OMAHA, Neb.--(BUSINESS WIRE)--TD Ameritrade Holding Corporation (NYSE: AMTD) has released results for fiscal 2015. The Company gathered approximately $63 billion in net new client assets, maintaining its industry-leading double-digit net new client asset growth rate for the seventh consecutive year.
The Company’s results for the fiscal year ended Sept. 30, 2015 include the following: (1)
- Record $1.49 earnings per diluted share, on record net income of $813 million
- Record net new client assets of approximately $63 billion, an annualized growth rate of 10 percent
- Record average client trades per day of approximately 462,000, an activity rate of 7.1 percent
- Record net revenues of $3.2 billion, 55 percent of which were asset-based
- Record investment product fee revenue of $334 million, up 8 percent year-over-year
- Record pre-tax income of $1.3 billion, or 40 percent of net revenues
- Record EBITDA(2) of $1.5 billion, or 47 percent of net revenues
- Record interest rate-sensitive assets(3) of $108 billion, up 8 percent year-over-year
- Client assets of approximately $667 billion, up 2 percent year-over-year
“The story of 2015 is one of continued momentum and strength in nearly every area of our business,” said Fred Tomczyk, president and chief executive officer. “Strong trading and asset gathering have again helped us deliver growth in earnings, despite the continued low interest rate environment. We finished the year strong in trading, averaging a record 462,000 trades per day, as volatility returned to the markets in the fourth quarter. And, we gathered a record $63 billion in net new client assets, a double-digit growth rate for the seventh consecutive year. We will carry that momentum with us into fiscal 2016. We have a strong competitive position, an unrelenting client focus, and we remain well-aligned with the secular growth trends – which will serve to help us continue delivering strong organic growth and earnings.”
“Fiscal 2015 was a good year, with record earnings of $1.49 per diluted share, despite a prolonged near-zero interest rate environment. We also bought back nearly 11 million shares of our common stock, or 2 percent of outstanding shares. Building our long-term earnings power remains our focus, and with interest rate-sensitive assets now at a record $108 billion, we remain well-positioned for a rising rate environment,” said Steve Boyle, executive vice president and chief financial officer. “As we look ahead, our client-focused growth strategy will remain our utmost priority, with trading levels, balance growth and the interest rate environment being the primary drivers of our fiscal 2016 results. We will be disciplined on managing expenses, utilizing productivity savings to invest in future growth. We would expect that these efforts, combined with plans to return 60-to-80 percent of net income excluding amortization of intangible assets, will provide our shareholders with continued value and further enhance our results.”
Fourth Quarter 2015 Results
In addition, the Company has
released its results for the quarter ended Sept. 30, 2015, which include
the following: (1)
- Net income of $216 million, or $0.40 per diluted share, up 5 percent year-over-year
- Net new client assets of approximately $16 billion, an annualized growth rate of 9 percent
- Average client trades per day of approximately 479,000, an activity rate of 7.3 percent
- Record net revenues of $831 million, 55 percent of which were asset-based
- Investment product fee revenue of $82 million, down 1 percent year-over-year
- Pre-tax income of $347 million, or 42 percent of net revenues
- EBITDA(2) of $405 million, or 49 percent of net revenues
- Return on average stockholders’ equity (annualized) of 17 percent
Capital Management
During the 2015 fiscal year, the Company
paid $326 million, or $0.60 per share, in cash dividends, which included
four quarterly dividends of $0.15 per share. The Company also
repurchased approximately 11 million shares of its common stock.
The Company has declared a $0.17 per share quarterly cash dividend, an increase of 13 percent year-over-year, payable on Nov. 24, 2015 to all holders of record of common stock as of Nov. 10, 2015.
Fiscal 2016 Outlook
The Company has also released its
outlook for the 2016 fiscal year, which reflects expected earnings of
$1.45 to $1.75 per diluted share for its 2016 fiscal year.
More information on the fiscal 2016 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 Call
TD Ameritrade will host its
September Quarter conference call this morning, Oct. 27, 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 beginning at 10:30 a.m. EDT (9:30 a.m. CDT) on Oct. 27,
2015 by dialing 877-344-7529 and entering the Conference ID 10072134.
The replay will be available until 9:00 a.m. EDT (8:00 a.m. CDT) on Nov.
4, 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, Oct. 28, 2015.
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 Corporation
Millions 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 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, 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 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 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” 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, 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 | Fiscal Year Ended | ||||||||||||||||||
| Sept. 30, 2015 | June 30, 2015 | Sept. 30, 2014 | Sept. 30, 2015 | Sept. 30, 2014 | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Transaction-based revenues: | |||||||||||||||||||
| Commissions and transaction fees | $ | 364 | $ | 328 | $ | 332 | $ | 1,401 | $ | 1,351 | |||||||||
| Asset-based revenues: | |||||||||||||||||||
| Insured deposit account fees | 218 | 209 | 208 | 839 | 820 | ||||||||||||||
| Net interest revenue | 155 | 156 | 159 | 622 | 581 | ||||||||||||||
| Investment product fees | 82 | 85 | 83 | 334 | 309 | ||||||||||||||
| Total asset-based revenues | 455 | 450 | 450 | 1,795 | 1,710 | ||||||||||||||
| Other revenues | 12 | 16 | 13 | 51 | 62 | ||||||||||||||
| Net revenues | 831 | 794 | 795 | 3,247 | 3,123 | ||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Employee compensation and benefits | 199 | 202 | 195 | 807 | 760 | ||||||||||||||
| Clearing and execution costs | 39 | 36 | 36 | 148 | 134 | ||||||||||||||
| Communications | 32 | 31 | 31 | 125 | 116 | ||||||||||||||
| Occupancy and equipment costs | 42 | 40 | 41 | 163 | 156 | ||||||||||||||
| Depreciation and amortization | 22 | 23 | 23 | 91 | 95 | ||||||||||||||
| Amortization of acquired intangible assets | 23 | 22 | 23 | 90 | 90 | ||||||||||||||
| Professional services | 39 | 43 | 38 | 159 | 155 | ||||||||||||||
| Advertising | 49 | 54 | 45 | 248 | 250 | ||||||||||||||
| Other | 26 | 18 | 25 | 91 | 82 | ||||||||||||||
| Total operating expenses | 471 | 469 | 457 | 1,922 | 1,838 | ||||||||||||||
| Operating income | 360 | 325 | 338 | 1,325 | 1,285 | ||||||||||||||
| Other expense (income): | |||||||||||||||||||
| Interest on borrowings | 13 | 13 | 6 | 43 | 25 | ||||||||||||||
| Gain on sale of investments | - | (7 | ) | (10 | ) | (7 | ) | (10 | ) | ||||||||||
| Other | - | - | - | 1 | - | ||||||||||||||
| Total other expense (income) | 13 | 6 | (4 | ) | 37 | 15 | |||||||||||||
| Pre-tax income | 347 | 319 | 342 | 1,288 | 1,270 | ||||||||||||||
| Provision for income taxes | 131 | 122 | 131 | 475 | 483 | ||||||||||||||
| Net income | $ | 216 | $ | 197 | $ | 211 | $ | 813 | $ | 787 | |||||||||
| Earnings per share - basic | $ | 0.40 | $ | 0.36 | $ | 0.39 | $ | 1.50 | $ | 1.43 | |||||||||
| Earnings per share - diluted | $ | 0.40 | $ | 0.36 | $ | 0.38 | $ | 1.49 | $ | 1.42 | |||||||||
| Weighted average shares outstanding - basic | 541 | 544 | 547 | 543 | 550 | ||||||||||||||
| Weighted average shares outstanding - diluted | 545 | 547 | 551 | 547 | 554 | ||||||||||||||
| Dividends declared per share | $ | 0.15 | $ | 0.15 | $ | 0.12 | $ | 0.60 | $ | 0.98 | |||||||||
| TD AMERITRADE HOLDING CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| In millions | ||||||||
| (Unaudited) | ||||||||
| Sept. 30, 2015 | Sept. 30, 2014 | |||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 1,978 | $ | 1,460 | ||||
| Segregated cash and investments | 6,305 | 5,116 | ||||||
| Broker/dealer receivables | 862 | 1,108 | ||||||
| Client receivables, net | 12,770 | 11,639 | ||||||
| Goodwill and intangible assets | 3,128 | 3,218 | ||||||
| Other | 1,332 | 1,288 | ||||||
| Total assets | $ | 26,375 | $ | 23,829 | ||||
| Liabilities and stockholders' equity: | ||||||||
| Liabilities: | ||||||||
| Broker/dealer payables | $ | 2,707 | $ | 2,421 | ||||
| Client payables | 16,027 | 14,497 | ||||||
| Notes payable | - | 150 | ||||||
| Long-term debt | 1,800 | 1,099 | ||||||
| Other | 938 | 914 | ||||||
| Total liabilities | 21,472 | 19,081 | ||||||
| Stockholders' equity | 4,903 | 4,748 | ||||||
| Total liabilities and stockholders' equity | $ | 26,375 | $ | 23,829 | ||||
| TD AMERITRADE HOLDING CORPORATION | |||||||||||||||
| SELECTED OPERATING DATA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Quarter Ended | Fiscal Year Ended | ||||||||||||||
| Sept. 30, 2015 | June 30, 2015 | Sept. 30, 2014 | Sept. 30, 2015 | Sept. 30, 2014 | |||||||||||
|
Key Metrics: |
|||||||||||||||
| Net new assets (in billions) | $16.2 | $11.7 | $13.4 | $63.0 | $53.4 | ||||||||||
| Net new asset growth rate (annualized) | 9 | % | 7 | % | 8 | % | 10 | % | 10 | % | |||||
| Average client trades per day | 478,776 | 433,759 | 402,638 | 461,541 | 426,888 | ||||||||||
|
Profitability Metrics: |
|||||||||||||||
| Operating margin | 43.3 | % | 40.9 | % | 42.5 | % | 40.8 | % | 41.1 | % | |||||
| Pre-tax margin | 41.8 | % | 40.2 | % | 43.0 | % | 39.7 | % | 40.7 | % | |||||
| Return on average stockholders' equity (annualized) | 17.4 | % | 15.9 | % | 17.8 | % | 16.7 | % | 16.8 | % | |||||
| EBITDA(1) as a percentage of net revenues | 48.7 | % | 47.5 | % | 49.6 | % | 46.6 | % | 47.4 | % | |||||
|
Liquidity Metrics: |
|||||||||||||||
| Interest on borrowings (in millions) | $13 | $13 | $6 | $43 | $25 | ||||||||||
| Interest coverage ratio (EBITDA(1)/interest on borrowings) | 31.2 | 29.0 | 65.7 | 35.2 | 59.2 | ||||||||||
|
Liquid assets available for corporate investing and financing activities(1) (in billions) |
$0.5 | $0.6 | $0.8 | $0.5 | $0.8 | ||||||||||
| Cash and cash equivalents (in billions) | $2.0 | $2.2 | $1.5 | $2.0 | $1.5 | ||||||||||
|
Transaction-Based Revenue Metrics: |
|||||||||||||||
| Total trades (in millions) | 30.6 | 27.3 | 25.6 | 115.8 | 106.9 | ||||||||||
| Average commissions and transaction fees per trade | $11.89 | $11.99 | $12.97 | $12.09 | $12.62 | ||||||||||
| Average client trades per funded account (annualized) | 18.2 | 16.7 | 16.1 | 17.9 | 17.4 | ||||||||||
| Activity rate - funded accounts | 7.3 | % | 6.7 | % | 6.4 | % | 7.1 | % | 6.9 | % | |||||
| Trading days | 64.0 | 63.0 | 63.5 | 251.0 | 250.5 | ||||||||||
| Order routing revenue (in millions) | $76 | $71 | $77 | $299 | $304 | ||||||||||
|
Spread-Based Asset Metrics: |
|||||||||||||||
| Average insured deposit account balances (in billions) | $78.2 | $74.8 | $73.6 | $75.7 | $72.9 | ||||||||||
| Average interest-earning assets (in billions) | 21.6 | 20.5 | 19.3 | 20.2 | 18.6 | ||||||||||
| Average spread-based balances (in billions) | $99.8 | $95.3 | $92.9 | $95.9 | $91.5 | ||||||||||
| Insured deposit account fee revenue (in millions) | $218 | $209 | $208 | $839 | $820 | ||||||||||
| Net interest revenue (in millions) | 155 | 156 | 159 | 622 | 581 | ||||||||||
| Spread-based revenue (in millions) | $373 | $365 | $367 | $1,461 | $1,401 | ||||||||||
| Avg. annualized yield - insured deposit account fees | 1.09 | % | 1.10 | % | 1.11 | % | 1.09 | % | 1.11 | % | |||||
| Avg. annualized yield - interest-earning assets | 2.81 | % | 3.02 | % | 3.23 | % | 3.03 | % | 3.09 | % | |||||
| Net interest margin (NIM) | 1.46 | % | 1.51 | % | 1.55 | % | 1.50 | % | 1.51 | % | |||||
|
Fee-Based Investment Metrics: |
|||||||||||||||
|
Money market mutual fund fees: |
|||||||||||||||
| Average balance (in billions) | $5.7 | $5.6 | $5.5 | $5.6 | $5.3 | ||||||||||
| Average annualized yield | 0.02 | % | 0.00 | % | 0.00 | % | 0.01 | % | 0.00 | % | |||||
| Fee revenue (in millions) | $0 | $0 | $0 | $0 | $0 | ||||||||||
|
Market fee-based investment balances: |
|||||||||||||||
| Average balance (in billions) | $151.4 | $155.7 | $138.5 | $150.5 | $131.4 | ||||||||||
| Average annualized yield | 0.21 | % | 0.22 | % | 0.23 | % | 0.22 | % | 0.23 | % | |||||
| Fee revenue (in millions) | $82 | $85 | $83 | $334 | $309 | ||||||||||
| Average fee-based investment balances (in billions) | $157.1 | $161.3 | $144.0 | $156.1 | $136.7 | ||||||||||
| Average annualized yield | 0.20 | % | 0.21 | % | 0.23 | % | 0.21 | % | 0.22 | % | |||||
| Investment product fee revenue (in millions) | $82 | $85 | $83 | $334 | $309 | ||||||||||
|
(1) See attached reconciliation of non-GAAP financial measures. |
|||||||||||||||
|
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, 2015 | June 30, 2015 | Sept. 30, 2014 | Sept. 30, 2015 | Sept. 30, 2014 | |||||||||||
|
Client Account and Client Asset Metrics: |
|||||||||||||||
| Funded accounts (beginning of period) | 6,551,000 | 6,467,000 | 6,237,000 | 6,301,000 | 5,993,000 | ||||||||||
| Funded accounts (end of period) | 6,621,000 | 6,551,000 | 6,301,000 | 6,621,000 | 6,301,000 | ||||||||||
| Percentage change during period | 1 | % | 1 | % | 1 | % | 5 | % | 5 | % | |||||
| Client assets (beginning of period, in billions) | $702.3 | $695.3 | $650.2 | $653.1 | $555.9 | ||||||||||
| Client assets (end of period, in billions) | $667.4 | $702.3 | $653.1 | $667.4 | $653.1 | ||||||||||
| Percentage change during period | (5 | %) | 1 | % | 0 | % | 2 | % | 17 | % | |||||
|
Net Interest Revenue: |
|||||||||||||||
|
Segregated cash: |
|||||||||||||||
| Average balance (in billions) | $5.1 | $4.0 | $5.3 | $4.7 | $5.3 | ||||||||||
| Average annualized yield | 0.08 | % | 0.11 | % | 0.13 | % | 0.11 | % | 0.13 | % | |||||
| Interest revenue (in millions) | $1 | $1 | $2 | $5 | $7 | ||||||||||
|
|
|||||||||||||||
|
Client margin balances: |
|||||||||||||||
| Average balance (in billions) | $12.6 | $12.5 | $11.2 | $12.1 | $10.5 | ||||||||||
| Average annualized yield | 3.57 | % | 3.56 | % | 3.69 | % | 3.60 | % | 3.81 | % | |||||
| Interest revenue (in millions) | $115 | $112 | $105 | $443 | $405 | ||||||||||
|
Securities borrowing/lending: |
|||||||||||||||
| Average securities borrowing balance (in billions) | $0.9 | $1.0 | $1.1 | $0.9 | $1.1 | ||||||||||
| Average securities lending balance (in billions) | $2.4 | $2.2 | $2.4 | $2.3 | $2.5 | ||||||||||
| Net interest revenue - securities borrowing/lending (in millions) | $39 | $43 | $52 | $174 | $169 | ||||||||||
|
Other cash and interest-earning investments: |
|||||||||||||||
| Average balance (in billions) | $3.0 | $3.0 | $1.7 | $2.5 | $1.7 | ||||||||||
| Average annualized yield | 0.03 | % | 0.03 | % | 0.05 | % | 0.04 | % | 0.07 | % | |||||
| Interest revenue - net (in millions) | $0 | $0 | $0 | $1 | $1 | ||||||||||
|
Client credit balances: |
|||||||||||||||
| Average balance (in billions) | $13.3 | $12.2 | $11.8 | $12.4 | $11.2 | ||||||||||
| 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) | $21.6 | $20.5 | $19.3 | $20.2 | $18.6 | ||||||||||
| Average annualized yield | 2.81 | % | 3.02 | % | 3.23 | % | 3.03 | % | 3.09 | % | |||||
| Net interest revenue (in millions) | $155 | $156 | $159 | $622 | $581 | ||||||||||
|
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, 2015 | June 30, 2015 | Sept. 30, 2014 | Sept. 30, 2015 | Sept. 30, 2014 | |||||||||||||||||||||||||||||||||||
| $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | ||||||||||||||||||||||||||||||
|
EBITDA (1) |
|||||||||||||||||||||||||||||||||||||||
| EBITDA | $ | 405 | 48.7 | % | $ | 377 | 47.5 | % | $ | 394 | 49.6 | % | $ | 1,512 | 46.6 | % | $ | 1,480 | 47.4 | % | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (22 | ) | (2.6 | %) | (23 | ) | (2.9 | %) | (23 | ) | (2.9 | %) | (91 | ) | (2.8 | %) | (95 | ) | (3.0 | %) | |||||||||||||||||||
| Amortization of acquired intangible assets | (23 | ) | (2.8 | %) | (22 | ) | (2.8 | %) | (23 | ) | (2.9 | %) | (90 | ) | (2.8 | %) | (90 | ) | (2.9 | %) | |||||||||||||||||||
| Interest on borrowings | (13 | ) | (1.6 | %) | (13 | ) | (1.6 | %) | (6 | ) | (0.8 | %) | (43 | ) | (1.3 | %) | (25 | ) | (0.8 | %) | |||||||||||||||||||
| Provision for income taxes | (131 | ) | (15.8 | %) | (122 | ) | (15.4 | %) | (131 | ) | (16.5 | %) | (475 | ) | (14.6 | %) | (483 | ) | (15.5 | %) | |||||||||||||||||||
| Net income | $ | 216 | 26.0 | % | $ | 197 | 24.8 | % | $ | 211 | 26.5 | % | $ | 813 | 25.0 | % | $ | 787 | 25.2 | % | |||||||||||||||||||
| As of | |||||||||||||||||||||||||||||||||||||||
| Sept. 30 | June 30, | Mar. 31, | Dec. 31, | Sept. 30, | |||||||||||||||||||||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | |||||||||||||||||||||||||||||||||||
|
Liquid Assets Available for Corporate Investing and Financing Activities (2) |
|||||||||||||||||||||||||||||||||||||||
| Liquid assets available for corporate investing and financing activities | $ | 530 | $ | 581 | $ | 740 | $ | 731 | $ | 762 | |||||||||||||||||||||||||||||
| Plus: | Non-corporate cash and cash equivalents | 909 | 1,116 | 662 | 1,519 | 1,162 | |||||||||||||||||||||||||||||||||
| Corporate liquidity maintained for operational contingencies | 750 | 750 | 750 | - | - | ||||||||||||||||||||||||||||||||||
| Less: | Corporate short-term investments | - | - | (501 | ) | - | - | ||||||||||||||||||||||||||||||||
| Excess broker-dealer regulatory net capital | (211 | ) | (214 | ) | (371 | ) | (373 | ) | (464 | ) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,978 | $ | 2,233 | $ | 1,280 | $ | 1,877 | $ | 1,460 | |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
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 available for corporate investing and financing activities is considered a non-GAAP financial measure as defined by SEC Regulation G. We consider "liquid assets available for corporate investing and financing activities" to be an important measure of our liquidity. We include the excess capital of our broker-dealer subsidiaries in the calculation of liquid assets available for corporate investing and financing activities, 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. Liquid assets available for corporate investing and financing activities should be considered as a supplemental measure of liquidity, rather than as a substitute for cash and cash equivalents. | |
| We define liquid assets available for corporate investing and financing activities as the sum of (a) corporate cash and cash equivalents and short-term investments, excluding $750 million that is being maintained to provide liquidity for operational contingencies, including lending to our broker-dealer and futures commission merchant subsidiaries under intercompany credit agreements 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 available for corporate investing and financing activities is based on more conservative measures of broker-dealer net capital than regulatory requirements because we generally manage to higher levels of net capital at the broker-dealer subsidiaries than the regulatory thresholds require. | ||
