|
|
|
x
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
Delaware
|
|
82-0543156
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
|
|
Page No.
|
|
|
|
|
|
|
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
|
|
(In millions)
|
||||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,662
|
|
|
$
|
1,855
|
|
Cash and investments segregated and on deposit for regulatory purposes
|
|
9,263
|
|
|
8,729
|
|
||
Receivable from brokers, dealers and clearing organizations
|
|
959
|
|
|
1,190
|
|
||
Receivable from clients, net
|
|
12,039
|
|
|
11,941
|
|
||
Receivable from affiliates
|
|
143
|
|
|
106
|
|
||
Other receivables, net
|
|
136
|
|
|
160
|
|
||
Securities owned, at fair value
|
|
177
|
|
|
331
|
|
||
Investments available-for-sale, at fair value
|
|
747
|
|
|
757
|
|
||
Property and equipment at cost, net
|
|
531
|
|
|
526
|
|
||
Goodwill
|
|
2,467
|
|
|
2,467
|
|
||
Acquired intangible assets, net
|
|
556
|
|
|
575
|
|
||
Other assets
|
|
154
|
|
|
181
|
|
||
Total assets
|
|
$
|
28,834
|
|
|
$
|
28,818
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Payable to brokers, dealers and clearing organizations
|
|
$
|
2,028
|
|
|
$
|
2,040
|
|
Payable to clients
|
|
19,062
|
|
|
19,055
|
|
||
Accounts payable and other liabilities
|
|
484
|
|
|
565
|
|
||
Payable to affiliates
|
|
8
|
|
|
9
|
|
||
Long-term debt
|
|
1,769
|
|
|
1,817
|
|
||
Deferred income taxes
|
|
284
|
|
|
281
|
|
||
Total liabilities
|
|
23,635
|
|
|
23,767
|
|
||
Stockholders' equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value; 100 million shares authorized, none issued
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; one billion shares authorized; 631 million shares issued;
December 31, 2016 - 528 million shares outstanding;
September 30, 2016 - 526 million shares outstanding
|
|
6
|
|
|
6
|
|
||
Additional paid-in capital
|
|
1,689
|
|
|
1,670
|
|
||
Retained earnings
|
|
5,640
|
|
|
5,518
|
|
||
Treasury stock, common, at cost:
December 31, 2016 - 103 million shares;
September 30, 2016 - 105 million shares
|
|
(2,110
|
)
|
|
(2,121
|
)
|
||
Deferred compensation
|
|
1
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
|
(27
|
)
|
|
(22
|
)
|
||
Total stockholders' equity
|
|
5,199
|
|
|
5,051
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
28,834
|
|
|
$
|
28,818
|
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In millions, except per share amounts)
|
||||||
Revenues:
|
|
|
|
|
||||
Transaction-based revenues:
|
|
|
|
|
||||
Commissions and transaction fees
|
|
$
|
355
|
|
|
$
|
328
|
|
Asset-based revenues:
|
|
|
|
|
||||
Insured deposit account fees
|
|
245
|
|
|
227
|
|
||
Net interest revenue
|
|
151
|
|
|
154
|
|
||
Investment product fees
|
|
94
|
|
|
92
|
|
||
Total asset-based revenues
|
|
490
|
|
|
473
|
|
||
Other revenues
|
|
14
|
|
|
11
|
|
||
Net revenues
|
|
859
|
|
|
812
|
|
||
Operating expenses:
|
|
|
|
|
||||
Employee compensation and benefits
|
|
214
|
|
|
201
|
|
||
Clearing and execution costs
|
|
36
|
|
|
30
|
|
||
Communications
|
|
35
|
|
|
32
|
|
||
Occupancy and equipment costs
|
|
44
|
|
|
43
|
|
||
Depreciation and amortization
|
|
24
|
|
|
22
|
|
||
Amortization of acquired intangible assets
|
|
19
|
|
|
22
|
|
||
Professional services
|
|
53
|
|
|
37
|
|
||
Advertising
|
|
57
|
|
|
62
|
|
||
Other
|
|
24
|
|
|
20
|
|
||
Total operating expenses
|
|
506
|
|
|
469
|
|
||
Operating income
|
|
353
|
|
|
343
|
|
||
Other expense:
|
|
|
|
|
||||
Interest on borrowings
|
|
14
|
|
|
12
|
|
||
Total other expense
|
|
14
|
|
|
12
|
|
||
Pre-tax income
|
|
339
|
|
|
331
|
|
||
Provision for income taxes
|
|
123
|
|
|
119
|
|
||
Net income
|
|
$
|
216
|
|
|
$
|
212
|
|
Earnings per share - basic
|
|
$
|
0.41
|
|
|
$
|
0.39
|
|
Earnings per share - diluted
|
|
$
|
0.41
|
|
|
$
|
0.39
|
|
Weighted average shares outstanding - basic
|
|
527
|
|
|
537
|
|
||
Weighted average shares outstanding - diluted
|
|
530
|
|
|
540
|
|
||
Dividends declared per share
|
|
$
|
0.18
|
|
|
$
|
0.17
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In millions)
|
||||||
Net income
|
|
$
|
216
|
|
|
$
|
212
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
||||
Investments available-for-sale:
|
|
|
|
|
||||
Unrealized loss
|
|
(10
|
)
|
|
—
|
|
||
Cash flow hedging instruments:
|
|
|
|
|
||||
Reclassification adjustment for portion of realized loss amortized to net income
|
|
1
|
|
|
1
|
|
||
Total other comprehensive income (loss), before tax
|
|
(9
|
)
|
|
1
|
|
||
Income tax effect
|
|
4
|
|
|
—
|
|
||
Total other comprehensive income (loss), net of tax
|
|
(5
|
)
|
|
1
|
|
||
Comprehensive income
|
|
$
|
211
|
|
|
$
|
213
|
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
216
|
|
|
$
|
212
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
24
|
|
|
22
|
|
||
Amortization of acquired intangible assets
|
|
19
|
|
|
22
|
|
||
Deferred income taxes
|
|
7
|
|
|
12
|
|
||
Stock-based compensation
|
|
10
|
|
|
9
|
|
||
Excess tax benefits on stock-based compensation
|
|
(9
|
)
|
|
(15
|
)
|
||
Other, net
|
|
1
|
|
|
2
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Cash and investments segregated and on deposit for regulatory purposes
|
|
(534
|
)
|
|
265
|
|
||
Receivable from brokers, dealers and clearing organizations
|
|
231
|
|
|
(160
|
)
|
||
Receivable from clients, net
|
|
(98
|
)
|
|
361
|
|
||
Receivable from/payable to affiliates, net
|
|
(38
|
)
|
|
(34
|
)
|
||
Other receivables, net
|
|
24
|
|
|
1
|
|
||
Securities owned, at fair value
|
|
154
|
|
|
162
|
|
||
Other assets
|
|
(21
|
)
|
|
(46
|
)
|
||
Payable to brokers, dealers and clearing organizations
|
|
(12
|
)
|
|
(658
|
)
|
||
Payable to clients
|
|
7
|
|
|
70
|
|
||
Accounts payable and other liabilities
|
|
(71
|
)
|
|
(74
|
)
|
||
Net cash provided by (used in) operating activities
|
|
(90
|
)
|
|
151
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchase of property and equipment
|
|
(29
|
)
|
|
(43
|
)
|
||
Purchase of short-term investments
|
|
—
|
|
|
(201
|
)
|
||
Net cash used in investing activities
|
|
(29
|
)
|
|
(244
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Payment of cash dividends
|
|
(95
|
)
|
|
(91
|
)
|
||
Proceeds from exercise of stock options: Three months ended December 31, 2016 - 1.3 million shares
|
|
23
|
|
|
—
|
|
||
Purchase of treasury stock: Three months ended December 31, 2015 - 1.1 million shares
|
|
—
|
|
|
(38
|
)
|
||
Purchase of treasury stock for income tax withholding on stock-based compensation: Three months ended December 31, 2016 - 0.3 million shares; 2015 - 0.7 million shares
|
|
(11
|
)
|
|
(27
|
)
|
||
Payment for future treasury stock purchases under accelerated stock repurchase agreement
|
|
—
|
|
|
(9
|
)
|
||
Excess tax benefits on stock-based compensation
|
|
9
|
|
|
15
|
|
||
Net cash used in financing activities
|
|
(74
|
)
|
|
(150
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(193
|
)
|
|
(243
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
1,855
|
|
|
1,978
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,662
|
|
|
$
|
1,735
|
|
Supplemental cash flow information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
19
|
|
|
$
|
20
|
|
Income taxes paid
|
|
$
|
99
|
|
|
$
|
138
|
|
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Broker-dealer subsidiaries
|
|
$
|
904
|
|
|
$
|
1,153
|
|
Corporate
|
|
442
|
|
|
460
|
|
||
Trust company subsidiary
|
|
163
|
|
|
85
|
|
||
Futures commission merchant and forex dealer member subsidiary
|
|
136
|
|
|
125
|
|
||
Investment advisory subsidiaries
|
|
17
|
|
|
32
|
|
||
Total
|
|
$
|
1,662
|
|
|
$
|
1,855
|
|
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
U.S. government debt securities
|
|
$
|
6,214
|
|
|
$
|
6,523
|
|
Cash in demand deposit accounts
|
|
2,064
|
|
|
657
|
|
||
Reverse repurchase agreements (collateralized by U.S. government debt securities)
|
|
700
|
|
|
1,288
|
|
||
Cash on deposit with futures commission merchants
|
|
210
|
|
|
186
|
|
||
U.S. government debt securities on deposit with futures commission merchant
|
|
75
|
|
|
75
|
|
||
Total
|
|
$
|
9,263
|
|
|
$
|
8,729
|
|
December 31, 2016
|
|
Face
Value
|
|
Unamortized Discounts and Debt Issuance Costs
|
|
Fair Value
Adjustment
(1)
|
|
Net Carrying
Value
|
||||||||
Senior Notes:
|
|
|
|
|
|
|
|
|
||||||||
5.600% Notes due 2019
|
|
$
|
500
|
|
|
$
|
(1
|
)
|
|
$
|
22
|
|
|
$
|
521
|
|
2.950% Notes due 2022
|
|
750
|
|
|
(6
|
)
|
|
—
|
|
|
744
|
|
||||
3.625% Notes due 2025
|
|
500
|
|
|
(4
|
)
|
|
8
|
|
|
504
|
|
||||
Total long-term debt
|
|
$
|
1,750
|
|
|
$
|
(11
|
)
|
|
$
|
30
|
|
|
$
|
1,769
|
|
September 30, 2016
|
|
Face
Value
|
|
Unamortized Discounts and Debt Issuance Costs
|
|
Fair Value
Adjustment
(1)
|
|
Net Carrying
Value
|
||||||||
Senior Notes:
|
|
|
|
|
|
|
|
|
||||||||
5.600% Notes due 2019
|
|
$
|
500
|
|
|
$
|
(2
|
)
|
|
$
|
33
|
|
|
$
|
531
|
|
2.950% Notes due 2022
|
|
750
|
|
|
(6
|
)
|
|
—
|
|
|
744
|
|
||||
3.625% Notes due 2025
|
|
500
|
|
|
(4
|
)
|
|
46
|
|
|
542
|
|
||||
Total long-term debt
|
|
$
|
1,750
|
|
|
$
|
(12
|
)
|
|
$
|
79
|
|
|
$
|
1,817
|
|
|
(1)
|
Fair value adjustments relate to changes in the fair value of the debt while in a fair value hedging relationship. See "
Fair Value Hedging
" below.
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Gain (loss) on fair value of interest rate swaps
|
|
$
|
(49
|
)
|
|
$
|
(17
|
)
|
Gain (loss) on fair value of hedged fixed-rate debt
|
|
49
|
|
|
17
|
|
||
Net gain (loss) recorded in interest on borrowings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Balance Sheet Location
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Interest rate contracts:
|
|
|
|
|
|
|
||||
Pay-variable interest rate swaps designated as fair
value hedges
|
|
Other assets
|
|
$
|
30
|
|
|
$
|
79
|
|
TD Ameritrade Futures & Forex LLC
|
||||||||||||
Date
|
|
Adjusted Net
Capital
|
|
Required Adjusted Net Capital
($20 Million Plus 5% of All Foreign Exchange Liabilities Owed to Forex Clients in Excess of $10 Million)
|
|
Adjusted Net
Capital
in Excess of
Required
Adjusted Net
Capital
|
||||||
December 31, 2016
|
|
$
|
122
|
|
|
$
|
22
|
|
|
$
|
100
|
|
September 30, 2016
|
|
$
|
117
|
|
|
$
|
22
|
|
|
$
|
95
|
|
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Client margin securities
|
|
$
|
16.5
|
|
|
$
|
16.5
|
|
Stock borrowings
|
|
0.8
|
|
|
1.1
|
|
||
Total collateral available
|
|
$
|
17.3
|
|
|
$
|
17.6
|
|
|
|
|
|
|
||||
Collateral loaned
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
Collateral repledged
|
|
2.9
|
|
|
2.7
|
|
||
Total collateral loaned or repledged
|
|
$
|
4.9
|
|
|
$
|
4.7
|
|
•
|
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, money market mutual 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 and inactive 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.
|
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
1,391
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,391
|
|
Investments segregated for regulatory purposes:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
6,289
|
|
|
—
|
|
|
6,289
|
|
||||
Securities owned:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
||||
Other
|
|
7
|
|
|
5
|
|
|
—
|
|
|
12
|
|
||||
Subtotal - Securities owned
|
|
7
|
|
|
170
|
|
|
—
|
|
|
177
|
|
||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
747
|
|
|
—
|
|
|
747
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Pay-variable interest rate swaps
(1)
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||
U.S. government debt securities
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Auction rate securities
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Subtotal - Other assets
|
|
—
|
|
|
34
|
|
|
1
|
|
|
35
|
|
||||
Total assets at fair value
|
|
$
|
1,398
|
|
|
$
|
7,240
|
|
|
$
|
1
|
|
|
$
|
8,639
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable and other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Securities sold, not yet purchased:
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
(1)
|
See "
Fair Value Hedging
" in Note
6
for details.
|
|
|
As of September 30, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
1,658
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,658
|
|
Investments segregated for regulatory purposes:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
6,598
|
|
|
—
|
|
|
6,598
|
|
||||
Securities owned:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
320
|
|
|
—
|
|
|
320
|
|
||||
Other
|
|
6
|
|
|
5
|
|
|
—
|
|
|
11
|
|
||||
Subtotal - Securities owned
|
|
6
|
|
|
325
|
|
|
—
|
|
|
331
|
|
||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
757
|
|
|
—
|
|
|
757
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Pay-variable interest rate swaps
(1)
|
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
||||
U.S. government debt securities
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Auction rate securities
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Subtotal - Other assets
|
|
—
|
|
|
83
|
|
|
1
|
|
|
84
|
|
||||
Total assets at fair value
|
|
$
|
1,664
|
|
|
$
|
7,763
|
|
|
$
|
1
|
|
|
$
|
9,428
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable and other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Securities sold, not yet purchased:
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
(1)
|
See "
Fair Value Hedging
" in Note
6
for details.
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the
Condensed Consolidated
Balance Sheet
|
|
|
||||||||||||||
|
|
Gross Amounts
of Recognized
Assets and
Liabilities
|
|
Gross Amounts
Offset in the
Condensed
Consolidated
Balance Sheet
|
|
Net Amounts
Presented in
the Condensed
Consolidated
Balance Sheet
|
|
Financial
Instruments
(4)
|
|
Collateral
Received or
Pledged
(Including
Cash)
(5)
|
|
Net
Amount
(6)
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments segregated for
regulatory purposes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reverse repurchase agreements
|
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
(700
|
)
|
|
$
|
—
|
|
Receivable from brokers, dealers
and clearing organizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits paid for
securities borrowed
(1)
|
|
801
|
|
|
—
|
|
|
801
|
|
|
(59
|
)
|
|
(721
|
)
|
|
21
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pay-variable interest rate swaps
|
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
||||||
Total
|
|
$
|
1,531
|
|
|
$
|
—
|
|
|
$
|
1,531
|
|
|
$
|
(59
|
)
|
|
$
|
(1,451
|
)
|
|
$
|
21
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payable to brokers, dealers
and clearing organizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits received for
securities loaned
(2)(3)
|
|
$
|
1,964
|
|
|
$
|
—
|
|
|
$
|
1,964
|
|
|
$
|
(59
|
)
|
|
$
|
(1,706
|
)
|
|
$
|
199
|
|
|
|
September 30, 2016
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the
Condensed Consolidated
Balance Sheet
|
|
|
||||||||||||||
|
|
Gross Amounts
of Recognized
Assets and
Liabilities
|
|
Gross Amounts
Offset in the
Condensed
Consolidated
Balance Sheet
|
|
Net Amounts
Presented in
the Condensed
Consolidated
Balance Sheet
|
|
Financial
Instruments
(4)
|
|
Collateral
Received or
Pledged
(Including
Cash)
(5)
|
|
Net
Amount
(6)
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments segregated for
regulatory purposes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reverse repurchase agreements
|
|
$
|
1,288
|
|
|
$
|
—
|
|
|
$
|
1,288
|
|
|
$
|
—
|
|
|
$
|
(1,288
|
)
|
|
$
|
—
|
|
Receivable from brokers, dealers
and clearing organizations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits paid for
securities borrowed
(1)
|
|
1,051
|
|
|
—
|
|
|
1,051
|
|
|
(172
|
)
|
|
(862
|
)
|
|
17
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pay-variable interest rate swaps
|
|
79
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
(79
|
)
|
|
—
|
|
||||||
Total
|
|
$
|
2,418
|
|
|
$
|
—
|
|
|
$
|
2,418
|
|
|
$
|
(172
|
)
|
|
$
|
(2,229
|
)
|
|
$
|
17
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payable to brokers, dealers
and clearing organizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits received for
securities loaned
(2)(3)
|
|
$
|
1,990
|
|
|
$
|
—
|
|
|
$
|
1,990
|
|
|
$
|
(172
|
)
|
|
$
|
(1,638
|
)
|
|
$
|
180
|
|
|
(1)
|
Included in the gross amounts of deposits paid for securities borrowed is
$449 million
and
$590 million
as of
December 31, 2016
and
September 30, 2016
, respectively, transacted through a risk-sharing program with the OCC, which guarantees the return of cash to the Company. See "General Contingencies" in Note
8
for a discussion of the potential risks associated with securities borrowing transactions and how the Company mitigates those risks.
|
(2)
|
Included in the gross amounts of deposits received for securities loaned is
$1.35 billion
and
$1.07 billion
as of
December 31, 2016
and
September 30, 2016
, respectively, transacted through a risk-sharing program with the OCC, which guarantees the return of securities to the Company. See "General Contingencies" in Note
8
for a discussion of the potential risks associated with securities lending transactions and how the Company mitigates those risks.
|
(3)
|
Substantially all of the Company's securities lending transactions have a continuous contractual term and, upon notice by either party, may be terminated within three business days. The following table summarizes the Company's gross liability for securities lending transactions by the class of securities loaned (dollars in millions):
|
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Deposits received for securities loaned:
|
|
|
|
|
||||
Equity securities
|
|
$
|
1,659
|
|
|
$
|
1,652
|
|
Exchange-traded funds
|
|
191
|
|
|
216
|
|
||
Closed-end funds
|
|
50
|
|
|
73
|
|
||
Other
|
|
64
|
|
|
49
|
|
||
Total
|
|
$
|
1,964
|
|
|
$
|
1,990
|
|
(4)
|
Amounts represent recognized assets and liabilities that are subject to enforceable master agreements with rights of setoff.
|
(5)
|
Represents the fair value of collateral the Company had received or pledged under enforceable master agreements, limited for table presentation purposes to the net amount of the recognized assets due from or liabilities due to each counterparty. At
December 31, 2016
and
September 30, 2016
, the Company had received total collateral with a fair value of
$1.52 billion
and
$2.44 billion
, respectively, and pledged total collateral with a fair value of
$1.76 billion
and
$1.81 billion
, respectively.
|
(6)
|
Represents the amount for which, in the case of net recognized assets, the Company had not received collateral, and in the case of net recognized liabilities, the Company had not pledged collateral.
|
|
|
Three Months Ended December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
Before Tax
|
|
Tax Effect
|
|
Net of Tax
|
|
Before Tax
|
|
Tax Effect
|
|
Net of Tax
|
||||||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss
|
|
$
|
(10
|
)
|
|
$
|
4
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash flow hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassification adjustment for portion of realized loss amortized to net income
(1)
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Other comprehensive income (loss)
|
|
$
|
(9
|
)
|
|
$
|
4
|
|
|
$
|
(5
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
(1)
|
The before tax reclassification amounts and the related tax effects are included in interest on borrowings and provision for income taxes, respectively, on the Condensed Consolidated Statements of Income.
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Investments available-for-sale:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
—
|
|
|
$
|
—
|
|
Other comprehensive loss before reclassification
|
|
(6
|
)
|
|
—
|
|
||
Ending balance
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
Cash flow hedging instruments:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
(22
|
)
|
|
$
|
(25
|
)
|
Amount reclassified from accumulated other comprehensive loss
|
|
1
|
|
|
1
|
|
||
Ending balance
|
|
$
|
(21
|
)
|
|
$
|
(24
|
)
|
Total accumulated other comprehensive loss:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
(22
|
)
|
|
$
|
(25
|
)
|
Current period change
|
|
(5
|
)
|
|
1
|
|
||
Ending balance
|
|
$
|
(27
|
)
|
|
$
|
(24
|
)
|
|
|
|
|
Revenues from TD and Affiliates
|
||||||
|
|
Statement of Income
Classification
|
|
Three months ended
December 31, |
||||||
Description
|
|
2016
|
|
2015
|
||||||
Insured Deposit Account Agreement
|
|
Insured deposit account fees
|
|
$
|
245
|
|
|
$
|
227
|
|
Referral and Strategic Alliance Agreement
|
|
Various
|
|
3
|
|
|
3
|
|
||
Mutual Fund Agreements
|
|
Investment product fees
|
|
4
|
|
|
1
|
|
||
Other
|
|
Various
|
|
2
|
|
|
1
|
|
||
Total revenues
|
|
$
|
254
|
|
|
$
|
232
|
|
|
|
|
|
Expenses to TD and Affiliates
|
||||||
|
|
Statement of Income
Classification
|
|
Three months ended
December 31, |
||||||
Description
|
|
|
2016
|
|
2015
|
|||||
Canadian Call Center Services Agreement
|
|
Professional services
(1)
|
|
$
|
4
|
|
|
$
|
4
|
|
Other
|
|
Various
|
|
—
|
|
|
1
|
|
||
Total expenses
|
|
$
|
4
|
|
|
$
|
5
|
|
|
(1)
|
On September 30, 2016, the Company notified TD of its intent to not extend or renew the Canadian Call Center Services Agreement. The Company expects that services with the Canadian Call Center will be completed by September 30, 2017.
|
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Assets:
|
|
|
|
|
||||
Receivable from affiliates
|
|
$
|
143
|
|
|
$
|
106
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Payable to brokers, dealers and clearing organizations
|
|
$
|
35
|
|
|
$
|
72
|
|
Payable to affiliates
|
|
8
|
|
|
9
|
|
|
|
Parent
|
|
Guarantor
Subsidiary
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Net revenues
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
857
|
|
|
$
|
(7
|
)
|
|
$
|
859
|
|
Operating expenses
|
|
7
|
|
|
—
|
|
|
506
|
|
|
(7
|
)
|
|
506
|
|
|||||
Operating income
|
|
2
|
|
|
—
|
|
|
351
|
|
|
—
|
|
|
353
|
|
|||||
Other expense
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Income (loss) before income taxes and equity
in income of subsidiaries
|
|
(12
|
)
|
|
—
|
|
|
351
|
|
|
—
|
|
|
339
|
|
|||||
Provision for (benefit from) income taxes
|
|
(5
|
)
|
|
1
|
|
|
127
|
|
|
—
|
|
|
123
|
|
|||||
Income (loss) before equity in income of
subsidiaries
|
|
(7
|
)
|
|
(1
|
)
|
|
224
|
|
|
—
|
|
|
216
|
|
|||||
Equity in income of subsidiaries
|
|
223
|
|
|
224
|
|
|
—
|
|
|
(447
|
)
|
|
—
|
|
|||||
Net income
|
|
$
|
216
|
|
|
$
|
223
|
|
|
$
|
224
|
|
|
$
|
(447
|
)
|
|
$
|
216
|
|
|
|
Parent
|
|
Guarantor
Subsidiary
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Net revenues
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
813
|
|
|
$
|
(5
|
)
|
|
$
|
812
|
|
Operating expenses
|
|
4
|
|
|
—
|
|
|
470
|
|
|
(5
|
)
|
|
469
|
|
|||||
Operating income
|
|
—
|
|
|
—
|
|
|
343
|
|
|
—
|
|
|
343
|
|
|||||
Other expense
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Income (loss) before income taxes and equity
in income of subsidiaries
|
|
(12
|
)
|
|
—
|
|
|
343
|
|
|
—
|
|
|
331
|
|
|||||
Provision for (benefit from) income taxes
|
|
(7
|
)
|
|
—
|
|
|
126
|
|
|
—
|
|
|
119
|
|
|||||
Income (loss) before equity in income of
subsidiaries
|
|
(5
|
)
|
|
—
|
|
|
217
|
|
|
—
|
|
|
212
|
|
|||||
Equity in income of subsidiaries
|
|
217
|
|
|
217
|
|
|
—
|
|
|
(434
|
)
|
|
—
|
|
|||||
Net income
|
|
$
|
212
|
|
|
$
|
217
|
|
|
$
|
217
|
|
|
$
|
(434
|
)
|
|
$
|
212
|
|
|
|
|
|
Parent
|
|
Guarantor
Subsidiary |
|
Non-Guarantor
Subsidiaries |
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(114
|
)
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
(90
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Purchase of property and equipment
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
||||
Net cash used in investing activities
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Payment of cash dividends
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
||||
Purchase of treasury stock for income tax withholding on
stock-based compensation
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||
Other
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||
Net cash used in financing activities
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
||||
Intercompany investing and financing activities, net
|
|
230
|
|
|
—
|
|
|
(230
|
)
|
|
—
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
42
|
|
|
—
|
|
|
(235
|
)
|
|
(193
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
248
|
|
|
2
|
|
|
1,605
|
|
|
1,855
|
|
||||
Cash and cash equivalents at end of period
|
|
$
|
290
|
|
|
$
|
2
|
|
|
$
|
1,370
|
|
|
$
|
1,662
|
|
|
|
Parent
|
|
Guarantor
Subsidiary
|
|
Non-Guarantor
Subsidiaries
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(55
|
)
|
|
$
|
—
|
|
|
$
|
206
|
|
|
$
|
151
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Purchase of property and equipment
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
(43
|
)
|
||||
Purchase of short-term investments
|
|
(201
|
)
|
|
—
|
|
|
—
|
|
|
(201
|
)
|
||||
Net cash used in investing activities
|
|
(201
|
)
|
|
—
|
|
|
(43
|
)
|
|
(244
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Payment of cash dividends
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
||||
Purchase of treasury stock
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
||||
Purchase of treasury stock for income tax withholding on
stock-based compensation
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||
Other, net
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Net cash used in financing activities
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
||||
Intercompany investing and financing activities, net
|
|
175
|
|
|
—
|
|
|
(175
|
)
|
|
—
|
|
||||
Net decrease in cash and cash equivalents
|
|
(231
|
)
|
|
—
|
|
|
(12
|
)
|
|
(243
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
920
|
|
|
2
|
|
|
1,056
|
|
|
1,978
|
|
||||
Cash and cash equivalents at end of period
|
|
$
|
689
|
|
|
$
|
2
|
|
|
$
|
1,044
|
|
|
$
|
1,735
|
|
|
|
Three months ended December 31,
|
||||||||||||
|
|
2016
|
|
2015
|
||||||||||
|
|
$
|
|
% of Net Revenues
|
|
$
|
|
% of Net Revenues
|
||||||
Net income - GAAP
|
|
$
|
216
|
|
|
25.1
|
%
|
|
$
|
212
|
|
|
26.1
|
%
|
Add:
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
24
|
|
|
2.8
|
%
|
|
22
|
|
|
2.7
|
%
|
||
Amortization of acquired intangible assets
|
|
19
|
|
|
2.2
|
%
|
|
22
|
|
|
2.7
|
%
|
||
Interest on borrowings
|
|
14
|
|
|
1.6
|
%
|
|
12
|
|
|
1.5
|
%
|
||
Provision for income taxes
|
|
123
|
|
|
14.3
|
%
|
|
119
|
|
|
14.7
|
%
|
||
EBITDA - non-GAAP
|
|
$
|
396
|
|
|
46.1
|
%
|
|
$
|
387
|
|
|
47.7
|
%
|
|
|
Three months ended
December 31, |
|
Increase/
(Decrease)
|
||||||||
|
|
2016
|
|
2015
|
|
|||||||
Average insured deposit account balances
|
|
$
|
93,263
|
|
|
$
|
80,345
|
|
|
$
|
12,918
|
|
Average interest-earning assets
|
|
24,454
|
|
|
22,187
|
|
|
2,267
|
|
|||
Average spread-based balances
|
|
$
|
117,717
|
|
|
$
|
102,532
|
|
|
$
|
15,185
|
|
|
|
|
|
|
|
|
||||||
Insured deposit account fee revenue
|
|
$
|
245
|
|
|
$
|
227
|
|
|
$
|
18
|
|
Net interest revenue
|
|
151
|
|
|
154
|
|
|
(3
|
)
|
|||
Spread-based revenue
|
|
$
|
396
|
|
|
$
|
381
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
||||||
Avg. annualized yield—insured deposit account fees
|
|
1.03
|
%
|
|
1.10
|
%
|
|
(0.07
|
)%
|
|||
Avg. annualized yield—interest-earning assets
|
|
2.42
|
%
|
|
2.71
|
%
|
|
(0.29
|
)%
|
|||
Net interest margin (NIM)
|
|
1.32
|
%
|
|
1.45
|
%
|
|
(0.13
|
)%
|
|
|
Interest Revenue (Expense)
|
|
Increase/
(Decrease)
|
||||||||
|
|
Three months ended
December 31, |
|
|||||||||
|
|
2016
|
|
2015
|
|
|||||||
Segregated cash
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
6
|
|
Client margin balances
|
|
108
|
|
|
111
|
|
|
(3
|
)
|
|||
Securities lending/borrowing, net
|
|
33
|
|
|
41
|
|
|
(8
|
)
|
|||
Other cash and interest-earning investments
|
|
3
|
|
|
1
|
|
|
2
|
|
|||
Client credit balances
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net interest revenue
|
|
$
|
151
|
|
|
$
|
154
|
|
|
$
|
(3
|
)
|
|
|
Average Balance
|
|
%
Change |
|||||||
|
|
Three months ended
December 31, |
|
||||||||
|
|
2016
|
|
2015
|
|
||||||
Segregated cash
|
|
$
|
8,723
|
|
|
$
|
6,171
|
|
|
41
|
%
|
Client margin balances
|
|
11,898
|
|
|
12,262
|
|
|
(3
|
)%
|
||
Securities borrowing
|
|
955
|
|
|
784
|
|
|
22
|
%
|
||
Other cash and interest-earning investments
|
|
2,878
|
|
|
2,970
|
|
|
(3
|
)%
|
||
Interest-earning assets
|
|
$
|
24,454
|
|
|
$
|
22,187
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|||||
Client credit balances
|
|
$
|
16,106
|
|
|
$
|
14,043
|
|
|
15
|
%
|
Securities lending
|
|
1,886
|
|
|
2,373
|
|
|
(21
|
)%
|
||
Interest-bearing liabilities
|
|
$
|
17,992
|
|
|
$
|
16,416
|
|
|
10
|
%
|
|
|
Fee Revenue
|
|
Increase/
(Decrease)
|
||||||||
|
|
Three months ended
December 31, |
|
|||||||||
|
|
2016
|
|
2015
|
|
|||||||
Money market mutual fund
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Market fee-based investment balances
|
|
91
|
|
|
91
|
|
|
—
|
|
|||
Total investment product fees
|
|
$
|
94
|
|
|
$
|
92
|
|
|
$
|
2
|
|
|
|
Average Balance
|
|
%
Change |
|||||||
|
|
Three months ended
December 31, |
|
||||||||
|
|
2016
|
|
2015
|
|
||||||
Money market mutual fund
|
|
$
|
3,701
|
|
|
$
|
5,753
|
|
|
(36
|
)%
|
Market fee-based investment balances
|
|
166,749
|
|
|
152,882
|
|
|
9
|
%
|
||
Total fee-based investment balances
|
|
$
|
170,450
|
|
|
$
|
158,635
|
|
|
7
|
%
|
|
|
Average Annualized Yield
|
|
Increase/
(Decrease) |
|||||
|
|
Three months ended
December 31, |
|
||||||
|
|
2016
|
|
2015
|
|
||||
Money market mutual fund
|
|
0.38
|
%
|
|
0.06
|
%
|
|
0.32
|
%
|
Market fee-based investment balances
|
|
0.21
|
%
|
|
0.23
|
%
|
|
(0.02
|
)%
|
Total investment product fees
|
|
0.22
|
%
|
|
0.23
|
%
|
|
(0.01
|
)%
|
|
|
Three months ended
December 31, |
|
%
Change |
|||||||
|
|
2016
|
|
2015
|
|
||||||
Total trades (in millions)
|
|
30.43
|
|
|
27.60
|
|
|
10
|
%
|
||
Average client trades per day
|
|
486,801
|
|
|
438,108
|
|
|
11
|
%
|
||
Trading days
|
|
62.5
|
|
|
63.0
|
|
|
(1
|
)%
|
||
Average commissions and transaction fees per trade
|
|
$
|
11.65
|
|
|
$
|
11.90
|
|
|
(2
|
)%
|
Order routing revenue (in millions)
|
|
$
|
79
|
|
|
$
|
70
|
|
|
13
|
%
|
Average order routing revenue per trade
(1)
|
|
$
|
2.59
|
|
|
$
|
2.54
|
|
|
2
|
%
|
|
(1)
|
Average order routing revenue per trade is included in average commissions and transaction fees per trade.
|
|
|
Three months ended
December 31, |
|
%
Change |
|||||||
|
|
2016
|
|
2015
|
|
||||||
Funded accounts (beginning of period)
|
|
6,950,000
|
|
|
6,621,000
|
|
|
5
|
%
|
||
Funded accounts (end of period)
|
|
7,046,000
|
|
|
6,686,000
|
|
|
5
|
%
|
||
Percentage change during period
|
|
1
|
%
|
|
1
|
%
|
|
|
|||
|
|
|
|
|
|
|
|||||
Client assets (beginning of period, in billions)
|
|
$
|
773.8
|
|
|
$
|
667.4
|
|
|
16
|
%
|
Client assets (end of period, in billions)
|
|
$
|
797.0
|
|
|
$
|
695.3
|
|
|
15
|
%
|
Percentage change during period
|
|
3
|
%
|
|
4
|
%
|
|
|
|||
|
|
|
|
|
|
|
|||||
Net new assets (in billions)
|
|
$
|
18.7
|
|
|
$
|
17.5
|
|
|
7
|
%
|
Net new assets annualized growth rate
|
|
10
|
%
|
|
10
|
%
|
|
|
|
|
Three months ended December 31,
|
|
%
Change |
|||||||
|
|
2016
|
|
2015
|
|
||||||
Revenues:
|
|
|
|
|
|
|
|||||
Transaction-based revenues:
|
|
|
|
|
|
|
|||||
Commissions and transaction fees
|
|
$
|
355
|
|
|
$
|
328
|
|
|
8
|
%
|
Asset-based revenues:
|
|
|
|
|
|
|
|||||
Insured deposit account fees
|
|
245
|
|
|
227
|
|
|
8
|
%
|
||
Net interest revenue
|
|
151
|
|
|
154
|
|
|
(2
|
)%
|
||
Investment product fees
|
|
94
|
|
|
92
|
|
|
2
|
%
|
||
Total asset-based revenues
|
|
490
|
|
|
473
|
|
|
4
|
%
|
||
Other revenues
|
|
14
|
|
|
11
|
|
|
27
|
%
|
||
Net revenues
|
|
859
|
|
|
812
|
|
|
6
|
%
|
||
Operating expenses:
|
|
|
|
|
|
|
|||||
Employee compensation and benefits
|
|
214
|
|
|
201
|
|
|
6
|
%
|
||
Clearing and execution costs
|
|
36
|
|
|
30
|
|
|
20
|
%
|
||
Communications
|
|
35
|
|
|
32
|
|
|
9
|
%
|
||
Occupancy and equipment costs
|
|
44
|
|
|
43
|
|
|
2
|
%
|
||
Depreciation and amortization
|
|
24
|
|
|
22
|
|
|
9
|
%
|
||
Amortization of acquired intangible assets
|
|
19
|
|
|
22
|
|
|
(14
|
)%
|
||
Professional services
|
|
53
|
|
|
37
|
|
|
43
|
%
|
||
Advertising
|
|
57
|
|
|
62
|
|
|
(8
|
)%
|
||
Other
|
|
24
|
|
|
20
|
|
|
20
|
%
|
||
Total operating expenses
|
|
506
|
|
|
469
|
|
|
8
|
%
|
||
Operating income
|
|
353
|
|
|
343
|
|
|
3
|
%
|
||
Other expense:
|
|
|
|
|
|
|
|||||
Interest on borrowings
|
|
14
|
|
|
12
|
|
|
17
|
%
|
||
Total other expense
|
|
14
|
|
|
12
|
|
|
17
|
%
|
||
Pre-tax income
|
|
339
|
|
|
331
|
|
|
2
|
%
|
||
Provision for income taxes
|
|
123
|
|
|
119
|
|
|
3
|
%
|
||
Net income
|
|
$
|
216
|
|
|
$
|
212
|
|
|
2
|
%
|
Other information:
|
|
|
|
|
|
|
|||||
Effective income tax rate
|
|
36.3
|
%
|
|
36.0
|
%
|
|
|
|||
Average debt outstanding
|
|
$
|
1,749
|
|
|
$
|
1,748
|
|
|
0
|
%
|
Effective interest rate incurred on borrowings
|
|
3.19
|
%
|
|
2.85
|
%
|
|
|
|
|
Net Capital
|
|
Early Warning
Threshold
|
|
Net Capital in
Excess of
Early Warning
Threshold
|
||||||
TD Ameritrade Clearing, Inc.
|
|
$
|
1,768
|
|
|
$
|
724
|
|
|
$
|
1,044
|
|
TD Ameritrade, Inc.
|
|
$
|
215
|
|
|
$
|
0.3
|
|
|
$
|
215
|
|
|
|
Adjusted Net Capital
|
|
Early Warning
Threshold
|
|
Adjusted Net
Capital in
Excess of
Early Warning
Threshold
|
||||||
TD Ameritrade Futures & Forex LLC
|
|
$
|
122
|
|
|
$
|
24
|
|
|
$
|
98
|
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
||||||
|
|
2016
|
|
2016
|
|
Change
|
||||||
Cash and cash equivalents - GAAP
|
|
$
|
1,662
|
|
|
$
|
1,855
|
|
|
$
|
(193
|
)
|
Less: Non-corporate cash and cash equivalents
|
|
(1,220
|
)
|
|
(1,395
|
)
|
|
175
|
|
|||
Corporate cash and cash equivalents
|
|
442
|
|
|
460
|
|
|
(18
|
)
|
|||
Corporate investments
|
|
747
|
|
|
757
|
|
|
(10
|
)
|
|||
Less: Corporate liquidity maintained for operational contingencies
|
|
(773
|
)
|
|
(773
|
)
|
|
—
|
|
|||
Excess corporate cash and cash equivalents and investments
|
|
416
|
|
|
444
|
|
|
(28
|
)
|
|||
Excess broker-dealer regulatory net capital
|
|
485
|
|
|
369
|
|
|
116
|
|
|||
Liquid assets available for corporate investing and financing activities - non-GAAP
|
|
$
|
901
|
|
|
$
|
813
|
|
|
$
|
88
|
|
Liquid assets available for corporate investing and financing activities as of September 30, 2016
|
|
$
|
813
|
|
|
|
|
||
Plus: EBITDA
(1)
|
|
396
|
|
|
Proceeds from exercise of stock options
|
|
23
|
|
|
Change in net capital related to daily futures client cash sweep
|
|
18
|
|
|
|
|
|
||
Less: Income taxes paid
|
|
(99
|
)
|
|
Payment of cash dividends
|
|
(95
|
)
|
|
Purchase of property and equipment
|
|
(29
|
)
|
|
Interest paid
|
|
(19
|
)
|
|
Purchase of treasury stock for income tax withholding on stock-based compensation
|
|
(11
|
)
|
|
Additional net capital requirement due to increase in aggregate debits
|
|
(9
|
)
|
|
Other changes in working capital and regulatory net capital
|
|
(87
|
)
|
|
Liquid assets available for corporate investing and financing activities as of December 31, 2016
|
|
$
|
901
|
|
|
(1)
|
See "Financial Performance Metrics" earlier in this section for a description of EBITDA.
|
Description
|
|
Date Issued
|
|
Maturity Date
|
|
Aggregate Principal
|
|
Interest Rate
|
2019 Notes
|
|
November 25, 2009
|
|
December 1, 2019
|
|
$500
|
|
5.600%
|
2022 Notes
|
|
March 4, 2015
|
|
April 1, 2022
|
|
$750
|
|
2.950%
|
2025 Notes
|
|
October 17, 2014
|
|
April 1, 2025
|
|
$500
|
|
3.625%
|
Borrower Subsidiary
|
|
Committed Facility
|
|
Uncommitted Facility
(1)
|
|
Termination Date
|
TD Ameritrade Clearing, Inc.
|
|
$700
|
|
$300
|
|
March 1, 2022
|
TD Ameritrade, Inc.
|
|
$50
|
|
$300
|
|
March 1, 2022
|
TD Ameritrade Futures & Forex LLC
|
|
$22.5
|
|
N/A
|
|
August 11, 2021
|
|
(1)
|
The Parent is permitted, but under no obligation, to make loans under uncommitted facilities.
|
2.1^
|
|
Agreement and Plan of Merger, dated as of October 24, 2016, by and among Scottrade Financial Services, Inc., Rodger O. Riney, as Voting Trustee of the Rodger O. Riney Family Voting Trust U/A/D 12/31/2012, TD Ameritrade Holding Corporation and Alto Acquisition Corp. (incorporated by reference to Exhibit 2.1 of the Company's Form 8-K filed on October 28, 2016)
|
|
|
|
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 Company's Form 8-K filed on January 27, 2006)
|
|
|
|
3.2
|
|
Amended and Restated By-Laws of TD Ameritrade Holding Corporation, effective February 12, 2014 (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed on February 19, 2014)
|
|
|
|
4.1
|
|
Form of Certificate for Common Stock (incorporated by reference to Exhibit 4.1 of the Company's 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 Company's Form 8-K filed on November 25, 2009)
|
|
|
|
4.3
|
|
Form of 5.600% Senior Note due 2019 (included in Exhibit 4.2)
|
|
|
|
4.4
|
|
Indenture, dated October 22, 2014, between TD Ameritrade Holding Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company's Form 8-K filed on October 23, 2014)
|
|
|
|
4.5
|
|
Form of 3.625% Senior Note due 2025 (included in Exhibit 4.4)
|
|
|
|
4.6
|
|
Supplemental Indenture, dated October 22, 2014, between TD Ameritrade Holding Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 of the Company's Form 8-K filed on October 23, 2014)
|
|
|
|
4.7
|
|
Second Supplemental Indenture, dated March 9, 2015, between TD Ameritrade Holding Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 of the Company's Form 8-K filed on March 9, 2015)
|
|
|
|
4.8
|
|
Form of 2.950% Senior Note due 2022 (included in Exhibit 4.7)
|
|
|
|
10.1
|
|
Separation and Release of Claims Agreement, dated September 22, 2016, between Fredric J. Tomczyk and TD Ameritrade Holding Corporation (incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K filed on November 18, 2016)
|
|
|
|
10.2
|
|
Separation Agreement and Release of Claims, dated August 1, 2016, between Marvin W. Adams and TD Ameritrade Holding Corporation (incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K filed on November 18, 2016)
|
|
|
|
10.3
|
|
Form of Performance-Based Restricted Stock Unit Agreement for Tim Hockey
|
|
|
|
10.4
|
|
Form of Performance-Based Restricted Stock Unit Agreement for Employees
|
|
|
|
10.5
|
|
Letter Agreement, dated as of October 24, 2016, by and among TD Ameritrade Holding Corporation, The Toronto-Dominion Bank and TD Luxembourg International Holdings S.à.r.l. (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on October 28, 2016)
|
|
|
|
10.6
|
|
Subscription Agreement, dated as of October 24, 2016, by and among TD Ameritrade Holding Corporation, The Toronto-Dominion Bank and TD Luxembourg International Holdings S.à.r.l. (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K filed on October 28, 2016)
|
|
|
|
10.7
|
|
Amendment No. 1, dated as of October 24, 2016, to the Insured Deposit Account Agreement by and among TD Bank USA, N.A., TD Bank, N.A., TD Ameritrade, Inc., TD Ameritrade Clearing, Inc., TD Ameritrade Trust Company and solely for purposes of Sections 7(b), 14 and 15(c), The Toronto-Dominion Bank, effective as of January 1, 2013 (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed on October 28, 2016)
|
|
|
|
15.1
|
|
Awareness Letter of Independent Registered Public Accounting Firm
|
|
|
|
31.1
|
|
Certification of Tim Hockey, Principal Executive Officer, as required pursuant to Section 302 of the Sarbanes - Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of Stephen J. Boyle, 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
|
|
|
|
99.1
|
|
Form of Registration Rights Agreement, by and among TD Ameritrade Holding Corporation, Rodger O. Riney, as Voting Trustee of the Rodger O. Riney Family Voting Trust U/A/D 12/31/2012, The Toronto-Dominion Bank and the other stockholders described therein (incorporated by reference to Exhibit 99.1 of the Company's Form 8-K filed on October 28, 2016)
|
|
|
|
99.2
|
|
Form of Stockholders Agreement by and among TD Ameritrade Holding Corporation and Rodger O. Riney, as Voting Trustee of the Rodger O. Riney Family Voting Trust U/A/D 12/31/2012 (incorporated by reference to Exhibit 99.2 of the Company's Form 8-K filed on October 28, 2016)
|
|
|
|
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
|
|
^
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule upon request.
|
|
|
|
TD Ameritrade Holding Corporation
|
||
|
(Registrant)
|
||
|
|
|
|
|
By:
|
|
/s/ TIM HOCKEY
|
|
|
|
Tim Hockey
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
By:
|
|
/s/ STEPHEN J. BOYLE
|
|
|
|
Stephen J. Boyle
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Grant Date:
|
[GRANTDATE]
|
Target Number of Performance-Based Restricted Stock Units ("Target"):
|
[SHARESGRANTED]
This reflects the target number of Performance-Based Restricted Stock Units granted to you on the Grant Date. The actual number of Shares that vest under this Award, if any, may be higher or lower than Target and will depend on the extent to which the vesting schedule is satisfied. The Performance-Based Restricted Stock Units ("PRSUs") shall be increased as of any date by the cumulative number of additional PRSUs, if any, credited by this Agreement through such date in payment of Dividend Equivalent Rights as described in paragraph 25 of Appendix A (attached).
|
Performance Period:
|
[PERIOD]
|
Scheduled Vesting:
|
The PRSUs will vest based on satisfaction of the performance-based vesting schedule and other conditions set forth in Appendix A and B (attached) and provisions of the Plan and this Agreement.
|
Settlement Date:
|
One Share will be issued for each PRSU that has vested on the date (the "Vesting Date") specified in Appendix A and B (or on a date as soon as practicable, and no more than thirty (30) days, thereafter).
|
Acceptance:
|
You must accept this grant of PRSUs prior to the Acceptance Deadline, which is sixty (60) days from the Grant Date.
|
|
1.
|
Ameriprise Financial, Inc.
|
2.
|
TD Ameritrade Holding Corporation (the Company)
|
3.
|
BGC Partners, Inc.
|
4.
|
Cowen Group, Inc.
|
5.
|
E*TRADE Financial Corporation
|
6.
|
The Goldman Sachs Group, Inc.
|
7.
|
Interactive Brokers Group, Inc.
|
8.
|
Investment Technology Group Inc.
|
9.
|
KCG Holdings, Inc.
|
10.
|
LPL Financial Holdings Inc.
|
11.
|
MarketAxess Holdings Inc.
|
12.
|
Morgan Stanley
|
13.
|
Nomura Holdings, Inc.
|
14.
|
Piper Jaffray Companies
|
15.
|
Raymond James Financial, Inc.
|
16.
|
The Charles Schwab Corporation
|
17.
|
Stifel Financial Corp.
|
18.
|
Virtu Financial, Inc.
|
Grant Date:
|
[GRANTDATE]
|
Target Number of Performance-Based Restricted Stock Units ("Target"):
|
[SHARESGRANTED]
This reflects the target number of Performance-Based Restricted Stock Units granted to you on the Grant Date. The actual number of Shares that vest under this Award, if any, may be higher or lower than Target and will depend on the extent to which the vesting schedule is satisfied. The Performance-Based Restricted Stock Units ("PRSUs") shall be increased as of any date by the cumulative number of additional PRSUs, if any, credited by this Agreement through such date in payment of Dividend Equivalent Rights as described in paragraph 25 of Appendix A (attached).
|
Performance Period:
|
[PERIOD]
|
Scheduled Vesting:
|
The PRSUs will vest based on satisfaction of the performance-based vesting schedule and other conditions set forth in Appendix A and B (attached) and provisions of the Plan and this Agreement.
|
Settlement Date:
|
One Share will be issued for each PRSU that has vested on the date (the "Vesting Date") specified in Appendix A and B (or on a date as soon as practicable, and no more than thirty (30) days, thereafter).
|
Acceptance:
|
You must accept this grant of PRSUs prior to the Acceptance Deadline, which is sixty (60) days from the Grant Date.
|
|
1.
|
Ameriprise Financial, Inc.
|
2.
|
TD Ameritrade Holding Corporation (the Company)
|
3.
|
BGC Partners, Inc.
|
4.
|
Cowen Group, Inc.
|
5.
|
E*TRADE Financial Corporation
|
6.
|
The Goldman Sachs Group, Inc.
|
7.
|
Interactive Brokers Group, Inc.
|
8.
|
Investment Technology Group Inc.
|
9.
|
KCG Holdings, Inc.
|
10.
|
LPL Financial Holdings Inc.
|
11.
|
MarketAxess Holdings Inc.
|
12.
|
Morgan Stanley
|
13.
|
Nomura Holdings, Inc.
|
14.
|
Piper Jaffray Companies
|
15.
|
Raymond James Financial, Inc.
|
16.
|
The Charles Schwab Corporation
|
17.
|
Stifel Financial Corp.
|
18.
|
Virtu Financial, Inc.
|
(1)
|
Registration Statement (Form S-8 No. 333-132016),
|
(2)
|
Registration Statement (Form S-8 No. 333-105336),
|
(3)
|
Registration Statement (Form S-8 No. 333-86164),
|
(4)
|
Registration Statement (Form S-8 No. 333-160073),
|
(5)
|
Registration Statement (Form S-3 No. 333-163211), and
|
(6)
|
Registration Statement (Form S-3 No. 333-185286);
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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 registrant’s 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:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
/
S
/ TIM HOCKEY
|
|
Tim Hockey
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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 registrant’s 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:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
/s/ STEPHEN J. BOYLE
|
|
Stephen J. Boyle
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
Dated:
|
February 6, 2017
|
/s/ TIM HOCKEY
|
|
|
Tim Hockey
|
|
|
President and Chief Executive Officer
|
|
|
|
Dated:
|
February 6, 2017
|
/s/ STEPHEN J. BOYLE
|
|
|
Stephen J. Boyle
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|