TD Ameritrade Holding Corporation (NYSE: AMTD) has released results for the second quarter of fiscal 2013. The Company ended the quarter with a record $517 billion in total client assets, driven by its continued double-digit organic client asset growth rate and market appreciation.
The Company's results for the quarter ended Mar. 31, 2013 include the following:(1)
- Net income of $144 million, or $0.26 per diluted share
- Net new client assets of approximately $13 billion, an annualized growth rate of 11 percent
- Average client trades per day of approximately 378,000, an activity rate of 6.5 percent(2)
- Net revenues of $679 million, 55 percent of which were asset-based
- Record market fee-based revenue of $62 million, up 38 percent year-over-year
- Pre-tax income of $231 million, or 34 percent of net revenues
- EBITDA(3) of $279 million, or 41 percent of net revenues
- Interest rate sensitive assets(4) of $88 billion, up 10 percent year-over-year
- Record client assets of approximately $517 billion
"Halfway through fiscal 2013, following the two best quarters for asset gathering in our history, we have gathered a record $29 billion in net new client assets. In addition, we have increased our market fee-based revenue for the first six months by 32 percent year-over-year and kept our expenses well in check," said Fred Tomczyk, president and chief executive officer. "While retail investor sentiment has improved, a large number of investors remain cautious in this environment, and yet we continue to execute well against our strategy and on the items we can control."
"Over the last five years, we have gathered more than $170 billion in net new client assets, despite facing ongoing challenges from market and economic conditions, bringing our total client assets to over $500 billion for the first time in our history," said Bill Gerber, executive vice president and chief financial officer. "Remaining disciplined on expenses as we invest in the future and continuing to generate strong free cash flow provides us with considerable flexibility to take advantage of opportunities as they present themselves."
Capital Deployment
The Company has declared a $0.09 per
share quarterly cash dividend, payable on May 15, 2013 to all holders of
record of common stock as of May 1, 2013.
Company Hosts Conference Call
TD Ameritrade will host its
March Quarter conference call this morning, Apr. 16, 2013, at 8:30 a.m.
EDT (7:30 a.m. CDT). Participants may listen to the call by dialing
877-881-2595. The Company will also webcast the conference live at www.amtd.com
and will make all accompanying materials available to participants prior
to the call. A phone replay of the call will be available by dialing
855-859-2056 and entering the Conference ID 22315975 beginning at 11:30
a.m. EDT (10:30 a.m. CDT) on Apr. 16, 2013. This replay will be
available until 11:59 p.m. EDT (10:59 p.m. CDT) on Apr. 23, 2013.
Interested parties may also view an archived version of the webcast,
which will be available on www.amtd.com
immediately following the call.
The company asks that interested parties visit or subscribe to newsfeeds at www.amtd.com for the most up-to-date corporate financial information, presentation announcements, transcripts and archives. The company also communicates this information via Twitter, @TDAmeritradePR. Web site links, corporate titles and telephone numbers provided in this release, although correct when published, may change in the future.
AMTD-E
About TD Ameritrade Holding Corporation
Millions of
investors and independent registered investment advisors (RIAs) have
turned to TD Ameritrade's (NYSE: AMTD) technology,
people
and education
to help make investing and trading easier to understand and do. Online
or over the phone. In a branch or with an independent RIA. First-timer
or sophisticated trader. Our clients want to take control, and we help
them decide how - bringing Wall Street to Main Street for nearly 38
years. An official
sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams,
TD Ameritrade has time and again been recognized
as a leader in investment services. Please visit TD Ameritrade's newsroom
or www.amtd.com,
or follow @TDAmeritradePR
for more information.
Safe Harbor
This document contains forward-looking
statements within the meaning of the federal securities laws. We intend
these forward-looking statements to be covered by the safe harbor
provisions of the federal securities laws. In particular, any
projections regarding our future revenues, expenses, earnings, capital
expenditures, effective tax rates, client trading activity, accounts or
stock price, as well as the assumptions on which such expectations are
based, are forward-looking statements. These statements reflect only our
current expectations and are not guarantees of future performance or
results. These statements involve risks, uncertainties and assumptions
that could cause actual results or performance to differ materially from
those contained in the forward-looking statements. These risks,
uncertainties and assumptions include, but are not limited to: general
economic and political conditions and other securities industry risks,
fluctuations in interest rates, stock market fluctuations and changes in
client trading activity, credit risk with clients and counterparties,
increased competition, systems failures, delays and capacity
constraints, network security risks, liquidity risks, new laws and
regulations affecting our business, regulatory and legal matters and
uncertainties and other risk factors described in our latest Annual
Report, as amended, on Form 10-K/A, filed with the SEC on Feb. 4, 2013
and our latest Quarterly Report on Form 10-Q filed thereafter. These
forward-looking statements speak only as of the date on which the
statements were made. We undertake no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent required
by the federal securities laws.
1 Please see the Glossary of Terms, located in "Investor" section of www.amtd.com for more information on how these metrics are calculated.
2 Funded account activity rate (AR%). Average client trades per day during the period divided by the average number of total funded accounts during the period.
3 See attached reconciliation of non-GAAP financial measures.
4 Interest rate-sensitive assets consist of spread-based assets and money market mutual funds. Ending balances as of March 31, 2013.
Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org) /NFA (www.nfa.futures.org).
TD AMERITRADE HOLDING CORPORATION | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
In millions, except per share amounts | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction-based revenues: | ||||||||||||||||||||
Commissions and transaction fees | $ | 287 | $ | 257 | $ | 292 | $ | 544 | $ | 566 | ||||||||||
Asset-based revenues: | ||||||||||||||||||||
Interest revenue | 116 | 118 | 108 | 234 | 219 | |||||||||||||||
Brokerage interest expense | (2 | ) | (2 | ) | (1 | ) | (3 | ) | (3 | ) | ||||||||||
Net interest revenue | 114 | 116 | 107 | 231 | 216 | |||||||||||||||
Insured deposit account fees | 200 | 205 | 209 | 405 | 414 | |||||||||||||||
Investment product fees | 62 | 56 | 46 | 117 | 90 | |||||||||||||||
Total asset-based revenues | 376 | 377 | 362 | 753 | 720 | |||||||||||||||
Other revenues | 16 | 17 | 19 | 33 | 41 | |||||||||||||||
Net revenues | 679 | 651 | 673 | 1,330 | 1,327 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Employee compensation and benefits | 178 | 168 | 174 | 346 | 347 | |||||||||||||||
Clearing and execution costs | 27 | 24 | 24 | 51 | 44 | |||||||||||||||
Communications | 29 | 28 | 27 | 57 | 55 | |||||||||||||||
Occupancy and equipment costs | 40 | 39 | 37 | 79 | 75 | |||||||||||||||
Depreciation and amortization | 20 | 20 | 18 | 41 | 35 | |||||||||||||||
Amortization of acquired intangible assets | 22 | 23 | 23 | 45 | 46 | |||||||||||||||
Professional services | 33 | 34 | 44 | 67 | 89 | |||||||||||||||
Advertising | 76 | 52 | 84 | 128 | 140 | |||||||||||||||
Other | 17 | 22 | 23 | 38 | 48 | |||||||||||||||
Total operating expenses | 442 | 410 | 454 | 852 | 879 | |||||||||||||||
Operating income | 237 | 241 | 219 | 478 | 448 | |||||||||||||||
Other expense (income): | ||||||||||||||||||||
Interest on borrowings | 6 | 6 | 7 | 12 | 14 | |||||||||||||||
Gain on sale of investments | - | (2 | ) | - | (2 | ) | - | |||||||||||||
Total other expense (income) | 6 | 4 | 7 | 10 | 14 | |||||||||||||||
Pre-tax income | 231 | 237 | 212 | 468 | 434 | |||||||||||||||
Provision for income taxes | 87 | 90 | 75 | 177 | 145 | |||||||||||||||
Net income | $ | 144 | $ | 147 | $ | 137 | $ | 291 | $ | 289 | ||||||||||
Earnings per share - basic | $ | 0.26 | $ | 0.27 | $ | 0.25 | $ | 0.53 | $ | 0.53 | ||||||||||
Earnings per share - diluted | $ | 0.26 | $ | 0.27 | $ | 0.25 | $ | 0.53 | $ | 0.52 | ||||||||||
Weighted average shares outstanding - basic | 549 | 546 | 549 | 547 | 549 | |||||||||||||||
Weighted average shares outstanding - diluted | 554 | 551 | 554 | 552 | 555 | |||||||||||||||
Dividends declared per share | $ | 0.09 | $ | 0.59 | $ | 0.06 | $ | 0.68 | $ | 0.12 | ||||||||||
TD AMERITRADE HOLDING CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
In millions | ||||||||
(Unaudited) | ||||||||
Mar. 31, 2013 | Sept. 30, 2012 | |||||||
Assets: | ||||||||
Cash and cash equivalents | $ | 1,218 | $ | 915 | ||||
Short-term investments | 4 | 154 | ||||||
Segregated cash and investments | 4,384 | 4,030 | ||||||
Broker/dealer receivables | 1,299 | 1,110 | ||||||
Client receivables, net | 8,850 | 8,647 | ||||||
Goodwill and intangible assets | 3,354 | 3,399 | ||||||
Other | 1,411 | 1,258 | ||||||
Total assets | $ | 20,520 | $ | 19,513 | ||||
Liabilities and stockholders' equity: | ||||||||
Liabilities: | ||||||||
Broker/dealer payables | $ | 2,316 | $ | 1,992 | ||||
Client payables | 11,517 | 10,728 | ||||||
Notes payable | 165 | - | ||||||
Long-term debt | 1,079 | 1,345 | ||||||
Other | 1,031 | 1,023 | ||||||
Total liabilities | 16,108 | 15,088 | ||||||
Stockholders' equity | 4,412 | 4,425 | ||||||
Total liabilities and stockholders' equity | $ | 20,520 | $ | 19,513 | ||||
TD AMERITRADE HOLDING CORPORATION | ||||||||||
SELECTED OPERATING DATA | ||||||||||
(Unaudited) | ||||||||||
Quarter Ended | Six Months Ended | |||||||||
Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | ||||||
Key Metrics: | ||||||||||
Net new assets (in billions) | $12.9 | $15.6 | $10.8 | $28.5 | $21.0 | |||||
Net new asset growth rate (annualized) | 11% | 13% | 11% | 12% | 11% | |||||
Average client trades per day | 378,096 | 334,035 | 387,571 | 355,884 | 377,485 | |||||
Profitability Metrics: | ||||||||||
Operating margin | 34.9% | 37.0% | 32.5% | 35.9% | 33.8% | |||||
Pre-tax margin | 34.0% | 36.4% | 31.5% | 35.2% | 32.7% | |||||
Return on client assets (annualized) | 0.18% | 0.20% | 0.20% | 0.19% | 0.21% | |||||
Return on average stockholders' equity (annualized) | 13.2% | 13.3% | 13.0% | 13.2% | 13.9% | |||||
EBITDA(1) as a percentage of net revenues | 41.1% | 43.9% | 38.6% | 42.6% | 39.9% | |||||
Debt and Liquidity Metrics: | ||||||||||
Interest on borrowings (in millions) | $6 | $6 | $7 | $12 | $14 | |||||
Average debt outstanding (in billions) | $1.2 | $1.2 | $1.3 | $1.2 | $1.3 | |||||
Leverage ratio (average debt/annualized EBITDA(1)) | 1.1 | 1.0 | 1.2 | 1.1 | 1.2 | |||||
Interest coverage ratio (EBITDA(1)/interest on borrowings) | 46.5 | 47.7 | 37.1 | 47.2 | 37.8 | |||||
Liquid assets - management target(1) (in billions) | $0.7 | $0.8 | $0.9 | $0.7 | $0.9 | |||||
Liquid assets - regulatory threshold(1) (in billions) | $1.3 | $1.3 | $1.5 | $1.3 | $1.5 | |||||
Cash and cash equivalents (in billions) | $1.2 | $1.9 | $1.0 | $1.2 | $1.0 | |||||
Transaction-Based Revenue Metrics: | ||||||||||
Total trades (in millions) | 22.7 | 20.4 | 24.0 | 43.1 | 47.0 | |||||
Average commissions and transaction fees per trade(2) | $12.63 | $12.62 | $12.15 | $12.62 | $12.03 | |||||
Average client trades per funded account (annualized) | 16.0 | 14.3 | 17.1 | 15.2 | 16.7 | |||||
Activity rate - funded accounts | 6.5% | 5.8% | 6.8% | 6.1% | 6.7% | |||||
Trading days | 60.0 | 61.0 | 62.0 | 121.0 | 124.5 | |||||
Spread-Based Asset Metrics: | ||||||||||
Average interest-earning assets (in billions) | $15.5 | $15.1 | $15.7 | $15.3 | $14.7 | |||||
Average insured deposit account balances (in billions) | 67.1 | 64.2 | 58.4 | 65.6 | 58.6 | |||||
Average spread-based balance (in billions) | $82.6 | $79.3 | $74.1 | $80.9 | $73.3 | |||||
Net interest revenue (in millions) | $114 | $116 | $107 | $231 | $216 | |||||
Insured deposit account fee revenue (in millions) | 200 | 205 | 209 | 405 | 414 | |||||
Spread-based revenue (in millions) | $314 | $321 | $316 | $636 | $630 | |||||
Avg. annualized yield - interest-earning assets | 2.95% | 3.02% | 2.69% | 2.99% | 2.88% | |||||
Avg. annualized yield - insured deposit account fees | 1.19% | 1.25% | 1.42% | 1.22% | 1.39% | |||||
Net interest margin (NIM) | 1.52% | 1.58% | 1.69% | 1.55% | 1.69% | |||||
Interest days | 90 | 92 | 91 | 182 | 183 | |||||
Fee-Based Investment Metrics: | ||||||||||
Money market mutual fund fees: | ||||||||||
Average balance (in billions) | $5.2 | $5.1 | $5.0 | $5.1 | $5.4 | |||||
Average annualized yield | 0.01% | 0.05% | 0.04% | 0.03% | 0.06% | |||||
Fee revenue (in millions) | $0 | $1 | $1 | $1 | $2 | |||||
Market fee-based investment balances: | ||||||||||
Average balance (in billions) | $105.7 | $94.9 | $79.9 | $100.3 | $76.0 | |||||
Average annualized yield | 0.23% | 0.23% | 0.23% | 0.23% | 0.23% | |||||
Fee revenue (in millions) | $62 | $55 | $45 | $116 | $88 | |||||
Average fee-based investment balances (in billions) | $110.9 | $100.0 | $84.9 | $105.4 | $81.4 | |||||
Average annualized yield | 0.22% | 0.22% | 0.22% | 0.22% | 0.22% | |||||
Investment product fee revenue (in millions) | $62 | $56 | $46 | $117 | $90 | |||||
Client Account and Client Asset Metrics: | ||||||||||
New accounts opened | 197,000 | 174,000 | 183,000 | 371,000 | 323,000 | |||||
Funded accounts (beginning of period) | 5,836,000 | 5,764,000 | 5,645,000 | 5,764,000 | 5,617,000 | |||||
Funded accounts (end of period) | 5,880,000 | 5,836,000 | 5,703,000 | 5,880,000 | 5,703,000 | |||||
Percentage change during period | 1% | 1% | 1% | 2% | 2% | |||||
Client assets (beginning of period, in billions) | $480.8 | $472.3 | $406.3 | $472.3 | $378.7 | |||||
Client assets (end of period, in billions) | $516.8 | $480.8 | $452.4 | $516.8 | $452.4 | |||||
Percentage change during period | 7% | 2% | 11% | 9% | 19% | |||||
(1) See attached reconciliation of non-GAAP financial measures. | ||||||||||
(2) Average commissions and transaction fees per trade excludes TD Waterhouse UK business. | ||||||||||
NOTE: See Glossary of Terms on the Company's web site at www.amtd.com for definitions of the above metrics. | ||||||||||
TD AMERITRADE HOLDING CORPORATION | ||||||||||
SELECTED OPERATING DATA | ||||||||||
(Unaudited) | ||||||||||
Quarter Ended | Six Months Ended | |||||||||
Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | ||||||
Net Interest Revenue: | ||||||||||
Segregated cash: | ||||||||||
Average balance (in billions) | $4.5 | $3.8 | $5.6 | $4.2 | $4.8 | |||||
Average annualized yield | 0.13% | 0.17% | 0.07% | 0.15% | 0.06% | |||||
Interest revenue (in millions) | $1 | $2 | $1 | $3 | $1 | |||||
Client margin balances: | ||||||||||
Average balance (in billions) | $8.5 | $8.7 | $7.9 | $8.6 | $7.8 | |||||
Average annualized yield | 3.99% | 4.02% | 4.06% | 4.00% | 4.19% | |||||
Interest revenue (in millions) | $85 | $89 | $81 | $174 | $166 | |||||
Securities borrowing/lending | ||||||||||
Average securities borrowing balance (in billions) | $1.0 | $0.9 | $0.8 | $0.9 | $0.7 | |||||
Average securities lending balance (in billions) | $2.2 | $1.9 | $1.8 | $2.0 | $1.8 | |||||
Interest revenue (in millions) | $30 | $27 | $26 | $56 | $51 | |||||
Interest expense (in millions) | (2) | (2) | (1) | (2) | (2) | |||||
Net interest revenue - securities borrowing/lending (in millions) | $28 | $25 | $25 | $54 | $49 | |||||
Other cash and interest-earning investments: | ||||||||||
Average balance (in billions) | $1.5 | $1.7 | $1.4 | $1.6 | $1.4 | |||||
Average annualized yield | 0.07% | 0.07% | 0.09% | 0.07% | 0.11% | |||||
Interest revenue - net (in millions) | $0 | $0 | $0 | $1 | $1 | |||||
Client credit balances: | ||||||||||
Average balance (in billions) | $9.1 | $9.2 | $10.1 | $9.1 | $9.4 | |||||
Average annualized cost | 0.01% | 0.01% | 0.01% | 0.01% | 0.02% | |||||
Interest expense (in millions) | ($0) | ($0) | ($0) | ($1) | ($1) | |||||
Average interest-earning assets (in billions) | $15.5 | $15.1 | $15.7 | $15.3 | $14.7 | |||||
Average annualized yield | 2.95% | 3.02% | 2.69% | 2.99% | 2.88% | |||||
Net interest revenue (in millions) | $114 | $116 | $107 | $231 | $216 | |||||
NOTE: See Glossary of Terms on the Company's web site at www.amtd.com for definitions of the above metrics. | ||||||||||
TD AMERITRADE HOLDING CORPORATION | |||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||||||||||||||||||||
Dollars in millions | |||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||
Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | |||||||||||||||||||||||||||||||||||
$ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | ||||||||||||||||||||||||||||||
EBITDA (1) | |||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 279 | 41.1 | % | $ | 286 | 43.9 | % | $ | 260 | 38.6 | % | $ | 566 | 42.6 | % | $ | 529 | 39.9 | % | |||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (20 | ) | (2.9 | %) | (20 | ) | (3.1 | %) | (18 | ) | (2.7 | %) | (41 | ) | (3.1 | %) | (35 | ) | (2.6 | %) | |||||||||||||||||||
Amortization of acquired intangible assets | (22 | ) | (3.2 | %) | (23 | ) | (3.5 | %) | (23 | ) | (3.4 | %) | (45 | ) | (3.4 | %) | (46 | ) | (3.5 | %) | |||||||||||||||||||
Interest on borrowings | (6 | ) | (0.9 | %) | (6 | ) | (0.9 | %) | (7 | ) | (1.0 | %) | (12 | ) | (0.9 | %) | (14 | ) | (1.1 | %) | |||||||||||||||||||
Provision for income taxes | (87 | ) | (12.8 | %) | (90 | ) | (13.8 | %) | (75 | ) | (11.1 | %) | (177 | ) | (13.3 | %) | (145 | ) | (10.9 | %) | |||||||||||||||||||
Net income | $ | 144 | 21.2 | % | $ | 147 | 22.6 | % | $ | 137 | 20.4 | % | $ | 291 | 21.9 | % | $ | 289 | 21.8 | % | |||||||||||||||||||
As of | |||||||||||||||||||||||||||||||||||||||
Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | |||||||||||||||||||||||||||||||||||
| 2013 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||||||||||||||||||||||
Liquid Assets - Management Target (2) | |||||||||||||||||||||||||||||||||||||||
Liquid assets - management target | $ | 706 | $ | 774 | $ | 1,054 | $ | 993 | $ | 917 | |||||||||||||||||||||||||||||
Plus: | Broker-dealer cash and cash equivalents | 719 | 841 | 406 | 387 | 507 | |||||||||||||||||||||||||||||||||
Trust company cash and cash equivalents | 84 | 556 | 95 | 74 | 75 | ||||||||||||||||||||||||||||||||||
Investment advisory cash and cash equivalents | 24 | 15 | 11 | 25 | 18 | ||||||||||||||||||||||||||||||||||
Less: | Corporate short-term investments | - | - | (150 | ) | (126 | ) | (50 | ) | ||||||||||||||||||||||||||||||
Excess broker-dealer regulatory net capital | (315 | ) | (334 | ) | (501 | ) | (443 | ) | (441 | ) | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,218 | $ | 1,852 | $ | 915 | $ | 910 | $ | 1,026 | |||||||||||||||||||||||||||||
Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||||||||||||||||||||||
Liquid Assets - Regulatory Threshold (2) | |||||||||||||||||||||||||||||||||||||||
Liquid assets - regulatory threshold | $ | 1,288 | $ | 1,337 | $ | 1,611 | $ | 1,554 | $ | 1,485 | |||||||||||||||||||||||||||||
Plus: | Broker-dealer cash and cash equivalents | 719 | 841 | 406 | 387 | 507 | |||||||||||||||||||||||||||||||||
Trust company cash and cash equivalents | 84 | 556 | 95 | 74 | 75 | ||||||||||||||||||||||||||||||||||
Investment advisory cash and cash equivalents | 24 | 15 | 11 | 25 | 18 | ||||||||||||||||||||||||||||||||||
Less: | Corporate short-term investments | - | - | (150 | ) | (126 | ) | (50 | ) | ||||||||||||||||||||||||||||||
Excess trust company Tier 1 capital | (8 | ) | (10 | ) | (10 | ) | (10 | ) | (10 | ) | |||||||||||||||||||||||||||||
Excess broker-dealer regulatory net capital | (889 | ) | (887 | ) | (1,048 | ) | (994 | ) | (999 | ) | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,218 | $ | 1,852 | $ | 915 | $ | 910 | $ | 1,026 | |||||||||||||||||||||||||||||
Note: The term "GAAP" in the following explanation refers to generally accepted accounting principles in the United States. | |||||||||||||||||||||||||||||||||||||||
(1) | EBITDA (earnings before interest, taxes, depreciation and amortization) is considered a non-GAAP financial measure as defined by SEC Regulation G. We consider EBITDA an important measure of our financial performance and of our ability to generate cash flows to service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA is used as the denominator in the consolidated leverage ratio calculation for covenant purposes under our holding company's senior revolving credit facility. EBITDA eliminates the non-cash effect of tangible asset depreciation and amortization and intangible asset amortization. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities. | ||||||||||||||||||||||||||||||||||||||
(2) | Our liquid assets metrics are considered non-GAAP financial measures as defined by SEC Regulation G. We include the excess capital of our broker-dealer and trust company subsidiaries in the calculation of our liquid assets metrics, rather than simply including broker-dealer and trust company cash and cash equivalents, because capital requirements may limit the amount of cash available for dividend from the broker-dealer and trust company subsidiaries to the parent company. Excess capital, as defined below, is generally available for dividend from the broker-dealer and trust company subsidiaries to the parent company. We consider our liquid assets metrics to be important measures of our liquidity and of our ability to fund corporate investing and financing activities. The liquid assets metrics should be considered as supplemental measures of liquidity, rather than as substitutes for cash and cash equivalents. | ||||||||||||||||||||||||||||||||||||||
We define "liquid assets - management target" as the sum of (a) corporate cash and cash equivalents, (b) corporate short-term investments and (c) regulatory net capital of (i) our clearing broker-dealer subsidiary in excess of 10% of aggregate debit items and (ii) our introducing broker-dealer subsidiaries in excess of a minimum operational target established by management ($50 million in the case of our primary introducing broker-dealer, TD Ameritrade, Inc.). "Liquid assets - management target" is based on more conservative measures of broker-dealer net capital than "liquid assets - regulatory threshold" (defined below) because we prefer to maintain significantly more conservative levels of net capital at the broker-dealer subsidiaries than the regulatory thresholds require. We consider "liquid assets - management target" to be a measure that reflects our liquidity that would be readily available for corporate investing or financing activities under normal operating circumstances. | |||||||||||||||||||||||||||||||||||||||
We define "liquid assets - regulatory threshold" as the sum of (a) corporate cash and cash equivalents, (b) corporate short-term investments, (c) regulatory net capital of (i) our clearing broker-dealer subsidiary in excess of 5% of aggregate debit items and (ii) our introducing broker-dealer subsidiaries in excess of the applicable "early warning" net capital requirement and (d) Tier 1 capital of our trust company in excess of the minimum dollar requirement. We consider "liquid assets - regulatory threshold" to be a measure that reflects our liquidity that would be available for corporate investing or financing activities under unusual operating circumstances, such as the need to provide funding for significant strategic business transactions. |
TD Ameritrade Holding Corporation
Kim Hillyer, 402-574-6523
Director,
Communications
kim.hillyer@tdameritrade.com
or
Jeff
Goeser, 402-597-8464
Director, Investor Relations and Finance
jeffrey.goeser@tdameritrade.com