lending rates have boosted customer margin borrowing. Our fully-paid Stock Yield Enhancement Program continues to provide an additional first of interest revenue that shared with our participating customers. Keeping pace with the increase in commission revenue, net interest income as a percentage of net revenue held steady at 27%.
With the growing customer asset base, we believe we are well positioned to benefit from a rise in interest rate. Based on current balances, we estimate that a general rise in overnight interest rates of 25 basis points would produce an additional $50 million in net interest income annually. The next 25 basis points would yield about $40 million of additional and thereafter, the increases would be less due to the fact that our rates are pegged to market benchmarks.
Execution and clearing fees expenses increased to $41 million for the quarter, up 13% from the year ago quarter and 12% sequentially in line with volume increases. Fixed expenses increased $49 million, up 7% on the year ago quarter, primarily due to higher software development related expenses. Pre-tax income from an electronic brokerage was $123 million in the second quarter, up 37% on the year ago quarter and 11% sequentially.
Turning now to Market Making, Market Making trade volume was up 14% from the prior year quarter though mixed across the product types. Options contract volume was down from 7% while futures contract volume and stock shares volume were up 47% and 57%, respectively.
Trading gains from Market Making for the second quarter of 2013 were $59 million, down 31% on a year ago quarter. Currency translation effect negatively impacted second quarter's reported earnings by $43 million, a similar effect to the year-ago quarter when reported earnings were reduced by $41 million. Our overall equity is measured in U.S. dollars, was reduced by the strengthening of the U.S. dollar against certain currencies.
More specifically, we measure the overall loss from our strategy of carrying our equity in proportion to the basket of currencies we call the GLOBAL to be about $75 million for the quarter. Because of $32 million, translation loss is reported as other comprehensive income, typically for the loss of $43 million to be included in reported earnings. To summarize this, if we eliminated all currency effects, pre-tax income from Market Making for the second quarter of 2013, would be about $51 million.
Execution and clearing fees expenses decreased to $25 million for the quarter, down 20% on the year-ago quarter, driven by lower trading volumes in options. Fixed expenses were $35 million down 4% from the year-ago quarter, primarily due to our devoting fewer software development resources to this segment.
Pre-tax income from Market Making was $8 million for the quarter, down 68% from the year-ago quarter. Taking into account the currency effects from each period, the year-over-year decrease in pre-tax income from Market Making would be 22%.
Now, I'll turn the call back over to the moderator, and we will take some questions.
Operator: Richard Repetto, Sandler O'Neill.
Richard Repetto - Sandler O'Neill: My first question is on Brokerage. So, the interest rate sensitivity that you talked about with 25 basis points equaling $50 million. I calculate on that that 25 basis points increase you'd take somewhere around 20 basis points of that to get to the $50 million or can you give us sort of how the split would be on the first and second increases?
Paul J. Brody - CFO, Treasurer, and Secretary: I can tell you in broad stroke. We take most of it on the first 25 because many current allowed holdings are in currencies with low interest rate like the dollar right now. As a result the credit rate to the customers is generally zero in those currencies. Hence as the rates rise by the first 25 basis points we capture most or all of that. As the rates continue to rise if you look at our website for example, it will show you that we based our credit interest to our customers on the benchmark rates minus some spreads say 50 basis points. So, while we recapture most of it at some point we cease to capture to all of it and then we are pegged in a spread 50 basis points spread environment. The only other thing I would add to that is that in some currencies like Australian dollar or Canadian dollar, the interest rates are already higher so as rates go up we may earn more but we also pay more immediately to those customers.
Richard Repetto - Sandler O'Neill: And then on Brokerage so your allocated it looks like around $300,000 more capital to the (book) and I'm just wondering, why you would do like the margin loan balances stayed pretty flat up slightly. I'm just trying to understand the brokerage part of the capital allocation strategy here?
Thomas Peterffy - Chairman, CEO and President: We do not allocate capital. The capital ends up in the segment where it's earned.
Richard Repetto - Sandler O'Neill: Got it. That makes sense. Then the last question, Thomas, this is the question everybody else is going to ask you to, but on the market maker, so if you're seeing – I calculate somewhere capital declining because of the dividend and so forth about 8% quarter-to-quarter down 230,000, so I guess the question is…
Thomas Peterffy - Chairman, CEO and President: 230 – what are you saying 230,000?
Richard Repetto - Sandler O'Neill: That the capital was – if you just look on Page 1 of your earnings release, there's...
Thomas Peterffy - Chairman, CEO and President: $2.53 billion?
Richard Repetto - Sandler O'Neill: Well, it's $2.6 billion. We had $4.9 billion in total equity and $2.3 billion to the broker, that leaves $2.6 billion. Last quarter, it was $2.83 billion. So, in rough numbers, it's probably rounding issues, but down about 230,000 quarter-to-quarter.
Thomas Peterffy - Chairman, CEO and President: $230 million?
Richard Repetto - Sandler O'Neill: $230 million, my mistake. You're absolutely right, $230 million. So, I guess the question is, if that's about an 8% decrease around there quarter-to-quarter, what level like – and we know you've been very – it has been important to keep the market maker overcapitalized and I know you gave the number that – the $2 billion in excess capital for the brokerage – in the BD, but the question is, at what level does it become – you can't – I don't think it can go down to 200 million or 500 million. At what level do you have to say the market maker should no longer operate, because the capital level is too low?
Thomas Peterffy - Chairman, CEO and President: As I said in my prepared remarks that we are shrinking the number of products and the number of exchanges that we're making in markets. So, as those products decrease the required capital decreases. So, basically we could be making – we could maintain the market maker on a few hundred million dollars' worth of capital on a very limited number of products.
Richard Repetto - Sandler O'Neill: So, that would be the strategy then just to continue this slow decline in capital rather than at some point say, enough, and return capital to shareholders and cease operating…
Thomas Peterffy - Chairman, CEO and President: Unless something unusual happens, that is what we have been doing and that is what we're going to continue to do. If suddenly there are great opportunities, we can imagine two things, taking some capital from the broker and put it in the market maker and if it really becomes a hopeless situation then we could take the money out of the market – all the money out of the market maker, right.
Operator: (Sean Brown, Teton Capital).
Sean Brown - Teton Capital: Congratulations on a very good quarter. I just had a quick housekeeping question around share count here at IBG Inc., level I saw that it's up some from Q1 maybe about like 1.4 million shares and I know that share grants are sort of lumpy there. And so I'm just wondering is that from share grants or is that from people I guess transferring or converting IBG Holding stock over to Inc. level?
Paul J. Brody - CFO, Treasurer, and Secretary: No, Sean it's the former. In our stock incentive plan there is the vesting period over six and a half years and the vesting occurs every May, which is as we would agree in the second quarter. So, every second quarter you're going to see the effect of shared investing and becoming part of the public flows.
Sean Brown - Teton Capital: So it was basically restricted stock before and now it's just common stock?
Paul J. Brody - CFO, Treasurer, and Secretary: We're a restricted stock unit inside the stock incentive plan which have vested and become common stock that's exactly right.
Operator: Macrae Sykes, Gabelli & Company.
Macrae Sykes - Gabelli & Company: I was wondering Thomas if you could comment on Brokerage markets outside the U.S. where are you most optimistic about the firms positioning?
Thomas Peterffy - Chairman, CEO and President: As far as deal revenue goes it's the dilution. Our Brokerage account have grown most in Asia and secondarily in the United States.
Macrae Sykes - Gabelli & Company: You've done a terrific job with the Brokerage balances and you talked about the margin rates. I was just curious as to what the inputs really are for your customers in terms of maintaining the margin balances, i.e. what's the risk to decreased balances? I mean, are they more sensitive to market declines, volatility perhaps higher interest rates, competitive aspects. I just wanted to try to figure out sort of the sticky…?
Thomas Peterffy - Chairman, CEO and President: We did fine when the market fell, the balances have come down and then as the market rises, balances tend to rise again. I would think that the more people come – you see, many people do not believe that we really only charge what we charge. So, there are a lot of people who come to believe that I expect that these balances are going to rise.
Operator: Niamh Alexander, KBW.
Niamh Alexander - Keefe, Bruyette & Woods: If I could stick on the broker piece, Thomas or Paul maybe you could – can you share with me what the strategy is with the institutional client group at the broker, because it seems like it is growing. You gave us the order in which you're growing clients, but can you help me understand how you're selling to that group, how you're marketing to that group and what if anything has changed in your marketing strategy therefore with that group?
Thomas Peterffy - Chairman, CEO and President: Well, not a lot has changed. We are obviously – you see, we are product driven, so, we always start with product development and then we train our sales force to understand what the new aspect of the products are and then they go out and try to push those products. So, instead of being marketing driven, we are product driven and maybe that doesn't work as well in the instructional marketplace. It has worked in other things that we have done, but believe me, we're working on it very hard.
Niamh Alexander - Keefe, Bruyette & Woods: No sign of you hiring a few Wall Street sales people then there?
Thomas Peterffy - Chairman, CEO and President: Sorry?
Niamh Alexander - Keefe, Bruyette & Woods: You're not about to hire a few Wall Street sales people?
Thomas Peterffy - Chairman, CEO and President: I don't want to get into the issue of multi-million dollar compensation with sales people, I don't like the taste of it and I do not like the potential repercussions.
Niamh Alexander - Keefe, Bruyette & Woods: So, is this same as you'd been doing before, to kind of build the platform and let it sell itself as it were kind of recommendations and going so forth from there? Also, can I go back to one of your comments on the market maker, because clearly you're making money in the market maker and you're kind of trying to layout, articulate the strategy, but you didn't make a comment about potential opportunities with capital changes for banks and what not because some of your biggest competitors in the Market Making space are the banks and do you see an opportunity there or if some of them have to kind of start reallocating capital, is that one of the reasons that you're kind of doing this at a more slower pace?
Thomas Peterffy - Chairman, CEO and President: Well yes, in the Market Making space, some of our biggest competitors are banks and I think that the returns as we so well demonstrate are not so very big in Market Making in exchange to products and I assume that if capital would become more dear to them then that would -- they will consider may be leaving that business. Secondarily, some of the smaller market makers use the same banks as clearing organization and the banks take capital hits on the loans they make for these market makers. So, if they have to raise those interest rates then maybe those market makers will leave the business.
Niamh Alexander - Keefe, Bruyette & Woods: So, that's -- I guess it's maybe something that plays out over the next couple of years as oppose to couple of quarters but it's something kind of it seems like you've see potential opportunity?
Thomas Peterffy - Chairman, CEO and President: That's correct.
Niamh Alexander - Keefe, Bruyette & Woods: Then the other thing is just on the FX. I guess, you don't have quite a big impact on -- the volatility in the earnings that you're reporting and kind of clouds all the strength in the Brokerage a little bit. So, I'm just wondering if it's worth maybe reporting just non-GAAP earnings number that excludes FX on an ongoing basis. We could chat about that offline again.
Thomas Peterffy - Chairman, CEO and President: I think the (price) is exclusively for the earnings in GLOBALs.
Paul J. Brody - CFO, Treasurer, and Secretary: It would certainly be less volatile in GLOBALs. What we intend to do is show the various measures and leave it up to investors and analysts like yourselves to determine which ones they want to follow, but we do say that we -- we've been saying we as a business philosophy, we maintain our equity in this basket of currencies. And so you can do that as part of the core activity or not part of the core activity.
Thomas Peterffy - Chairman, CEO and President: Well, thank you very much.
Deborah Liston - IR: Thanks everyone for participating today. And just a reminder, this call will be available for replay on website and we also will be posting the clean version of the transcript on the website tomorrow as well. Thanks again for your time and have a great evening.
Operator: Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect and have a wonderful day.