OMAHA, Neb.--(BUSINESS WIRE)--TD Ameritrade Holding Corporation (NASDAQ: AMTD) has released results for the third quarter of fiscal 2011. The Company continues to execute on its organic growth strategy, delivering strong net new client asset growth while returning 80 percent of its net income to shareholders through its stock repurchases and quarterly dividend.
The Company’s results for the quarter ended June 30, 2011 include the following (year-over-year comparisons):(1)
- Net income of $157 million, or $0.27 per diluted share, including a $0.02 per share impact of technology-related asset write-offs
- Net new client assets of $7.9 billion, an annualized growth rate of 8 percent of beginning client assets
- Average client trades per day of approximately 370,000, a decrease of 11 percent
- Net revenues of $685 million, 54 percent of which were asset-based
- Operating income of $263 million, or 38 percent of net revenues
- Pre-tax income of $254 million, or 37 percent of net revenues
- EBITDA of $302 million, or 44 percent of net revenues(2)
- Record interest rate sensitive assets of $74 billion, an increase of 16 percent(3)
- Client assets of approximately $414 billion, an increase of 28 percent
“Despite the economic uncertainty and what looks to be a seasonally slow summer, we delivered solid growth in net new assets and asset-based revenues. Year-to-date, we have gathered $29.1 billion in net new assets, an annualized growth rate of 11 percent,” said Fred Tomczyk, president and chief executive officer. “Our strong financial position enabled us to buy back close to five million shares, or one percent of our outstanding common stock. And, when that is combined with our quarterly dividend, we returned 80 percent of our quarterly net income to shareholders. We remain focused on initiatives that will drive client engagement and fuel organic growth.”
“TD Ameritrade continues to deliver solid organic growth. Interest rate-sensitive balances reached a record high, including insured deposit account assets that have nearly doubled over the past two years and now exceed $50 billion,” said Bill Gerber, executive vice president and chief financial officer. “Despite the continued near-zero interest rate environment, our net interest margin has remained relatively stable over the last four quarters. The strong growth in balances is resulting in solid asset-based revenues and positions us well for when interest rates begin to rise.”
Stock Repurchases
During the third quarter of fiscal 2011, TD Ameritrade repurchased 4.8 million shares of its common stock at an average price of $20.24 per share, for approximately $97 million. Year-to-date, the Company has used $191 million to repurchase 10 million shares at an average price of $19.05 per share. It has 20 million shares remaining on its existing stock repurchase authorization.
Quarterly Dividend
The Company also announced that it has declared a $0.05 per share quarterly cash dividend, which is payable on Aug. 16, 2011 to all holders of record of common stock as of Aug. 2, 2011.
Industry Recognition
TD Ameritrade, Inc., a TD Ameritrade Holding Corporation brokerage subsidiary, earned the highest possible rating — 5 stars — for “Customer Service,” “Trading Tools” and “Mutual Funds & Investment Products” in SmartMoney Magazine's 2011 review of discount brokers. In the June 2011 issue of SmartMoney, writers praised the Company for its breadth of research, investment options, mobile apps — including two for the iPad — and highlighted it as a top firm for exceptional customer service. The Company was also named winner in the category of “Education Materials” in SmartMoney’s search for the best brokers for foreign exchange traders, an online extension of the publication’s 2011 broker rankings.*
Company Hosts Conference Call
TD Ameritrade will host its June Quarter conference call this morning, July 19, 2011, at 7:30 a.m. CDT. Participants may listen to the call by dialing 877-881-2595. Interested parties may listen to a replay of the call by dialing 800-642-1687 and the passcode 64265381. The Company will Webcast the conference live at www.amtd.com and will make all accompanying materials available for participants to print prior to the call.
AMTD-E
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NASDAQ: 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 more than 36 years. An official sponsor of the 2012 U.S. Olympic Team, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit the TD Ameritrade newsroom or www.amtd.com 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, benefits of the thinkorswim acquisition, 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 general economic and political conditions, interest rates, market fluctuations and changes in client trading activity, increased competition, systems failures and capacity constraints, ability to service debt obligations, ability to realize the expected benefits from the thinkorswim acquisition, new laws and regulations effecting our business, regulatory and legal matters and uncertainties and other risk factors described in our latest Annual Report on Form 10-K, filed with the SEC on Nov. 19, 2010 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 See attached reconciliation of non-GAAP financial measures.
3 Interest rate sensitive assets consist of spread-based assets and money market mutual funds. Ending balances as of June 30, 2011.
Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org) /NFA (www.nfa.futures.org).
* TD Ameritrade ranked #2 of 10 Discount (Online) Brokers in SmartMoney Magazine's Annual Broker Survey in the publication's June 2011 issue. TD Ameritrade was also awarded a five-star rating (the highest available) in the Mutual Fund and Investment Products category along with two other firms, a five-star rating in the Trading Tools category along with two other firms, and a five-star rating in the Customer Service category along with one other firm. TD Ameritrade was also named winner in the category of Education Materials in SmartMoney’s search for the best brokers for foreign exchange traders, an online extension of the publication’s 2011 broker rankings. SmartMoney is a registered trademark of Dow Jones & Company, Inc.
iPad is a registered trademark of Apple Inc.
| TD AMERITRADE HOLDING CORPORATION | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| In thousands, except per share amounts | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||
| June 30, 2011 | Mar. 31, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Transaction-based revenues: | ||||||||||||||||||||
| Commissions and transaction fees | $ | 281,591 | $ | 338,320 | $ | 333,081 | $ | 912,607 | $ | 943,740 | ||||||||||
| Asset-based revenues: | ||||||||||||||||||||
| Interest revenue | 132,334 | 122,804 | 112,804 | 371,959 | 315,457 | |||||||||||||||
| Brokerage interest expense | (1,052 | ) | (1,237 | ) | (1,422 | ) | (3,581 | ) | (4,694 | ) | ||||||||||
| Net interest revenue | 131,282 | 121,567 | 111,382 | 368,378 | 310,763 | |||||||||||||||
| Insured deposit account fees | 196,817 | 187,471 | 180,075 | 562,759 | 505,370 | |||||||||||||||
| Investment product fees | 43,938 | 40,440 | 33,194 | 125,075 | 92,964 | |||||||||||||||
| Total asset-based revenues | 372,037 | 349,478 | 324,651 | 1,056,212 | 909,097 | |||||||||||||||
| Other revenues | 31,154 | 30,430 | 34,072 | 90,382 | 99,019 | |||||||||||||||
| Net revenues | 684,782 | 718,228 | 691,804 | 2,059,201 | 1,951,856 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Employee compensation and benefits | 168,564 | 169,662 | 156,251 | 500,632 | 467,767 | |||||||||||||||
| Clearing and execution costs | 22,648 | 25,119 | 22,387 | 71,566 | 68,422 | |||||||||||||||
| Communications | 27,057 | 27,811 | 27,030 | 81,782 | 76,329 | |||||||||||||||
| Occupancy and equipment costs | 36,318 | 33,153 | 35,452 | 104,663 | 104,184 | |||||||||||||||
| Depreciation and amortization | 16,914 | 16,579 | 14,499 | 49,629 | 41,573 | |||||||||||||||
| Amortization of acquired intangible assets | 24,083 | 24,073 | 25,119 | 72,747 | 75,722 | |||||||||||||||
| Professional services | 42,882 | 40,059 | 31,998 | 123,257 | 97,170 | |||||||||||||||
| Advertising | 48,109 | 81,400 | 51,596 | 204,092 | 188,359 | |||||||||||||||
| Gains on money market funds and client guarantees | - | - | (9,209 | ) | - | (11,145 | ) | |||||||||||||
| Other | 35,668 | 17,456 | 36,420 | 71,291 | 75,347 | |||||||||||||||
| Total operating expenses | 422,243 | 435,312 | 391,543 | 1,279,659 | 1,183,728 | |||||||||||||||
| Operating income | 262,539 | 282,916 | 300,261 | 779,542 | 768,128 | |||||||||||||||
| Other expense: | ||||||||||||||||||||
| Interest on borrowings | 6,916 | 7,486 | 11,197 | 25,227 | 33,764 | |||||||||||||||
| Loss on debt refinancing | 1,435 | - | - | 1,435 | 8,392 | |||||||||||||||
| Total other expense | 8,351 | 7,486 | 11,197 | 26,662 | 42,156 | |||||||||||||||
| Pre-tax income | 254,188 | 275,430 | 289,064 | 752,880 | 725,972 | |||||||||||||||
| Provision for income taxes | 96,793 | 103,762 | 109,625 | 278,778 | 247,743 | |||||||||||||||
| Net income | $ | 157,395 | $ | 171,668 | $ | 179,439 | $ | 474,102 | $ | 478,229 | ||||||||||
| Earnings per share - basic | $ | 0.28 | $ | 0.30 | $ | 0.31 | $ | 0.83 | $ | 0.81 | ||||||||||
| Earnings per share - diluted | $ | 0.27 | $ | 0.30 | $ | 0.30 | $ | 0.82 | $ | 0.80 | ||||||||||
| Weighted average shares outstanding - basic | 570,287 | 573,305 | 587,086 | 573,034 | 588,176 | |||||||||||||||
| Weighted average shares outstanding - diluted | 576,784 | 579,459 | 593,647 | 579,168 | 595,221 | |||||||||||||||
| Dividends declared per share | $ | 0.05 | $ | 0.05 | $ | - | $ | 0.15 | $ | - | ||||||||||
| TD AMERITRADE HOLDING CORPORATION | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| In thousands | ||||||
| (Unaudited) | ||||||
| June 30, 2011 | Sept. 30, 2010 | |||||
| Assets: | ||||||
| Cash and cash equivalents | $ | 1,323,646 | $ | 741,492 | ||
| Short-term investments | 3,540 | 3,592 | ||||
| Segregated cash and investments | 377,260 | 994,026 | ||||
| Broker/dealer receivables | 1,033,020 | 1,207,723 | ||||
| Client receivables | 8,714,661 | 7,393,855 | ||||
| Goodwill and intangible assets | 3,515,710 | 3,591,272 | ||||
| Other | 722,767 | 794,958 | ||||
| Total assets | $ | 15,690,604 | $ | 14,726,918 | ||
| Liabilities and stockholders' equity: | ||||||
| Liabilities: | ||||||
| Broker/dealer payables | $ | 2,083,014 | $ | 1,934,315 | ||
| Client payables | 7,269,012 | 6,810,391 | ||||
| Long-term debt | 1,290,467 | 1,302,269 | ||||
| Other | 873,039 | 908,064 | ||||
| Total liabilities | 11,515,532 | 10,955,039 | ||||
| Stockholders' equity | 4,175,072 | 3,771,879 | ||||
| Total liabilities and stockholders' equity | $ | 15,690,604 | $ | 14,726,918 | ||
| TD AMERITRADE HOLDING CORPORATION | |||||||||||||||
| SELECTED OPERATING DATA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||||
| June 30, 2011 | Mar. 31, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||
|
Key Metrics: |
|||||||||||||||
| Net new assets (in billions) | $7.9 | $11.5 | $8.9 | $29.1 | $27.9 | ||||||||||
| Net new asset growth rate (annualized) | 8 | % | 12 | % | 10 | % | 11 | % | 12 | % | |||||
| Average client trades per day | 369,716 | 439,158 | 413,461 | 393,297 | 390,369 | ||||||||||
|
Profitability Metrics: |
|||||||||||||||
| Operating margin | 38.3 | % | 39.4 | % | 43.4 | % | 37.9 | % | 39.4 | % | |||||
| Pre-tax margin | 37.1 | % | 38.3 | % | 41.8 | % | 36.6 | % | 37.2 | % | |||||
| Return on client assets (annualized) | 0.24 | % | 0.28 | % | 0.34 | % | 0.25 | % | 0.30 | % | |||||
| Return on average stockholders' equity (annualized) | 15.1 | % | 16.8 | % | 18.4 | % | 15.7 | % | 16.9 | % | |||||
| EBITDA(1) as a percentage of net revenues | 44.1 | % | 45.1 | % | 49.1 | % | 43.7 | % | 44.9 | % | |||||
|
Debt and Liquidity Metrics: |
|||||||||||||||
| Interest on borrowings (in millions) | $6.9 | $7.5 | $11.2 | $25.2 | $33.8 | ||||||||||
| Average debt outstanding (in billions) | $1.3 | $1.3 | $1.3 | $1.3 | $1.3 | ||||||||||
| Leverage ratio (average debt/annualized EBITDA(1)) | 1.0 | 1.0 | 0.9 | 1.1 | 1.1 | ||||||||||
| Interest coverage ratio (EBITDA(1)/interest on borrowings) | 43.7 | 43.2 | 30.4 | 35.7 | 26.0 | ||||||||||
| Liquid assets - management target(1) (in billions) | $0.8 | $0.8 | $0.7 | $0.8 | $0.7 | ||||||||||
| Liquid assets - regulatory threshold(1) (in billions) | $1.4 | $1.3 | $1.2 | $1.4 | $1.2 | ||||||||||
| Cash and cash equivalents (in billions) | $1.3 | $1.1 | $0.7 | $1.3 | $0.7 | ||||||||||
|
Transaction-Based Revenue Metrics: |
|||||||||||||||
| Total trades (in millions) | 23.3 | 27.2 | 26.0 | 74.1 | 73.0 | ||||||||||
| Average commissions and transaction fees per trade(2) | $12.08 | $12.42 | $12.79 | $12.30 | $12.93 | ||||||||||
| Average client trades per total account (annualized) | 11.4 | 13.7 | 13.2 | 12.3 | 12.7 | ||||||||||
| Average client trades per funded account (annualized) | 16.7 | 20.1 | 19.2 | 18.0 | 18.3 | ||||||||||
| Activity rate - total accounts | 4.5 | % | 5.4 | % | 5.3 | % | 4.9 | % | 5.0 | % | |||||
| Activity rate - funded accounts | 6.6 | % | 8.0 | % | 7.6 | % | 7.1 | % | 7.3 | % | |||||
| Trading days | 63.0 | 62.0 | 63.0 | 188.5 | 187.0 | ||||||||||
|
Spread-Based Asset Metrics: |
|||||||||||||||
| Average interest-earning assets (excluding conduit business) (in billions) | $14.0 | $13.6 | $12.6 | $13.5 | $13.7 | ||||||||||
| Average insured deposit account balances (in billions) | 48.6 | 46.8 | 41.8 | 46.7 | 37.9 | ||||||||||
| Average spread-based balance (in billions) | $62.6 | $60.4 | $54.4 | $60.2 | $51.6 | ||||||||||
| Net interest revenue (excluding conduit business) (in millions) | $131.2 | $121.5 | $111.2 | $368.1 | $310.2 | ||||||||||
| Insured deposit account fee revenue (in millions) | 196.8 | 187.5 | 180.1 | 562.8 | 505.4 | ||||||||||
| Spread-based revenue (in millions) | $328.0 | $309.0 | $291.3 | $930.9 | $815.6 | ||||||||||
| Avg. annualized yield - interest-earning assets (excluding conduit business) | 3.70 | % | 3.56 | % | 3.50 | % | 3.58 | % | 2.99 | % | |||||
| Avg. annualized yield - insured deposit account fees | 1.60 | % | 1.60 | % | 1.70 | % | 1.59 | % | 1.76 | % | |||||
| Net interest margin (NIM) | 2.07 | % | 2.04 | % | 2.12 | % | 2.04 | % | 2.09 | % | |||||
| Interest days | 91 | 90 | 91 | 273 | 273 | ||||||||||
|
Fee-Based Investment Metrics: |
|||||||||||||||
|
Money market mutual fund fees: |
|||||||||||||||
| Average balance (in billions) | $8.8 | $8.8 | $9.1 | $8.8 | $10.2 | ||||||||||
| Average annualized yield | 0.06 | % | 0.10 | % | 0.10 | % | 0.11 | % | 0.08 | % | |||||
| Fee revenue (in millions) | $1.4 | $2.3 | $2.3 | $7.3 | $6.3 | ||||||||||
|
Other fee-based investment balances: |
|||||||||||||||
| Average balance (in billions) | $73.2 | $69.5 | $53.3 | $68.8 | $50.0 | ||||||||||
| Average annualized yield | 0.23 | % | 0.22 | % | 0.23 | % | 0.23 | % | 0.23 | % | |||||
| Fee revenue (in millions) | $42.5 | $38.1 | $30.9 | $117.8 | $86.7 | ||||||||||
| Average fee-based investment balances (in billions) | $82.0 | $78.3 | $62.4 | $77.6 | $60.1 | ||||||||||
| Average annualized yield | 0.21 | % | 0.21 | % | 0.21 | % | 0.21 | % | 0.20 | % | |||||
| Investment product fee revenue (in millions) | $43.9 | $40.4 | $33.2 | $125.1 | $93.0 | ||||||||||
|
Client Account and Client Asset Metrics: |
|||||||||||||||
| Total accounts (beginning of period) | 8,138,000 | 8,037,000 | 7,788,000 | 7,946,000 | 7,563,000 | ||||||||||
| New accounts opened | 154,000 | 176,000 | 175,000 | 495,000 | 542,000 | ||||||||||
| Accounts closed | (76,000 | ) | (75,000 | ) | (73,000 | ) | (225,000 | ) | (215,000 | ) | |||||
| Total accounts (end of period) | 8,216,000 | 8,138,000 | 7,890,000 | 8,216,000 | 7,890,000 | ||||||||||
| Percentage change during period | 1 | % | 1 | % | 1 | % | 3 | % | 4 | % | |||||
| Funded accounts (beginning of period) | 5,547,000 | 5,491,000 | 5,379,000 | 5,455,000 | 5,279,000 | ||||||||||
| Funded accounts (end of period) | 5,592,000 | 5,547,000 | 5,440,000 | 5,592,000 | 5,440,000 | ||||||||||
| Percentage change during period | 1 | % | 1 | % | 1 | % | 3 | % | 3 | % | |||||
| Client assets (beginning of period, in billions) | $412.3 | $386.4 | $341.5 | $354.8 | $302.0 | ||||||||||
| Client assets (end of period, in billions) | $413.7 | $412.3 | $323.8 | $413.7 | $323.8 | ||||||||||
| Percentage change during period | 0 | % | 7 | % | (5 | %) | 17 | % | 7 | % | |||||
| (1) See attached reconciliation of non-GAAP financial measures. | |||||||||||||||
| (2) Average commissions and transaction fees per trade excludes thinkorswim active trader and TD Waterhouse UK businesses. | |||||||||||||||
|
NOTE: See Glossary of Terms on the Company's web site at www.amtd.com for definitions of the above metrics. |
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| TD AMERITRADE HOLDING CORPORATION | |||||||||||||||
| SELECTED OPERATING DATA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||||
| June 30, 2011 | Mar. 31, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||
|
Net Interest Revenue (excluding Conduit Business): |
|||||||||||||||
|
Segregated cash: |
|||||||||||||||
| Average balance (in billions) | $2.9 | $3.0 | $3.4 | $3.0 | $5.3 | ||||||||||
| Average annualized yield | 0.05 | % | 0.10 | % | 0.13 | % | 0.09 | % | 0.13 | % | |||||
| Interest revenue (in millions) | $0.4 | $0.7 | $1.1 | $2.2 | $5.2 | ||||||||||
|
Client margin balances: |
|||||||||||||||
| Average balance (in billions) | $9.4 | $8.9 | $7.5 | $8.8 | $6.8 | ||||||||||
| Average annualized yield | 4.32 | % | 4.42 | % | 4.68 | % | 4.40 | % | 4.71 | % | |||||
| Interest revenue (in millions) | $103.4 | $99.1 | $89.1 | $295.2 | $242.1 | ||||||||||
|
Securities borrowing/lending (excluding conduit business): |
|||||||||||||||
| Average securities borrowing balance (in billions) | $0.5 | $0.5 | $0.5 | $0.5 | $0.5 | ||||||||||
| Average securities lending balance (in billions) | $1.8 | $1.6 | $1.8 | $1.7 | $1.7 | ||||||||||
| Interest revenue (in millions) | $28.1 | $22.6 | $21.7 | $73.0 | $65.6 | ||||||||||
| Interest expense (in millions) | (0.4 | ) | (0.8 | ) | (0.6 | ) | (1.8 | ) | (1.5 | ) | |||||
| Net interest revenue - securities borrowing/lending | |||||||||||||||
| (excluding conduit business) (in millions) | $27.7 | $21.8 | $21.1 | $71.2 | $64.1 | ||||||||||
|
Other cash and interest-earning investments: |
|||||||||||||||
| Average balance (in billions) | $1.2 | $1.2 | $1.2 | $1.2 | $1.1 | ||||||||||
| Average annualized yield | 0.06 | % | 0.09 | % | 0.17 | % | 0.10 | % | 0.15 | % | |||||
| Interest revenue - net (in millions) | $0.1 | $0.3 | $0.5 | $0.8 | $1.2 | ||||||||||
|
Client credit balances: |
|||||||||||||||
| Average balance (in billions) | $8.7 | $8.5 | $7.7 | $8.4 | $8.9 | ||||||||||
| Average annualized cost | 0.02 | % | 0.02 | % | 0.03 | % | 0.02 | % | 0.04 | % | |||||
| Interest expense (in millions) | ($0.4 | ) | ($0.4 | ) | ($0.6 | ) | ($1.3 | ) | ($2.4 | ) | |||||
| Average interest-earning assets (excluding conduit business) (in billions) | $14.0 | $13.6 | $12.6 | $13.5 | $13.7 | ||||||||||
| Average annualized yield (excluding conduit business) | 3.70 | % | 3.56 | % | 3.50 | % | 3.58 | % | 2.99 | % | |||||
| Net interest revenue (excluding conduit business) (in millions) | $131.2 | $121.5 | $111.2 | $368.1 | $310.2 | ||||||||||
|
Conduit Business: |
|||||||||||||||
| Average balance (in billions) | $0.3 | $0.3 | $0.5 | $0.3 | $0.5 | ||||||||||
|
Securities borrowing - conduit business: |
|||||||||||||||
| Average annualized yield | 0.31 | % | 0.24 | % | 0.35 | % | 0.28 | % | 0.34 | % | |||||
| Interest revenue (in millions) | $0.3 | $0.2 | $0.4 | $0.7 | $1.4 | ||||||||||
|
Securities lending - conduit business: |
|||||||||||||||
| Average annualized cost | 0.25 | % | 0.16 | % | 0.20 | % | 0.18 | % | 0.20 | % | |||||
| Interest expense (in millions) | ($0.2 | ) | ($0.1 | ) | ($0.2 | ) | ($0.4 | ) | ($0.8 | ) | |||||
| Average interest-earning assets - conduit business (in billions) | $0.3 | $0.3 | $0.5 | $0.3 | $0.5 | ||||||||||
| Average annualized yield - conduit business | 0.06 | % | 0.08 | % | 0.16 | % | 0.10 | % | 0.14 | % | |||||
| Net interest revenue - conduit business (in millions) | $0.1 | $0.1 | $0.2 | $0.3 | $0.6 | ||||||||||
|
Net Interest Revenue (total): |
|||||||||||||||
| Average interest-earning assets (excluding conduit business) (in billions) | $14.0 | $13.6 | $12.6 | $13.5 | $13.7 | ||||||||||
| Average interest-earning assets - conduit business (in billions) | 0.3 | 0.3 | 0.5 | 0.3 | 0.5 | ||||||||||
| Average interest-earning assets - total (in billions) | $14.3 | $13.9 | $13.1 | $13.8 | $14.2 | ||||||||||
| Average annualized yield - total | 3.62 | % | 3.49 | % | 3.38 | % | 3.50 | % | 2.88 | % | |||||
| Net interest revenue (excluding conduit business) (in millions) | $131.2 | $121.5 | $111.2 | $368.1 | $310.2 | ||||||||||
| Net interest revenue - conduit business (in millions) | 0.1 | 0.1 | 0.2 | 0.3 | 0.6 | ||||||||||
| Net interest revenue - total (in millions) | $131.3 | $121.6 | $111.4 | $368.4 | $310.8 | ||||||||||
|
NOTE: See Glossary of Terms on the Company's web site at www.amtd.com for definitions of the above metrics. |
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| TD AMERITRADE HOLDING CORPORATION | ||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF FINANCIAL MEASURES | ||||||||||||||||||||||||||||||||||||||
| In thousands, except percentages | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
| June 30, 2011 | Mar. 31, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||||||||||||||||||||||||||
| $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | |||||||||||||||||||||||||||||
|
EBITDA (1) |
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| EBITDA | $ | 302,101 | 44.1 | % | $ | 323,568 | 45.1 | % | $ | 339,879 | 49.1 | % | $ | 900,483 | 43.7 | % | $ | 877,031 | 44.9 | % | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (16,914 | ) | (2.5 | %) | (16,579 | ) | (2.3 | %) | (14,499 | ) | (2.1 | %) | (49,629 | ) | (2.4 | %) | (41,573 | ) | (2.1 | %) | ||||||||||||||||||
| Amortization of acquired intangible assets | (24,083 | ) | (3.5 | %) | (24,073 | ) | (3.4 | %) | (25,119 | ) | (3.6 | %) | (72,747 | ) | (3.5 | %) | (75,722 | ) | (3.9 | %) | ||||||||||||||||||
| Interest on borrowings | (6,916 | ) | (1.0 | %) | (7,486 | ) | (1.0 | %) | (11,197 | ) | (1.6 | %) | (25,227 | ) | (1.2 | %) | (33,764 | ) | (1.7 | %) | ||||||||||||||||||
| Provision for income taxes | (96,793 | ) | (14.1 | %) | (103,762 | ) | (14.4 | %) | (109,625 | ) | (15.8 | %) | (278,778 | ) | (13.5 | %) | (247,743 | ) | (12.7 | %) | ||||||||||||||||||
| Net income | $ | 157,395 | 23.0 | % | $ | 171,668 | 23.9 | % | $ | 179,439 | 25.9 | % | $ | 474,102 | 23.0 | % | $ | 478,229 | 24.5 | % | ||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||||||||||
|
Liquid Assets - Management Target (2) |
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| Liquid assets - management target | $ | 801,535 | $ | 750,552 | $ | 759,970 | $ | 561,361 | $ | 660,775 | ||||||||||||||||||||||||||||
| Plus: | Broker-dealer cash and cash equivalents | 982,768 | 626,725 | 459,728 | 426,618 | 510,593 | ||||||||||||||||||||||||||||||||
| Trust company cash and cash equivalents | 38,887 | 70,701 | 60,632 | 50,937 | 51,488 | |||||||||||||||||||||||||||||||||
| Investment advisory cash and cash equivalents | 41,184 | 36,964 | 32,178 | 28,944 | 26,946 | |||||||||||||||||||||||||||||||||
| Less: | Corporate short-term investments | - | - | - | - | (739 | ) | |||||||||||||||||||||||||||||||
| Excess broker-dealer regulatory net capital | (540,728 | ) | (403,804 | ) | (419,125 | ) | (326,368 | ) | (532,600 | ) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,323,646 | $ | 1,081,138 | $ | 893,383 | $ | 741,492 | $ | 716,463 | ||||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||||||||||
|
Liquid Assets - Regulatory Threshold (2) |
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| Liquid assets - regulatory threshold | $ | 1,350,737 | $ | 1,336,533 | $ | 1,293,100 | $ | 1,076,256 | $ | 1,157,356 | ||||||||||||||||||||||||||||
| Plus: | Broker-dealer cash and cash equivalents | 982,768 | 626,725 | 459,728 | 426,618 | 510,593 | ||||||||||||||||||||||||||||||||
| Trust company cash and cash equivalents | 38,887 | 70,701 | 60,632 | 50,937 | 51,488 | |||||||||||||||||||||||||||||||||
| Investment advisory cash and cash equivalents | 41,184 | 36,964 | 32,178 | 28,944 | 26,946 | |||||||||||||||||||||||||||||||||
| Less: | Corporate short-term investments | - | - | - | - | (739 | ) | |||||||||||||||||||||||||||||||
| Excess trust company Tier 1 capital | (8,410 | ) | (9,379 | ) | (12,039 | ) | (12,284 | ) | (12,637 | ) | ||||||||||||||||||||||||||||
| Excess broker-dealer regulatory net capital | (1,081,520 | ) | (980,406 | ) | (940,216 | ) | (828,979 | ) | (1,016,544 | ) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,323,646 | $ | 1,081,138 | $ | 893,383 | $ | 741,492 | $ | 716,463 | ||||||||||||||||||||||||||||
| 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.). 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 120% of the minimum dollar net capital requirement or in excess of 8 1/3% of aggregate indebtedness 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. |