TD Ameritrade Delivers 4th Consecutive Year of Double-Digit Net New Client Asset Growth Rate

TD Ameritrade Delivers 4thConsecutive Year of Double-Digit Net New Client Asset Growth Rate

Conference Call Postponed until 11-5-12 Due to Inclement Weather on East Coast;

Net New Client Assets of $41 billion, 11% Annual Growth Rate;
Increases Quarterly Dividend 50% to $0.09 Per Share;
Diluted Earnings Per Share of $1.06


OMAHA, Neb.--(BUSINESS WIRE)-- TD Ameritrade Holding Corporation (NYS: AMTD) has released results for fiscal 2012. Despite a continued difficult economic environment, the Company gathered $41 billion of net new client assets, maintaining its industry-leading, double-digit net new client asset growth rate for the 4th consecutive year.

The Company's results for the fiscal year ended Sept. 30, 2012 include the following:(1)

  • Net income of $586 million, or $1.06 per diluted share

  • Average client trades per day of approximately 360,000, an activity rate of 6.3 percent(2)

  • Net new client assets of $41 billion, an annual growth rate of 11 percent of beginning client assets

  • Net revenues of $2.6 billion, 56 percent of which were asset-based

  • Pre-tax income of $906 million, or 34 percent of net revenues

  • EBITDA of $1.1 billion, or 42 percent of net revenues(3)

  • Record interest rate-sensitive assets of $83 billion(4)

  • Record client assets of approximately $472 billion, up 25 percent year-over-year

"In each of the last four years, TD Ameritrade has delivered industry-leading, double-digit growth in asset gathering," said Fred Tomczyk, president and chief executive officer. "In 2012 we grew total clients assets to a record $472 billion, up 25 percent year-over-year. We gathered $41 billion in net new client assets, an annual growth rate of 11 percent. We maintained our industry-leading position and again grew our market share in trading. And, we continued to make strategic investments in our client offering. We remain focused on what we can control, executing our strategy and building our long-term earnings power."

"We're proud of our financial performance given the challenging operating environment," said Bill Gerber, executive vice president and chief financial officer. "We have increased our quarterly dividend by 50 percent to 9 cents, and we will continue to take a disciplined approach to expense management and process improvement. We remain optimistic for the long term given our business model, dedicated associates and growth momentum."

Fiscal 2013 Outlook

The Company has also released an updated Outlook Statement which reflects expected earnings of $1.00 to $1.20 per share for its 2013 fiscal year.

More information on the fiscal 2013 forecast is available through the Company's Outlook Statement, located in the "Investor" section of its Web site, www.amtd.com.

Fourth Quarter 2012 Results

In addition, the Company has released its results for the quarter ended Sept. 30, 2012, which include the following:(1)

  • Average client trades per day of approximately 328,000, an activity rate of 5.7 percent(2)

  • Net new client assets of approximately $10 billion, an annualized growth rate of 9 percent

  • Net revenues of $647 million, 58 percent of which were asset-based

  • Pre-tax income of $225 million, or 35 percent of net revenues

  • Net income of $143 million, or $0.26 per diluted share

  • EBITDA of $274 million, or 42 percent of net revenues(3)

Stock Repurchases

During the fourth quarter of fiscal 2012, TD Ameritrade repurchased 1.8 million shares of its common stock at an average price of $16.38 per share, for approximately $30 million. For the full year of fiscal 2012, the Company has used approximately $196 million to repurchase 11.8 million shares at an average price of $16.58 per share.

Quarterly Dividend Increase

The Company has declared a $0.09 per share quarterly cash dividend, an increase of 50 percent, from the previous quarter's dividend. The dividend is payable on Nov. 23, 2012 to all holders of record of common stock as of Nov. 9, 2012.

"In 2012, TD Ameritrade returned 56 percent of our net income to our shareholders," Tomczyk continued. "Increasing our quarterly dividend by 50 percent to $0.09 per share is another effective way for us to continue returning that capital and expand our investor base. Our financial position and cash flow remain healthy, providing us with the continued flexibility to return capital to our shareholders while investing in future growth in these challenging macroeconomic times."

Conference Call to discuss results to be rescheduled

The company's conference call discussing these results has been rescheduled for Monday, Nov. 5, 2012 at 8:30 a.m. ET (7:30 a.m. CT). Questions from analysts and the media will be addressed following the formal presentation, and executives will not be available for comment about the results until that time. However, financial information related to this press release, such as monthly operating metrics, an updated Outlook Statement, and the company's standard presentation slides has been posted to the company's corporate web site, www.amtd.com.

"We considered a number of alternatives, given the inclement weather situation on the East coast," Tomczyk continued. "While we are still open for business, we have a large number of shareholders and analysts in the affected area, and we believe that this was the right decision to make. We will share our comments on the quarter and our fiscal year during Monday's conference call."

Accessing the Conference Call

Participants may listen to the conference call by dialing 877-881-2595. The Company will also webcast the call through its corporate web site, www.amtd.com. Participants will be able to access the webcast from the Events and Presentations section of the site. A transcript of the webcast will also be available online beginning Tuesday, Nov. 6, 2012.

A phone replay of the call will be available by dialing 855-859-2056 and entering the Conference ID 14145637 beginning at 11:30 a.m. ET (10:30 a.m. CT) on Nov. 5, 2012. This replay will be available until 11:59 p.m. ET (10:59 p.m. CT) on Nov. 12, 2012. 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. You can also follow the Company on 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 (NYS: 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 37 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, 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 on Form 10-K, filed with the SEC on Nov. 18, 2011 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 September 30, 2012.

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

Fiscal Year Ended

Sept. 30, 2012

June 30, 2012

Sept. 30, 2011

Sept. 30, 2012

Sept. 30, 2011

Revenues:

Transaction-based revenues:

Commissions and transaction fees

$

256

$

266

$

315

$

1,087

$

1,228

Asset-based revenues:

Interest revenue

117

120

125

456

497

Brokerage interest expense

(1

)

(2

)

(1

)

(6

)

(5

)

Net interest revenue

116

118

124

450

492

Insured deposit account fees

207

206

200

828

763

Investment product fees

52

54

41

196

166

Total asset-based revenues

375

378

365

1,474

1,421

Other revenues

16

23

24

80

114

Net revenues

647

667

704

2,641

2,763

Operating expenses:

Employee compensation and benefits

167

176

174

690

675

Clearing and execution costs

23

22

28

89

100

Communications

28

29

25

111

107

Occupancy and equipment costs

38

36

38

150

142

Depreciation and amortization

19

18

17

72

67

Amortization of acquired intangible assets

23

23

24

92

97

Professional services

39

40

47

168

170

Advertising

58

50

49

248

253

Other

20

19

33

87

104

Total operating expenses

415

413

435

1,707

1,715

Operating income

232

254

269

934

1,048

Other expense (income):

Interest on borrowings

7

7

7

28

32

Loss on debt refinancing

-

-

-

-

1

Gain on sale of investments

-

-

(2

)

-

(2

)

Total other expense (income)

7

7

5

28

31

Pre-tax income

225

247

264

906

1,017

Provision for income taxes

82

93

100

320

379

Net income

$

143

$

154

$

164

$

586

$

638

Earnings per share - basic

$

0.26

$

0.28

$

0.29

$

1.07

$

1.12

Earnings per share - diluted

$

0.26

$

0.28

$

0.29

$

1.06

$

1.11

Weighted average shares outstanding - basic

546

548

562

548

570

Weighted average shares outstanding - diluted

551

553

568

554

576

Dividends declared per share

$

0.06

$

0.06

$

0.05

$

0.24

$

0.20

TD AMERITRADE HOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

In millions

(Unaudited)

Sept. 30, 2012

Sept. 30, 2011

Assets:

Cash and cash equivalents

$

915

$

1,032

Short-term investments

154

4

Segregated cash and investments

4,030

2,519

Broker/dealer receivables

1,110

834

Client receivables, net

8,647

8,059

Goodwill and intangible assets