|
|
|
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
|
for the transition period from
|
|
to
|
|
|
|
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
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
Page No.
|
|
|
|
|
|
|
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
|
|
(In millions)
|
||||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
5,117
|
|
|
$
|
2,690
|
|
Cash and investments segregated and on deposit for regulatory purposes
|
|
3,185
|
|
|
3,185
|
|
||
Receivable from brokers, dealers and clearing organizations
|
|
1,398
|
|
|
1,374
|
|
||
Receivable from clients, net
|
|
19,439
|
|
|
22,616
|
|
||
Receivable from affiliates
|
|
189
|
|
|
151
|
|
||
Other receivables, net
|
|
286
|
|
|
304
|
|
||
Securities owned, at fair value
|
|
109
|
|
|
156
|
|
||
Investments available-for-sale, at fair value (including $98 million of securities pledged as collateral for repurchase agreements at September 30, 2018)
|
|
884
|
|
|
484
|
|
||
Property and equipment at cost, net
|
|
797
|
|
|
792
|
|
||
Goodwill
|
|
4,227
|
|
|
4,227
|
|
||
Acquired intangible assets, net
|
|
1,298
|
|
|
1,329
|
|
||
Other assets
|
|
262
|
|
|
212
|
|
||
Total assets
|
|
$
|
37,191
|
|
|
$
|
37,520
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Payable to brokers, dealers and clearing organizations
|
|
$
|
2,298
|
|
|
$
|
2,980
|
|
Payable to clients
|
|
22,099
|
|
|
22,884
|
|
||
Accounts payable and other liabilities
|
|
738
|
|
|
896
|
|
||
Payable to affiliates
|
|
4
|
|
|
45
|
|
||
Other borrowings
|
|
—
|
|
|
96
|
|
||
Long-term debt
|
|
3,484
|
|
|
2,439
|
|
||
Deferred income taxes
|
|
211
|
|
|
177
|
|
||
Total liabilities
|
|
28,834
|
|
|
29,517
|
|
||
Stockholders' equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value; 100 million shares authorized, none issued
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; one billion shares authorized; 670 million shares issued; December 31, 2018 – 561 million shares outstanding; September 30, 2018 – 563 million shares outstanding
|
|
7
|
|
|
7
|
|
||
Additional paid-in capital
|
|
3,400
|
|
|
3,379
|
|
||
Retained earnings
|
|
7,475
|
|
|
7,011
|
|
||
Treasury stock, common, at cost: December 31, 2018 – 109 million shares;
September 30, 2018 – 107 million shares
|
|
(2,515
|
)
|
|
(2,371
|
)
|
||
Deferred compensation
|
|
4
|
|
|
4
|
|
||
Accumulated other comprehensive loss
|
|
(14
|
)
|
|
(27
|
)
|
||
Total stockholders' equity
|
|
8,357
|
|
|
8,003
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
37,191
|
|
|
$
|
37,520
|
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In millions, except per share amounts)
|
||||||
Revenues:
|
|
|
|
|
||||
Transaction-based revenues:
|
|
|
|
|
||||
Commissions and transaction fees
|
|
$
|
537
|
|
|
$
|
440
|
|
Asset-based revenues:
|
|
|
|
|
||||
Bank deposit account fees
|
|
428
|
|
|
381
|
|
||
Net interest revenue
|
|
376
|
|
|
276
|
|
||
Investment product fees
|
|
143
|
|
|
133
|
|
||
Total asset-based revenues
|
|
947
|
|
|
790
|
|
||
Other revenues
|
|
32
|
|
|
27
|
|
||
Net revenues
|
|
1,516
|
|
|
1,257
|
|
||
Operating expenses:
|
|
|
|
|
||||
Employee compensation and benefits
|
|
317
|
|
|
415
|
|
||
Clearing and execution costs
|
|
49
|
|
|
47
|
|
||
Communications
|
|
42
|
|
|
53
|
|
||
Occupancy and equipment costs
|
|
68
|
|
|
80
|
|
||
Depreciation and amortization
|
|
35
|
|
|
34
|
|
||
Amortization of acquired intangible assets
|
|
31
|
|
|
38
|
|
||
Professional services
|
|
74
|
|
|
74
|
|
||
Advertising
|
|
58
|
|
|
64
|
|
||
Other
|
|
46
|
|
|
116
|
|
||
Total operating expenses
|
|
720
|
|
|
921
|
|
||
Operating income
|
|
796
|
|
|
336
|
|
||
Other expense (income):
|
|
|
|
|
||||
Interest on borrowings
|
|
32
|
|
|
20
|
|
||
Loss on sale of investments
|
|
—
|
|
|
11
|
|
||
Other
|
|
(14
|
)
|
|
2
|
|
||
Total other expense (income)
|
|
18
|
|
|
33
|
|
||
Pre-tax income
|
|
778
|
|
|
303
|
|
||
Provision for income taxes
|
|
174
|
|
|
6
|
|
||
Net income
|
|
$
|
604
|
|
|
$
|
297
|
|
Earnings per share — basic
|
|
$
|
1.07
|
|
|
$
|
0.52
|
|
Earnings per share — diluted
|
|
$
|
1.07
|
|
|
$
|
0.52
|
|
Weighted average shares outstanding — basic
|
|
562
|
|
|
567
|
|
||
Weighted average shares outstanding — diluted
|
|
564
|
|
|
569
|
|
||
Dividends declared per share
|
|
$
|
0.30
|
|
|
$
|
0.21
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In millions)
|
||||||
Net income
|
|
$
|
604
|
|
|
$
|
297
|
|
Other comprehensive income, before tax:
|
|
|
|
|
||||
Investments available-for-sale:
|
|
|
|
|
||||
Unrealized gain (loss)
|
|
16
|
|
|
(4
|
)
|
||
Reclassification adjustment for realized loss included in net income
|
|
—
|
|
|
11
|
|
||
Net change in investments available-for-sale
|
|
16
|
|
|
7
|
|
||
Cash flow hedging instruments:
|
|
|
|
|
||||
Reclassification adjustment for portion of realized loss amortized to net income
|
|
1
|
|
|
1
|
|
||
Total other comprehensive income, before tax
|
|
17
|
|
|
8
|
|
||
Income tax effect
|
|
(4
|
)
|
|
(3
|
)
|
||
Total other comprehensive income, net of tax
|
|
13
|
|
|
5
|
|
||
Comprehensive income
|
|
$
|
617
|
|
|
$
|
302
|
|
|
|
Three Months Ended December 31, 2017
|
|||||||||||||||||||||||||||||
|
|
Total Common
Shares Outstanding
|
|
Total Stockholders' Equity
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Deferred Compensation
|
|
Accumulated Other
Comprehensive Loss
|
|||||||||||||||
|
|
(In Millions)
|
|||||||||||||||||||||||||||||
Balance, September 30, 2017
|
|
567
|
|
|
$
|
7,247
|
|
|
$
|
7
|
|
|
$
|
3,369
|
|
|
$
|
6,011
|
|
|
$
|
(2,116
|
)
|
|
$
|
1
|
|
|
$
|
(25
|
)
|
Net income
|
|
—
|
|
|
297
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||||
Payment of cash dividends
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchases of common stock for income tax withholding on stock-based compensation
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||||||
Common stock issued for stock-based compensation, including tax effects
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||||||
Deferred compensation
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, December 31, 2017
|
|
567
|
|
|
$
|
7,433
|
|
|
$
|
7
|
|
|
$
|
3,375
|
|
|
$
|
6,189
|
|
|
$
|
(2,119
|
)
|
|
$
|
1
|
|
|
$
|
(20
|
)
|
|
|
Three Months Ended December 31, 2018
|
|||||||||||||||||||||||||||||
|
|
Total Common
Shares Outstanding
|
|
Total Stockholders' Equity
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Deferred Compensation
|
|
Accumulated Other
Comprehensive Loss
|
|||||||||||||||
|
|
(In Millions)
|
|||||||||||||||||||||||||||||
Balance, September 30, 2018
|
|
563
|
|
|
$
|
8,003
|
|
|
$
|
7
|
|
|
$
|
3,379
|
|
|
$
|
7,011
|
|
|
$
|
(2,371
|
)
|
|
$
|
4
|
|
|
$
|
(27
|
)
|
Net income
|
|
—
|
|
|
604
|
|
|
—
|
|
|
—
|
|
|
604
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||||
Payment of cash dividends
|
|
—
|
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchases of common stock
|
|
(3
|
)
|
|
(114
|
)
|
|
—
|
|
|
31
|
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|||||||
Future treasury stock purchases under accelerated stock repurchase agreement
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchases of common stock for income tax withholding on stock-based compensation
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||||||
Common stock issued for stock-based compensation, including tax effects
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Adoption of Accounting Standards Update 2014-09 (Note 15)
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, December 31, 2018
|
|
561
|
|
|
$
|
8,357
|
|
|
$
|
7
|
|
|
$
|
3,400
|
|
|
$
|
7,475
|
|
|
$
|
(2,515
|
)
|
|
$
|
4
|
|
|
$
|
(14
|
)
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
604
|
|
|
$
|
297
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
35
|
|
|
34
|
|
||
Amortization of acquired intangible assets
|
|
31
|
|
|
38
|
|
||
Deferred income taxes
|
|
25
|
|
|
(13
|
)
|
||
Loss on sale of investments
|
|
—
|
|
|
11
|
|
||
Stock-based compensation
|
|
11
|
|
|
10
|
|
||
Provision for doubtful accounts on client and other receivables
|
|
5
|
|
|
—
|
|
||
Other, net
|
|
7
|
|
|
5
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Investments segregated and on deposit for regulatory purposes
|
|
503
|
|
|
278
|
|
||
Receivable from brokers, dealers and clearing organizations
|
|
(24
|
)
|
|
43
|
|
||
Receivable from clients, net
|
|
3,172
|
|
|
(1,428
|
)
|
||
Receivable from/payable to affiliates, net
|
|
(79
|
)
|
|
(101
|
)
|
||
Other receivables, net
|
|
18
|
|
|
(24
|
)
|
||
Securities owned, at fair value
|
|
47
|
|
|
(90
|
)
|
||
Other assets
|
|
(16
|
)
|
|
(90
|
)
|
||
Payable to brokers, dealers and clearing organizations
|
|
(682
|
)
|
|
560
|
|
||
Payable to clients
|
|
(785
|
)
|
|
179
|
|
||
Accounts payable and other liabilities
|
|
(110
|
)
|
|
(127
|
)
|
||
Net cash provided by (used in) operating activities
|
|
2,762
|
|
|
(418
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchase of property and equipment
|
|
(44
|
)
|
|
(63
|
)
|
||
Proceeds from sale of property and equipment
|
|
11
|
|
|
—
|
|
||
Cash paid in business acquisition
|
|
—
|
|
|
(12
|
)
|
||
Purchase of investments available-for-sale, at fair value
|
|
(383
|
)
|
|
—
|
|
||
Proceeds from sale of investments available-for-sale, at fair value
|
|
—
|
|
|
643
|
|
||
Purchase of other investments
|
|
(11
|
)
|
|
—
|
|
||
Proceeds from sale of other investments
|
|
1
|
|
|
—
|
|
||
Proceeds from sale and maturity of short-term investments
|
|
—
|
|
|
65
|
|
||
Net cash provided by (used in) investing activities
|
|
(426
|
)
|
|
633
|
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
|
999
|
|
|
—
|
|
||
Payment of debt issuance costs
|
|
(7
|
)
|
|
—
|
|
||
Net proceeds from secured uncommitted lines of credit
|
|
—
|
|
|
50
|
|
||
Net payments on securities sold under agreements to repurchase
|
|
(96
|
)
|
|
—
|
|
||
Payment of cash dividends
|
|
(168
|
)
|
|
(119
|
)
|
||
Purchase of treasury stock
|
|
(114
|
)
|
|
—
|
|
||
Purchase of treasury stock for income tax withholding on stock-based compensation
|
|
(8
|
)
|
|
(8
|
)
|
||
Payment for future treasury stock purchases under accelerated stock repurchase agreement
|
|
(12
|
)
|
|
—
|
|
||
Other
|
|
—
|
|
|
2
|
|
||
Net cash provided by (used in) financing activities
|
|
594
|
|
|
(75
|
)
|
||
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
2,930
|
|
|
140
|
|
||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
|
|
4,548
|
|
|
9,760
|
|
||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period
|
|
$
|
7,478
|
|
|
$
|
9,900
|
|
Supplemental cash flow information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
31
|
|
|
$
|
36
|
|
Income taxes paid
|
|
$
|
139
|
|
|
$
|
112
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
Broker-dealer subsidiaries
|
|
$
|
4,058
|
|
|
$
|
2,094
|
|
Corporate
|
|
848
|
|
|
342
|
|
||
Futures commission merchant and forex dealer member subsidiary
|
|
97
|
|
|
89
|
|
||
Trust company subsidiary
|
|
92
|
|
|
124
|
|
||
Investment advisory subsidiaries
|
|
22
|
|
|
41
|
|
||
Total cash and cash equivalents
|
|
$
|
5,117
|
|
|
$
|
2,690
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
Cash and cash equivalents
|
|
$
|
5,117
|
|
|
$
|
2,690
|
|
Restricted cash and restricted cash equivalents included in cash and investments segregated and on deposit for regulatory purposes
|
|
2,361
|
|
|
1,858
|
|
||
Total cash, cash equivalents, restricted cash and restricted cash equivalents shown in the Condensed Consolidated Statements of Cash Flows
|
|
$
|
7,478
|
|
|
$
|
4,548
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
Cash in demand deposit accounts
|
|
$
|
1,546
|
|
|
$
|
956
|
|
U.S. government agency mortgage-backed securities
|
|
799
|
|
|
1,302
|
|
||
Reverse repurchase agreements (collateralized by U.S. government debt securities)
|
|
500
|
|
|
500
|
|
||
U.S. government debt securities
|
|
175
|
|
|
200
|
|
||
Cash on deposit with futures commission merchants
|
|
140
|
|
|
202
|
|
||
U.S. government debt securities on deposit with futures commission merchant
|
|
25
|
|
|
25
|
|
||
Total
|
|
$
|
3,185
|
|
|
$
|
3,185
|
|
|
|
Severance Pay and Other Employment Benefits
|
|
Contract Termination and Other Costs
|
|
Total
|
||||||
Balance, September 30, 2018
|
|
$
|
21
|
|
|
$
|
48
|
|
|
$
|
69
|
|
Costs incurred and charged to expense
|
|
2
|
|
(1)
|
(2
|
)
|
(2)
|
—
|
|
|||
Costs paid or otherwise settled
|
|
(15
|
)
|
|
(39
|
)
|
|
(54
|
)
|
|||
Balance, December 31, 2018
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
15
|
|
|
|
Severance Pay and Other Employment Benefits
|
|
Contract Termination and Other Costs
|
|
Total
|
||||||
Balance, September 30, 2017
|
|
$
|
138
|
|
|
$
|
—
|
|
|
$
|
138
|
|
Exit liabilities assumed - post closing adjustments
|
|
—
|
|
|
9
|
|
|
9
|
|
|||
Costs incurred and charged to expense
|
|
82
|
|
(1)
|
98
|
|
(2)
|
180
|
|
|||
Costs paid or otherwise settled
|
|
(20
|
)
|
|
(95
|
)
|
|
(115
|
)
|
|||
Balance, December 31, 2017
|
|
$
|
200
|
|
|
$
|
12
|
|
|
$
|
212
|
|
|
|
|
Severance Pay and Other Employment Benefits
|
|
Contract Termination and Other Costs
|
|
Total
|
||||||
Exit liabilities assumed in business acquisition
|
|
$
|
100
|
|
|
$
|
9
|
|
|
$
|
109
|
|
Employee compensation and benefits
|
|
267
|
|
|
—
|
|
|
267
|
|
|||
Clearing and execution costs
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
Communications
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
Occupancy and equipment costs
|
|
—
|
|
|
7
|
|
|
7
|
|
|||
Professional services
|
|
—
|
|
|
30
|
|
|
30
|
|
|||
Other operating expense
|
|
—
|
|
|
171
|
|
|
171
|
|
|||
Other non-operating expense
|
|
—
|
|
|
2
|
|
|
2
|
|
|||
Total
|
|
$
|
367
|
|
|
$
|
221
|
|
|
$
|
588
|
|
December 31, 2018
|
|
Face
Value
|
|
Unamortized Discounts and Debt Issuance Costs
|
|
Fair Value
Adjustment
(1)
|
|
Net Carrying
Value
|
||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes:
|
|
|
|
|
|
|
|
|
||||||||
5.600% Notes due 2019
|
|
$
|
500
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
501
|
|
Variable-rate Notes due 2021
|
|
600
|
|
|
(3
|
)
|
|
—
|
|
|
597
|
|
||||
2.950% Notes due 2022
|
|
750
|
|
|
(4
|
)
|
|
(14
|
)
|
|
732
|
|
||||
3.75% Notes due 2024
|
|
400
|
|
|
(4
|
)
|
|
—
|
|
|
396
|
|
||||
3.625% Notes due 2025
|
|
500
|
|
|
(3
|
)
|
|
(5
|
)
|
|
492
|
|
||||
3.300% Notes due 2027
|
|
800
|
|
|
(9
|
)
|
|
(25
|
)
|
|
766
|
|
||||
Total long-term debt
|
|
$
|
3,550
|
|
|
$
|
(24
|
)
|
|
$
|
(42
|
)
|
|
$
|
3,484
|
|
September 30, 2018
|
|
Face
Value
|
|
Unamortized Discounts and Debt Issuance Costs
|
|
Fair Value
Adjustment
(1)
|
|
Net Carrying
Value
|
||||||||
Other borrowings:
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under agreements to repurchase
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
96
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes:
|
|
|
|
|
|
|
|
|
||||||||
5.600% Notes due 2019
|
|
500
|
|
|
(1
|
)
|
|
2
|
|
|
501
|
|
||||
2.950% Notes due 2022
|
|
750
|
|
|
(4
|
)
|
|
(27
|
)
|
|
719
|
|
||||
3.625% Notes due 2025
|
|
500
|
|
|
(3
|
)
|
|
(17
|
)
|
|
480
|
|
||||
3.300% Notes due 2027
|
|
800
|
|
|
(9
|
)
|
|
(52
|
)
|
|
739
|
|
||||
Subtotal - Long-term debt
|
|
2,550
|
|
|
(17
|
)
|
|
(94
|
)
|
|
2,439
|
|
||||
Total long-term debt and other borrowings
|
|
$
|
2,646
|
|
|
$
|
(17
|
)
|
|
$
|
(94
|
)
|
|
$
|
2,535
|
|
|
(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.
|
2019 Remaining
|
|
$
|
—
|
|
2020
|
|
500
|
|
|
2021
|
|
—
|
|
|
2022
|
|
1,350
|
|
|
2023
|
|
—
|
|
|
Thereafter
|
|
1,700
|
|
|
Total
|
|
$
|
3,550
|
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Gain (loss) on fair value of interest rate swaps
|
|
$
|
52
|
|
|
$
|
(24
|
)
|
Gain (loss) on fair value of hedged fixed-rate debt
|
|
(52
|
)
|
|
24
|
|
||
Net gain (loss) recorded in interest on borrowings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
Pay-variable interest rate swaps designated as fair value hedges:
|
|
|
|
|
||||
Other assets
|
|
$
|
2
|
|
|
$
|
2
|
|
Accounts payable and other liabilities
|
|
$
|
(44
|
)
|
|
$
|
(96
|
)
|
Borrower Subsidiary
|
|
Committed Facility
|
|
Uncommitted Facility
(1)
|
|
Termination Date
|
TD Ameritrade Clearing, Inc.
|
|
$1,200
|
|
$300
|
|
March 1, 2022
|
TD Ameritrade, Inc.
|
|
N/A
|
|
$300
|
|
March 1, 2022
|
TD Ameritrade Futures & Forex LLC
|
|
$45
|
|
N/A
|
|
August 11, 2021
|
|
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, 2018
|
|
$
|
140
|
|
|
$
|
23
|
|
|
$
|
117
|
|
September 30, 2018
|
|
$
|
129
|
|
|
$
|
23
|
|
|
$
|
106
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
Client margin securities
|
|
$
|
26.9
|
|
|
$
|
31.4
|
|
Stock borrowings
|
|
0.4
|
|
|
0.8
|
|
||
Total collateral available
|
|
$
|
27.3
|
|
|
$
|
32.2
|
|
|
|
|
|
|
||||
Collateral loaned
|
|
$
|
2.2
|
|
|
$
|
2.9
|
|
Collateral repledged
|
|
5.6
|
|
|
6.3
|
|
||
Total collateral loaned or repledged
|
|
$
|
7.8
|
|
|
$
|
9.2
|
|
•
|
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, U.S. government agency mortgage-backed securities, which consist of Ginnie Mae Home Equity Conversion Mortgages, 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.
|
|
|
December 31, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
4,524
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,524
|
|
Investments segregated and on deposit for regulatory purposes:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
200
|
|
|
—
|
|
|
200
|
|
||||
U.S. government agency mortgage-backed securities
|
|
—
|
|
|
799
|
|
|
—
|
|
|
799
|
|
||||
Subtotal - Investments segregated for regulatory purposes
|
|
—
|
|
|
999
|
|
|
—
|
|
|
999
|
|
||||
Securities owned:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||
Other
|
|
3
|
|
|
6
|
|
|
—
|
|
|
9
|
|
||||
Subtotal - Securities owned
|
|
3
|
|
|
106
|
|
|
—
|
|
|
109
|
|
||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
884
|
|
|
—
|
|
|
884
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Pay-variable interest rate swaps
(1)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
U.S. government debt securities
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Subtotal - Other assets
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Total assets at fair value
|
|
$
|
4,527
|
|
|
$
|
1,992
|
|
|
$
|
—
|
|
|
$
|
6,519
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable and other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Pay-variable interest rate swaps
(1)
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
(1)
|
See "
Fair Value Hedging
" in Note
6
for details.
|
|
|
September 30, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
2,373
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,373
|
|
Investments segregated and on deposit for regulatory purposes:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
225
|
|
|
—
|
|
|
225
|
|
||||
U.S. government agency mortgage-backed securities
|
|
—
|
|
|
1,302
|
|
|
—
|
|
|
1,302
|
|
||||
Subtotal - Investments segregated for regulatory purposes
|
|
—
|
|
|
1,527
|
|
|
—
|
|
|
1,527
|
|
||||
Securities owned:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
149
|
|
|
—
|
|
|
149
|
|
||||
Other
|
|
1
|
|
|
6
|
|
|
—
|
|
|
7
|
|
||||
Subtotal - Securities owned
|
|
1
|
|
|
155
|
|
|
—
|
|
|
156
|
|
||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government debt securities
|
|
—
|
|
|
484
|
|
|
—
|
|
|
484
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Pay-variable interest rate swaps
(1)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
U.S. government debt securities
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Auction rate securities
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Subtotal - Other assets
|
|
—
|
|
|
3
|
|
|
1
|
|
|
4
|
|
||||
Total assets at fair value
|
|
$
|
2,374
|
|
|
$
|
2,169
|
|
|
$
|
1
|
|
|
$
|
4,544
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable and other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Pay-variable interest rate swaps
(1)
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
(1)
|
See "
Fair Value Hedging
" in Note
6
for details.
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
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
(5)
|
|
Collateral
Received or
Pledged
(Including
Cash)
(6)
|
|
Net
Amount
(7)
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments segregated for
regulatory purposes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reverse repurchase agreements
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
(500
|
)
|
|
$
|
—
|
|
Receivable from brokers, dealers
and clearing organizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits paid for
securities borrowed
(1)
|
|
389
|
|
|
—
|
|
|
389
|
|
|
(16
|
)
|
|
(362
|
)
|
|
11
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pay-variable interest rate swaps
|
|
2
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
891
|
|
|
$
|
—
|
|
|
$
|
891
|
|
|
$
|
(18
|
)
|
|
$
|
(862
|
)
|
|
$
|
11
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payable to brokers, dealers
and clearing organizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits received for
securities loaned
(2)(3)
|
|
$
|
2,172
|
|
|
$
|
—
|
|
|
$
|
2,172
|
|
|
$
|
(20
|
)
|
|
$
|
(1,890
|
)
|
|
$
|
262
|
|
Accounts payable and other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pay-variable interest rate swaps
|
|
44
|
|
|
—
|
|
|
44
|
|
|
(46
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Total
|
|
$
|
2,216
|
|
|
$
|
—
|
|
|
$
|
2,216
|
|
|
$
|
(66
|
)
|
|
$
|
(1,890
|
)
|
|
$
|
260
|
|
|
|
September 30, 2018
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
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
(5)
|
|
Collateral
Received or
Pledged
(Including
Cash)
(6)
|
|
Net
Amount
(7)
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments segregated for
regulatory purposes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reverse repurchase agreements
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
(500
|
)
|
|
$
|
—
|
|
Receivable from brokers, dealers
and clearing organizations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits paid for
securities borrowed
(1)
|
|
803
|
|
|
—
|
|
|
803
|
|
|
(41
|
)
|
|
(744
|
)
|
|
18
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pay-variable interest rate swaps
|
|
2
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
1,305
|
|
|
$
|
—
|
|
|
$
|
1,305
|
|
|
$
|
(43
|
)
|
|
$
|
(1,244
|
)
|
|
$
|
18
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payable to brokers, dealers
and clearing organizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits received for
securities loaned
(2)(3)
|
|
$
|
2,914
|
|
|
$
|
—
|
|
|
$
|
2,914
|
|
|
$
|
(43
|
)
|
|
$
|
(2,544
|
)
|
|
$
|
327
|
|
Securities sold under agreements to repurchase
(
4
)
|
|
96
|
|
|
—
|
|
|
96
|
|
|
(96
|
)
|
|
—
|
|
|
—
|
|
||||||
Accounts payable and other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pay-variable interest rate swaps
|
|
96
|
|
|
—
|
|
|
96
|
|
|
(82
|
)
|
|
—
|
|
|
14
|
|
||||||
Total
|
|
$
|
3,106
|
|
|
$
|
—
|
|
|
$
|
3,106
|
|
|
$
|
(221
|
)
|
|
$
|
(2,544
|
)
|
|
$
|
341
|
|
|
(1)
|
Included in the gross amounts of deposits paid for securities borrowed is
$227 million
and
$462 million
as of
December 31, 2018
and
September 30, 2018
, 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
$1.41 billion
and
$2.01 billion
as of
December 31, 2018
and
September 30, 2018
, 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 two 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,
2018 |
|
September 30,
2018 |
||||
Deposits received for securities loaned:
|
|
|
|
|
||||
Equity securities
|
|
$
|
1,643
|
|
|
$
|
2,583
|
|
Exchange-traded funds
|
|
413
|
|
|
223
|
|
||
Closed-end funds
|
|
67
|
|
|
74
|
|
||
Other
|
|
49
|
|
|
34
|
|
||
Total
|
|
$
|
2,172
|
|
|
$
|
2,914
|
|
(4)
|
The collateral pledged includes available-for-sale U.S. government debt securities at fair value. All of the Company's repurchase agreements have a remaining contractual maturity of less than 90 days and, upon default by either party, may be terminated at the option of the non-defaulting party. See "General Contingencies" in Note
8
for a discussion of the potential risks associated with repurchase agreements and how the Company mitigates those risks.
|
(5)
|
Amounts represent recognized assets and liabilities that are subject to enforceable master agreements with rights of setoff.
|
(6)
|
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, 2018
and
September 30, 2018
, the Company had received total collateral with a fair value of
$0.89 billion
and
$1.30 billion
, respectively, and pledged total collateral with a fair value of
$1.96 billion
and
$2.76 billion
, respectively.
|
(7)
|
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,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
|
Before Tax
|
|
Tax Effect
|
|
Net of Tax
|
|
Before Tax
|
|
Tax Effect
|
|
Net of Tax
|
||||||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gain (loss)
|
|
$
|
16
|
|
|
$
|
(4
|
)
|
|
$
|
12
|
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
Reclassification adjustment for realized loss included in net income
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
(4
|
)
|
|
7
|
|
||||||
Net change in investments available-for-sale
|
|
16
|
|
|
(4
|
)
|
|
12
|
|
|
7
|
|
|
(3
|
)
|
|
4
|
|
||||||
Cash flow hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassification adjustment for portion of realized loss amortized to net income
(2)
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Net change in cash flow hedging instruments
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Other comprehensive income
|
|
$
|
17
|
|
|
$
|
(4
|
)
|
|
$
|
13
|
|
|
$
|
8
|
|
|
$
|
(3
|
)
|
|
$
|
5
|
|
|
(2)
|
The before tax reclassification amounts and 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,
|
||||||
|
|
2018
|
|
2017
|
||||
Investments available-for-sale:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
(7
|
)
|
|
$
|
(5
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
12
|
|
|
(3
|
)
|
||
Amounts reclassified from accumulated other comprehensive loss
|
|
—
|
|
|
7
|
|
||
Current period change
|
|
12
|
|
|
4
|
|
||
Ending balance
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
Cash flow hedging instruments:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
(20
|
)
|
|
$
|
(20
|
)
|
Amounts reclassified from accumulated other comprehensive loss
|
|
1
|
|
|
1
|
|
||
Ending balance
|
|
$
|
(19
|
)
|
|
$
|
(19
|
)
|
Total accumulated other comprehensive loss:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
(27
|
)
|
|
$
|
(25
|
)
|
Current period change
|
|
13
|
|
|
5
|
|
||
Ending balance
|
|
$
|
(14
|
)
|
|
$
|
(20
|
)
|
|
|
|
|
Revenues from TD and its Affiliates
|
||||||
|
|
Condensed Consolidated
Statement of Income Classification
|
|
Three months ended
December 31, |
||||||
Description
|
|
2018
|
|
2017
|
||||||
Insured Deposit Account Agreement
|
|
Bank deposit account fees
|
|
$
|
402
|
|
|
$
|
344
|
|
Order Routing Agreement
(1)
|
|
Other revenues
|
|
6
|
|
|
1
|
|
||
Mutual Fund Agreements
|
|
Investment product fees
|
|
2
|
|
|
4
|
|
||
Other
|
|
Various
|
|
13
|
|
|
3
|
|
||
Total revenues
|
|
$
|
423
|
|
|
$
|
352
|
|
|
|
|
|
Expenses to TD and its Affiliates
|
||||||
|
|
Condensed Consolidated
Statement of Income Classification
|
|
Three months ended
December 31, |
||||||
Description
|
|
2018
|
|
2017
|
||||||
Order Routing Agreement
(1)
|
|
Other expense
|
|
$
|
5
|
|
|
N/A
|
|
|
Other
|
|
Various
|
|
2
|
|
|
2
|
|
||
Total expenses
|
|
$
|
7
|
|
|
$
|
2
|
|
|
(1)
|
Prior to fiscal year 2019, the Company accounted for revenues associated with the Order Routing Agreement between the Company and an affiliate of TD on a net basis through other revenues. Following the adoption of the new revenue recognition standard (ASU 2014-09) on October 1, 2018, the Company began accounting for Order Routing Agreement revenues on a gross basis. The Company adopted the new guidance using the modified retrospective approach, which requires the standard be applied only to the most current period presented; therefore, the prior period has not been adjusted to reflect the current period presentation. See "Recently Adopted Accounting Pronouncements" in Note 1 for additional details regarding the amended guidance.
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
Assets:
|
|
|
|
|
||||
Receivable from affiliates
|
|
$
|
189
|
|
|
$
|
151
|
|
Other receivables
|
|
11
|
|
|
—
|
|
||
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Payable to brokers, dealers and clearing organizations
|
|
$
|
60
|
|
|
$
|
47
|
|
Payable to affiliates
|
|
4
|
|
|
7
|
|
|
|
Balance at
September 30, 2018
|
|
Adjustments from
Adoption of
ASU 2014-09
|
|
Balance at
October 1, 2018
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Other assets
|
|
$
|
212
|
|
|
$
|
37
|
|
|
$
|
249
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Deferred income taxes
|
|
177
|
|
|
9
|
|
|
186
|
|
|||
Stockholders' equity:
|
|
|
|
|
|
|
||||||
Retained earnings
|
|
7,011
|
|
|
28
|
|
|
7,039
|
|
|
|
As of December 31, 2018
|
||||||||||
Condensed Consolidated Balance Sheet
|
|
As Reported
|
|
Balances Without Adoption of
ASU 2014-09
|
|
Effect of Change Higher/(Lower)
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Other assets
|
|
$
|
262
|
|
|
$
|
228
|
|
|
$
|
34
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Deferred income taxes
|
|
211
|
|
|
203
|
|
|
8
|
|
|||
Stockholders' equity:
|
|
|
|
|
|
|
||||||
Retained earnings
|
|
7,475
|
|
|
7,449
|
|
|
26
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
Condensed Consolidated Statement of Income
|
|
As Reported
|
|
Balances Without Adoption of
ASU 2014-09
|
|
Effect of Change Higher/(Lower)
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Other revenues
|
|
$
|
32
|
|
|
$
|
20
|
|
|
$
|
12
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
|
317
|
|
|
314
|
|
|
3
|
|
|||
Clearing and execution costs
|
|
49
|
|
|
45
|
|
|
4
|
|
|||
Other
|
|
46
|
|
|
38
|
|
|
8
|
|
|||
Provision for income taxes
|
|
174
|
|
|
175
|
|
|
(1
|
)
|
|||
Net Income
|
|
604
|
|
|
606
|
|
|
(2
|
)
|
|
|
Three Months Ended December 31,
|
|
|
|||||||
|
|
2018
|
|
2017
|
|
% Change
|
|||||
Revenues:
|
|
|
|
|
|
|
|||||
Transaction-based revenues:
|
|
|
|
|
|
|
|||||
Commissions
|
|
$
|
364
|
|
|
$
|
313
|
|
|
16
|
%
|
Order routing revenue
|
|
129
|
|
|
98
|
|
|
32
|
%
|
||
Other
|
|
44
|
|
|
29
|
|
|
52
|
%
|
||
Total transaction-based revenues
|
|
537
|
|
|
440
|
|
|
|
|||
Asset-based revenues:
|
|
|
|
|
|
|
|||||
Bank deposit account fees
|
|
428
|
|
|
381
|
|
|
12
|
%
|
||
Net interest revenue
|
|
376
|
|
|
276
|
|
|
36
|
%
|
||
Investment product fees
|
|
143
|
|
|
133
|
|
|
8
|
%
|
||
Total asset-based revenues
|
|
947
|
|
|
790
|
|
|
|
|||
Other revenues
|
|
32
|
|
|
27
|
|
|
19
|
%
|
||
Net revenues
|
|
$
|
1,516
|
|
|
$
|
1,257
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|||||||
|
|
2018
|
|
2017
|
|
% Change
|
|||||
Investment product fees:
|
|
|
|
|
|
|
|||||
Investment program fees
|
|
$
|
69
|
|
|
$
|
65
|
|
|
6
|
%
|
Mutual fund service fees
|
|
67
|
|
|
58
|
|
|
16
|
%
|
||
Other
|
|
7
|
|
|
10
|
|
|
(30
|
)%
|
||
Total investment product fees
|
|
$
|
143
|
|
|
$
|
133
|
|
|
|
|
|
Contract Balances
|
||||||||||||||
|
|
Receivable from Clients
|
|
Receivable from Affiliates
|
|
Other Receivables
|
|
Total Receivables from
Contracts with Clients
|
||||||||
Opening balance, October 1, 2018
|
|
$
|
16
|
|
|
$
|
7
|
|
|
$
|
115
|
|
|
$
|
138
|
|
Closing balance, December 31, 2018
|
|
27
|
|
|
7
|
|
|
116
|
|
|
150
|
|
||||
Increase
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
12
|
|
|
|
Three months ended December 31,
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
$
|
|
% of Net Revenues
|
|
$
|
|
% of Net Revenues
|
||||||
Net income (GAAP)
|
|
$
|
604
|
|
|
39.8
|
%
|
|
$
|
297
|
|
|
23.6
|
%
|
Add:
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
35
|
|
|
2.3
|
%
|
|
34
|
|
|
2.7
|
%
|
||
Amortization of acquired intangible assets
|
|
31
|
|
|
2.0
|
%
|
|
38
|
|
|
3.0
|
%
|
||
Interest on borrowings
|
|
32
|
|
|
2.1
|
%
|
|
20
|
|
|
1.6
|
%
|
||
Provision for income taxes
|
|
174
|
|
|
11.5
|
%
|
|
6
|
|
|
0.5
|
%
|
||
EBITDA (non-GAAP)
|
|
$
|
876
|
|
|
57.8
|
%
|
|
$
|
395
|
|
|
31.4
|
%
|
|
|
Three months ended
December 31, |
|
Increase/
(Decrease)
|
||||||||
|
|
2018
|
|
2017
|
|
|||||||
Average bank deposit account balances
|
|
$
|
114,349
|
|
|
$
|
119,101
|
|
|
$
|
(4,752
|
)
|
Average interest-earning assets
|
|
30,012
|
|
|
31,620
|
|
|
(1,608
|
)
|
|||
Average spread-based balances
|
|
$
|
144,361
|
|
|
$
|
150,721
|
|
|
$
|
(6,360
|
)
|
|
|
|
|
|
|
|
||||||
Bank deposit account fee revenue
|
|
$
|
428
|
|
|
$
|
381
|
|
|
$
|
47
|
|
Net interest revenue
|
|
376
|
|
|
276
|
|
|
100
|
|
|||
Spread-based revenue
|
|
$
|
804
|
|
|
$
|
657
|
|
|
$
|
147
|
|
|
|
|
|
|
|
|
||||||
Average annualized yield — bank deposit account fees
|
|
1.47
|
%
|
|
1.25
|
%
|
|
0.22
|
%
|
|||
Average annualized yield — interest-earning assets
|
|
4.90
|
%
|
|
3.42
|
%
|
|
1.48
|
%
|
|||
Net interest margin (NIM)
|
|
2.18
|
%
|
|
1.71
|
%
|
|
0.47
|
%
|
|
|
Interest Revenue (Expense)
|
|
Increase/
(Decrease)
|
||||||||
|
|
Three months ended
December 31, |
|
|||||||||
|
|
2018
|
|
2017
|
|
|||||||
Segregated cash
|
|
$
|
15
|
|
|
$
|
28
|
|
|
$
|
(13
|
)
|
Client margin balances
|
|
289
|
|
|
191
|
|
|
98
|
|
|||
Securities lending/borrowing, net
|
|
54
|
|
|
53
|
|
|
1
|
|
|||
Other cash and interest-earning investments
|
|
20
|
|
|
6
|
|
|
14
|
|
|||
Client credit balances
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Net interest revenue
|
|
$
|
376
|
|
|
$
|
276
|
|
|
$
|
100
|
|
|
|
Average Balance
|
|
%
Change |
|||||||
|
|
Three months ended
December 31, |
|
||||||||
|
|
2018
|
|
2017
|
|
||||||
Segregated cash
|
|
$
|
2,889
|
|
|
$
|
9,900
|
|
|
(71
|
)%
|
Client margin balances
|
|
22,138
|
|
|
17,553
|
|
|
26
|
%
|
||
Securities borrowing
|
|
626
|
|
|
1,153
|
|
|
(46
|
)%
|
||
Other cash and interest-earning investments
|
|
4,359
|
|
|
3,014
|
|
|
45
|
%
|
||
Interest-earning assets
|
|
$
|
30,012
|
|
|
$
|
31,620
|
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|||||
Client credit balances
|
|
$
|
19,330
|
|
|
$
|
21,407
|
|
|
(10
|
)%
|
Securities lending
|
|
2,716
|
|
|
2,641
|
|
|
3
|
%
|
||
Interest-bearing liabilities
|
|
$
|
22,046
|
|
|
$
|
24,048
|
|
|
(8
|
)%
|
|
|
Three months ended
December 31, |
|
Increase / (Decrease)
|
||||||||
|
|
2018
|
|
2017
|
|
|||||||
Average fee-based investment balances
|
|
$
|
263,635
|
|
|
$
|
229,951
|
|
|
$
|
33,684
|
|
Average annualized yield
—
investment product fees
|
|
0.21
|
%
|
|
0.23
|
%
|
|
(0.02
|
)%
|
|||
Investment product fee revenue
|
|
$
|
143
|
|
|
$
|
133
|
|
|
$
|
10
|
|
|
|
Three months ended
December 31, |
|
%
Change |
|||||||
|
|
2018
|
|
2017
|
|
||||||
Total trades (in millions)
|
|
57.53
|
|
|
45.40
|
|
|
27
|
%
|
||
Average client trades per day
|
|
927,849
|
|
|
726,438
|
|
|
28
|
%
|
||
Trading days
|
|
62.0
|
|
|
62.5
|
|
|
(1
|
)%
|
||
Average commissions per trade
|
|
$
|
7.09
|
|
|
$
|
7.54
|
|
|
(6
|
)%
|
Order routing revenue (in millions)
|
|
$
|
129
|
|
|
$
|
98
|
|
|
32
|
%
|
|
|
Three months ended
December 31, |
|
%
Change |
|||||||
|
|
2018
|
|
2017
|
|
||||||
Funded accounts (beginning of period)
|
|
11,514,000
|
|
|
11,004,000
|
|
|
5
|
%
|
||
Funded accounts (end of period)
|
|
11,630,000
|
|
|
11,129,000
|
|
|
5
|
%
|
||
Percentage change during period
|
|
1
|
%
|
|
1
|
%
|
|
|
|||
|
|
|
|
|
|
|
|||||
Client assets (beginning of period, in billions)
|
|
$
|
1,297.5
|
|
|
$
|
1,118.5
|
|
|
16
|
%
|
Client assets (end of period, in billions)
|
|
$
|
1,161.6
|
|
|
$
|
1,178.8
|
|
|
(1
|
)%
|
Percentage change during period
|
|
(10
|
)%
|
|
5
|
%
|
|
|
|||
|
|
|
|
|
|
|
|||||
Net new assets (in billions)
|
|
$
|
31.8
|
|
|
$
|
26.5
|
|
|
20
|
%
|
Net new assets annualized growth rate
|
|
10
|
%
|
|
9
|
%
|
|
|
|
|
Three months ended December 31,
|
|
%
Change |
|||||||
|
|
2018
|
|
2017
|
|
||||||
Revenues:
|
|
|
|
|
|
|
|||||
Transaction-based revenues:
|
|
|
|
|
|
|
|||||
Commissions and transaction fees
|
|
$
|
537
|
|
|
$
|
440
|
|
|
22
|
%
|
Asset-based revenues:
|
|
|
|
|
|
|
|||||
Bank deposit account fees
|
|
428
|
|
|
381
|
|
|
12
|
%
|
||
Net interest revenue
|
|
376
|
|
|
276
|
|
|
36
|
%
|
||
Investment product fees
|
|
143
|
|
|
133
|
|
|
8
|
%
|
||
Total asset-based revenues
|
|
947
|
|
|
790
|
|
|
20
|
%
|
||
Other revenues
|
|
32
|
|
|
27
|
|
|
19
|
%
|
||
Net revenues
|
|
1,516
|
|
|
1,257
|
|
|
21
|
%
|
||
Operating expenses:
|
|
|
|
|
|
|
|||||
Employee compensation and benefits
|
|
317
|
|
|
415
|
|
|
(24
|
)%
|
||
Clearing and execution costs
|
|
49
|
|
|
47
|
|
|
4
|
%
|
||
Communications
|
|
42
|
|
|
53
|
|
|
(21
|
)%
|
||
Occupancy and equipment costs
|
|
68
|
|
|
80
|
|
|
(15
|
)%
|
||
Depreciation and amortization
|
|
35
|
|
|
34
|
|
|
3
|
%
|
||
Amortization of acquired intangible assets
|
|
31
|
|
|
38
|
|
|
(18
|
)%
|
||
Professional services
|
|
74
|
|
|
74
|
|
|
0
|
%
|
||
Advertising
|
|
58
|
|
|
64
|
|
|
(9
|
)%
|
||
Other
|
|
46
|
|
|
116
|
|
|
(60
|
)%
|
||
Total operating expenses
|
|
720
|
|
|
921
|
|
|
(22
|
)%
|
||
Operating income
|
|
796
|
|
|
336
|
|
|
137
|
%
|
||
Other expense (income):
|
|
|
|
|
|
|
|||||
Interest on borrowings
|
|
32
|
|
|
20
|
|
|
60
|
%
|
||
Loss on sale of investments
|
|
—
|
|
|
11
|
|
|
(100
|
)%
|
||
Other
|
|
(14
|
)
|
|
2
|
|
|
N/A
|
|
||
Total other expense (income)
|
|
18
|
|
|
33
|
|
|
(45
|
)%
|
||
Pre-tax income
|
|
778
|
|
|
303
|
|
|
157
|
%
|
||
Provision for income taxes
|
|
174
|
|
|
6
|
|
|
2,800
|
%
|
||
Net income
|
|
$
|
604
|
|
|
$
|
297
|
|
|
103
|
%
|
Other information:
|
|
|
|
|
|
|
|||||
Effective income tax rate
|
|
22.4
|
%
|
|
2.0
|
%
|
|
|
|||
Average debt outstanding
|
|
$
|
3,259
|
|
|
$
|
2,653
|
|
|
23
|
%
|
Effective interest rate incurred on borrowings
|
|
3.92
|
%
|
|
3.12
|
%
|
|
|
|
|
Net Capital
|
|
Early Warning
Threshold
|
|
Net Capital in
Excess of
Early Warning
Threshold
|
||||||
TD Ameritrade Clearing, Inc.
|
|
$
|
3,040
|
|
|
$
|
1,115
|
|
|
$
|
1,925
|
|
TD Ameritrade, Inc.
|
|
$
|
192
|
|
|
$
|
0.3
|
|
|
$
|
191
|
|
|
|
Adjusted Net Capital
|
|
Early Warning
Threshold
|
|
Adjusted Net
Capital in
Excess of
Early Warning
Threshold
|
||||||
TD Ameritrade Futures & Forex LLC
|
|
$
|
140
|
|
|
$
|
25
|
|
|
$
|
115
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
TD Ameritrade Clearing, Inc.
|
|
$
|
945
|
|
|
$
|
585
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
TD Ameritrade Clearing, Inc.
|
|
$
|
21.8
|
|
|
$
|
22.5
|
|
|
|
December 31,
2018 |
|
September 30,
2018 |
||||
TD Ameritrade Clearing, Inc.
|
|
$
|
2.9
|
|
|
$
|
2.9
|
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
||||||
|
|
2018
|
|
2018
|
|
Change
|
||||||
Cash and cash equivalents (GAAP)
|
|
$
|
5,117
|
|
|
$
|
2,690
|
|
|
$
|
2,427
|
|
Less: Non-corporate cash and cash equivalents
|
|
(4,247
|
)
|
|
(2,307
|
)
|
|
(1,940
|
)
|
|||
Corporate cash and cash equivalents
|
|
870
|
|
|
383
|
|
|
487
|
|
|||
Corporate investments
|
|
884
|
|
|
386
|
|
|
498
|
|
|||
Excess regulatory net capital over management targets
|
|
862
|
|
|
296
|
|
|
566
|
|
|||
Liquid assets (non-GAAP)
|
|
$
|
2,616
|
|
|
$
|
1,065
|
|
|
$
|
1,551
|
|
Liquid assets as of September 30, 2018
|
|
$
|
1,065
|
|
Plus: Proceeds from issuance of long-term debt
|
|
999
|
|
|
EBITDA
(1)
|
|
876
|
|
|
Other changes in working capital and regulatory net capital
|
|
262
|
|
|
Net decrease in cash collateral pledged to interest rate swap counterparties
|
|
24
|
|
|
Proceeds from sale of property and equipment
|
|
11
|
|
|
Change in net capital related to daily futures client cash sweep
|
|
8
|
|
|
Proceeds from sale of other investments
|
|
1
|
|
|
Less: Payment of cash dividends
|
|
(168
|
)
|
|
Income taxes paid
|
|
(139
|
)
|
|
Purchase of treasury stock
|
|
(114
|
)
|
|
Net payments on securities sold under agreements to repurchase
|
|
(96
|
)
|
|
Purchase of property and equipment
|
|
(44
|
)
|
|
Interest paid
|
|
(31
|
)
|
|
Payment for future treasury stock purchases under accelerated stock repurchase agreement
|
|
(12
|
)
|
|
Purchase of other investments
|
|
(11
|
)
|
|
Purchase of treasury stock for income tax withholding on stock-based compensation
|
|
(8
|
)
|
|
Payment of debt issuance costs
|
|
(7
|
)
|
|
Liquid assets as of December 31, 2018
|
|
$
|
2,616
|
|
|
(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%
|
2021 Notes
|
|
October 30, 2018
|
|
November 1, 2021
|
|
$600
|
|
Variable
|
2022 Notes
|
|
March 4, 2015
|
|
April 1, 2022
|
|
$750
|
|
2.950%
|
2024 Notes
|
|
October 30, 2018
|
|
April 1, 2024
|
|
$400
|
|
3.750%
|
2025 Notes
|
|
October 17, 2014
|
|
April 1, 2025
|
|
$500
|
|
3.625%
|
2027 Notes
|
|
April 27, 2017
|
|
April 1, 2027
|
|
$800
|
|
3.300%
|
Borrower Subsidiary
|
|
Committed Facility
|
|
Uncommitted Facility
(1)
|
|
Termination Date
|
TD Ameritrade Clearing, Inc.
|
|
$1,200
|
|
$300
|
|
March 1, 2022
|
TD Ameritrade, Inc.
|
|
N/A
|
|
$300
|
|
March 1, 2022
|
TD Ameritrade Futures & Forex LLC
|
|
$45
|
|
N/A
|
|
August 11, 2021
|
|
(1)
|
The Parent is permitted, but under no obligation, to make loans under uncommitted facilities.
|
|
||
|
|
|
|
||
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|
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|
||
|
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|
||
|
|
|
|
||
|
|
|
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
|
|
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)
|
|
|
|
TD Ameritrade Holding Corporation
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Karen Ganzlin
|
|
|
|
|
|
|
|
|
Title:
|
Executive Vice President, Chief Human Resources Officer
|
|
|
|
|
|
|
|
Very truly yours,
|
||
|
|
|
|
|
|
|
Scottrade Financial Services, Inc.
|
||
|
|
|
|
|
|
|
By:
|
/s/ Rodger O. Riney
|
|
|
|
|
Name:
|
Rodger O. Riney
|
|
|
|
Title:
|
President
|
|
|
|
|
|
|
|
|
|
|
Agreed and accepted:
|
|
|
|
|
|
|
|
|
|
/s/ Peter J. deSilva
|
|
|
|
|
Peter J. deSilva
|
|
|
|
|
|
|
|
|
|
Date: September 29, 2016
|
|
|
|
|
|
Scottrade Financial Services, Inc. and its Affiliates
|
||
|
|
|
|
|
|
|
By:
|
/s/ Rodger O. Riney
|
|
|
|
|
Rodger O. Riney, President
|
|
|
|
|
|
|
|
|
"You"
|
|
|
|
|
|
|
|
|
|
/s/ Peter J. deSilva
|
||
|
|
Signature
|
|
|
|
|
|
|
|
|
|
Printed Name: Peter J. deSilva
|
||
|
|
|
|
|
|
|
Date signed:
|
2/22/2016
|
Peter J. DeSilva
Employee’s Printed Name |
President, Scottrade, Inc.
Position
|
/s/ Peter J. DeSilva
Employee’s Signature |
11/16/16
Date
|
(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),
|
(6)
|
Registration Statement (Form S-3 No. 333-185286),
|
(7)
|
Registration Statement (Form S-3 No. 333-217367), and
|
(8)
|
Registration Statement (Form S-3 No. 333-220513);
|
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:
|
January 31, 2019
|
/s/ TIM HOCKEY
|
|
|
Tim Hockey
|
|
|
President and Chief Executive Officer
|
|
|
|
Dated:
|
January 31, 2019
|
/s/ STEPHEN J. BOYLE
|
|
|
Stephen J. Boyle
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|