Record Net Revenues of $819M, Up 9%
Year-Over-YearRecord Net New Client Assets of $18.8B, 11%
Annualized Growth RateAverage Client Trades per Day of 457,000
TD Ameritrade Holding Corporation (NYSE: AMTD) has released
operating results for the first quarter of fiscal 2015.
The Company’s results for the quarter ended Dec. 31, 2014
include the following:(1)
- Net income of $211 million, or $0.39
per diluted share
- Record net new client assets of $18.8
billion, an annualized growth rate of 11 percent, up 30 percent
year-over-year
- Average client trades per day of
457,000, an activity rate of 7.2 percent, up 11 percent
year-over-year
- Record net revenues of $819 million, up
9 percent year-over-year, 55 percent of which were asset-based
- Investment product fee revenues of $83
million, up 15 percent year-over-year
- Pre-tax income of $334 million, or 41
percent of net revenues
- EBITDA(2) of $389 million, or 47
percent of net revenues
- Record interest rate sensitive
assets(3) of $101 billion, up 4 percent year-over-year
- Record client assets of $672 billion,
up 13 percent year-over-year
“We’re off to a great start for 2015 as we delivered our best
asset-gathering quarter in company history adding $18.8 billion in
net new assets, up 30 percent year-over-year. We continue to see
strong asset gathering in both the retail and institutional
channels,” said Fred Tomczyk, president and chief executive
officer. “Trading was at strong levels due to market volatility and
investors continue to increase their usage of options, futures and
mobile technology.”
“TD Ameritrade achieved record net revenues of $819 million, up
9 percent year-over-year due to strong trading and asset-based
revenues. Client assets reached a record $672 billion, up 13
percent year-over-year, with interest rate sensitive assets
accounting for a record $101 billion, up 4 percent year-over-year,”
said Bill Gerber, executive vice president and chief financial
officer. “We had a strong start to the fiscal year and we will
continue to focus on delivering long-term value to our
shareholders.”
Capital DeploymentDuring the first quarter of fiscal
2015, TD Ameritrade repurchased 3.7 million shares of its common
stock at an average price of $32.39 per share for $118 million.
The Company has also declared a $0.15 per share quarterly cash
dividend, payable on Feb. 18, 2015 to all holders of record of
common stock as of Feb. 4, 2015.
Company Hosts Conference CallTD Ameritrade will host its
December Quarter conference call this morning, Jan. 21, 2015, at
8:30 a.m. EST (7:30 a.m. CST). 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 by dialing 877-344-7529 and entering the Conference ID
10057542 beginning at 10:30 a.m. EST (9:30 a.m. CST) on Jan. 21,
2015. The replay will be available until 9:00 a.m. EST (8:00 a.m.
CST) on Jan. 29, 2015. 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 Thursday, Jan. 22, 2015.
Interested parties can 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.
Source: TD Ameritrade Holding Corporation
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 for the 2014, 2015
and 2016 seasons, 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.
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. 21, 2014. 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.
1Please see the Glossary of Terms, located in “Investor” section
of www.amtd.com for more information on how these metrics are
calculated.
2See attached reconciliation of non-GAAP financial measures.
3Interest rate-sensitive assets consist of spread-based assets
and money market mutual funds. Ending balances as of December 31,
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 Dec. 31, 2014 Sept. 30, 2014 Dec. 31,
2013 Revenues: Transaction-based revenues: Commissions and
transaction fees $ 359 $ 332 $ 328 Asset-based revenues:
Interest revenue 163 161 128 Brokerage interest expense (2 )
(2 ) (1 ) Net interest revenue 161 159 127 Insured
deposit account fees 207 208 208 Investment product fees 83
83 72 Total asset-based revenues
451 450 407 Other revenues 9 13
17 Net revenues 819 795
752 Operating expenses: Employee compensation
and benefits 199 195 183 Clearing and execution costs 35 36 30
Communications 31 31 28 Occupancy and equipment costs 41 41 37
Depreciation and amortization 23 23 24 Amortization of acquired
intangible assets 23 23 23 Professional services 37 38 38
Advertising 64 45 63 Other 22 25
19 Total operating expenses 475 457
445 Operating income 344 338 307 Other
expense (income): Interest on borrowings 9 6 6 Gain on sale of
investments - (10 ) - Other 1 -
- Total other expense (income) 10 (4 )
6 Pre-tax income 334 342 301 Provision for
income taxes 123 131 109
Net income $ 211 $ 211 $ 192 Earnings
per share - basic $ 0.39 $ 0.39 $ 0.35 Earnings per share - diluted
$ 0.39 $ 0.38 $ 0.35 Weighted average shares outstanding -
basic 544 547 551 Weighted average shares outstanding - diluted 548
551 555 Dividends declared per share $ 0.15 $ 0.12 $ 0.62
TD AMERITRADE HOLDING CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS In millions (Unaudited)
Dec. 31, 2014 Sept. 30, 2014
Assets: Cash and cash equivalents $ 1,877 $ 1,460 Segregated cash
and investments 4,531 5,116 Broker/dealer receivables 1,196 1,108
Client receivables, net 11,646 11,639 Goodwill and intangible
assets 3,195 3,218 Other 1,370 1,290 Total assets $
23,815 $ 23,831 Liabilities and stockholders' equity:
Liabilities: Broker/dealer payables $ 2,079 $ 2,421 Client payables
14,861 14,497 Notes payable 113 150 Long-term debt 1,112 1,101
Other 890 914 Total liabilities 19,055 19,083
Stockholders' equity 4,760 4,748 Total liabilities
and stockholders' equity $ 23,815 $ 23,831
TD
AMERITRADE HOLDING CORPORATION SELECTED OPERATING DATA
(Unaudited)
Quarter Ended Dec. 31, 2014
Sept. 30, 2014 Dec. 31,
2013
Key
Metrics:
Net new assets (in billions) $18.8 $13.4 $14.5 Net new asset growth
rate (annualized) 11 % 8 % 10 % Average client trades per day
457,243 402,638 413,743
Profitability
Metrics:
Operating margin 42.0 % 42.5 % 40.8 % Pre-tax margin 40.8 % 43.0 %
40.0 % Return on average stockholders' equity (annualized) 17.8 %
17.8 % 16.4 % EBITDA(1) as a percentage of net revenues 47.5 % 49.6
% 47.1 %
Liquidity
Metrics:
Interest on borrowings (in millions) $9 $6 $6 Interest coverage
ratio (EBITDA(1)/interest on borrowings) 43.2 65.7 59.0 Liquid
assets - management target(1) (in billions) $0.7 $0.8 $0.7 Cash and
cash equivalents (in billions) $1.9 $1.5 $1.3
Transaction-Based
Revenue Metrics:
Total trades (in millions) 28.8 25.6 26.1 Average commissions and
transaction fees per trade(2) $12.45 $12.97 $12.56 Average client
trades per funded account (annualized) 18.1 16.1 17.2 Activity rate
- funded accounts 7.2 % 6.4 % 6.9 % Trading days 63.0 63.5 63.0
Order routing revenue (in millions) $77 $77 $71
Spread-Based
Asset Metrics:
Average interest-earning assets (in billions) $19.5 $19.3 $17.6
Average insured deposit account balances (in billions) 75.0
73.6 72.7 Average spread-based balance (in billions)
$94.5 $92.9 $90.3 Net interest revenue
(in millions) $161 $159 $127 Insured deposit account fee revenue
(in millions) 207 208 208 Spread-based revenue
(in millions) $368 $367 $335 Avg.
annualized yield - interest-earning assets 3.23 % 3.23 % 2.81 %
Avg. annualized yield - insured deposit account fees 1.08 % 1.11 %
1.12 % Net interest margin (NIM) 1.53 % 1.55 % 1.45 %
Fee-Based
Investment Metrics:
Money market mutual
fund fees:
Average balance (in billions) $5.6 $5.5 $5.3 Average annualized
yield 0.00 % 0.00 % 0.00 % Fee revenue (in millions) $0 $0
$0
Market fee-based
investment balances:
Average balance (in billions) $145.1 $138.5 $125.2 Average
annualized yield 0.22 % 0.23 % 0.22 % Fee revenue (in millions) $83
$83 $72 Average fee-based investment
balances (in billions) $150.7 $144.0 $130.5 Average annualized
yield 0.22 % 0.23 % 0.22 % Investment product fee revenue (in
millions) $83 $83 $72 (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
Dec. 31, 2014 Sept. 30, 2014
Dec. 31, 2013
Client Account
and Client Asset Metrics:
Funded accounts (beginning of period) 6,301,000 6,237,000 5,993,000
Funded accounts (end of period) 6,371,000 6,301,000 6,048,000
Percentage change during period 1 % 1 % 1 % Client assets
(beginning of period, in billions) $653.1 $650.2 $555.9 Client
assets (end of period, in billions) $672.4 $653.1 $596.5 Percentage
change during period 3 % 0 % 7 %
Net Interest
Revenue:
Segregated
cash:
Average balance (in billions) $5.3 $5.3 $5.4 Average annualized
yield 0.13 % 0.13 % 0.11 % Interest revenue (in millions) $2
$2 $2
Client margin
balances:
Average balance (in billions) $11.5 $11.2 $9.3 Average annualized
yield 3.69 % 3.69 % 3.92 % Interest revenue (in millions) $108
$105 $93
Securities
borrowing/lending:
Average securities borrowing balance (in billions) $0.9 $1.1 $1.2
Average securities lending balance (in billions) $2.3 $2.4
$2.2 Net interest revenue - securities
borrowing/lending (in millions) $51 $52 $32
Other cash and
interest-earning investments:
Average balance (in billions) $1.8 $1.7 $1.7 Average annualized
yield 0.05 % 0.05 % 0.07 % Interest revenue - net (in millions) $0
$0 $0
Client credit
balances:
Average balance (in billions) $12.2 $11.8 $10.7 Average annualized
cost 0.01 % 0.01 % 0.01 % Interest expense (in millions) ($0 ) ($0
) ($0 ) Average interest-earning assets (in billions) $19.5
$19.3 $17.6 Average annualized yield 3.23 % 3.23 % 2.81 % Net
interest revenue (in millions) $161 $159 $127
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 Dec. 31,
2014 Sept. 30, 2014 Dec. 31, 2013 $ %
of Net Rev. $ % of Net Rev. $ % of Net
Rev.
EBITDA
(1)
EBITDA $ 389 47.5 % $ 394 49.6 % $ 354 47.1 % Less: Depreciation
and amortization (23 ) (2.8 %) (23 ) (2.9 %) (24 ) (3.2 %)
Amortization of acquired intangible assets (23 ) (2.8 %) (23 ) (2.9
%) (23 ) (3.1 %) Interest on borrowings (9 ) (1.1 %) (6 ) (0.8 %)
(6 ) (0.8 %) Provision for income taxes (123 ) (15.0 %)
(131 ) (16.5 %) (109 ) (14.5 %) Net income $ 211
25.8 % $ 211 26.5 % $ 192 25.5 %
As of Dec. 31, Sept. 30, June 30,
Mar. 31, Dec. 31, 2014 2014 2014
2014 2013
Liquid Assets -
Management Target (2)
Liquid assets - management target $ 732 $ 762 $ 767 $ 706 $ 707
Plus: Broker-dealer cash and cash
equivalents
1,434 1,090 871 508 926 Futures commission merchant cash and cash
equivalents 2 - - - - Trust company cash and cash equivalents 55 53
54 64 60 Investment advisory cash and cash equivalents 28 19 9 14
25 Less:Excess broker-dealer regulatory net capital (374 )
(464 ) (441 ) (359 ) (409 ) Cash and
cash equivalents $ 1,877 $ 1,460 $ 1,260 $ 933
$ 1,309 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 CorporationKristin Petrick,
402-574-6569Director,
Communicationskristin.petrick@tdameritrade.com@TDAmeritradePRorJeff
Goeser, 402-597-8464Director, Investor Relations and
Financejeffrey.goeser@tdameritrade.com
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