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

$