TD AMERITRADE ANNUAL SHAREHOLDERS MEETING. February 25, 2010

Transcription

1 1 TD AMERITRADE ANNUAL SHAREHOLDERS MEETING February 25, 2010 TD AMERITRADE, Inc., member FINRA/SIPC, is a subsidiary of TD AMERITRADE Holding Corporation. TD AMERITRADE is a trademark jointly owned by TD AMERITRADE IP Company, Inc. and The Toronto-Dominion Bank TD AMERITRADE IP Company, Inc. All rights reserved. Used with permission.

2 STANDING COMMITTEES Audit 2. HR and Compensation 3. Corporate Governance 4. Outside Independent Directors 5. Non-TD Directors

3 AUDIT COMMITTEE 3 Purpose: Oversee the Company s internal accounting and operational controls Review Company financial statements and audit findings Selects the Company s independent public accounting firm Members: Cohen (Chair), Tessler, Prezzano

4 HR AND COMPENSATION COMMITTEE 4 Purpose - review and approve: Broad compensation philosophy and policy Succession planning Management development Members: Clark (Chair), Cook, Mitchell

5 CORPORATE GOVERNANCE COMMITTEE 5 Purpose: Ensure that the Company has and follows the appropriate governance standards Members: Tessler (Chair), Clark, Cohen, Cook, Joe Ricketts

6 OUTSIDE INDEPENDENT DIRECTORS 6 Purpose assist the board in fulfilling oversight responsibilities by: Identifying individuals to serve on the board Review and approve any transactions involving major shareholders, directors other related parties Members: Cook (Chair), Mitchell, Tessler

7 NON-TD DIRECTORS 7 Purpose: Make determinations related to any acquisition by the Company of a competing business held by TD Members: Cook, Mitchell, Joe Ricketts, Pete Ricketts, Tessler, Tomczyk, Moglia

8 8 TD AMERITRADE ANNUAL SHAREHOLDERS MEETING February 25, 2010

9 SAFE HARBOR 9 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, benefits of the thinkorswim acquisition, 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 general economic and political conditions, interest rates, market fluctuations and changes in client trading activity, increased competition, systems failures and capacity constraints, ability to service debt obligations, ability to realize the expected benefits from the thinkorswim acquisition, 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. 13, 2009, 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.

10 10 TD AMERITRADE ANNUAL SHAREHOLDERS MEETING February 25, 2010 TD AMERITRADE, Inc., member FINRA/SIPC, is a subsidiary of TD AMERITRADE Holding Corporation. TD AMERITRADE is a trademark jointly owned by TD AMERITRADE IP Company, Inc. and The Toronto-Dominion Bank TD AMERITRADE IP Company, Inc. All rights reserved. Used with permission.

11 OUR VISION 11 To be the better investment firm for today s investor.

12 STRATEGIC OBJECTIVES 12 RETAIL INVESTOR FOCUS GATHER ASSETS TRADING GOAL Become a premier asset gatherer Maintain and extend leadership position APPROACH Organic Acquisition

13 BUSINESS MODEL KEY TO DRIVING ORGANIC GROWTH 13 CLIENT NEEDS 1. Trading 2. Investing 3. Advice CLIENT-CENTRIC MULTI-CHANNEL DELIVERY Web Phone Education Branch RIAs BROAD PRODUCT RANGE OPEN ARCHITECTURE Tools and Information Seminars and Coaching Planning Services Packaged Products Cash Management

14 MANAGING THROUGH THE CRISIS STRONG FINANCIAL POSITION 14 Conservative Balance Sheet TD Bank relationship No U.S. real estate credit risk Strong Cash Position Prudent Financial Leverage Investment-Grade Credit Rating POSITIONED TO TAKE ADVANTAGE OF OPPORTUNITIES

15 MANAGING THROUGH THE CRISIS TAKING ADVANTAGE OF DISLOCATION 15 Reduce Nonclient-Facing Expenses Increase Marketing Investments thinkorswim Acquisition Share Buyback Cash Management Strategy Refinance Debt WELL POSITIONED FOR THE OTHER SIDE OF THE CYCLE

16 RECORD GROWTH TRADES MAINTAINING, ENHANCING LEADERSHIP 16 8 Trades Per Day & Activity Rate* TD AMERITRADE TPD (K) (2) 23% % %* 6.3%* 7.3%* FY07 FY08 FY09 Pro Forma (3) 6.0% 7.2% 8.1% #1 in Market Share (1) Increased Client Engagement Educational programs Risk management tools Options (4) Quality execution Strong Funded Account Growth Strong Activity Rates thinkorswim Acquisition (1) Source: Based on last twelve months publicly available reports for E*Trade Financial, optionsxpress and Charles Schwab. (2) Effective in Oct 2007, Average Trades Per Day have been adjusted to exclude nonrevenue-generating mutual fund trades. (3) Pro forma combined with thinkorswim funded activity rate. (4) Options involve risks and are not suitable for all investors. * Funded account activity rate. Average client trades per day during the period divided by the average number of total funded accounts, during the period.

17 RECORD GROWTH ASSETS GATHERED ON PAR WITH PREMIER ASSET GATHERERS 17 9 NNA ($B) (1) AMTD 115% $26.6 $22.8 $12.4 5%* 8%* 10%* Significant Improvement in Client Service Sales and Service Culture Client-Centric Business Model Share of Wallet Strategies Investments in Marketing FY07 FY08 FY09 S&P % (1) Net new assets (NNA) consists of total client asset inflows, less total client asset outflows, excluding activity from business combinations. Client asset inflows include interest and dividend payments and exclude changes in client assets due to market fluctuations. Net new assets are measured based on the market value of the assets as of the date of the inflows and outflows. * NNA as a % of client assets as of the beginning of the period.

18 FINANCIAL RESULTS FISCAL Financial Metrics EPS (1) $1.10 Net Revenues $2.4B 46% Asset-Based Pre-Tax Income $1.1B 44% of Net Revenues EBITDA (2) $1.2B 51% of Net Revenues Return on Equity 21% TOTAL SHAREHOLDER RETURN 18% (1) Earnings per diluted share. (2) See attached reconciliation of financial measures.

19 SHAREHOLDER RETURN (1) AMTD Peer Group S&P % 100-7% 75-26% /08 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 (1) Graph compares the cumulative total return, through the end of the Company s most recent fiscal year, from a $100 investment on September 30, 2008, in the Company s common stock, a broad-based stock index and the stocks composing an industry peer group (ETFC and SCHW).

20 2010 BUSINESS CLIMATE 20 Near-Zero Interest Rates Economic/Market Environment Competitive Environment Regulatory Reform

21 2010 STRATEGIC OBJECTIVES 21 Maintain and Grow Leadership Position in Trades Per Day Continue to Drive Asset Gathering Strategy Deliver on thinkorswim Integration Leverage Investor Education Continue Enhancing Technology Capabilities Further Leverage Partnership with TD Bank

22 KEY TAKEAWAYS 22 Business Model Working Record Organic Growth Financially Strong and Stable Positioned for Rising Rate Environment Poised to Take Advantage of Opportunities WELL POSITIONED TO DELIVER LONG-TERM SHAREHOLDER VALUE

23 23 QUESTIONS AND ANSWERS TD AMERITRADE ANNUAL SHAREHOLDERS MEETING

24 24 RECONCILIATION OF FINANCIAL MEASURES TD AMERITRADE ANNUAL SHAREHOLDERS MEETING

25 25 TD AMERITRADE HOLDING CORPORATION RECONCILIATION OF FINANCIAL MEASURES In thousands, except percentages (Unaudited) Fiscal Year Ended Sept. 30, 2009 $ % of Rev. EBITDA (1) EBITDA $ 1,219, % Less: Depreciation and amortization (45,891) (1.9%) Amortization of acquired intangible assets (73,870) (3.1%) Interest on borrowings (40,070) (1.7%) Provision for income taxes (415,700) (17.3%) Net income $ 643, % 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 senior revolving credit facility. EBITDA eliminates the noncash 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.