TD Ameritrade Gathers a Record $16 Billion in Net New Client Assets
TD Ameritrade Gathers a Record $16 Billion in Net New Client Assets
Record 13% Annualized Net New Client Asset Growth Rate
Diluted Earnings per Share of $0.27
Record Market Fee-based Revenue of $55 Million, up 28% Year-Over-Year
OMAHA, Neb.--(BUSINESS WIRE)-- TD Ameritrade Holding Corporation (NYS: AMTD) has released results for the first quarter of fiscal 2013. The Company gathered record net new client assets of $16 billion - a 13 percent annualized growth rate - up more than 50 percent from the same quarter a year ago.
The Company's results for the quarter ended Dec. 31, 2012 include the following:(1)
Net income of $147 million, or $0.27 per diluted share
Record net new client assets of approximately $16 billion, a record annualized growth rate of 13 percent
Average client trades per day of approximately 334,000, an activity rate of 5.8 percent(2)
Net revenues of $651 million, 58 percent of which were asset-based
Record market fee-based revenue of $55 million, up 28 percent year-over-year
Pre-tax income of $237 million, or 36 percent of net revenues
EBITDA of $286 million, or 44 percent of net revenues(3)
Record interest rate sensitive assets(4) of $90 billion, up 14 percent year-over-year
Client assets of approximately $481 billion
"Record net new client assets of $16 billion and earnings per share of 27 cents is a significant achievement in this environment, and a strong start to our fiscal year," said Fred Tomczyk, president and chief executive officer. "In the face of continued investor uncertainty, we maintained our strong organic growth momentum and had record sales of guidance and advice solutions, all while keeping our expenses in check."
"TD Ameritrade continues to benefit from strong organic growth and disciplined management of our balance sheet," said Bill Gerber, executive vice president and chief financial officer. "Our record organic growth this quarter helped grow interest rate sensitive assets to a record $90 billion, up 14 percent from last year, leaving us even better-positioned for rising interest rates. In addition, market fee-based revenue is up 28 percent year-over-year, driven by our effective referral and sales processes. We remain focused on maintaining our momentum as we move forward."
Capital Deployment
The Company has declared a $0.09 per share quarterly cash dividend, payable on Feb. 15, 2013 to all holders of record of common stock as of Feb. 1, 2013.
"In addition to the quarterly dividend, TD Ameritrade paid down a maturing tranche of debt and issued a special dividend of 50 cents per share in the first quarter," Tomczyk continued. "Strong cash flow, combined with a clean and stable balance sheet gives us the flexibility to return or deploy capital to the benefit of our shareholders while maintaining our ability to be opportunistic."
Company Hosts Conference Call
TD Ameritrade will host its December Quarter conference call this morning, Jan. 22, 2013, at 8:30 a.m. EST (7:30 a.m. CST). 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 75110688 beginning at 11:30 a.m. EST (10:30 a.m. CST) on January 22, 2013.
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 38 years. 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. 26, 2012. 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.
3See attached reconciliation of non-GAAP financial measures.
4Interest rate-sensitive assets consist of spread-based assets and money market mutual funds. Ending balances as of December 31, 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 | |||||||||||||||
Dec. 31, 2012 | Sept. 30, 2012 | Dec. 31, 2011 | |||||||||||||
Revenues: | |||||||||||||||
Transaction-based revenues: | |||||||||||||||
Commissions and transaction fees | $ | 257 | $ | 256 | $ | 273 | |||||||||
Asset-based revenues: | |||||||||||||||
Interest revenue | 118 | 117 | 111 | ||||||||||||
Brokerage interest expense | (2 | ) | (1 | ) | (2 | ) | |||||||||
Net interest revenue | 116 | 116 | 109 | ||||||||||||
Insured deposit account fees | 205 | 207 | 205 | ||||||||||||
Investment product fees | 56 | 52 | 44 | ||||||||||||
Total asset-based revenues | 377 | 375 | 358 | ||||||||||||
Other revenues | 17 | 16 | 22 | ||||||||||||
Net revenues | 651 | 647 | 653 | ||||||||||||
Operating expenses: | |||||||||||||||
Employee compensation and benefits | 168 | 167 | 173 | ||||||||||||
Clearing and execution costs | 24 | 23 | 20 | ||||||||||||
Communications | 28 | 28 | 28 | ||||||||||||
Occupancy and equipment costs | 39 | 38 | 38 | ||||||||||||
Depreciation and amortization | 20 | 19 | 17 | ||||||||||||
Amortization of acquired intangible assets | 23 | 23 | 23 | ||||||||||||
Professional services | 34 | 39 | 45 | ||||||||||||
Advertising | 52 | 58 | 57 | ||||||||||||
Other | 22 | 20 | 24 | ||||||||||||
Total operating expenses | 410 | 415 | 425 | ||||||||||||
Operating income | 241 | 232 | 228 | ||||||||||||
Other expense (income): | |||||||||||||||
Interest on borrowings | 6 | 7 | 7 | ||||||||||||
Gain on sale of investments | (2 | ) | - | - | |||||||||||
Total other expense (income) | 4 | 7 | 7 | ||||||||||||
Pre-tax income | 237 | 225 | 221 | ||||||||||||
Provision for income taxes | 90 | 82 | 69 | ||||||||||||
Net income | $ | 147 | $ | 143 | $ | 152 | |||||||||
Earnings per share - basic | $ | 0.27 | $ | 0.26 | $ | 0.28 | |||||||||
Earnings per share - diluted | $ | 0.27 | $ | 0.26 | $ | 0.27 | |||||||||
Weighted average shares outstanding - basic | 546 | 546 | 550 | ||||||||||||
Weighted average shares outstanding - diluted | 551 | 551 | 555 | ||||||||||||
Dividends declared per share | $ | 0.59 | $ | 0.06 | $ | 0.06 | |||||||||
TD AMERITRADE HOLDING CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
In millions | ||||||||
(Unaudited) | ||||||||
Dec. 31, 2012 | Sept. 30, 2012 | |||||||
Assets: | ||||||||
Cash and cash equivalents | $ | 1,852 | $ | 915 | ||||
Short-term investments | 4 | 154 | ||||||
Segregated cash and investments | 4,682 | 4,030 | ||||||
Broker/dealer receivables | 948 | 1,110 | ||||||
Client receivables, net | 8,799 | 8,647 | ||||||
Goodwill and intangible assets | 3,376 | 3,399 | ||||||
Other | 1,357 | 1,258 | ||||||
Total assets | $ | 21,018 | $ | 19,513 | ||||
Liabilities and stockholders' equity: | ||||||||
Liabilities: | ||||||||
Broker/dealer payables | $ | 1,941 | $ | 1,992 | ||||
Client payables | 12,459 | 10,728 | ||||||
Notes payable | 275 | - | ||||||
Long-term debt | 1,087 | 1,345 | ||||||
Other | 978 | 1,023 | ||||||
16,740 | 15,088 | |||||||
Stockholders' equity | 4,278 | 4,425 | ||||||
Total liabilities and stockholders' equity | $ | 21,018 | $ | 19,513 | ||||
TD AMERITRADE HOLDING CORPORATION | |||||||||||||||
SELECTED OPERATING DATA | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | |||||||||||||||
Dec. 31, 2012 | Sept. 30, 2012 | Dec. 31, 2011 | |||||||||||||
Key Metrics: | |||||||||||||||
Net new assets (in billions) | $ | 15.6 | $ | 10.1 | $ | 10.2 | |||||||||
Net new asset growth rate (annualized) | 13 | % | 9 | % | 11 | % | |||||||||
Average client trades per day | 334,035 | 328,280 | 367,479 | ||||||||||||
Profitability Metrics: | |||||||||||||||
Operating margin | 37.0 | % | 35.9 | % | 34.9 | % | |||||||||
Pre-tax margin | 36.4 | % | 34.8 | % | 33.8 | % | |||||||||
Return on client assets (annualized) | 0.20 | % | 0.20 | % | 0.22 | % | |||||||||
Return on average stockholders' equity (annualized) | 13.3 | % | 13.1 | % | 14.8 | % | |||||||||
EBITDA(1) as a percentage of net revenues | 43.9 | % | 42.3 | % | 41.0 | % | |||||||||
Debt and Liquidity Metrics: | |||||||||||||||
Interest on borrowings (in millions) | $ | 6 | $ | 7 | $ | 7 | |||||||||
Average debt outstanding (in billions) | $ | 1.2 | $ | 1.3 | $ | 1.3 | |||||||||
Leverage ratio (average debt/annualized EBITDA(1)) | 1.0 | 1.1 | 1.2 | ||||||||||||
Interest coverage ratio (EBITDA(1)/interest on borrowings) | 45.4 | 39.8 | 38.0 | ||||||||||||
Liquid assets - management target(1) (in billions) | $ | 0.8 | $ | 1.1 | $ | 0.9 | |||||||||
Liquid assets - regulatory threshold(1) (in billions) | $ | 1.3 | $ | 1.6 | $ | 1.4 | |||||||||
Cash and cash equivalents (in billions) | $ | 1.9 | $ | 0.9 | $ | ||||||||||
