TD Ameritrade Delivers Strong Third Quarter on Record Net Revenue

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TD Ameritrade Delivers Strong Third Quarter on Record Net Revenue

Net New Client Assets of $11B, up 11% Year-Over-Year

Record Net Revenues of $725M, up 9% Year-Over-Year


Diluted Earnings per Share of $0.33, up 18% Year-Over-Year

OMAHA, Neb.--(BUSINESS WIRE)-- TD Ameritrade Holding Corporation (NYS: AMTD) has released results for the third quarter of fiscal 2013. The Company ended the quarter with improved trading activity; record interest rate sensitive assets, record net revenues and record market fee-based revenue; and diluted earnings per share of 33 cents.

The Company's results for the quarter ended June 30, 2013 include the following:(1)

  • Net income of $184 million, or $0.33 per diluted share
  • Net new client assets of approximately $11 billion, an annualized growth rate of 8 percent
  • Average client trades per day of approximately 399,000, an activity rate of 6.7 percent(2)
  • Record net revenues of $725 million, 53 percent of which were asset-based
  • Record market fee-based revenue of $65 million, up 23 percent year-over-year
  • Pre-tax income of $298 million, or 41 percent of net revenues
  • EBITDA(3)of $349 million, or 48 percent of net revenues
  • Record interest rate sensitive assets(4) of $94 billion, up 19 percent year-over-year
  • Client assets of approximately $524 billion

"TD Ameritrade had a strong third quarter in virtually all metrics, as we continue to execute well against our growth strategy while being disciplined on expenses," said Fred Tomczyk, president and chief executive officer. "We had record interest rate sensitive assets, record net revenues and record market fee-based revenue during the quarter. We are encouraged by the increase in the yield curve and the more positive trends we're seeing in terms of retail investor sentiment."

"We are pleased with our performance this quarter," said Bill Gerber, executive vice president and chief financial officer. "Earnings per share came in at 33 cents - the third highest ever and the highest since the June quarter in 2008. We benefited from the improved trading environment, and we kept our eyes focused on disciplined expense management and maintaining our strong balance sheet. We have good momentum, and we're well positioned as we look ahead to fiscal 2014."

Capital Deployment
The Company has declared a $0.09 per share quarterly cash dividend, payable on August 15, 2013 to all holders of record of common stock as of August 1, 2013.

Notable Items
On July 1, 2013, Knight Capital Group, Inc. (NYS: KCG) closed its merger with GETCO Holding Company LLC. As a result, TD Ameritrade expects to record a pre-tax gain on its investment in Knight of approximately $54 million, or $0.06 per share. The Company will record this gain in its fourth fiscal quarter, which ends on Sept. 30, 2013.

Additionally, the Company received a credit rating upgrade from Moody's Investors Service on May 14, 2013. The rating agency increased the Company's issuer and senior unsecured ratings from Baa1 to A3.

Company Hosts Conference Call
TD Ameritrade will host its June Quarter conference call this morning, July 23, 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 July 23, 2013. This replay will be available until 11:59 p.m. EDT (10:59 p.m. CDT) on July 30, 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 (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 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 June 30, 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 EndedNine Months Ended
June 30, 2013Mar. 31, 2013June 30, 2012June 30, 2013June 30, 2012
Revenues:
Transaction-based revenues:
Commissions and transaction fees$321$287$266$865$832
 
Asset-based revenues:
Interest revenue122116120356339
Brokerage interest expense (2) (2) (2) (5) (5)
Net interest revenue120114118351334
 
Insured deposit account fees199200206604621
Investment product fees 65  62  54  182  144 
Total asset-based revenues3843763781,1371,099
 
Other revenues 20  16  23  53  63 
 
Net revenues 725  679  667  2,055  1,994 
 
Operating expenses:
Employee compensation and benefits176178176522524
Clearing and execution costs3027228166
Communications2829298583
Occupancy and equipment costs424036121111
Depreciation and amortization2220186353
Amortization of acquired intangible assets2322236869
Professional services363340103129
Advertising567650184191
Other 14  17  19  52  66 
Total operating expenses 427  442  413  1,279  1,292 
 
Operating income298237254776702
 
Other expense (income):
Interest on borrowings6671922
Gain on sale of investments (6) -  -  (8) - 
Total other expense (income) -  6  7  11  22 
 
Pre-tax income298231247765680
 
Provision for income taxes 114  87  93  291  238 
 
Net income$184 $144 $154 $474 $442 
 
Earnings per share - basic$0.33$0.26$0.28$0.86$0.81
Earnings per share - diluted$0.33$0.26$0.28$0.86$0.80
 
Weighted average shares outstanding - basic550549548548549
Weighted average shares outstanding - diluted554554553553554
 
Dividends declared per share$0.09$0.09$0.06$0.77$0.18
 
 
TD AMERITRADE HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In millions
(Unaudited)
    
June 30, 2013Sept. 30, 2012
Assets:
Cash and cash equivalents$963$915
Short-term investments4154
Segregated cash and investments5,7794,030
Broker/dealer receivables1,0641,110
Client receivables, net8,7078,647
Goodwill and intangible assets3,3313,399
Other 1,335 1,258
 
Total assets$21,183$19,513
 
Liabilities and stockholders' equity:
 
Liabilities:
Broker/dealer payables$2,914$1,992
Client payables11,63010,728
Notes payable95-
Long-term debt1,0531,345
Other 940 1,023
Total liabilities16,63215,088
 
Stockholders' equity 4,551 4,425
 
Total liabilities and stockholders' equity$21,183$19,513
 
 
TD AMERITRADE HOLDING CORPORATION
SELECTED OPERATING DATA
(Unaudited)
     
Quarter Ended
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