Annual Shareholders Meeting

Transcription

1 2018 Annual Shareholders Meeting February 16, 2018 TD Ameritrade Holding Corporation (Nasdaq: AMTD). Brokerage services provided by TD Ameritrade, Inc., member FINRA/SIPC, and TD Ameritrade Clearing, Inc., member FINRA/SIPC, subsidiaries of TD Ameritrade Holding Corp. 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 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, stock price or any projections or expectations regarding the acquisition of Scottrade Financial Services, Inc., 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 of performance to differ materially from those contained in the forward-looking statements. These risks, uncertainties and assumptions include, but are not limited to: economic, social and political conditions and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; difficulties and delays in integrating the Scottrade business or fully realizing cost savings and other benefits from the acquisition; business disruption following the Scottrade acquisition; disruptions due to Scottrade integration-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with other acquisitions; and the other risks and uncertainties set forth in our latest Annual Report on Form 10-K, filed with the SEC on Nov. 17, 2017 and our latest Quarterly Report on Form 10-Q filed thereafter and in other filings with the SEC. These forward-looking statements speak only as of the date on which the statements were made. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws. 2

3 Use of Non-GAAP Financial Measures The term GAAP refers to U.S. generally accepted accounting principles. The Company utilized the non-gaap calculation of net income and earnings per share (EPS) excluding amortization of intangible assets and acquisition-related expenses, as an additional measure to aid in understanding and analyzing the Company s financial results. Specifically, the Company believes that the non-gaap measure provides useful information by excluding certain items that may not be indicative of the Company s core operating results and business outlook. The Company believes this non-gaap measure may be useful in evaluating the operating performance of the business and facilitating a meaningful comparison of the Company s results in the current period to those in the prior and future periods. Reference to this non-gaap financial measure should not be considered as a substitute for results that are presented in a manner consistent with GAAP. This non-gaap measure is provided to enhance investors overall understanding of the Company s financial performance. *Certain totals may not foot due to rounding. **Changes based on rounding numbers to the nearest $ millions. ***See Appendix for footnotes descriptions. 3

4 Chairman of the Board OE MOGLIA 4

5 BOARD OF DIRECTORS In Memory Dan Cook years with Goldman Sachs Board of Directors, Chairman, OID HR/Comp Committee Corporate Governance Committee 5

6 BOARD OF DIRECTORS Up for Election 2018 Tim Hockey Brian Levitt Karen Maidment Mark Mitchell President and CEO Director since years in retail banking and wealth management Since 2016 Chairman of the Board, TD Bank Group 40+ year legal career TD designee HR/Comp Committee Since years in financial services TD Bank designee Audit (Chr.) and Risk Committees Since 1996 Univ. Chicago and Harvard Fmr. Sr. Financial Economist for SEC Independent director Risk (Chr.), Audit, HR/Comp and OID Committees 5

7 General Counsel llen Koplow 6

8 ANNUAL MEETING Business to be Considered Election of four nominees recommended by the board of directors to the board Advisory vote on executive compensation Ratification of the appointment of Ernst & Young LLP as the company s independent registered public accounting firm for the fiscal year ending Sept. 30,

9 BOARD OF DIRECTORS Re-elected 2018 Tim Hockey Brian Levitt Karen Maidment Mark Mitchell 8

10 BOARD OF DIRECTORS 2018 Larry Bettino Ann Hailey Bharat Masrani Irene Miller Since 2014 Since 2016 Vice Chairman Since 2013 Since

11 BOARD OF DIRECTORS 2018 Bill Prezzano Since 2006 Allan Tessler Since 2006 Todd Ricketts Since 2011 Joe Moglia CEO Chairman Since

12 Bull Market Dow Jones Industrial Average 30,000 25, years 1,000 to 5,000 20,000 15,000 10,000 5,

13 Bull Market Dow Jones Industrial Average 30,000 25, years 1,000 to 5,000 4 years 10,000 20,000 15,000 10,000 5,

14 Bull Market Dow Jones Industrial Average 30,000 25, years 1,000 to 5,000 4 years 10, years 15,000 20,000 15,000 10,000 5,

15 Bull Market Dow Jones Industrial Average 30,000 25, years 1,000 to 5,000 4 years 10, years 15,000 4 years 20,000 20,000 15,000 10,000 5,

16 Bull Market Dow Jones Industrial Average 12 months 25,000 30,000 25, years 1,000 to 5,000 4 years 10, years 15,000 4 years 20,000 20,000 15,000 10,000 5,

17 Bull Market Dow Jones Industrial Average 30,000 25,000 20, years 1,000 to 5, % 15,000 10,000 5,

18 Bull Market Dow Jones Industrial Average 30,000 25,000 20, years 1,000 to 5, % 4 years 10, % 15,000 10,000 5,

19 Bull Market Dow Jones Industrial Average 30,000 25,000 20, years 1,000 to 5, % 4 years 10, % 14 years 15,000 50% 15,000 10,000 5,

20 Bull Market Dow Jones Industrial Average 30,000 25,000 20, years 1,000 to 5, % 4 years 10, % 14 years 15,000 50% 4 years 20,000 33% 15,000 10,000 5,

21 Bull Market Dow Jones Industrial Average 12 months 25,000 25% 30,000 25,000 20, years 1,000 to 5, % 4 years 10, % 14 years 15,000 50% 4 years 20,000 33% 15,000 10,000 5,

22 2017 IN REVIEW Year of Headlines 1. New Administration 2. Trade Agreements 3. Climate change/paris Accord 4. Election investigation 5. Terrorist attacks at home/abroad 6. Hurricane devastation 7. Congress takes on healthcare 8. Tax reform passes 13

23 2017 IN REVIEW And yet volatility remained low Days with S&P Volatility > 1% FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 14

24 2018 ENVIRONMENT New year brings volatility back Days with S&P Volatility > 1% /9 trading days /21 trading days 0 Jan '18 Feb '18 MTD 15

25 2018 ENVIRONMENT Trends provide tailwinds for future growth 1. Well-positioned for further rate hikes, increased investor engagement 2. Investments in distribution and scale (Scottrade) 3. Increasing operational efficiency 4. Technology and innovation driving future opportunities 16

26 Chief Executive Officer IM HOCKEY 17

27 Welcome to Southlake

28 OUR GOAL Win on the client experience.

29 2017 STRATEGY Delivering on our goals Enhance our scale Simplify how we operate Increase our speed to market Encourage innovation 20

30 2017 STRATEGY Delivering on our goals Enhance our scale Simplify how we operate Increase our speed to market Encourage innovation 21

31 2017 STRATEGY Integrating Scottrade Combined FY17 Pro-forma Combined FY16 (10/24/16 announcement) Variance End Funded Accounts (1) End Client Assets (2) 11.0M 10.1M $1,119B $944B +0.9M +$175B Full Year DARTS (3) Pro-forma 658K 600K +58K End Client Cash $149.2B $149.0B $0.2B 22

32 2017 STRATEGY Enhanced size and scale 87% of clients within 25 miles of a branch 23

33 2017 STRATEGY Delivering a successful integration Branch mapping, talent decisions Opening St. Louis service center Transitioning new account flows Managing Client and Associate experiences Executing clearing conversion Phasing out Scottrade infrastructure 24

34 The Way Forward

35 WE EXIST: to transform lives and investing for the better.

36 THE WAY FORWARD Turning our Funnel into a Pipe CLIENTS & ASSOCIATES CLIENTS & ASSOCIATES 27

37 THE WAY FORWARD Software deliverables by Quarter 4,000 3,000 2,000 3x THROUGHPUT AT HALF THE COST (Q4 16 vs. Q4 17) 1,000 0 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 28

38 High Tech, Right Touch 29

39 TECH FOR RETAIL: Robo advisor (4) Digital guidance app Earnings analysis tool ETF Market Center TD Ameritrade Network Automated deposits & transfers Enhanced, free education

40 TECH FOR ADVISORS: VeoOne Model Market Center ETF Market Center Automated account opening & money movement Automated service solutions

41 NEWER TECH ADDITIONS: Alexa skill First chat bot with trading and education, available via Facebook Messenger and Twitter First 24/5 trading Blockchain pilots

42 HIGH TECH, RIGHT TOUCH Associate Engagement Sustainable Engagement 87% RECOGNITION Better Begins with Me 800 peer nominations DEVELOPMENT Financial Consultant Development Academy Second Class #1 DIVERSITY & INCLUSION Best Places to Work Corporate Equality Index 33

43 HIGH TECH, RIGHT TOUCH Community Giving 19k HOURS SERVED IN OUR COMMUNITIES 9 HOMES BUILT FOR HABITAT FOR HUMANITY $1.2M RAISED FOR AMERICAN RED CROSS RELIEF EFFORTS 34

44 Delivering Results

45 DELIVERING RESULTS Fiscal 2017 $3.7B NET REVENUES (UP 10% YOY) 511,000 AVERAGE CLIENT TRADES PER DAY (UP 10% YOY) $80B NET NEW CLIENT ASSETS (6) (UP 33% YOY) $1.64 GAAP EARNINGS PER DILUTED SHARE (UP 4% YOY) $1.1T TOTAL CLIENT ASSETS (2) (UP 45% YOY) $1.84 NON-GAAP EARNINGS PER DILUTED SHARE (5) (UP 10% YOY) $379M PAID IN CASH DIVIDENDS 36

46 DELIVERING RESULTS Q1 Fiscal 2018 $1.3B NET REVENUES (UP 46% YOY) 726,000 AVERAGE CLIENT TRADES PER DAY (UP 49% YOY) $26.5B NET NEW CLIENT ASSETS (6) (UP 42% YOY) $0.52 GAAP EARNINGS PER DILUTED SHARE (UP 27% YOY) $1.2T TOTAL CLIENT ASSETS (2) (UP 48% YOY) $0.80 NON-GAAP EARNINGS PER DILUTED SHARE (5) (UP 86% YOY) $119M PAID IN CASH DIVIDENDS 37

47 DELIVERING RESULTS Shareholder Return (9/30/16 through 1/31/18) 70% 60% 50% 40% 30% AMTD (+62%) S&P 500 (+34%) XBD (+64%) S&P 500 Financials (+57%) 20% 10% 0% -10% 38

48 DELIVERING RESULTS Looking Ahead

49 WE EXIST to transform lives and investing for the better.

50 uestions

51 Submit your questions to:

52 ppendix

53 APPENDIX FOOTNOTES 1) End funded accounts are all open client accounts with a total liquidation value greater than zero. 2) End client assets are the total value of cash and securities in brokerage accounts. 3) DARTS are the total trades divided by the number of trading days in the period. 4) Essential Portfolios was noted as having the best one-year taxable return. Research provided by Condor Capital ( in The Robo Report, fourth quarter 2017 edition. More information can be found by subscription at 5) Please see our reconciliation of non-gaap financial measures on the following slide. 6) Net new assets (NNA) consist 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.

54 APPENDIX NON-GAAP RECONCILIATION TD AMERITRADE HOLDING CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Dollars in millions, except per share amounts (Unaudited) Quarter Ended Fiscal Year Ended Dec. 31, 2017 Dec. 31, 2016 Sept. 30, 2017 Sept. 30, 2016 Non-GAAP Net Income and Non-GAAP Diluted EPS (1) Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Net income and diluted EPS - GAAP $ 297 $ 0.52 $ 216 $ 0.41 $ 872 $ 1.64 $ 842 $ 1.58 Non-GAAP adjustments: Amortization of acquired intangible assets Acquisition-related expenses Income tax effect of above adjustments (59) (0.10) (8) (0.02) (63) (0.12) (35) (0.07) Non-GAAP net income and non-gaap diluted EPS $ 455 $ 0.80 $ 230 $ 0.43 $ 976 $ 1.84 $ 899 $ 1.68 Note: The term "GAAP" in the following explanations refers to generally accepted accounting principles in the United States. (1) Non-GAAP net income and non-gaap diluted earnings per share (EPS) are non-gaap financial measures as defined by SEC Regulation G. We define non-gaap net income as net income adjusted to remove the after-tax effect of amortization of acquired intangible assets and acquisition-related expenses. We consider non-gaap net income and non-gaap diluted EPS as important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook and may be useful in evaluating the operating performance of the business and facilitating a meaningful comparison of our results in the current period to those in prior and future periods. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of our underlying business performance. Acquisition-related expenses are excluded as these costs are directly related to our acquisition of Scottrade Financial Services, Inc. and are not representative of the costs of running the Company s on-going business. Non-GAAP net income and non-gaap diluted EPS should be considered in addition to, rather than as a substitute for, GAAP net income and diluted EPS.

55 ONLY IF NEEDED ANNUAL SHAREHOLDERS MEETING Voting is now closed

56 ONLY IF NEEDED ANNUAL SHAREHOLDERS MEETING Thank you for your patience. The meeting will reconvene momentarily.