þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended September 30, 2011 | ||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware | 82-0543156 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Title of each class | Name of each exchange on which registered | |
Common Stock $0.01 par value
|
The NASDAQ Stock Market LLC |
Large accelerated
filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
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Item 1. | Business |
| Focus on brokerage services. We continue to focus on attracting active traders, long-term investors and RIAs to our brokerage services. This focused strategy is designed to enable us to maintain our low operating cost structure while offering our clients outstanding products and services. We primarily execute client securities transactions on an agency, rather than a principal, basis. We maintain only a small inventory of fixed income securities to meet client requirements. | |
| Provide a comprehensive long-term investor solution. We continue to expand our suite of diversified investment products and services to best serve investors needs. We help clients make investment decisions by providing simple-to-use investment tools, guidance, education and objective third-party research. | |
| Maintain industry leadership and market share with active traders. We help active traders make better-informed investment decisions by offering fast access to markets, insight into market trends and innovative tools such as strategy back-testing and comprehensive options research and trading capabilities. | |
| Continue to be a leader in the RIA industry. We provide RIAs with comprehensive brokerage and custody services supported by our robust integrated technology platform, customized personal service and practice management solutions. |
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| Leverage our infrastructure to add incremental revenue. Through our proprietary technology, we are able to provide a very robust online experience for long-term investors and active traders. Our low-cost, scalable systems provide speed, reliability and quality trade execution services for clients. The scalable capacity of our trading system allows us to add a significant number of transactions while incurring minimal additional fixed costs. | |
| Continue to be a low-cost provider of quality services. We achieve low operating costs per trade by creating economies of scale, utilizing our proprietary transaction-processing systems, continuing to automate processes and locating much of our operations in low-cost geographical areas. This low fixed-cost infrastructure provides us with significant financial flexibility. | |
| Continue to differentiate our offerings through innovative technologies and service enhancements. We have been an innovator in our industry over our 36-year history. We continually strive to provide our clients with the ability to customize their trading experience. We provide our clients greater choice by tailoring our features and functionality to meet their specific needs. | |
| Leverage the TD Ameritrade brand. We believe that we have a superior brand identity and that our advertising has established TD Ameritrade as a leading brand in the retail brokerage market. | |
| Continue to aggressively pursue growth through acquisitions. When evaluating potential acquisitions, we look for transactions that will give us operational leverage, technological leverage, increased market share or other strategic opportunities. |
| TD Ameritrade ® is our core offering for self-directed retail investors. We offer sophisticated tools and services, including Trade Architect ® , SnapTicket, tm Trade Triggers, tm QuoteScope, tm Market Motion Detector and WealthRuler. TM We offer futures and foreign exchange trading to TD Ameritrade brokerage clients through our thinkorswim from TD Ameritrade desktop application. We offer TD Ameritrade Apex tm for clients who place an average of five trades per month over a three-month period or maintain a total account value of at least $100,000. Apex clients receive free access to services that are normally available on a paid subscription basis, as well as access to exclusive services and content. | |
| TD Ameritrade Institutional is a leading provider of comprehensive brokerage and custody services to more than 4,000 independent RIAs and their clients. Our advanced technology platform, coupled with personal support from our dedicated service teams, allows RIAs to run their practices more effectively and efficiently while optimizing time with clients. Additionally, TD Ameritrade Institutional provides a robust offering of products, programs and services. These services are all designed to help advisors build their businesses. | |
| thinkorswim by TD Ameritrade provides a suite of trading platforms serving self-directed and institutional traders and money managers. thinkorswim platforms have easy-to-use interfaces, sophisticated analytical and research tools, and fast and efficient order execution for complex trading strategies. thinkorswim clients trade a broad range of products including stock and stock options, index options, futures and futures options, foreign exchange, mutual funds and fixed income. | |
| Investools offers a comprehensive suite of investor education products and services for stock, option, foreign exchange, futures, mutual fund and fixed-income investors. Investools educational products and services are primarily built around an investing method that is designed to teach both experienced and beginning investors how to approach the selection process for investment securities and actively manage their investment portfolios. Course offerings are generally combined with web-based tools, personalized |
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instruction techniques and ongoing service and support and are offered in a variety of learning formats. Designed for the advanced student, continuing education programs offer students comprehensive access to a multitude of products and services priced either individually or on a bundled basis. Typically included in the continuing education bundles are additional curriculum, online courses, live workshops and coaching services. |
| Amerivest TM is an online advisory service that develops portfolios of exchange-traded funds (ETFs) or mutual funds, along with cash and cash alternatives, to help long-term investors pursue their financial goals. Our subsidiary, Amerivest Investment Management, LLC, recommends an investment portfolio based on our proprietary automated five-step process centered on an investors goals and risk tolerance. | |
| TD Ameritrade Corporate Services provides self-directed brokerage services to employees and executives of corporations, either directly in partnership with the employer or through joint marketing relationships with third-party administrators, such as 401(k) providers and employee benefit consultants. Trust and custody services are also offered to a wide range of plan types through our TD Ameritrade Trust Company subsidiary. |
| Common and preferred stock. Clients can purchase common and preferred stocks, American Depository Receipts and closed-end funds traded on any United States exchange or quotation system. | |
| Exchange-Traded Funds. ETFs are baskets of securities (stocks or bonds) that typically track recognized indices. They are similar to mutual funds, except that they trade on an exchange like stocks. Our ETF Market Center offers our clients over 100 commission-free ETFs, each of which has been selected by independent experts at Morningstar Associates. Trades in these ETFs are commission-free, provided the funds are held for 30 days or longer. Our Web site includes an ETF screener, along with independent research and commentary to assist investors in their decision-making. | |
| Options. We offer a full range of option trades, including complex, multi-leg option strategies. All option trades, including complex trades, are accessible on our trading platform. | |
| Futures. We offer futures trades, as well as options on futures, in a wide variety of commodities, stock indices and currencies. | |
| Foreign exchange. We offer access to trading in over 100 different currency pairs. | |
| Mutual funds. Clients can compare and select from a portfolio of over 13,000 mutual funds from leading fund families, including a broad range of no-transaction-fee (NTF) funds. Clients can also easily exchange funds within the same mutual fund family. | |
| Fixed income. We offer our clients access to a variety of Treasury, corporate, government agency and municipal bonds, as well as mortgage-backed securities and certificates of deposit. | |
| New issue securities. We offer primary and secondary offerings of fixed income securities, closed-end funds and preferred stock. | |
| Margin lending. We extend credit to clients that maintain margin accounts. | |
| Cash management services. Through third-party banking relationships, we offer FDIC-insured deposit accounts and money market mutual funds to our clients as cash sweep alternatives. Through these relationships, we also offer free standard checking, free online bill pay and ATM services with unlimited ATM fee reimbursements at any machine nationwide. |
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Percentage of Net Revenues
|
||||||||||||
Fiscal Year Ended September 30, | ||||||||||||
Class of Service | 2011 | 2010 | 2009 | |||||||||
Commissions and transaction fees
|
44.5 | % | 46.6 | % | 52.0 | % | ||||||
Net interest revenue
|
17.8 | % | 16.5 | % | 14.4 | % | ||||||
Insured deposit account fees
|
27.6 | % | 26.6 | % | 23.6 | % | ||||||
Investment product fees
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6.0 | % | 5.1 | % | 7.7 | % | ||||||
Other revenues
|
4.1 | % | 5.2 | % | 2.3 | % | ||||||
Net revenues
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Ensuring prompt response to client service calls through adequate staffing with properly trained and motivated personnel in our client service departments, a majority of whom hold the Series 7 license; | |
| Tailoring client service to the particular expectations of the clients of each of our client segments; and | |
| Expanding our use of technology to provide automated responses to the most typical inquiries generated in the course of clients securities trading and related activities. |
| Web sites. Our Web sites provide basic information on how to use our services, as well as an in-depth education center that includes a guide to online investing and an encyclopedia of finance. Ted, our Virtual Investment Consultant, is a Web tool that allows retail clients to interact with a virtual representative to ask questions regarding our products, tools and services. | |
| Branches. We offer a nationwide network of over 100 retail branches, located primarily in large metropolitan areas. | |
| E-mail. Clients are encouraged to use e-mail to contact our client service representatives. Our operating standards require a response within 24 hours of receipt of the e-mail; however, we strive to respond within four hours after receiving the original message. | |
| Telephone. For clients who choose to call or whose inquiries necessitate calling one of our client service representatives, we provide a toll-free number that connects to advanced call handling systems. These systems provide automated answering and directing of calls to the proper department. Our systems also allow linkage between caller identification and the client database to give the client service representative immediate access to the clients account data when the call is received. Client service representatives are available 24 hours a day, seven days a week. |
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| Maintaining client accounts; | |
| Extending credit in a margin account to the client; | |
| Engaging in securities lending and borrowing transactions; | |
| Settling securities transactions with clearinghouses such as The Depository Trust & Clearing Corporation and The Options Clearing Corporation; | |
| Settling commissions and transaction fees; | |
| Preparing client trade confirmations and statements; | |
| Performing designated cashiering functions, including the delivery and receipt of funds and securities to or from the client; |
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| Possession, control and safeguarding of funds and securities in client accounts; | |
| Processing cash sweep transactions to and from insured deposit accounts and money market mutual funds; | |
| Transmitting tax accounting information to the client and to the applicable tax authority; and | |
| Forwarding prospectuses, proxy materials and other shareholder information to clients. |
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Item 1A. | Risk Factors |
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| sales practices and suitability of financial products and services; | |
| money market mutual funds; | |
| mutual fund and exchange-traded fund trading; | |
| anti-money laundering policies and procedures; | |
| client cash sweep arrangements; | |
| regulatory reporting obligations; | |
| risk management; | |
| valuation of financial instruments; | |
| best execution practices; | |
| client privacy; | |
| system security and safeguarding practices; | |
| advertising claims; | |
| brokerage services provided to investment advisors; | |
| systemic risk; | |
| fraud detection; | |
| market access and manipulative trading; |
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| trading in low-priced securities; | |
| use of social media; and | |
| financial and liquidity risk. |
| difficulties in the integration of acquired operations, services and products; | |
| failure to achieve expected synergies; | |
| diversion of managements attention from other business concerns; | |
| assumption of unknown material liabilities of acquired companies; | |
| amortization of acquired intangible assets, which could reduce future reported earnings; | |
| potential loss of clients or key employees of acquired companies; and | |
| dilution to existing stockholders. |
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| speculation in the investment community or the press about, or actual changes in, our competitive position, organizational structure, executive team, operations, financial condition, financial reporting and results, effectiveness of cost reduction initiatives, or strategic transactions; | |
| the announcement of new products, services, acquisitions, or dispositions by us or our competitors; and | |
| increases or decreases in revenue or earnings, changes in earnings estimates by the investment community, and variations between estimated financial results and actual financial results. |
| incur additional indebtedness; | |
| create liens; | |
| sell all or substantially all of our assets; | |
| change the nature of our business; | |
| merge or consolidate with another entity; and | |
| conduct transactions with affiliates. |
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| the presence of a classified board of directors; | |
| the ability of the board of directors to issue and determine the terms of preferred stock; | |
| advance notice requirements for inclusion of stockholder proposals at stockholder meetings; and | |
| the anti-takeover provisions of Delaware law. |
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Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
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Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Common Stock Price | ||||||||||||||||
For the Fiscal Year Ended September 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
High | Low | High | Low | |||||||||||||
First Quarter
|
$ | 19.01 | $ | 15.90 | $ | 21.30 | $ | 17.91 | ||||||||
Second Quarter
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$ | 22.90 | $ | 18.44 | $ | 20.06 | $ | 16.55 | ||||||||
Third Quarter
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$ | 22.60 | $ | 18.44 | $ | 20.58 | $ | 15.18 | ||||||||
Fourth Quarter
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$ | 20.76 | $ | 13.43 | $ | 16.98 | $ | 14.53 |
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Period Ended | ||||||||||||||||||||||||
Index | 9/29/06 | 9/30/07 | 9/30/08 | 9/30/09 | 9/30/10 | 9/30/11 | ||||||||||||||||||
TD Ameritrade Holding Corporation
|
100.00 | 96.66 | 88.44 | 104.14 | 85.68 | 78.83 | ||||||||||||||||||
S&P 500
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100.00 | 116.44 | 90.85 | 84.58 | 93.17 | 94.24 | ||||||||||||||||||
Peer Group
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100.00 | 105.26 | 110.07 | 81.62 | 60.72 | 48.04 | ||||||||||||||||||
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Total Number of
|
Maximum Number
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|||||||||||||||
Shares Purchased as
|
of Shares that May
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|||||||||||||||
Total Number of
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Average Price
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Part of Publicly
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Yet Be Purchased
|
|||||||||||||
Period | Shares Purchased | Paid per Share | Announced Program | Under the Program | ||||||||||||
July 1, 2011 July 31, 2011
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2,114,696 | $ | 18.91 | 2,100,859 | 17,888,170 | |||||||||||
August 1, 2011 August 31, 2011
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5,311,651 | $ | 14.99 | 5,311,651 | 12,576,519 | |||||||||||
September 1, 2011 September 30, 2011
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5,844,486 | $ | 14.49 | 5,831,870 | 6,744,649 | |||||||||||
Total Three months ended September 30, 2011
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13,270,833 | $ | 15.39 | 13,244,380 | 6,744,649 | |||||||||||
Item 6. | Selected Financial Data |
Fiscal Year Ended September 30, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Consolidated Statements of Income Data:
|
||||||||||||||||||||
Net revenues
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$ | 2,762,659 | $ | 2,560,691 | $ | 2,407,926 | $ | 2,537,356 | $ | 2,176,946 | ||||||||||
Operating income
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1,047,842 | 965,373 | 1,101,478 | 1,341,021 | 1,146,995 | |||||||||||||||
Net income
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637,753 | 592,188 | 643,705 | 803,917 | 645,900 | |||||||||||||||
Earnings per share basic
|
$ | 1.12 | $ | 1.01 | $ | 1.11 | $ | 1.35 | $ | 1.08 | ||||||||||
Earnings per share diluted
|
$ | 1.11 | $ | 1.00 | $ | 1.10 | $ | 1.33 | $ | 1.06 | ||||||||||
Weighted average shares outstanding basic
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570,314 | 585,128 | 578,972 | 593,746 | 598,503 | |||||||||||||||
Weighted average shares outstanding diluted
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576,462 | 591,922 | 587,252 | 603,133 | 608,263 | |||||||||||||||
Dividends declared per share
|
$ | 0.20 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 |
As of September 30, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Consolidated Balance Sheet Data:
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||||||||||||||||||||
Cash and cash equivalents
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$ | 1,031,963 | $ | 741,492 | $ | 791,211 | $ | 674,135 | $ | 413,787 | ||||||||||
Total assets
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17,125,762 | 14,726,918 | 18,371,810 | 15,951,522 | 18,092,443 | |||||||||||||||
Long-term obligations
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1,347,573 | 1,323,068 | 1,443,465 | 1,444,544 | 1,481,948 | |||||||||||||||
Stockholders equity
|
4,115,817 | 3,771,879 | 3,551,283 | 2,925,038 | 2,154,921 |
Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
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Fiscal Year Ended September 30, | ||||||||||||||||||||||||
2011 | 2010 | 2009 | ||||||||||||||||||||||
% of Net
|
% of Net
|
% of Net
|
||||||||||||||||||||||
$ | Revenues | $ | Revenues | $ | Revenues | |||||||||||||||||||
EBITDA
|
$ | 1,212,373 | 43.9 | % | $ | 1,114,438 | 43.5 | % | $ | 1,219,236 | 50.6 | % | ||||||||||||
Less:
|
||||||||||||||||||||||||
Depreciation and amortization
|
(66,759 | ) | (2.4 | )% | (57,032 | ) | (2.2 | )% | (45,891 | ) | (1.9 | )% | ||||||||||||
Amortization of acquired intangible assets
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(97,126 | ) | (3.5 | )% | (100,463 | ) | (3.9 | )% | (73,870 | ) | (3.1 | )% | ||||||||||||
Interest on borrowings
|
(32,017 | ) | (1.2 | )% | (44,858 | ) | (1.8 | )% | (40,070 | ) | (1.7 | )% | ||||||||||||
Provision for income taxes
|
(378,718 | ) | (13.7 | )% | (319,897 | ) | (12.5 | )% | (415,700 | ) | (17.3 | )% | ||||||||||||
Net income
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$ | 637,753 | 23.1 | % | $ | 592,188 | 23.1 | % | $ | 643,705 | 26.7 | % | ||||||||||||
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11 vs. 10
|
10 vs. 09
|
|||||||||||||||||||
Fiscal Year |
Increase/
|
Increase/
|
||||||||||||||||||
2011 | 2010 | 2009 | (Decrease) | (Decrease) | ||||||||||||||||
Average interest-earning assets (excluding conduit business)
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$ | 13,495 | $ | 13,272 | $ | 9,917 | $ | 223 | $ | 3,355 | ||||||||||
Average insured deposit account balances
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48,537 | 39,187 | 22,003 | 9,350 | 17,184 | |||||||||||||||
Average spread-based balances
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$ | 62,032 | $ | 52,459 | $ | 31,920 | $ | 9,573 | $ | 20,539 | ||||||||||
Net interest revenue (excluding conduit business)
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$ | 491.6 | $ | 420.9 | $ | 342.7 | $ | 70.7 | $ | 78.2 | ||||||||||
Insured deposit account fee revenue
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762.5 | 682.2 | 568.1 | 80.3 | 114.1 | |||||||||||||||
Spread-based revenue
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$ | 1,254.1 | $ | 1,103.1 | $ | 910.8 | $ | 151.0 | $ | 192.3 | ||||||||||
Average yield interest-earning assets (excluding
conduit business)
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3.59 | % | 3.13 | % | 3.41 | % | 0.46 | % | (0.28 | )% | ||||||||||
Average yield insured deposit account fees
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1.55 | % | 1.72 | % | 2.55 | % | (0.17 | )% | (0.83 | )% | ||||||||||
Net interest margin (NIM)
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1.99 | % | 2.07 | % | 2.81 | % | (0.08 | )% | (0.74 | )% |
Interest Revenue (Expense)
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11 vs. 10
|
10 vs. 09
|
||||||||||||||||||
Fiscal Year |
Increase/
|
Increase/
|
||||||||||||||||||
2011 | 2010 | 2009 | (Decrease) | (Decrease) | ||||||||||||||||
Segregated cash
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$ | 2.2 | $ | 6.3 | $ | 6.6 | $ | (4.1 | ) | $ | (0.3 | ) | ||||||||
Client margin balances
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389.5 | 333.1 | 234.2 | 56.4 | 98.9 | |||||||||||||||
Securities borrowing (excluding conduit business)
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102.9 | 84.9 | 105.4 | 18.0 | (20.5 | ) | ||||||||||||||
Other cash and interest-earning investments
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1.3 | 1.7 | 4.9 | (0.4 | ) | (3.2 | ) | |||||||||||||
Client credit balances
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(1.7 | ) | (2.9 | ) | (4.1 | ) | 1.2 | 1.2 | ||||||||||||
Securities lending (excluding conduit business)
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(2.6 | ) | (2.2 | ) | (4.3 | ) | (0.4 | ) | 2.1 | |||||||||||
Net interest revenue (excluding conduit business)
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491.6 | 420.9 | 342.7 | 70.7 | 78.2 | |||||||||||||||
Securities borrowing conduit business
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0.8 | 1.7 | 10.9 | (0.9 | ) | (9.2 | ) | |||||||||||||
Securities lending conduit business
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(0.6 | ) | (0.9 | ) | (6.7 | ) | 0.3 | 5.8 | ||||||||||||
Net interest revenue
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$ | 491.8 | $ | 421.7 | $ | 346.9 | $ | 70.1 | $ | 74.8 | ||||||||||
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Average Balance
|
11 vs. 10
|
10 vs. 09
|
||||||||||||||||||
Fiscal Year |
%
|
%
|
||||||||||||||||||
2011 | 2010 | 2009 | Change | Change | ||||||||||||||||
Segregated cash
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$ | 3,016 | $ | 4,675 | $ | 3,916 | (35 | )% | 19 | % | ||||||||||
Client margin balances
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8,756 | 6,991 | 4,491 | 25 | % | 56 | % | |||||||||||||
Securities borrowing (excluding conduit business)
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472 | 536 | 450 | (12 | )% | 19 | % | |||||||||||||
Other cash and interest-earning investments
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1,251 | 1,070 | 1,060 | 17 | % | 1 | % | |||||||||||||
Interest-earning assets (excluding conduit business)
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13,495 | 13,272 | 9,917 | 2 | % | 34 | % | |||||||||||||
Securities borrowing conduit business
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288 | 481 | 1,242 | (40 | )% | (61 | )% | |||||||||||||
Interest-earning assets
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$ | 13,783 | $ | 13,753 | $ | 11,159 | 0 | % | 23 | % | ||||||||||
Client credit balances
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$ | 8,351 | $ | 8,548 | $ | 6,219 | (2 | )% | 37 | % | ||||||||||
Securities lending (excluding conduit business)
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1,646 | 1,643 | 1,231 | 0 | % | 33 | % | |||||||||||||
Interest-bearing liabilities (excluding conduit business)
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9,997 | 10,191 | 7,450 | (2 | )% | 37 | % | |||||||||||||
Securities lending conduit business
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288 | 481 | 1,242 | (40 | )% | (61 | )% | |||||||||||||
Interest-bearing liabilities
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$ | 10,285 | $ | 10,672 | $ | 8,692 | (4 | )% | 23 | % | ||||||||||
11 vs. 10
|
10 vs. 09
|
|||||||||||||||||||
Average Yield (Cost)
|
Net Yield
|
Net Yield
|
||||||||||||||||||
Fiscal Year |
Increase/
|
Increase/
|
||||||||||||||||||
2011 | 2010 | 2009 | (Decrease) | (Decrease) | ||||||||||||||||
Segregated cash
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0.07 | % | 0.13 | % | 0.17 | % | (0.06 | )% | (0.04 | )% | ||||||||||
Client margin balances
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4.39 | % | 4.70 | % | 5.14 | % | (0.31 | )% | (0.44 | )% | ||||||||||
Other cash and interest-earning investments
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0.10 | % | 0.16 | % | 0.46 | % | (0.06 | )% | (0.30 | )% | ||||||||||
Client credit balances
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(0.02 | )% | (0.03 | )% | (0.07 | )% | 0.01 | % | 0.04 | % | ||||||||||
Net interest revenue (excluding conduit business)
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3.59 | % | 3.13 | % | 3.41 | % | 0.46 | % | (0.28 | )% | ||||||||||
Securities borrowing conduit business
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0.28 | % | 0.34 | % | 0.86 | % | (0.06 | )% | (0.52 | )% | ||||||||||
Securities lending conduit business
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(0.18 | )% | (0.19 | )% | (0.53 | )% | 0.01 | % | 0.34 | % | ||||||||||
Net interest revenue
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3.52 | % | 3.02 | % | 3.07 | % | 0.50 | % | (0.05 | )% |
Fee Revenue
|
11 vs. 10
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10 vs. 09
|
||||||||||||||||||
Fiscal Year |
Increase/
|
Increase/
|
||||||||||||||||||
2011 | 2010 | 2009 | (Decrease) | (Decrease) | ||||||||||||||||
Money market mutual fund
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$ | 8.5 | $ | 9.9 | $ | 108.5 | $ | (1.4 | ) | $ | (98.6 | ) | ||||||||
Other investment product fees
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157.9 | 119.4 | 75.8 | 38.5 | 43.6 | |||||||||||||||
Total investment product fees
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$ | 166.4 | $ | 129.3 | $ | 184.3 | $ | 37.1 | $ | (55.0 | ) | |||||||||
Average Balance
|
11 vs. 10
|
10 vs. 09
|
||||||||||||||||||
Fiscal Year |
%
|
%
|
||||||||||||||||||
2011 | 2010 | 2009 | Change | Change | ||||||||||||||||
Money market mutual fund
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$ | 8,712 | $ | 9,846 | $ | 23,312 | (12 | )% | (58 | )% | ||||||||||
Other fee-based investment balances
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69,568 | 51,734 | 36,113 | 34 | % | 43 | % | |||||||||||||
Total fee-based investment balances
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$ | 78,280 | $ | 61,580 | $ | 59,425 | 27 | % | 4 | % | ||||||||||
33
Average Yield
|
11 vs. 10
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10 vs. 09
|
||||||||||||||||||
Fiscal Year |
Increase/
|
Increase/
|
||||||||||||||||||
2011 | 2010 | 2009 | (Decrease) | (Decrease) | ||||||||||||||||
Money market mutual fund
|
0.10 | % | 0.10 | % | 0.46 | % | 0.00 | % | (0.36 | )% | ||||||||||
Other investment product fees
|
0.22 | % | 0.23 | % | 0.21 | % | (0.01 | )% | 0.02 | % | ||||||||||
Total investment product fees
|
0.21 | % | 0.21 | % | 0.31 | % | 0.00 | % | (0.10 | )% |
11 vs. 10
|
10 vs. 09
|
|||||||||||||||||||
Fiscal Year |
%
|
%
|
||||||||||||||||||
2011 | 2010 | 2009 | Change | Change | ||||||||||||||||
Total trades (in millions)
|
100.74 | 93.33 | 93.27 | 8 | % | 0 | % | |||||||||||||
Average commissions and transaction fees per trade(1)
|
$ | 12.18 | $ | 12.79 | $ | 13.35 | (5 | )% | (4 | )% | ||||||||||
Average client trades per day
|
398,986 | 371,835 | 371,579 | 7 | % | 0 | % | |||||||||||||
Average client trades per funded account (annualized)
|
18.2 | 17.3 | 18.2 | 5 | % | (5 | )% | |||||||||||||
Activity rate funded accounts
|
7.2 | % | 6.9 | % | 7.3 | % | 4 | % | (5 | )% | ||||||||||
Trading days
|
252.5 | 251.0 | 251.0 | 1 | % | 0 | % |
(1) | Average commissions and transaction fees per trade excludes thinkorswim active trader and TD Waterhouse UK businesses. |
Fiscal Year | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
New accounts opened
|
645,000 | 668,000 | 737,000 | |||||||||
Funded accounts (beginning of year)
|
5,455,000 | 5,279,000 | 4,918,000 | |||||||||
Funded accounts (end of year)
|
5,617,000 | 5,455,000 | 5,279,000 | |||||||||
Percentage change during year
|
3 | % | 3 | % | 7 | % | ||||||
Client assets (beginning of year, in billions)
|
$ | 354.8 | $ | 302.0 | $ | 278.0 | ||||||
Client assets (end of year, in billions)
|
$ | 378.7 | $ | 354.8 | $ | 302.0 | ||||||
Percentage change during year
|
7 | % | 17 | % | 9 | % | ||||||
Net new assets (in billions)
|
$ | 41.5 | $ | 33.9 | $ | 26.6 | ||||||
Net new assets annualized growth rate
|
12 | % | 11 | % | 10 | % |
34
Fiscal Year |
11 vs. 10
|
10 vs. 09
|
||||||||||||||||||
2011 | 2010 | 2009 | % Change | % Change | ||||||||||||||||
Revenues:
|
||||||||||||||||||||
Transaction-based revenues:
|
||||||||||||||||||||
Commissions and transaction fees
|
$ | 1,228.1 | $ | 1,193.8 | $ | 1,253.2 | 3 | % | (5 | )% | ||||||||||
Asset-based revenues:
|
||||||||||||||||||||
Interest revenue
|
496.7 | 427.7 | 362.1 | 16 | % | 18 | % | |||||||||||||
Brokerage interest expense
|
(4.8 | ) | (6.1 | ) | (15.2 | ) | (20 | )% | (60 | )% | ||||||||||
Net interest revenue
|
491.8 | 421.7 | 346.9 | 17 | % | 22 | % | |||||||||||||
Insured deposit account fees
|
762.5 | 682.2 | 568.1 | 12 | % | 20 | % | |||||||||||||
Investment product fees
|
166.4 | 129.3 | 184.3 | 29 | % | (30 | )% | |||||||||||||
Total asset-based revenues
|
1,420.8 | 1,233.2 | 1,099.3 | 15 | % | 12 | % | |||||||||||||
Other revenues
|
113.8 | 133.8 | 55.4 | (15 | )% | 141 | % | |||||||||||||
Net revenues
|
2,762.7 | 2,560.7 | 2,407.9 | 8 | % | 6 | % | |||||||||||||
Operating expenses:
|
||||||||||||||||||||
Employee compensation and benefits
|
674.9 | 622.4 | 511.2 | 8 | % | 22 | % | |||||||||||||
Clearing and execution costs
|
100.1 | 90.4 | 70.9 | 11 | % | 27 | % | |||||||||||||
Communications
|
106.5 | 106.9 | 83.1 | (0 | )% | 29 | % | |||||||||||||
Occupancy and equipment costs
|
142.4 | 142.9 | 124.3 | (0 | )% | 15 | % | |||||||||||||
Depreciation and amortization
|
66.8 | 57.0 | 45.9 | 17 | % | 24 | % | |||||||||||||
Amortization of acquired intangible assets
|
97.1 | 100.5 | 73.9 | (3 | )% | 36 | % | |||||||||||||
Professional services
|
169.8 | 132.2 | 127.6 | 28 | % | 4 | % | |||||||||||||
Advertising
|
253.2 | 250.0 | 197.1 | 1 | % | 27 | % | |||||||||||||
(Gains) losses on money market funds and client guarantees
|
| (12.7 | ) | 13.8 | (100 | )% | N/A | |||||||||||||
Other
|
104.1 | 105.7 | 58.7 | (2 | )% | 80 | % | |||||||||||||
Total operating expenses
|
1,714.8 | 1,595.3 | 1,306.4 | 7 | % | 22 | % | |||||||||||||
Operating income
|
1,047.8 | 965.4 | 1,101.5 | 9 | % | (12 | )% | |||||||||||||
Other expense (income):
|
||||||||||||||||||||
Interest on borrowings
|
32.0 | 44.9 | 40.1 | (29 | )% | 12 | % | |||||||||||||
Loss on debt refinancing
|
1.4 | 8.4 | | (83 | )% | N/A | ||||||||||||||
(Gain) loss on sale of investments
|
(2.1 | ) | 0.0 | 2.0 | N/A | (98 | )% | |||||||||||||
Total other expense (income)
|
31.4 | 53.3 | 42.1 | (41 | )% | 27 | % | |||||||||||||
Pre-tax income
|
1,016.5 | 912.1 | 1,059.4 | 11 | % | (14 | )% | |||||||||||||
Provision for income taxes
|
378.7 | 319.9 | 415.7 | 18 | % | (23 | )% | |||||||||||||
Net income
|
$ | 637.8 | $ | 592.2 | $ | 643.7 | 8 | % | (8 | )% | ||||||||||
Other information:
|
||||||||||||||||||||
Effective income tax rate
|
37.3 | % | 35.1 | % | 39.2 | % | ||||||||||||||
Average debt outstanding
|
$ | 1,267.6 | $ | 1,303.0 | $ | 1,444.3 | (3 | )% | (10 | )% | ||||||||||
Average interest rate incurred on borrowings
|
2.28 | % | 3.09 | % | 2.44 | % |
35
36
37
38
39
40
Liquid Assets-
|
Liquid Assets-
|
|||||||||||||||||||||||
Management Target | Regulatory Threshold | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Cash and cash equivalents
|
$ | 1,031,963 | $ | 741,492 | $ | 290,471 | $ | 1,031,963 | $ | 741,492 | $ | 290,471 | ||||||||||||
Less: Broker-dealer cash and cash equivalents
|
(656,206 | ) | (426,618 | ) | (229,588 | ) | (656,206 | ) | (426,618 | ) | (229,588 | ) | ||||||||||||
Trust company cash and cash equivalents
|
(108,587 | ) | (50,937 | ) | (57,650 | ) | (108,587 | ) | (50,937 | ) | (57,650 | ) | ||||||||||||
Investment advisory cash and cash equivalents
|
(7,184 | ) | (28,944 | ) | 21,760 | (7,184 | ) | (28,944 | ) | 21,760 | ||||||||||||||
Corporate cash and cash equivalents
|
259,986 | 234,993 | 24,993 | 259,986 | 234,993 | 24,993 | ||||||||||||||||||
Plus: Excess trust company Tier 1 capital
|
| | | 8,555 | 12,284 | (3,729 | ) | |||||||||||||||||
Excess broker-dealer regulatory net capital
|
591,902 | 326,368 | 265,534 | 1,138,972 | 828,979 | 309,993 | ||||||||||||||||||
Liquid assets
|
$ | 851,888 | $ | 561,361 | $ | 290,527 | $ | 1,407,513 | $ | 1,076,256 | $ | 331,257 | ||||||||||||
Liquid Assets | ||||||||
Management
|
Regulatory
|
|||||||
Target | Threshold | |||||||
Liquid assets as of September 30, 2010
|
$ | 561,361 | $ | 1,076,256 | ||||
Plus: EBITDA(1)
|
1,212,373 | 1,212,373 | ||||||
Proceeds from exercise of stock options
|
3,351 | 3,351 | ||||||
Cash received in sale of business
|
5,228 | 5,228 | ||||||
Proceeds from sale of investments
|
2,581 | 2,581 | ||||||
Return of prepayment on structured stock repurchase
|
118,834 | 118,834 | ||||||
Other changes in working capital and regulatory net capital
|
61,142 | 47,712 | ||||||
Less: Income taxes paid
|
(321,100 | ) | (321,100 | ) | ||||
Interest paid
|
(43,409 | ) | (43,409 | ) | ||||
Purchase of property and equipment
|
(152,889 | ) | (152,889 | ) | ||||
Cash transferred in disposal of subsidiary
|
(3,453 | ) | (3,453 | ) | ||||
Purchase of investments
|
(5,006 | ) | (5,006 | ) | ||||
Purchase of treasury stock
|
(348,534 | ) | (348,534 | ) | ||||
Payment of debt issuance costs
|
(1,783 | ) | (1,783 | ) | ||||
Principal payments on long-term debt
|
(4,262 | ) | (4,262 | ) | ||||
Principal payments on capital lease obligations
|
(10,015 | ) | (10,015 | ) | ||||
Payment of cash dividends
|
(114,212 | ) | (114,212 | ) | ||||
Additional net capital requirement due to increase in aggregate
debits
|
(108,319 | ) | (54,159 | ) | ||||
Liquid assets as of September 30, 2011
|
$ | 851,888 | $ | 1,407,513 | ||||
(1) | See Financial Performance Metrics earlier in this section for a description of EBITDA. |
41
42
43
Payments Due by Period (Fiscal Years): | ||||||||||||||||||||
Less Than
|
More Than
|
|||||||||||||||||||
1 Year | 1-3 Years | 3-5 Years | 5 Years | |||||||||||||||||
Contractual Obligations | Total | 2012 | 2013-14 | 2015-16 | After 2016 | |||||||||||||||
Long-term debt obligations(1)
|
$ | 1,395,879 | $ | 26,050 | $ | 295,955 | $ | 529,398 | $ | 544,476 | ||||||||||
Capital lease obligations
|
11,329 | 6,397 | 4,932 | | | |||||||||||||||
Operating lease obligations
|
360,526 | 48,482 | 91,323 | 78,138 | 142,583 | |||||||||||||||
Purchase obligations(2)
|
303,196 | 194,697 | 85,308 | 7,890 | 15,301 | |||||||||||||||
Income taxes payable(3)
|
195,053 | 195,053 | | | | |||||||||||||||
Total
|
$ | 2,265,983 | $ | 470,679 | $ | 477,518 | $ | 615,426 | $ | 702,360 | ||||||||||
(1) | Represents scheduled principal payments, estimated interest payments and commitment fees pursuant to the Senior Notes, the interest rate swaps and the revolving credit facilities. Actual amounts of interest may vary depending on changes in variable interest rates associated with the interest rate swaps. | |
(2) | Purchase obligations primarily relate to agreements for goods and services such as computer hardware and software, telecommunications, market information, advertising and marketing, professional services, property and construction, and employee compensation and benefits. | |
(3) | A significant portion of our income taxes payable as of September 30, 2011 consists of liabilities for uncertain tax positions and related interest and penalties. The timing of payments, if any, on liabilities for uncertain tax positions cannot be predicted with reasonable accuracy. |
44
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
45
46
75
80
Item 8.
Financial
Statements and Supplementary Data
47
Table of Contents
48
Table of Contents
2011
2010
2009
(In thousands, except per share amounts)
$
1,228,064
$
1,193,761
$
1,253,154
496,661
427,723
362,076
(4,826
)
(6,065
)
(15,165
)
491,835
421,658
346,911
762,527
682,206
568,084
166,394
129,308
184,341
1,420,756
1,233,172
1,099,336
113,839
133,758
55,436
2,762,659
2,560,691
2,407,926
674,866
622,449
511,170
100,060
90,367
70,877
106,547
106,933
83,121
142,412
142,902
124,296
66,759
57,032
45,891
97,126
100,463
73,870
169,764
132,218
127,572
253,206
250,007
197,121
(12,732
)
13,829
104,077
105,679
58,701
1,714,817
1,595,318
1,306,448
1,047,842
965,373
1,101,478
32,017
44,858
40,070
1,435
8,392
(2,081
)
38
2,003
31,371
53,288
42,073
1,016,471
912,085
1,059,405
378,718
319,897
415,700
$
637,753
$
592,188
$
643,705
$
1.12
$
1.01
$
1.11
$
1.11
$
1.00
$
1.10
570,314
585,128
578,972
576,462
591,922
587,252
$
0.20
$
0.00
$
0.00
49
Table of Contents
Total
Accumulated
Common
Total
Additional
Other
Shares
Stockholders
Common
Paid-In
Retained
Treasury
Deferred
Comprehensive
Outstanding
Equity
Stock
Capital
Earnings
Stock
Compensation
Income (Loss)
(In thousands)
593,131
$
2,925,038
$
6,314
$
1,613,700
$
1,886,412
$
(580,664
)
$
146
$
(870
)
643,705
643,705
(302
)
(302
)
1,330
1,330
(232
)
(232
)
644,501
27,083
385,639
(24,209
)
409,848
(39,030
)
(466,144
)
(466,144
)
1,557
(18,412
)
18,412
4,366
37,227
(21,411
)
58,638
2
2
(49
)
27
24
25,020
25,019
1
587,109
3,551,283
6,314
1,574,638
2,530,117
(559,883
)
171
(74
)
592,188
592,188
1
1
125
125
592,314
(15,376
)
(265,599
)
(265,599
)
(169,200
)
(169,200
)
842
(14,677
)
14,677
3,531
28,189
(34,846
)
63,035
29
544
20
499
25
34,348
34,348
576,135
3,771,879
6,314
1,390,283
3,122,305
(747,271
)
196
52
637,753
637,753
(3
)
(3
)
104
104
637,854
(114,212
)
(114,212
)
(20,340
)
(348,534
)
(348,534
)
(3,159
)
50,366
(50,366
)
118,834
118,834
980
(16,794
)
16,794
654
13,240
4,069
9,171
16
170
(17
)
237
(50
)
35,039
35,039
1,547
1,547
554,286
$
4,115,817
$
6,314
$
1,583,327
$
3,645,846
$
(1,119,969
)
$
146
$
153
50
Table of Contents
2011
2010
2009
(In thousands)
$
637,753
$
592,188
$
643,705
66,759
57,032
45,891
97,126
100,463
73,870
2,185
154,380
(70,674
)
(2,081
)
38
2,003
16,893
5,854
6,285
(12,732
)
13,829
1,435
8,392
35,039
34,348
25,020
(9,898
)
(15,653
)
(8,743
)
261
214
874
(1,525,223
)
4,819,836
(5,553,862
)
373,254
570,018
2,415,389
(667,978
)
(1,681,557
)
1,222,434
916
1,423
97,886
(44,212
)
4,910
32,852
(229,375
)
(183,762
)
36,717
(6,254
)
(2,873
)
(4,077
)
(224,743
)
(557,302
)
(3,278,059
)
2,168,936
(3,104,432
)
4,844,153
120,550
(197,487
)
45,425
(21,282
)
(8,622
)
9,738
790,061
584,676
600,656
(152,889
)
(91,198
)
(86,698
)
86,423
(266,713
)
5,228
599
(3,453
)
(3,576
)
(5,790
)
(1,100
)
3,600
3,300
1,100
52,208
317,015
2,581
16
11,688
(5,006
)
550
(2
)
(146
)
(152,965
)
(41,466
)
62,168
1,248,557
(1,783
)
(10,595
)
(4,262
)
(1,410,638
)
(111,500
)
(10,015
)
(13,769
)
(5,002
)
3,351
12,536
28,486
(348,534
)
(265,599
)
(466,144
)
(169,200
)
118,834
(114,212
)
9,898
15,653
8,743
(346,723
)
(593,055
)
(545,417
)
98
126
(331
)
290,471
(49,719
)
117,076
741,492
791,211
674,135
$
1,031,963
$
741,492
$
791,211
$
43,409
$
39,028
$
60,680
$
321,100
$
352,504
$
359,666
$
9,933
$
19,956
$
9,711
$
50,366
$
$
$
$
6,003
$
32,780
$
$
$
8,400
$
$
$
362,967
51
Table of Contents
1.
Nature of
Operations and Summary of Significant Accounting
Policies
52
Table of Contents
53
Table of Contents
54
Table of Contents
55
Table of Contents
2.
Business
Combinations
3.
Goodwill
and Acquired Intangible Assets
$
2,472,098
(782
)
(4,303
)
2,467,013
(35
)
$
2,466,978
56
Table of Contents
(1)
Purchase accounting adjustments for fiscal 2010 primarily
consist of adjustments to assumed liabilities relating to the
acquisition of thinkorswim.
(2)
Represents the tax benefit realized on replacement stock awards
that were issued in connection with the Datek Online Holdings
Corp. (Datek) merger in fiscal 2002 and the
thinkorswim acquisition. The tax benefit realized on a stock
award is recorded as a reduction of goodwill to the extent the
Company recorded fair value of the replacement award in the
purchase accounting. To the extent any gain realized on a stock
award exceeds the fair value of the replacement award recorded
in the purchase accounting, the tax benefit on the excess is
recorded as additional paid-in capital.
September 30,
2011
2010
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
$
1,227,592
$
(415,767
)
$
811,825
$
1,230,469
$
(339,937
)
$
890,532
99,161
(33,576
)
65,585
100,904
(19,203
)
81,701
10,100
(10,100
)
10,100
(6,844
)
3,256
5,486
(4,218
)
1,268
5,486
(2,390
)
3,096
145,674
145,674
145,674
145,674
$
1,488,013
$
(463,661
)
$
1,024,352
$
1,492,633
$
(368,374
)
$
1,124,259
Estimated
Amortization
Fiscal Year
Expense
$
92,113
90,845
90,384
89,654
85,544
430,138
$
878,678
57
Table of Contents
4.
Cash and
Cash Equivalents
September 30,
2011
2010
$
259,986
$
234,993
656,206
426,618
108,587
50,937
7,184
28,944
$
1,031,963
$
741,492
5.
Receivable
from and Payable to Brokers, Dealers and Clearing
Organizations
September 30,
2011
2010
$
495,680
$
1,000,607
3,802
11,927
325,966
191,237
9,021
3,952
$
834,469
$
1,207,723
$
1,658,192
$
1,868,724
1,099
1,519
12,904
26,319
37,377
37,753
$
1,709,572
$
1,934,315
6.
Allowance
for Doubtful Accounts on Receivables
2011
2010
2009
$
11,112
$
13,536
$
22,482
8,533
2,720
1,171
272
(2,060
)
(5,144
)
(10,389
)
$
17,585
$
11,112
$
13,536
58
Table of Contents
7.
Property
and Equipment
September 30,
2011
2010
$
122,930
$
102,852
91,772
72,185
184,207
174,492
65,025
5,063
55,697
50,552
519,631
405,144
(178,941
)
(132,933
)
$
340,690
$
272,211
8.
Long-term
Debt
Face
Unamortized
Fair Value
Net Carrying
September 30, 2011
Value
Discount
Adjustment(1)
Value
$
250,000
$
(100
)
$
4,170
$
254,070
500,000
(313
)
33,223
532,910
500,000
(562
)
50,371
549,809
$
1,250,000
$
(975
)
$
87,764
$
1,336,789
Face
Unamortized
Fair Value
Net Carrying
September 30, 2010
Value
Discount
Adjustment(1)
Value
$
250,000
$
(185
)
$
9,299
$
259,114
500,000
(411
)
39,936
539,525
500,000
(632
)
N/A
499,368
1,250,000
(1,228
)
49,235
1,298,007
4,262
N/A
N/A
4,262
$
1,254,262
$
(1,228
)
$
49,235
$
1,302,269
(1)
Fair value adjustments relate to changes in the fair value of
the debt while in a fair value hedging relationship. See
Interest Rate Swaps below.
59
Table of Contents
$
250,000
500,000
500,000
$
1,250,000
60
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2011
2010
2009
$
38,529
$
49,235
N/A
(38,529
)
(49,235
)
N/A
$
$
N/A
September 30,
2011
2010
$
87,764
$
49,235
61
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9.
Income
Taxes
2011
2010
2009
$
356,384
$
168,972
$
438,911
19,827
(3,770
)
47,113
322
315
350
376,533
165,517
486,374
(5,196
)
145,349
(70,656
)
7,381
9,031
(18
)
2,185
154,380
(70,674
)
$
378,718
$
319,897
$
415,700
62
Table of Contents
2011
2010
2009
35.0
%
35.0
%
35.0
%
2.3
2.4
2.4
(0.1
)
0.5
0.5
0.5
(0.2
)
0.9
(0.5
)
(2.5
)
0.3
0.1
(0.1
)
0.1
37.3
%
35.1
%
39.2
%
63
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September 30,
2011
2010
$
76,838
$
83,532
6,041
8,960
16,224
21,504
26,901
21,516
6,426
4,037
12,017
15,272
38,887
34,031
2,109
2,109
185,443
190,961
(37,510
)
(32,096
)
147,933
158,865
(480,913
)
(488,814
)
(3,989
)
(4,339
)
(484,902
)
(493,153
)
$
(336,969
)
$
(334,288
)
64
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2011
2010
2009
$
148,536
$
310,255
$
227,025
9,998
15,367
87,894
7,132
2,911
338
(12,602
)
(5,986
)
(4,494
)
(866
)
(170,739
)
(7,671
)
(3,272
)
(508
)
$
144,527
$
148,536
$
310,255
10.
Capital
Requirements
65
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September 30,
2011
2010
Minimum
Minimum
Net Capital
Excess
Net Capital
Excess
Net Capital
Required
Net Capital
Net Capital
Required
Net Capital
$
1,263,535
$
199,308
$
1,064,227
$
1,092,692
$
177,644
$
915,048
374,907
1,000
373,907
142,859
1,000
141,859
N/A
N/A
N/A
39,039
250
38,789
$
1,638,442
$
200,308
$
1,438,134
$
1,274,590
$
178,894
$
1,095,696
11.
Stock-based
Compensation
66
Table of Contents
Weighted
Weighted
Average
Average
Remaining
Aggregate
Number of
Exercise
Contractual
Intrinsic
Options
Price
Term (Years)
Value
9,214
$
8.28
(654
)
$
5.13
(2
)
$
32.69
(29
)
$
18.94
8,529
$
8.48
3.2
$
63,111
7,464
$
7.09
2.6
$
63,105
2010
2009
2.49
%
1.80
%
0
%
0
%
50
%
51
%
6.2
3.4
67
Table of Contents
Weighted
Average
Number of
Grant Date
Units
Fair Value
3,764
$
16.19
2,162
$
18.67
17
$
18.20
(974
)
$
18.23
(319
)
$
16.47
4,650
$
16.91
Weighted
Average
Number of
Grant Date
Units
Fair Value
42
$
17.99
(42
)
$
17.99
$
12.
Employee
Benefit Plans
68
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13.
Earnings
Per Share
2011
2010
2009
$
637,753
$
592,188
$
643,705
570,314
585,128
578,972
6,148
6,794
8,280
576,462
591,922
587,252
$
1.12
$
1.01
$
1.11
$
1.11
$
1.00
$
1.10
14.
Commitments
and Contingencies
Minimum Lease
Sublease
Net Lease
Fiscal Year
Payments
Income
Commitments
$
48,482
$
(644
)
$
47,838
46,558
(161
)
46,397
44,765
44,765
40,630
40,630
37,508
37,508
142,583
142,583
$
360,526
$
(805
)
$
359,721
$
6,397
4,388
544
11,329
(545
)
$
10,784
69
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70
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71
Table of Contents
72
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15.
Fair
Value Disclosures
Level 1 Quoted prices (unadjusted) in active
markets for identical assets or liabilities that the Company has
the ability to access. This category includes active
exchange-traded funds, mutual funds and equity securities.
Level 2 Inputs other than quoted prices
included in Level 1 that are observable for the asset or
liability, either directly or indirectly. Such inputs include
quoted prices in markets that are not active, quoted prices for
similar assets and liabilities in active markets, inputs other
than quoted prices that are observable for the asset or
liability and inputs that are derived principally from or
corroborated by observable market data by correlation or other
means. This category includes most debt securities and other
interest-sensitive financial instruments.
Level 3 Unobservable inputs for the asset or
liability, where there is little, if any, observable market
activity or data for the asset or liability. This category
includes assets and liabilities related to money market and
other mutual funds managed by The Reserve for which the net
asset value has declined below $1.00 per
73
Table of Contents
share and the funds are being liquidated. This category also
includes auction rate securities for which the periodic auctions
have failed.
As of September 30, 2011
Level 1
Level 2
Level 3
Fair Value
$
$
$
19,609
$
19,609
1,098
1,098
521
278
799
423,010
423,010
972
972
653
653
468
468
521
425,381
20,707
446,609
2,528
2,528
1,029
1,029
87,764
87,764
91,321
91,321
$
521
$
516,702
$
20,707
$
537,930
$
4,600
$
55
$
$
4,655
178
178
9
9
$
4,600
$
242
$
$
4,842
(1)
See Interest Rate Swaps in Note 8 for details.
74
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As of September 30, 2010
Level 1
Level 2
Level 3
Fair Value
$
$
$
209,288
$
209,288
5,404
5,404
453
10
463
1,487
1,487
487
487
105
105
453
2,089
214,692
217,234
2,494
2,494
1,098
1,098
49,235
49,235
52,827
52,827
$
453
$
54,916
$
214,692
$
270,061
$
2,213
$
14
$
$
2,227
375
375
378
378
161
161
$
2,213
$
928
$
$
3,141
(1)
See Interest Rate Swaps in Note 8 for details.
Year Ended September 30, 2011
Purchases,
Net Gains
Sales,
September 30,
Included in
Issuances and
September 30,
2010
Earnings(1)
Settlements, Net
2011
$
209,288
$
4,182
$
(193,861
)
$
19,609
5,404
(4,306
)
1,098
$
214,692
$
4,182
$
(198,167
)
$
20,707
Table of Contents
(1)
Net gains on auction rate securities are recorded in other
revenues on the Consolidated Statements of Income and
$0.1 million of the net gains relate to assets held as of
September 30, 2011.
Year Ended September 30, 2010
Purchases,
Net Gains
Sales,
September 30,
Included in
Issuances and
September 30,
2009
Earnings
Settlements, Net
2010
$
50,971
$
1,237
(1)
$
(52,208
)
$
14,579
8,428
(2)
186,281
209,288
5,049
10,067
(1)
(9,712
)
5,404
19,628
18,495
176,569
214,692
$
70,599
$
19,732
$
124,361
$
214,692
(1)
Gains on money market and other mutual funds relate to shares of
The Reserve Primary and International Liquidity Funds that the
Company held as of September 30, 2010. These gains are
included in (gains) losses on money market funds and client
guarantees on the Consolidated Statements of Income.
(2)
Net gains on auction rate securities are recorded in other
revenues on the Consolidated Statements of Income and
$3.9 million of the gains related to assets held as of
September 30, 2010.
Year Ended September 30, 2009
Purchases,
Losses
Sales,
October 1,
Included in
Issuances and
September 30,
2008
Earnings(2)
Settlements, Net
2009
$
217,471
$
$
(217,471
)
$
368,066
(80
)
(317,015
)
50,971
6,925
(821
)
8,475
14,579
46,662
(41,613
)
5,049
53,587
(821
)
(33,138
)
19,628
10,000
(10,000
)
$
649,124
$
(901
)
$
(577,624
)
$
70,599
$
4,636
$
$
(4,635
)
$
1
(1)
Represents positions in The Reserve Primary Fund that were
classified as cash and cash equivalents as of October 1,
2008.
76
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(2)
Substantially all of the losses included in earnings are
recorded in other revenues on the Consolidated Statements of
Income and were related to assets held as of September 30,
2009.
77
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16.
Segment
and Geographic Area Information
17.
Structured
Stock Repurchase
18.
Related
Party Transactions
78
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Statement of Income
Revenues from TD and Affiliates
Description
Classification
2011
2010
2009
Insured deposit account fees
$
762,527
$
682,206
$
568,084
Investment product fees
8,488
9,807
108,462
Various
4,486
1,491
Net interest revenue
3,753
1,543
65
Other revenues
2,672
553
Commissions and transaction fees
505
84
Commissions and transaction fees
527
5,512
$
782,431
$
696,211
$
682,123
79
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Statement of Income
Expenses to TD and Affiliates
Description
Classification
2011
2010
2009
Professional Services
$
17,993
$
17,534
$
16,001
Advertising
2,045
2,276
3,510
Clearing and execution costs
850
812
825
Various
1,609
741
$
22,497
$
21,363
$
20,336
September 30,
2011
2010
$
206
$
1,201
92,963
90,523
$
87,771
$
40,849
3,912
3,244
19.
Condensed
Consolidating Financial Information
Table of Contents
As of September 30, 2011
(In thousands)
81
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As of September 30, 2010
(In thousands)
82
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For the Year Ended September 30, 2011
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Eliminations
Total
$
17,339
$
292
$
2,762,534
$
(17,506
)
$
2,762,659
16,602
173
1,715,548
(17,506
)
1,714,817
737
119
1,046,986
1,047,842
33,395
(2,024
)
31,371
(32,658
)
119
1,049,010
1,016,471
(13,643
)
(560
)
392,921
378,718
(19,015
)
679
656,089
637,753
656,768
673,503
38,162
(1,368,433
)
$
637,753
$
674,182
$
694,251
$
(1,368,433
)
$
637,753
For the Year Ended September 30, 2010
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Eliminations
Total
$
16,227
$
170
$
2,560,518
$
(16,224
)
$
2,560,691
12,787
(2,763
)
1,601,518
(16,224
)
1,595,318
3,440
2,933
959,000
965,373
52,138
38
1,112
53,288
(48,698
)
2,895
957,888
912,085
(33,382
)
(5,663
)
358,942
319,897
(15,316
)
8,558
598,946
592,188
607,504
596,197
10,272
(1,213,973
)
$
592,188
$
604,755
$
609,218
$
(1,213,973
)
$
592,188
83
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For the Year Ended September 30, 2009
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Eliminations
Total
$
30,614
$
1,120
$
2,407,032
$
(30,840
)
$
2,407,926
28,372
586
1,308,213
(30,723
)
1,306,448
2,242
534
1,098,819
(117
)
1,101,478
39,489
2,118
583
(117
)
42,073
(37,247
)
(1,584
)
1,098,236
1,059,405
(5,796
)
558
420,938
415,700
(31,451
)
(2,142
)
677,298
643,705
675,156
676,849
(1,352,005
)
$
643,705
$
674,707
$
677,298
$
(1,352,005
)
$
643,705
84
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For the Year Ended September 30, 2011
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Total
$
(45,223
)
$
202,112
$
633,172
$
790,061
(152,889
)
(152,889
)
(76
)
(76
)
(152,965
)
(152,965
)
(348,534
)
(348,534
)
118,834
118,834
(114,212
)
(114,212
)
12,255
(15,066
)
(2,811
)
(331,657
)
(15,066
)
(346,723
)
403,316
(220,000
)
(183,316
)
98
98
26,436
(17,888
)
281,923
290,471
67,033
25,058
649,401
741,492
$
93,469
$
7,170
$
931,324
$
1,031,963
85
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For the Year Ended September 30, 2010
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Total
$
(128,996
)
$
(732
)
$
714,404
$
584,676
(91,198
)
(91,198
)
113
51,695
400
52,208
16
(2,492
)
(2,476
)
113
51,711
(93,290
)
(41,466
)
1,248,557
1,248,557
(10,595
)
(10,595
)
(1,406,500
)
(4,138
)
(1,410,638
)
(265,599
)
(265,599
)
(169,200
)
(169,200
)
28,189
(13,769
)
14,420
(575,148
)
(17,907
)
(593,055
)
725,773
(135,000
)
(590,773
)
126
126
21,742
(84,021
)
12,560
(49,719
)
45,291
109,079
636,841
791,211
$
67,033
$
25,058
$
649,401
$
741,492
86
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For the Year Ended September 30, 2009
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Total
$
124,666
$
(161,364
)
$
637,354
$
600,656
(86,698
)
(86,698
)
86,423
86,423
(225,447
)
(41,266
)
(266,713
)
667
177,206
139,142
317,015
11,688
453
12,141
(224,780
)
147,628
139,320
62,168
(37,500
)
(74,000
)
(111,500
)
(466,144
)
(466,144
)
37,229
(5,002
)
32,227
(466,415
)
(79,002
)
(545,417
)
610,831
(48,195
)
(562,636
)
(331
)
(331
)
44,302
(61,931
)
134,705
117,076
989
171,010
502,136
674,135
$
45,291
$
109,079
$
636,841
$
791,211
87
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20.
Quarterly
Data
(Unaudited)
(Dollars in thousands, except per share amounts)
For the Fiscal Year Ended September 30, 2011
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
656,190
$
718,228
$
684,782
$
703,458
$
234,087
$
282,916
$
262,539
$
268,300
$
145,039
$
171,668
$
157,395
$
163,651
$
0.25
$
0.30
$
0.28
$
0.29
$
0.25
$
0.30
$
0.27
$
0.29
For the Fiscal Year Ended September 30, 2010
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
624,618
$
635,434
$
691,804
$
608,836
$
240,400
$
227,465
$
300,261
$
197,245
$
136,237
$
162,552
$
179,439
$
113,959
$
0.23
$
0.28
$
0.31
$
0.20
$
0.23
$
0.27
$
0.30
$
0.20
88
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
89
93
94
95
90
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Number of Securities
Remaining Available
for Future
Issuance Under Equity
Number of Securities to
Weighted-Average
Compensation Plans
be Issued Upon Exercise
Exercise Price of
(Excluding
of Outstanding Options,
Outstanding Options,
Securities Reflected
Warrants and Rights
Warrants and Rights
in Column (a))
Plan Category
(a)
(b)
(c)
8,529,332
$
8.48
20,075,251
(1)
(1)
The TD Ameritrade Holding Corporation Long-Term Incentive Plan
(the LTIP) and the 2006 Directors Incentive
Plan (the Directors Plan) authorize the issuance of
shares of common stock as well as options. As of
91
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September 30, 2011, there were 14,119,551 shares and
1,175,313 shares remaining available for issuance pursuant
to the LTIP and the Directors Plan, respectively.
Number of Securities to
Weighted-Average
be Issued Upon Exercise of
Exercise Price of
Outstanding Options,
Outstanding Options,
Warrants and Rights
Warrants and Rights
Plan Category
(a)
(b)
170,821
$
21.99
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accounting Fees and Services
Item 15.
Exhibits,
Financial Statement Schedules
Exhibit No.
Description
3
.1
Amended and Restated Certificate of Incorporation of TD
Ameritrade Holding Corporation, dated January 24, 2006
(incorporated by reference to Exhibit 3.1 of the
Companys
Form 8-K
filed on January 27, 2006)
3
.2
Amended and Restated By-Laws of TD Ameritrade Holding
Corporation, effective March 9, 2006 (incorporated by
reference to Exhibit 3.1 of the Companys
Form 8-K
filed on March 15, 2006)
4
.1
Form of Certificate for Common Stock (incorporated by reference
to Exhibit 4.1 of the Companys
Form 8-A
filed on September 5, 2002)
4
.2
First Supplemental Indenture, dated November 25, 2009,
among TD Ameritrade Holding Corporation, TD Ameritrade Online
Holdings Corp., as guarantor, and The Bank of New York Mellon
Trust Company, National Association, as trustee
(incorporated by reference to Exhibit 4.1 of the
Companys
Form 8-K
filed on November 25, 2009)
4
.3
Form of 2.950% Senior Note due 2012 (included in
Exhibit 4.2)
4
.4
Form of 4.150% Senior Note due 2014 (included in
Exhibit 4.2)
92
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Exhibit No.
Description
4
.5
Form of 5.600% Senior Note due 2019 (included in
Exhibit 4.2)
10
.1*
Form of Indemnification Agreement, dated as of May 30,
2006, between TD Ameritrade Holding Corporation and several
current and previous members of the Companys board of
directors (incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on June 5, 2006)
10
.2*
Chairman of the Board of Directors Term Sheet, effective as of
June 1, 2011, between Joseph H. Moglia and TD Ameritrade
Holding Corporation
10
.3*
Non-Qualified Stock Option Agreement, dated as of March 1,
2003, between Joseph H. Moglia and Ameritrade Holding
Corporation (incorporated by reference to Exhibit 10.9 of
the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.4*
Employment Agreement, as amended and restated, effective as of
May 16, 2008, between Fredric J. Tomczyk and TD Ameritrade
Holding Corporation (incorporated by reference to
Exhibit 10.2 of the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.5*
Non-Qualified Stock Option Agreement, dated May 15, 2008,
between Fredric J. Tomczyk and TD Ameritrade Holding
Corporation (incorporated by reference to Exhibit 10.3 of
the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.6*
Employment Agreement, as amended and restated, effective as of
October 13, 2008, between Ellen L.S. Koplow and TD
Ameritrade Holding Corporation (incorporated by reference to
Exhibit 10.9 of the Companys
Form 10-K
filed on November 26, 2008)
10
.7*
Employment Agreement, as amended and restated, effective as of
September 18, 2008, between John Bunch and TD Ameritrade
Holding Corporation (incorporated by reference to
Exhibit 10.3 of the Companys quarterly report on
Form 10-Q
filed on February 5, 2010)
10
.8*
Executive Employment Term Sheet, dated as of January 14,
2009, between TD Ameritrade Holding Corporation and Peter J.
Sidebottom (incorporated by reference to Exhibit 10.3 of
the Companys
Form 10-Q
filed on May 8, 2009)
10
.9*
Executive Employment Term Sheet, effective as of April 11,
2011, between Marvin W. Adams and TD Ameritrade Holding
Corporation (incorporated by reference to Exhibit 10.4 of
the Companys quarterly report on
Form 10-Q
filed on May 6, 2011)
10
.10*
Separation and Release of Claims Agreement, dated
February 11, 2011, between David M. Kelley and TD
Ameritrade Holding Corporation (incorporated by reference to
Exhibit 10.1 of the Companys quarterly report on
Form 10-Q
filed on May 6, 2011)
10
.11*
TD Ameritrade Holding Corporation Long-Term Incentive Plan, as
amended and restated (incorporated by reference to
Exhibit 10.1 of the Companys
Form 8-K
filed on February 18, 2011)
10
.12*
Form of 1996 Long Term Incentive Plan Non-Qualified Stock Option
Agreement for Executives (incorporated by reference to
Exhibit 10.25 of the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.13*
Form of Performance Restricted Stock Unit Agreement
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on March 9, 2006)
10
.14*
Form of Restricted Stock Unit Agreement for Employees
(incorporated by reference to Exhibit 10.1 of the
Companys quarterly report on
Form 10-Q
filed on February 4, 2011)
10
.15*
TD Ameritrade Holding Corporation 2006 Directors Incentive
Plan, effective as of November 15, 2006 (incorporated by
reference to Appendix A of the Companys Proxy
Statement filed on January 24, 2007)
10
.16*
Form of Directors Incentive Plan Non-Qualified Stock Option
Agreement (incorporated by reference to Exhibit 10.27 of
the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.17*
Form of Directors Incentive Plan Restricted Stock Agreement
(incorporated by reference to Exhibit 10.28 of the
Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.18*
Form of Restricted Stock Unit Agreement for Non-employee
Directors (incorporated by reference to Exhibit 10.2 of the
Companys quarterly report on
Form 10-Q
filed on February 4,2011)
10
.19*
Amended and Restated Ameritrade Holding Corporation Executive
Deferred Compensation Program effective December 28, 2005
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on December 30, 2005)
Table of Contents
Exhibit No.
Description
10
.20*
TD Ameritrade Holding Corporation Management Incentive Plan, as
amended effective as of February 24, 2010 (incorporated by
reference to Exhibit 10.2 of the Companys
Form 8-K
filed on February 18, 2011)
10
.21*
Datek Online Holdings Corp. 1998 Stock Option Plan, as amended
and restated effective as of September 9, 2002
(incorporated by reference to Exhibit 4.2 of the
Companys Registration Statement on
Form S-8,
File
No. 333-99481,
filed on September 13, 2002)
10
.22*
First Amendment of Datek Online Holdings Corp. 1998 Stock Option
Plan, effective as of September 25, 2004 (incorporated by
reference to Exhibit 10.32 of the Companys Annual
Report on
Form 10-K
filed on December 9, 2004)
10
.23*
Datek Online Holdings Corp. 2001 Stock Incentive Plan, as
amended and restated effective as of September 9, 2002
(incorporated by reference to Exhibit 4.2 of the
Companys Registration Statement on
Form S-8,
File
No. 333-99353,
filed on September 10, 2002)
10
.24*
First Amendment of Datek Online Holdings Corp. 2001 Stock
Incentive Plan, effective as of September 25, 2004
(incorporated by reference to Exhibit 10.34 of the
Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.25*
thinkorswim Group Inc. Second Amended and Restated 2001 Stock
Option Plan (incorporated by reference to Exhibit (a)(1)(F) to
thinkorswim Group Inc.s Form SC TO-I filed on
April 17, 2009)
10
.26*
thinkorswim Group Inc. Amended and Restated 2004 Restricted
Stock Plan (incorporated by reference to Annex A to the
proxy statement filed by thinkorswim Group Inc. on
April 24, 2008)
10
.27*
Telescan, Inc. Amended and Restated 1995 Stock Option Plan
(incorporated by reference to Telescan, Inc.s registration
statement on
Form S-8
filed on November 21, 2000)
10
.28*
Telescan, Inc. 2000 Stock Option Plan (incorporated by reference
to Telescan, Inc.s registration statement on
Form S-8
filed on November 21, 2000)
10
.29
Stockholders Agreement among Ameritrade Holding Corporation, The
Toronto-Dominion Bank, J. Joe Ricketts and certain of his
affiliates dated as of June 22, 2005 (incorporated by
reference to Exhibit 10.1 of the Companys
Form 8-K
filed on June 28, 2005)
10
.30
Amendment No. 1 to Stockholders Agreement among TD
Ameritrade Holding Corporation, The Toronto-Dominion Bank and
certain other stockholders of TD Ameritrade, dated
February 22, 2006 (incorporated by reference to
Exhibit 10.4 of the Companys quarterly report on
Form 10-Q
filed on May 8, 2006)
10
.31
Amendment No. 2 and Waiver to Stockholders Agreement among
TD Ameritrade Holding Corporation, The Toronto-Dominion Bank and
certain other stockholders of TD Ameritrade, dated
August 3, 2009 (incorporated by reference to
Exhibit 10.33 of the Companys Annual Report on
Form 10-K
filed on November 13, 2009)
10
.32
Amendment No. 3 to Stockholders Agreement among TD
Ameritrade Holding Corporation, The Toronto-Dominion Bank and
certain other stockholders of TD Ameritrade, dated
August 6, 2010 (incorporated by reference to
Exhibit 10.35 of the Companys Annual Report on
Form 10-K
filed on November 19, 2010)
10
.33
Amended and Restated Registration Rights Agreement by and among
Ameritrade Holding Corporation, The Toronto-Dominion Bank, J.
Joe Ricketts and certain of his affiliates, entities affiliated
with Silver Lake Partners, and entities affiliated with TA
Associates, dated as of June 22, 2005 (incorporated by
reference to Exhibit 99.1 of the Companys
Form 8-K
filed on September 12, 2005)
10
.34
Trademark License Agreement among The Toronto-Dominion Bank and
Ameritrade Holding Corporation, dated as of June 22, 2005
(incorporated by reference to Exhibit 99.3 of the
Companys
Form 8-K
filed on September 12, 2005)
10
.35
Credit Agreement, dated June 28, 2011, among TD Ameritrade
Holding Corporation, TD Ameritrade Online Holdings Corp., as
guarantor, the lenders party thereto, Bank of America, N.A., as
syndication agent, and JPMorgan Chase Bank, N.A., as
administrative agent (incorporated by reference to
Exhibit 10.1 of the Companys
Form 8-K
filed on July 5, 2011)
Table of Contents
Exhibit No.
Description
10
.36
Credit Agreement, dated June 28, 2011, among TD Ameritrade
Clearing, Inc., the lenders party thereto, Bank of America,
N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as
administrative agent (incorporated by reference to
Exhibit 10.2 of the Companys
Form 8-K
filed on July 5, 2011)
10
.37
Letter Agreement to effect a structured stock repurchase, dated
as of August 20, 2010, between TD Ameritrade Holding
Corporation and Barclays Capital Inc., acting as agent for
Barclays Bank PLC (incorporated by reference to
Exhibit 10.44 of the Companys Annual Report on
Form 10-K
filed on November 19, 2010)
10
.38
Guaranteed Maximum Price Amendment between TD Ameritrade
Services Company, Inc. and Kiewit Building Group, Inc.,
effective June 1, 2011 (incorporated by reference to
Exhibit 10.1 of the Companys
Form 8-K
filed on July 13, 2011)
10
.39
Construction agreement between TD Ameritrade Services Company,
Inc. and Kiewit Building Group, Inc., dated December 1,
2009 (incorporated by reference to Exhibit 10.2 of the
Companys
Form 8-K
filed on July 13, 2011)
12
Statement Re: Computation of Ratio of Earnings to Fixed Charges
14
Code of Ethics (incorporated by reference to Exhibit 14 of
the Companys quarterly report on
Form 10-Q
filed February 4, 2011)
21
.1
Subsidiaries of the Registrant
23
.1
Consent of Ernst & Young LLP
31
.1
Certification of Fredric J. Tomczyk, Principal Executive
Officer, as required pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31
.2
Certification of William J. Gerber, Principal Financial Officer,
as required pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32
.1
Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
101
.INS
XBRL Instance Document
101
.SCH
XBRL Taxonomy Extension Schema
101
.CAL
XBRL Taxonomy Extension Calculation
101
.LAB
XBRL Taxonomy Extension Label
101
.PRE
XBRL Taxonomy Extension Presentation
101
.DEF
XBRL Taxonomy Extension Definition
*
Management contracts and compensatory plans and arrangements
required to be filed as exhibits under Item 15(b) of this
report.
The Company has requested confidential treatment for portions of
this exhibit.
Table of Contents
By:
(Principal Executive Officer)
By:
Chairman of the Board
Director
Vice Chairman of the Board
Director
Director
Director
Director
Director
Director
Director
Director
96
Fiscal Year Ended September 30, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
Determination of earnings:
|
||||||||||||||||||||
Pre-tax income
|
$ | 1,016,471 | $ | 912,085 | $ | 1,059,405 | $ | 1,263,502 | $ | 1,034,703 | ||||||||||
Fixed charges
|
54,183 | 67,148 | 68,772 | 338,693 | 585,740 | |||||||||||||||
Less: Capitalized interest
|
(789 | ) | (97 | ) | | | | |||||||||||||
|
||||||||||||||||||||
Earnings (A)
|
$ | 1,069,865 | $ | 979,136 | $ | 1,128,177 | $ | 1,602,195 | $ | 1,620,443 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Fixed charges:
|
||||||||||||||||||||
Interest on borrowings
(1)
|
$ | 32,017 | $ | 44,858 | $ | 40,070 | $ | 78,447 | $ | 118,173 | ||||||||||
Capitalized interest
|
789 | 97 | | | | |||||||||||||||
Brokerage interest expense
|
4,826 | 6,065 | 15,165 | 249,616 | 455,467 | |||||||||||||||
Interest portion of rent expense
|
16,551 | 16,128 | 13,537 | 10,630 | 12,100 | |||||||||||||||
|
||||||||||||||||||||
Total fixed
charges (B)
|
$ | 54,183 | $ | 67,148 | $ | 68,772 | $ | 338,693 | $ | 585,740 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of earnings to fixed charges (A) ÷ (B)
|
19.7 | 14.6 | 16.4 | 4.7 | 2.8 | |||||||||||||||
|
||||||||||||||||||||
Ratio of earnings to fixed charges, excluding
brokerage interest expense (2) |
21.6 | 15.9 | 20.8 | 15.2 | 8.9 |
(1) | Interest on borrowings includes amortization of capitalized debt issuance costs. | |
(2) | Because interest expense incurred in connection with brokerage activities is completely offset by brokerage interest revenue, the Company considers such interest to be a reduction of net revenues. Accordingly, the ratio of earnings to fixed charges, excluding brokerage interest expense, reflects the elimination of such interest expense from fixed charges. |
Subsidiary | State or Other Jurisdiction of Domicile | |
Ameritrade Advisory Services, LLC
|
Delaware | |
Ameritrade International Company
|
Cayman Islands | |
Amerivest Investment Management, LLC
|
Delaware | |
Datek Online Management Corp.
|
Delaware | |
Financial Passport, Inc.
|
Delaware | |
Futures Forex Trading LLC
|
Delaware | |
Investools Inc.
|
Utah | |
Red Option Advisors, Inc.
|
Delaware | |
T2 API Technologies, LLC
|
Delaware | |
TD Ameritrade Clearing, Inc.
|
Nebraska | |
TD Ameritrade, Inc.
|
New York | |
TD Ameritrade IP Company, Inc.
|
Delaware | |
TD Ameritrade Online Holdings Corp.
|
Delaware | |
TD Ameritrade Services Company, Inc.
|
Delaware* | |
TD Ameritrade Trust Company
|
Maine | |
TD Waterhouse Canadian Call Center, Inc.
|
Canada | |
TenBagger, Inc.
|
Nevada | |
thinkorswim Advisors, Inc.
|
Illinois | |
thinkorswim Australia Pty Ltd.
|
Australia | |
thinkorswim Group Inc.
|
Delaware | |
thinkorswim Holdings Inc.
|
Delaware | |
thinkorswim Singapore Pte Ltd.
|
Singapore | |
TD Ameritrade Mobile, LLC
|
Delaware | |
ThinkTech, Inc.
|
Delaware** | |
tos RED, Inc.
|
Delaware | |
tos Services, Inc.
|
Delaware | |
TradeBridge, Inc.
|
Maryland | |
The Insurance Agency of TD Ameritrade, LLC
|
Delaware |
* | In Texas this entity does business as Ameritrade Support Services Corporation | |
** | In Texas this entity does business as T2 Technology Support, Inc. |
(1) | Registration Statement (Form S-8 No. 333-132016) of TD Ameritrade Holding Corporation, | |
(2) | Registration Statement (Form S-8 No. 333-105336) of TD Ameritrade Holding Corporation, | |
(3) | Registration Statement (Form S-8 No. 333-99481) of TD Ameritrade Holding Corporation, | |
(4) | Registration Statement (Form S-8 No. 333-99353) of TD Ameritrade Holding Corporation, | |
(5) | Registration Statement (Form S-8 No. 333-86164) of TD Ameritrade Holding Corporation, | |
(6) | Registration Statement (Form S-8 No. 333-77573) pertaining to the Associates 401(k) Profit Sharing Plan and Trust of TD Ameritrade Holding Corporation, | |
(7) | Registration Statement (Form S-8 No. 333-160073) of TD Ameritrade Holding Corporation, | |
(8) | Registration Statement (Form S-3 No. 333-87999) of TD Ameritrade Holding Corporation, | |
(9) | Registration Statement (Form S-3 No. 333-163211) of TD Ameritrade Holding Corporation, and | |
(10) | Post Effective Amendment No. 1 to Registration Statement No. 333-88632 on Form S-3 to Form S-4 of TD Ameritrade Holding Corporation; |
1. | I have reviewed this annual report on Form 10-K of TD Ameritrade Holding Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
|
/s/ FREDRIC J. TOMCZYK
|
||
|
Fredric J. Tomczyk
President, Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of TD Ameritrade Holding Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
|
/s/ WILLIAM J. GERBER | ||
|
|||
|
William J. Gerber
Executive Vice President, Chief Financial Officer |
Dated: November 18, 2011
|
/s/ FREDRIC J. TOMCZYK
President, Chief Executive Officer |
||
Dated: November 18, 2011
|
/s/ WILLIAM J. GERBER
Executive Vice President, Chief Financial Officer |