Average Client Trades Per Day of 434,000
Net New Client Assets of $11.7 billion, 7%
Annualized Growth Rate
Net Revenues of $794 million
Diluted Earnings per Share of $0.36
TD Ameritrade Holding Corporation (NYSE:AMTD) has released
operating results for the third quarter of fiscal 2015.
The Company’s results for the quarter ended June 30, 2015
include the following:(1)
- Net income of $197 million, or $0.36
per diluted share
- Net new client assets of approximately
$11.7 billion, an annualized growth rate of 7 percent
- Average client trades per day of
approximately 434,000, an activity rate of 6.7 percent
- Net revenues of $794 million, 57
percent of which were asset-based
- Investment product fee revenues of $85
million, up 8 percent year-over-year
- Pre-tax income of $319 million, or 40
percent of net revenues
- EBITDA(2) of $377 million, or 47
percent of net revenues
- Record Interest rate sensitive
assets(3) of $102 billion, up 6 percent year-over-year
- Record client assets of approximately
$702 billion, up 8 percent year-over-year
“As we complete our third quarter and look back on the last nine
months, we remain upbeat about our growth and prospects for another
strong year,” said Fred Tomczyk, president and chief executive
officer. “We continue to execute well against our growth strategy,
with $47 billion in net new client assets gathered year-to-date, an
organic growth rate of 10 percent and up 17 percent over last year.
Likewise, average client trades per day, year-to-date, are 456,000,
up 5 percent over last year. This leaves us with good momentum, and
we will continue to invest in organic growth initiatives.”
“Net revenues were up 4 percent from last year, driven by
continued growth in trading and asset gathering,” said Bill Gerber,
executive vice president and chief financial officer.
“Year-to-date, earnings per share of $1.09 were up 5 percent,
despite a continued difficult macroeconomic environment. We remain
focused on delivering strong results, being disciplined in overall
expense management and being good stewards of shareholder
capital.”
Capital DeploymentOver the quarter the Company
repurchased 125,000 shares of its common stock for $5 million, at
an average price of $36.75 per share.
The Company has also declared a $0.15 per share quarterly cash
dividend, payable on Aug. 18, 2015 to all holders of record of
common stock as of Aug. 4, 2015.
Company Hosts Conference CallTD Ameritrade will host its
June Quarter conference call this morning, Jul. 21, 2015, at 8:30
a.m. EDT (7:30 a.m. CDT). Participants may listen to the conference
call by dialing 855-238-2333. 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
10066897 beginning at 10:30 a.m. EDT (9:30 a.m. CDT) on Jul. 21,
2015. The replay will be available until 9:00 a.m. EDT (8:00 a.m.
CDT) on Jul. 28, 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 Wednesday, Jul. 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 40 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 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, or read our stories at Fresh
Accounts.
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 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
Relations” 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 June 30,
2015.
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 Nine Months Ended June
30, 2015 Mar. 31, 2015 June 30, 2014 June 30,
2015 June 30, 2014 Revenues: Transaction-based revenues:
Commissions and transaction fees $ 328 $ 350 $ 317 $ 1,036 $ 1,019
Asset-based revenues: Interest revenue 158 151 150 472 426
Brokerage interest expense (2 ) (2 ) (1 )
(5 ) (5 ) Net interest revenue 156 149 149 467 421
Insured deposit account fees 209 205 202 620 612 Investment
product fees 85 85 79
253 226 Total asset-based revenues 450
439 430 1,340 1,259 Other revenues 16
14 16 39 49 Net
revenues 794 803 763
2,415 2,327 Operating expenses:
Employee compensation and benefits 202 208 189 608 565 Clearing and
execution costs 36 37 35 108 98 Communications 31 30 29 92 84
Occupancy and equipment costs 40 39 39 121 116 Depreciation and
amortization 23 23 24 69 71 Amortization of acquired intangible
assets 22 22 22 67 68 Professional services 43 41 42 120 117
Advertising 54 82 48 199 205 Other 18 25
19 66 57 Total
operating expenses 469 507 447
1,450 1,381 Operating
income 325 296 316 965 946 Other expense (income): Interest
on borrowings 13 9 6 30 18 Gain on sale of investments (7 ) - - (7
) - Other - - - 1
- Total other expense (income) 6
9 6 24 18
Pre-tax income 319 287 310 941 928 Provision for income
taxes 122 98 120
344 352 Net income $ 197 $ 189
$ 190 $ 597 $ 576 Earnings per
share - basic $ 0.36 $ 0.35 $ 0.34 $ 1.10 $ 1.05 Earnings per share
- diluted $ 0.36 $ 0.35 $ 0.34 $ 1.09 $ 1.04 Weighted
average shares outstanding - basic 544 544 551 544 551 Weighted
average shares outstanding - diluted 547 547 555 547 555
Dividends declared per share $ 0.15 $ 0.15 $ 0.12 $ 0.45 $ 0.86
TD AMERITRADE HOLDING CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS In millions (Unaudited)
June 30, 2015
Sept. 30, 2014
Assets: Cash and cash equivalents $ 2,233 $ 1,460 Segregated cash
and investments 4,425 5,116 Broker/dealer receivables 1,144 1,108
Client receivables, net 12,868 11,639 Goodwill and intangible
assets 3,151 3,218 Other 1,338 1,290 Total assets $
25,159 $ 23,831 Liabilities and stockholders' equity:
Liabilities: Broker/dealer payables $ 2,414 $ 2,421 Client payables
15,070 14,497 Notes payable - 150 Long-term debt 1,810 1,101 Other
872 914 Total liabilities 20,166 19,083 Stockholders'
equity 4,993 4,748 Total liabilities and
stockholders' equity $ 25,159 $ 23,831
TD
AMERITRADE HOLDING CORPORATION SELECTED OPERATING DATA
(Unaudited)
Quarter Ended
Nine Months Ended June 30, 2015 Mar.
31, 2015 June 30, 2014 June 30,
2015 June 30, 2014
Key
Metrics:
Net new assets (in billions) $11.7 $16.3 $13.4 $46.8 $40.0 Net new
asset growth rate (annualized) 7% 10% 9% 10% 10% Average client
trades per day 433,759 476,590 401,468 455,642 435,123
Profitability
Metrics:
Operating margin 40.9% 36.9% 41.4% 40.0% 40.7% Pre-tax margin 40.2%
35.7% 40.6% 39.0% 39.9% Return on average stockholders' equity
(annualized) 15.9% 15.7% 16.2% 16.5% 16.5% EBITDA(1) as a
percentage of net revenues 47.5% 42.5% 47.4% 45.8% 46.6%
Liquidity
Metrics:
Interest on borrowings (in millions) $13 $9 $6 $30 $18 Interest
coverage ratio (EBITDA(1)/interest on borrowings) 29.0 37.9 60.3
36.9 60.3 Liquid assets - management target(1) (in billions) $0.6
$0.7 $0.8 $0.6 $0.8 Cash and cash equivalents (in billions) $2.2
$1.3 $1.3 $2.2 $1.3
Transaction-Based
Revenue Metrics:
Total trades (in millions) 27.3 29.1 25.3 85.2 81.4 Average
commissions and transaction fees per trade(2) $11.99 $12.02 $12.52
$12.16 $12.51 Average client trades per funded account (annualized)
16.7 18.6 16.2 17.8 17.9 Activity rate - funded accounts 6.7% 7.4%
6.5% 7.1% 7.1% Trading days 63.0 61.0 63.0 187.0 187.0 Order
routing revenue (in millions) $71 $75 $72 $223 $226
Spread-Based
Asset Metrics:
Average interest-earning assets (in billions) $20.5 $19.4 $18.8
$19.8 $18.3 Average insured deposit account balances (in billions)
74.8 74.9 72.4 74.9 72.7 Average spread-based balance (in billions)
$95.3 $94.3 $91.2 $94.7 $91.0 Net interest revenue (in
millions) $156 $149 $149 $467 $421 Insured deposit account fee
revenue (in millions) 209 205 202 620 612 Spread-based revenue (in
millions) $365 $354 $351 $1,087 $1,033 Avg. annualized yield
- interest-earning assets 3.02% 3.09% 3.13% 3.11% 3.04% Avg.
annualized yield - insured deposit account fees 1.10% 1.09% 1.10%
1.09% 1.11% Net interest margin (NIM) 1.51% 1.50% 1.52% 1.51% 1.50%
Fee-Based
Investment Metrics:
Money market mutual
fund fees:
Average balance (in billions) $5.6 $5.6 $5.2 $5.6 $5.2 Average
annualized yield 0.00% 0.00% 0.00% 0.00% 0.00% Fee revenue (in
millions) $0 $0 $0 $0 $0
Market fee-based
investment balances:
Average balance (in billions) $155.7 $149.5 $133.3 $150.1 $129.0
Average annualized yield 0.22% 0.23% 0.24% 0.22% 0.23% Fee revenue
(in millions) $85 $85 $79 $253 $226 Average fee-based
investment balances (in billions) $161.3 $155.1 $138.5 $155.7
$134.2 Average annualized yield 0.21% 0.22% 0.23% 0.21% 0.22%
Investment product fee revenue (in millions) $85 $85 $79 $253 $226
(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 Nine Months Ended June 30, 2015
Mar. 31, 2015 June 30,
2014 June 30, 2015 June 30, 2014
Client Account
and Client Asset Metrics:
Funded accounts (beginning of period) 6,467,000 6,371,000 6,146,000
6,301,000 5,993,000 Funded accounts (end of period) 6,551,000
6,467,000 6,237,000 6,551,000 6,237,000 Percentage change during
period 1% 2% 1% 4% 4% Client assets (beginning of period, in
billions) $695.3 $672.4 $617.1 $653.1 $555.9 Client assets (end of
period, in billions) $702.3 $695.3 $650.2 $702.3 $650.2 Percentage
change during period 1% 3% 5% 8% 17%
Net Interest
Revenue:
Segregated
cash:
Average balance (in billions) $4.0 $4.4 $5.2 $4.6 $5.3 Average
annualized yield 0.11% 0.13% 0.14% 0.13% 0.13% Interest revenue (in
millions) $1 $1 $2 $4 $5
Client margin
balances:
Average balance (in billions) $12.5 $11.9 $11.0 $12.0 $10.3 Average
annualized yield 3.56% 3.60% 3.79% 3.62% 3.85% Interest revenue (in
millions) $112 $107 $105 $328 $299
Securities
borrowing/lending:
Average securities borrowing balance (in billions) $1.0 $1.0 $1.0
$0.9 $1.1 Average securities lending balance (in billions) $2.2
$2.2 $2.6 $2.2 $2.5 Net interest
revenue - securities borrowing/lending (in millions) $43 $41 $42
$135 $117
Other cash and
interest-earning investments:
Average balance (in billions) $3.0 $2.1 $1.6 $2.3 $1.6 Average
annualized yield 0.03% 0.04% 0.06% 0.04% 0.07% Interest revenue -
net (in millions) $0 $0 $0 $1 $1
Client credit
balances:
Average balance (in billions) $12.2 $12.0 $11.5 $12.1 $11.1 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) $20.5 $19.4 $18.8 $19.8 $18.3 Average
annualized yield 3.02% 3.09% 3.13% 3.11% 3.04% Net interest revenue
(in millions) $156 $149 $149 $467 $421 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 Nine Months Ended June 30, 2015 Mar. 31,
2015 June 30, 2014 June 30, 2015 June 30,
2014 $ % of Net Rev. $ % of Net
Rev. $ % of Net Rev. $ % of Net
Rev. $ % of Net Rev.
EBITDA
(1)
EBITDA $ 377 47.5 % $ 341 42.5 % $ 362 47.4 % $ 1,107 45.8 % $
1,085 46.6 % Less: Depreciation and amortization (23 ) (2.9 %) (23
) (2.9 %) (24 ) (3.1 %) (69 ) (2.9 %) (71 ) (3.1 %) Amortization of
acquired intangible assets (22 ) (2.8 %) (22 ) (2.7 %) (22 ) (2.9
%) (67 ) (2.8 %) (68 ) (2.9 %) Interest on borrowings (13 ) (1.6 %)
(9 ) (1.1 %) (6 ) (0.8 %) (30 ) (1.2 %) (18 ) (0.8 %) Provision for
income taxes (122 ) (15.4 %) (98 ) (12.2 %)
(120 ) (15.7 %) (344 ) (14.2 %) (352 ) (15.1 %) Net
income $ 197 24.8 % $ 189 23.5 % $ 190 24.9 %
$ 597 24.7 % $ 576 24.8 %
As of
June 30, Mar. 31, Dec. 31, Sept. 30,
June 30, 2015 2015 2014 2014
2014
Liquid Assets -
Management Target (2)
Liquid assets - management target $ 579 $ 740 $ 731 $ 762 $ 767
Plus: Non-corporate cash and cash
equivalents
1,116 662 1,519 1,162 934 Corporate liquidity maintained for
operational contingencies 750 750 - - -
Less: Corporate short-term investments
- (501 ) - - - Excess broker-dealer and FCM regulatory net capital
(212 ) (371 ) (373 ) (464 ) (441
) Cash and cash equivalents $ 2,233 $ 1,280 $ 1,877
$ 1,460 $ 1,260
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 and short-term investments,
excluding $750 million from the 2.950% Senior Notes issued on March
4, 2015 that is being maintained to provide liquidity for
operational contingencies and (b) 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150721005374/en/
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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