Record Diluted Earnings per Share of $1.42, up
16% Year-Over-Year
Record Net Revenues of $3.1B, up 13%
Year-Over-Year
Record Net New Client Assets of $53B, 10%
Annualized Growth Rate
TD Ameritrade Holding Corporation (NYSE: AMTD) has released
results for fiscal 2014. The Company gathered approximately $53
billion in net new client assets, maintaining its industry-leading
double-digit net new client asset growth rate for the sixth
consecutive year.
The Company’s results for the fiscal year ended Sept. 30, 2014
include the following: (1)
- Record $1.42 earnings per diluted share
on net income of $787 million
- Record net new client assets of
approximately $53 billion, an annualized growth rate of 10
percent
- Record average client trades per day of
approximately 427,000, an activity rate of 6.9 percent
- Record net revenues of $3.1 billion, 55
percent of which were asset-based
- Record investment product fee revenue
of $309 million, up 24 percent year-over-year
- Record pre-tax income of $1.3 billion,
or 41 percent of net revenues
- Record EBITDA(2) of $1.5 billion, or 47
percent of net revenues
- Record interest rate sensitive
assets(3) of $100 billion, up 5 percent year-over-year
- Record client assets of approximately
$653 billion, up 17 percent year-over-year
“With improved investor sentiment, retail investors returned to
the markets in 2014, increasing engagement across our platforms and
boosting trading volumes. Asset gathering remained strong, as we
gathered a record $53 billion of net new client assets, our sixth
consecutive year of double-digit growth. In fact, over the last
five years, we have gathered a total of $219 billion of net new
client assets, one-third of our total client assets,” said Fred
Tomczyk, president and chief executive officer. “We had a strong
year and have good momentum as we start 2015. We will continue to
adapt and evolve as an organization by optimizing newer
technologies like big data, social media and mobile, in order to
enhance our clients’ investing and trading experience and drive
continued strong organic growth.”
“We have worked through significant interest rate compression
over the past five years, and yet we continue to strengthen our
earning power,” said Bill Gerber, executive vice president and
chief financial officer. “Interest rate-sensitive assets have grown
to a record $100 billion, mitigating the impact of the
macroeconomic environment and giving us the flexibility to invest
in and grow the business. As a result, fiscal 2014 earnings were a
record $1.42 per diluted share, client assets are at an all-time
high of $653 billion, and we effectively returned more than 90
percent of our net income to shareholders in the form of cash
dividends and share repurchases. Our proven growth strategy,
combined with prudent investments in our future, will help us
continue delivering growth and value for our stakeholders in 2015
and beyond.”
Fourth Quarter 2014 ResultsIn addition, the Company has
released its results for the quarter ended Sept. 30, 2014, which
include the following: (1)
- Net income of $211 million, or $0.38
per diluted share, up 6 percent year-over-year
- Net new client assets of approximately
$13 billion, an annualized growth rate of 8 percent
- Average client trades per day of
approximately 403,000, an activity rate of 6.4 percent
- Net revenues of $795 million, 57
percent of which were asset-based
- Investment product fee revenue of $83
million, up 24 percent year-over-year
- Pre-tax income of $342 million, or 43
percent of net revenues
- EBITDA(2)of $394 million, or 50 percent
of net revenues
Capital ManagementDuring the 2014 fiscal year, the
Company paid $540 million, or $0.98 per share, in cash dividends,
which included four quarterly dividends of $0.12 per share, and a
special dividend of $0.50 per share, paid in December 2013. The
Company also repurchased approximately 6 million shares of its
common stock at a weighted average share price of $31.37 per
share.
The Company has declared a $0.15 per share quarterly cash
dividend, an increase of 25 percent year-over-year, payable on Nov.
20, 2014 to all holders of record of common stock as of Nov. 6,
2014.
Additionally, on Oct. 22, 2014, the Company issued $500 million
in senior notes, bearing an interest rate of 3.625 percent, that
will mature on Apr. 1, 2025. The Company will use the net proceeds
from the sale of the notes, together with cash on hand, to repay
the $500 million aggregate principal amount of its 4.150 percent
senior notes that mature on Dec. 1, 2014.
Fiscal 2015 OutlookThe Company has also released an
updated Outlook Statement which reflects expected earnings of $1.45
to $1.70 per diluted share for its 2015 fiscal year.
More information on the fiscal 2015 forecast is available
through the Company’s Outlook Statement, located in the “Financials
& reports” section of its corporate web site, www.amtd.com.
Company Hosts Conference CallTD Ameritrade will host its
September Quarter conference call this morning, Oct. 28, 2014, at
8:30 a.m. EDT (7:30 a.m. CDT). Participants may listen to the
conference call by dialing 866-270-1533. The Company will webcast
the conference call through www.amtd.com, via the “Presentations
& Events” page of the web site. A replay of the phone call will
be available beginning at 10:30 a.m. EDT (9:30 a.m. CDT) on Oct.
28, 2014 by dialing 877-344-7529 and entering the Conference ID
10052174. The replay will be available until 9:00 a.m. EDT (8:00
a.m. CDT) on Nov. 5, 2014. A transcript of the call will be
available on the Company’s corporate web site, www.amtd.com, via
either the “Investor Relations” page or the “Presentations &
Events” page beginning Wednesday, Oct. 29, 2014.
Information about the Company’s corporate events, including
earnings conference calls and webcasts, can be found by visiting
www.amtd.com and clicking on “Investor Relations” and
“Presentations & Events.” Click on the date of the event to
access all pertinent links and resources. A high speed Internet
connection is required in order to view the webcast.
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.
About TD Ameritrade Holding CorporationMillions of
investors and independent registered investment advisors (RIAs)
have turned to TD Ameritrade’s (NYSE: 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 39 years. An official sponsor
of the 2016 U.S. Olympic and Paralympic Teams, as well as an
official sponsor of the National Football League,
TD Ameritrade has time and again been recognized as a leader
in investment services. Please visit TD Ameritrade's newsroom
or www.amtd.com for more information, or read our stories at
http://freshaccounts.amtd.com.
Source: TD Ameritrade Holding Corporation
Safe HarborThis 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. 22, 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 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 Sept. 30,
2014.
Brokerage services provided by TD Ameritrade, Inc., member
FINRA (www.FINRA.org) /SIPC (www.SIPC.org).
TD AMERITRADE HOLDING CORPORATION CONSOLIDATED STATEMENTS
OF INCOME In millions, except per share amounts (Unaudited)
Quarter Ended Fiscal
Year Ended Sept. 30, 2014 June 30, 2014 Sept.
30, 2013 Sept. 30, 2014 Sept. 30, 2013 Revenues:
Transaction-based revenues: Commissions and transaction fees $ 332
$ 317 $ 306 $ 1,351 $ 1,171 Asset-based revenues: Interest
revenue 161 150 120 587 476 Brokerage interest expense (2 )
(1 ) (1 ) (6 ) (7 ) Net interest
revenue 159 149 119 581 469 Insured deposit account fees 208
202 201 820 804 Investment product fees 83 79
67 309 250 Total
asset-based revenues 450 430 387 1,710 1,523 Other revenues
13 16 16 62
70 Net revenues 795 763
709 3,123 2,764
Operating expenses: Employee compensation and benefits 195 189 170
760 692 Clearing and execution costs 36 35 29 134 109
Communications 31 29 27 116 113 Occupancy and equipment costs 41 39
40 156 160 Depreciation and amortization 23 24 23 95 86
Amortization of acquired intangible assets 23 22 23 90 91
Professional services 38 42 41 155 145 Advertising 45 48 55 250 239
Other 25 19 22 82
73 Total operating expenses 457
447 430 1,838
1,708 Operating income 338 316 279 1,285 1,056 Other
expense (income): Interest on borrowings 6 6 6 25 25 Gain on
investments, net (10 ) - (49 )
(10 ) (57 ) Total other expense (income) (4 )
6 (43 ) 15 (32 ) Pre-tax
income 342 310 322 1,270 1,088 Provision for income taxes
131 120 122 483
413 Net income $ 211 $ 190 $ 200
$ 787 $ 675 Earnings per share - basic $ 0.39
$ 0.34 $ 0.36 $ 1.43 $ 1.23 Earnings per share - diluted $ 0.38 $
0.34 $ 0.36 $ 1.42 $ 1.22 Weighted average shares
outstanding - basic 547 551 550 550 549 Weighted average shares
outstanding - diluted 551 555 555 554 554 Dividends declared
per share $ 0.12 $ 0.12 $ 0.09 $ 0.98 $ 0.86
TD
AMERITRADE HOLDING CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS In millions (Unaudited)
Sept. 30, 2014 Sept. 30,
2013 Assets: Cash and cash equivalents $ 1,460 $ 1,062
Segregated cash and investments 5,116 5,894 Broker/dealer
receivables 1,108 1,348 Client receivables, net 11,639 8,984
Goodwill and intangible assets 3,218 3,308 Other 1,290
1,240 Total assets $ 23,831 $ 21,836 Liabilities and
stockholders' equity: Liabilities: Broker/dealer payables $
2,421 $ 1,973 Client payables 14,497 13,183 Notes payable 150 -
Long-term debt 1,101 1,052 Other 914 952 Total
liabilities 19,083 17,160 Stockholders' equity 4,748
4,676 Total liabilities and stockholders' equity $ 23,831 $
21,836
TD AMERITRADE HOLDING CORPORATION SELECTED
OPERATING DATA (Unaudited)
Quarter Ended Fiscal Year Ended Sept. 30, 2014
June 30, 2014 Sept. 30, 2013 Sept. 30, 2014
Sept. 30, 2013
Key
Metrics:
Net new assets (in billions) $13.4 $13.4 $10.1 $53.4 $49.5 Net new
asset growth rate (annualized) 8% 9% 8% 10% 10% Average client
trades per day 402,638 401,468 381,657 426,888 373,630
Profitability
Metrics:
Operating margin 42.5% 41.4% 39.4% 41.1% 38.2% Pre-tax margin 43.0%
40.6% 45.4% 40.7% 39.4% Return on average stockholders' equity
(annualized) 17.8% 16.2% 17.3% 16.8% 15.1% EBITDA(1) as a
percentage of net revenues 49.6% 47.4% 52.8% 47.4% 46.7%
Liquidity
Metrics:
Interest on borrowings (in millions) $6 $6 $6 $25 $25 Interest
coverage ratio (EBITDA(1)/interest on borrowings) 65.7 60.3 62.3
59.2 51.6 Liquid assets - management target(1) (in billions) $0.8
$0.8 $0.9 $0.8 $0.9 Cash and cash equivalents (in billions) $1.5
$1.3 $1.1 $1.5 $1.1
Transaction-Based
Revenue Metrics:
Total trades (in millions) 25.6 25.3 24.2 106.9 92.8 Average
commissions and transaction fees per trade(2) $12.97 $12.52 $12.61
$12.62 $12.61 Average client trades per funded account (annualized)
16.1 16.2 15.9 17.4 15.8 Activity rate - funded accounts 6.4% 6.5%
6.4% 6.9% 6.3% Trading days 63.5 63.0 63.5 250.5 248.5 Order
routing revenue (in millions) $77 $72 $62 $304 $236
Spread-Based
Asset Metrics:
Average interest-earning assets (in billions) $19.3 $18.8 $16.8
$18.6 $15.8 Average insured deposit account balances (in billions)
73.6 72.4 72.0 72.9 68.0 Average spread-based balance (in billions)
$92.9 $91.2 $88.8 $91.5 $83.8 Net interest revenue (in
millions) $159 $149 $119 $581 $469 Insured deposit account fee
revenue (in millions) 208 202 201 820 804 Spread-based revenue (in
millions) $367 $351 $320 $1,401 $1,273 Avg. annualized yield
- interest-earning assets 3.23% 3.13% 2.77% 3.09% 2.92% Avg.
annualized yield - insured deposit account fees 1.11% 1.10% 1.09%
1.11% 1.17% Net interest margin (NIM) 1.55% 1.52% 1.41% 1.51% 1.50%
Fee-Based
Investment Metrics:
Money market mutual
fund fees:
Average balance (in billions) $5.5 $5.2 $5.3 $5.3 $5.1 Average
annualized yield 0.00% 0.00% 0.00% 0.00% 0.02% Fee revenue (in
millions) $0 $0 $0 $0 $1
Market fee-based
investment balances:
Average balance (in billions) $138.5 $133.3 $117.0 $131.4 $107.7
Average annualized yield 0.23% 0.24% 0.22% 0.23% 0.23% Fee revenue
(in millions) $83 $79 $67 $309 $249 Average fee-based
investment balances (in billions) $144.0 $138.5 $122.3 $136.7
$112.8 Average annualized yield 0.23% 0.23% 0.21% 0.22% 0.22%
Investment product fee revenue (in millions) $83 $79 $67 $309 $250
(1) See attached reconciliation of non-GAAP financial
measures. (2) Average commissions and transaction fees per trade
excludes TD Waterhouse UK business.
NOTE: See Glossary of Terms on the
Company's web site at www.amtd.com for definitions of the above
metrics.
TD AMERITRADE HOLDING CORPORATION SELECTED
OPERATING DATA (Unaudited)
Quarter Ended Fiscal Year Ended Sept. 30, 2014
June 30, 2014 Sept. 30, 2013 Sept. 30, 2014
Sept. 30, 2013
Client Account
and Client Asset Metrics:
Funded accounts (beginning of period) 6,237,000 6,146,000 5,943,000
5,993,000 5,764,000 Funded accounts (end of period) 6,301,000
6,237,000 5,993,000 6,301,000 5,993,000 Percentage change during
period 1% 1% 1% 5% 4% Client assets (beginning of period, in
billions) $650.2 $617.1 $523.5 $555.9 $472.3 Client assets (end of
period, in billions) $653.1 $650.2 $555.9 $653.1 $555.9 Percentage
change during period 0% 5% 6% 17% 18%
Net Interest
Revenue:
Segregated
cash:
Average balance (in billions) $5.3 $5.2 $5.5 $5.3 $4.6 Average
annualized yield 0.13% 0.14% 0.09% 0.13% 0.12% Interest revenue (in
millions) $2 $2 $1 $7 $6
Client margin
balances:
Average balance (in billions) $11.2 $11.0 $8.5 $10.5 $8.6 Average
annualized yield 3.69% 3.79% 3.95% 3.81% 3.97% Interest revenue (in
millions) $105 $105 $86 $405 $345
Securities
borrowing/lending:
Average securities borrowing balance (in billions) $1.1 $1.0 $1.1
$1.1 $1.0 Average securities lending balance (in billions) $2.4
$2.6 $2.2 $2.5 $2.1 Net interest revenue - securities
borrowing/lending (in millions) $52 $42 $31 $169 $118
Other cash and
interest-earning investments:
Average balance (in billions) $1.7 $1.6 $1.7 $1.7 $1.6 Average
annualized yield 0.05% 0.06% 0.09% 0.07% 0.08% Interest revenue -
net (in millions) $0 $0 $1 $1 $1
Client credit
balances:
Average balance (in billions) $11.8 $11.5 $10.1 $11.2 $9.5 Average
annualized cost 0.01% 0.01% 0.01% 0.01% 0.01% Interest expense (in
millions) ($0) ($0) ($0) ($1) ($1) Average interest-earning
assets (in billions) $19.3 $18.8 $16.8 $18.6 $15.8 Average
annualized yield 3.23% 3.13% 2.77% 3.09% 2.92% Net interest revenue
(in millions) $159 $149 $119 $581 $469
NOTE: See Glossary of Terms on the
Company's web site at www.amtd.com for definitions of the above
metrics.
TD AMERITRADE HOLDING CORPORATION RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES Dollars in millions (Unaudited)
Quarter Ended Fiscal Year Ended Sept. 30, 2014
June 30, 2014 Sept. 30, 2013 Sept. 30, 2014
Sept. 30, 2013 $ % of Net Rev. $ %
of Net Rev. $ % of Net Rev. $ % of Net
Rev. $ % of Net Rev.
EBITDA
(1)
EBITDA $ 394 49.6 % $ 362 47.4 % $ 374 52.8 % $ 1,480 47.4 % $
1,290 46.7 % Less: Depreciation and amortization (23 ) (2.9 %) (24
) (3.1 %) (23 ) (3.2 %) (95 ) (3.0 %) (86 ) (3.1 %) Amortization of
acquired intangible assets (23 ) (2.9 %) (22 ) (2.9 %) (23 ) (3.2
%) (90 ) (2.9 %) (91 ) (3.3 %) Interest on borrowings (6 ) (0.8 %)
(6 ) (0.8 %) (6 ) (0.8 %) (25 ) (0.8 %) (25 ) (0.9 %) Provision for
income taxes (131 ) (16.5 %) (120 ) (15.7 %)
(122 ) (17.2 %) (483 ) (15.5 %) (413 ) (14.9 %) Net
income $ 211 26.5 % $ 190 24.9 % $ 200 28.2 %
$ 787 25.2 % $ 675 24.4 %
As of
Sept. 30 June 30, Mar. 31, Dec. 31,
Sept. 30, 2014 2014 2014 2013
2013
Liquid Assets -
Management Target (2)
Liquid assets - management target $ 762 $ 767 $ 706 $ 707 $ 874
Plus:
Broker-dealer cash and cash equivalents 1,090 871 508 926 540 Trust
company cash and cash equivalents 53 54 64 60 74 Investment
advisory cash and cash equivalents 19 9 14 25 19 Less: Excess
broker-dealer regulatory net capital (464 ) (441 )
(359 ) (409 ) (445 ) Cash and cash equivalents
$ 1,460 $ 1,260 $ 933 $ 1,309 $ 1,062
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) Liquid
assets - management target is considered a non-GAAP financial
measure as defined by SEC Regulation G. We include the excess
capital of our broker-dealer subsidiaries in the calculation of
liquid assets - management target, rather than simply including
broker-dealer cash and cash equivalents, because capital
requirements may limit the amount of cash available for dividend
from the broker-dealer subsidiaries to the parent company. Excess
capital, as defined below, is generally available for dividend from
the broker-dealer subsidiaries to the parent company. We consider
liquid assets - management target to be an important measure of our
liquidity and of our ability to fund corporate investing and
financing activities. Liquid assets - management target should be
considered a supplemental measure of liquidity, rather than a
substitute 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.). Liquid
assets - management target is based on more conservative measures
of broker-dealer net capital than regulatory thresholds require
because we prefer to maintain significantly more conservative
levels of net capital at the broker-dealer subsidiaries. We
consider liquid assets - management target to be a measure that
reflects our liquidity that would be readily available for
corporate investing and financing activities under normal operating
circumstances.
TD Ameritrade Holding CorporationKim Hillyer,
402-574-6523Director,
Communicationskim.hillyer@tdameritrade.comorJeff Goeser,
402-597-8464Director, Investor Relations and
Financejeffrey.goeser@tdameritrade.com
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