Record Diluted Earnings per Share of $1.58, up
6% Year-Over-Year
Record Net Revenues of $3.3B, up 2%
Year-Over-Year
Net New Client Assets of $60B, 9% Annualized
Growth Rate
TD Ameritrade Holding Corporation (Nasdaq:AMTD) has released
results for fiscal year 2016. The Company generated record
earnings and a record $1.58 per diluted share, driven by strong
organic growth.
The Company’s results for the fiscal year ended Sept. 30, 2016
include the following: (1)
- Record $1.58 in earnings per diluted
share, on net income of $842 million
- Net new client assets of approximately
$60 billion, a growth rate of 9 percent
- Average client trades per day of
approximately 463,000, up slightly year over year
- Record net revenues of $3.3 billion, 57
percent of which were asset-based
- Investment product fee revenue of $374
million, up 12 percent year over year
- Pre-tax income of $1.3 billion, or 38
percent of net revenues
- EBITDA(2) of $1.5 billion, or 45
percent of net revenues
- Interest rate-sensitive assets(3) of
$119 billion, up 10 percent year over year
- Record client assets of approximately
$774 billion, up 16 percent year over year
“We’re pleased to report another year of strong growth across
all our businesses,” said Tim Hockey, TD Ameritrade president and
chief executive officer. “Strong asset-gathering and growth in
investment products helped us deliver higher earnings despite a
challenging rate environment. We averaged 463,000 trades per day
and gathered $60 billion in net new client assets, a 9 percent
growth rate. We end 2016 with strong momentum and plans firmly in
place to continue building long-term earnings power.”
“We have a solid competitive position and a strong, healthy
culture. Our organic growth strategy will not change, but how we
execute that strategy will continue to evolve,” Hockey continued.
“Over the next 12 months we will continue driving greater
organizational efficiency and invest in initiatives that will help
us deliver a superior client experience that address the needs of
today’s investor -- and tomorrow’s. An intensified commitment to
agility and increasing our speed to market will be paramount to our
success and a key focus for our management team going forward.”
“Fiscal 2016 was a good year with record earnings of $1.58 per
diluted share, despite the persistence of near-zero interest rates,
and our capital-light model allowed us to return more than $700
million to our shareholders through dividends and share buybacks.
Building our long-term earnings power remains our primary focus,
and with interest rate-sensitive assets up 10 percent to $119
billion, we remain well-positioned for a rising-rate environment,”
said Steve Boyle, executive vice president and chief financial
officer. “Looking ahead, we expect trading and organic growth to
drive fiscal 2017 results, and we’ll remain disciplined on managing
expenses while generating savings that can be invested in
initiatives to fuel future growth.”
Fourth Quarter 2016 Results
TD Ameritrade also released its results for the quarter ended
Sept. 30, 2016, which include the following: (1)
- Net income of $185 million, or $0.35
per diluted share, down 13 percent year over year
- Net new client assets of approximately
$15 billion
- Average client trades per day of
approximately 444,000, down 7 percent year over year
- Net revenues of $829 million, 58
percent of which were asset-based
- Investment product fee revenue of $98
million, up 20 percent year over year
- Pre-tax income of $270 million, or 33
percent of net revenues
- EBITDA(2) of $327 million, or 39
percent of net revenues
- Return on average stockholders’ equity
(annualized) of 15 percent
Capital Management
During the 2016 fiscal year, the Company paid $362 million, in
cash dividends, which included four quarterly dividends of $0.17
per share. The Company also repurchased approximately 12 million
shares of its common stock.
The Company has declared an $0.18 per share quarterly cash
dividend, an increase of 6 percent year-over-year, payable on Nov.
22, 2016 to all holders of record of common stock as of Nov. 8,
2016.
Fiscal 2017 Outlook
The Company has also released its outlook for the 2017 fiscal
year, which reflects expected earnings of $1.50 to $1.80 per
diluted share for its 2017 fiscal year.
More information on the fiscal 2017 forecast is available
through the Company’s Outlook Statement, located in the “Financials
& reports” section of its corporate web site, www.amtd.com.
Company Hosts Conference Call
TD Ameritrade will host a conference call this morning, Oct. 24,
2016, at 8:30 a.m. EDT (7:30 a.m. CDT). Participants may listen to
the conference call by dialing 877-648-7976. The Company will
webcast the conference call through www.amtd.com, via the
“Presentations & Events” page of the web site. A replay of the
phone call will be available beginning at 12:00 p.m. EDT (11:00
a.m. CDT) on Oct. 24, 2016 by dialing 855-859-2056 and entering the
Conference ID 69450485. The replay will be available until 11:59
p.m. EDT (10:59 p.m. CDT) on Oct. 31, 2016. A transcript of the
call will be available on the Company’s corporate web site,
www.amtd.com, via either the “Investor Relations” page or the
“Presentations & Events” page beginning Tuesday, Oct. 25,
2016.
Information about the Company’s corporate events, including
earnings conference calls and webcasts, can be found by visiting
www.amtd.com and clicking on “Investor Relations” and
“Presentations & Events.” Click on the date of the event to
access all pertinent links and resources. A high speed Internet
connection is required in order to view the webcast.
The Company asks that interested parties visit or subscribe to
newsfeeds at www.amtd.com for the most up-to-date corporate
financial information, presentation announcements, transcripts and
archives. The Company also communicates this information via
Twitter, @TDAmeritradePR. Web site links, corporate titles and
telephone numbers provided in this release, although correct when
published, may change in the future.
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment
advisors (RIAs) have turned to TD Ameritrade’s (NASDAQ: AMTD)
technology, people and education to help make investing and trading
easier to understand and do. Online or over the phone. In a branch
or with an independent RIA. First-timer or sophisticated trader.
Our clients want to take control, and we help them decide how -
bringing Wall Street to Main Street for more than 40 years. An
official sponsor of the 2016 U.S. Olympic and Paralympic Teams, as
well as an official sponsor of the National Football League,
TD Ameritrade has time and again been recognized as a leader
in investment services. Please visit TD Ameritrade's newsroom
or www.amtd.com for more information, or read our stories at
http://freshaccounts.amtd.com.
Source: TD Ameritrade Holding Corporation
Safe Harbor
This document contains forward-looking statements within the
meaning of the federal securities laws. We intend these
forward-looking statements to be covered by the safe harbor
provisions of the federal securities laws. In particular, any
projections regarding our future revenues, expenses, earnings,
capital expenditures, effective tax rates, client trading activity,
accounts or stock price, as well as the assumptions on which such
expectations are based, are forward-looking statements. These
statements reflect only our current expectations and are not
guarantees of future performance or results. These statements
involve risks, uncertainties and assumptions that could cause
actual results or performance to differ materially from those
contained in the forward-looking statements. These risks,
uncertainties and assumptions include, but are not limited to:
general economic and political conditions and other securities
industry risks, fluctuations in interest rates, stock market
fluctuations and changes in client trading activity, credit risk
with clients and counterparties, increased competition, systems
failures, delays and capacity constraints, network security risks,
liquidity risks, new laws and regulations affecting our business,
regulatory and legal matters and uncertainties and other risk
factors described in our latest Annual Report on Form 10-K, filed
with the SEC on Nov. 20, 2015 and our latest Quarterly Report on
Form 10-Q filed thereafter. These forward-looking statements speak
only as of the date on which the statements were made. We undertake
no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise, except to the extent required by the federal
securities laws.
1 Please see the Glossary of Terms, located in “Investor”
section of www.amtd.com for more information on how these metrics
are calculated.
2See attached reconciliation of non-GAAP financial measures.
3Interest rate-sensitive assets consist of spread-based assets
and money market mutual funds. Ending balances as of Sept. 30,
2016.
Brokerage services provided by TD Ameritrade, Inc., member
FINRA (www.FINRA.org) /SIPC (www.SIPC.org).
TD AMERITRADE HOLDING CORPORATION CONSOLIDATED
STATEMENTS OF INCOME In millions, except per share amounts
(Unaudited)
Quarter Ended
Fiscal Year Ended Sept. 30, 2016 June 30, 2016
Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015
Revenues: Transaction-based revenues:
Commissions and transaction fees
$ 336 $ 347 $ 364 $ 1,372 $ 1,401 Asset-based revenues:
Insured deposit account fees 230 234 218 926 839 Net interest
revenue 151 143 155 595 622 Investment product fees 98
96 82 374 334 Total asset-based
revenues 479 473 455 1,895 1,795 Other revenues 14
18 12 60 51 Net revenues
829 838 831 3,327 3,247
Operating expenses: Employee compensation and benefits 222 209 199
839 807 Clearing and execution costs 34 35 39 136 148
Communications 38 33 32 137 125 Occupancy and equipment costs 43 43
42 171 163 Depreciation and amortization 24 23 22 92 91
Amortization of acquired intangible assets 20 22 23 86 90
Professional services 57 47 39 178 159 Advertising 59 58 49 260 248
Other 49 20 26 110 91
Total operating expenses 546 490 471
2,009 1,922 Operating income 283 348 360 1,318
1,325 Other expense (income): Interest on borrowings 13 14
13 53 43 Gain on sale of investments - - - - (7 ) Other -
- - - 1 Total other expense
(income) 13 14 13 53 37
Pre-tax income 270 334 347 1,265 1,288 Provision for income
taxes 85 94 131 423 475
Net income $ 185 $ 240 $ 216 $ 842 $ 813 Earnings per
share - basic $ 0.35 $ 0.45 $ 0.40 $ 1.59 $ 1.50 Earnings per share
- diluted $ 0.35 $ 0.45 $ 0.40 $ 1.58 $ 1.49 Weighted
average shares outstanding - basic 526 529 541 531 543 Weighted
average shares outstanding - diluted 529 531 545 534 547
Dividends declared per share $ 0.17 $ 0.17 $ 0.15 $ 0.68 $ 0.60
TD AMERITRADE HOLDING CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS In millions (Unaudited)
Sept. 30, 2016 Sept. 30, 2015
Assets: Cash and cash equivalents $ 1,855 $ 1,978 Segregated cash
and investments 8,729 6,305 Broker/dealer receivables 1,190 862
Client receivables, net 11,941 12,770 Investments
available-for-sale, at fair value 761 4 Goodwill and intangible
assets 3,042 3,128 Other 1,300 1,328 Total assets $
28,818 $ 26,375 Liabilities and stockholders' equity:
Liabilities: Broker/dealer payables $ 2,040 $ 2,707 Client payables
19,055 16,035 Long-term debt 1,817 1,800 Other 855
930 Total liabilities 23,767 21,472 Stockholders' equity
5,051 4,903 Total liabilities and stockholders' equity $
28,818 $ 26,375
TD AMERITRADE HOLDING
CORPORATION SELECTED OPERATING DATA (Unaudited)
Quarter Ended Fiscal
Year Ended Sept. 30, 2016 June 30, 2016 Sept.
30, 2015 Sept. 30, 2016 Sept. 30, 2015
Key
Metrics:
Net new assets (in billions) $15.1 $13.6 $16.2 $60.3 $63.0 Net new
asset growth rate (annualized) 8% 8% 9% 9% 10% Average client
trades per day 444,281 461,941 478,776 462,918 461,541
Profitability
Metrics:
Operating margin 34.1% 41.5% 43.3% 39.6% 40.8% Pre-tax margin 32.6%
39.9% 41.8% 38.0% 39.7% Return on average stockholders' equity
(annualized) 14.7% 19.5% 17.4% 17.0% 16.7% Net profit margin 22.3%
28.6% 26.0% 25.3% 25.0% EBITDA(1) as a percentage of net revenues
39.4% 46.9% 48.7% 45.0% 46.6%
Liquidity
Metrics:
Interest on borrowings (in millions) $13 $14 $13 $53 $43 Interest
coverage ratio (EBITDA(1)/interest on borrowings) 25.2 28.1 31.2
28.2 35.2 Cash and cash equivalents (in billions) $1.9 $1.9 $2.0
$1.9 $2.0
Liquid assets available for corporate
investing and financing activities(1) (in billions)
$0.8 $0.7 $0.5 $0.8 $0.5
Transaction-Based
Revenue Metrics:
Total trades (in millions) 28.4 29.6 30.6 116.7 115.8 Average
commissions and transaction fees per trade $11.82 $11.72 $11.89
$11.76 $12.09 Trading days 64.0 64.0 64.0 252.0 251.0 Order routing
revenue (in millions) $75 $77 $76 $299 $299
Spread-Based
Asset Metrics:
Average insured deposit account balances (in billions) $87.1 $83.4
$78.2 $83.7 $75.7 Average interest-earning assets (in billions)
23.8 22.7 21.6 22.7 20.2 Average spread-based balances (in
billions) $110.9 $106.1 $99.8 $106.4 $95.9 Insured deposit
account fee revenue (in millions) $230 $234 $218 $926 $839 Net
interest revenue (in millions) 151 143 155 595 622 Spread-based
revenue (in millions) $381 $377 $373 $1,521 $1,461 Avg.
annualized yield - insured deposit account fees 1.03% 1.11% 1.09%
1.09% 1.09% Avg. annualized yield - interest-earning assets 2.48%
2.50% 2.81% 2.59% 3.03% Net interest margin (NIM) 1.35% 1.41% 1.46%
1.41% 1.50%
Fee-Based
Investment Metrics:
Money market mutual
fund fees:
Average balance (in billions) $5.3 $5.8 $5.7 $5.7 $5.6 Average
annualized yield 0.28% 0.26% 0.02% 0.19% 0.01% Fee revenue (in
millions) $4 $4 $0 $11 $0
Market fee-based
investment balances:
Average balance (in billions) $163.7 $156.3 $151.4 $155.0 $150.5
Average annualized yield 0.22% 0.23% 0.21% 0.23% 0.22% Fee revenue
(in millions) $94 $92 $82 $363 $334 Average fee-based
investment balances (in billions) $169.0 $162.1 $157.1 $160.7
$156.1 Average annualized yield 0.23% 0.23% 0.20% 0.23% 0.21%
Investment product fee revenue (in millions) $98 $96 $82 $374 $334
(1) See attached reconciliation of non-GAAP financial
measures.
NOTE: See Glossary of Terms on the
Company's website at www.amtd.com for definitions of the above
metrics.
TD AMERITRADE HOLDING CORPORATION SELECTED
OPERATING DATA (Unaudited)
Quarter Ended
Fiscal Year Ended Sept. 30, 2016 June 30,
2016 Sept. 30, 2015 Sept. 30, 2016
Sept. 30, 2015
Client Account
and Client Asset Metrics:
Funded accounts (beginning of period) 6,872,000 6,777,000 6,551,000
6,621,000 6,301,000 Funded accounts (end of period) 6,950,000
6,872,000 6,621,000 6,950,000 6,621,000 Percentage change during
period 1% 1% 1% 5% 5% Client assets (beginning of period, in
billions) $736.3 $711.2 $702.3 $667.4 $653.1 Client assets (end of
period, in billions) $773.8 $736.3 $667.4 $773.8 $667.4 Percentage
change during period 5% 4% (5%) 16% 2%
Net Interest
Revenue:
Segregated
cash:
Average balance (in billions) $8.0 $7.4 $5.1 $7.0 $4.7 Average
annualized yield 0.27% 0.25% 0.08% 0.21% 0.11% Interest revenue (in
millions) $5 $5 $1 $15 $5
Client margin
balances:
Average balance (in billions) $11.7 $11.5 $12.6 $11.8 $12.1 Average
annualized yield 3.60% 3.69% 3.57% 3.65% 3.60% Interest revenue (in
millions) $107 $107 $115 $436 $443
Securities
borrowing/lending:
Average securities borrowing balance (in billions) $1.2 $1.0 $0.9
$0.9 $0.9 Average securities lending balance (in billions) $1.9
$2.1 $2.4 $2.1 $2.3 Net interest revenue - securities
borrowing/lending (in millions) $37 $30 $39 $141 $174
Other cash and
interest-earning investments:
Average balance (in billions) $2.9 $2.8 $3.0 $3.0 $2.5 Average
annualized yield 0.28% 0.21% 0.03% 0.18% 0.04% Interest revenue -
net (in millions) $2 $1 $0 $5 $1
Client credit
balances:
Average balance (in billions) $15.5 $14.7 $13.3 $14.7 $12.4 Average
annualized cost 0.01% 0.01% 0.01% 0.01% 0.01% Interest expense (in
millions) ($0) ($0) ($0) ($2) ($1) Average interest-earning
assets (in billions) $23.8 $22.7 $21.6 $22.7 $20.2 Average
annualized yield 2.48% 2.50% 2.81% 2.59% 3.03% Net interest revenue
(in millions) $151 $143 $155 $595 $622
NOTE: See Glossary of Terms on the
Company's website at www.amtd.com for definitions of the above
metrics.
TD AMERITRADE HOLDING
CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Dollars in
millions (Unaudited)
Quarter Ended
Fiscal Year Ended Sept. 30, 2016 June 30, 2016
Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015
$ % of Net Rev. $ % of Net Rev.
$ % of Net Rev. $ % of Net Rev.
$ % of Net Rev.
EBITDA
(1)
Net income $ 185 22.3 % $ 240 28.6 % $ 216 26.0 % $ 842 25.3 % $
813 25.0 % Add: Depreciation and amortization 24 2.9 % 23 2.7 % 22
2.6 % 92 2.8 % 91 2.8 % Amortization of acquired intangible assets
20 2.4 % 22 2.6 % 23 2.8 % 86 2.6 % 90 2.8 % Interest on borrowings
13 1.6 % 14 1.7 % 13 1.6 % 53 1.6 % 43 1.3 % Provision for income
taxes 85 10.3 % 94 11.2 % 131
15.8 % 423 12.7 % 475 14.6 % EBITDA $ 327
39.4 % $ 393 46.9 % $ 405 48.7 % $ 1,496 45.0
% $ 1,512 46.6 %
As of Sept. 30, June
30, Mar. 31, Dec. 31, Sept. 30,
2016 2016 2016 2015 2015
Liquid Assets Available for Corporate Investing and
Financing Activities (2) Cash and cash equivalents $
1,855 $ 1,917 $ 2,476 $ 1,735 $ 1,978 Less: Non-corporate cash and
cash equivalents (1,395 ) (1,088 ) (1,430 )
(934 ) (909 ) Corporate cash and cash equivalents 460
829 1,046 801 1,069 Corporate investments 757 400 - 201 - Less:
Corporate liquidity maintained for operational contingencies
(773 ) (764 ) (764 ) (764 ) (750 )
Excess corporate cash and cash equivalents and investments 444 465
282 238 319 Excess broker-dealer regulatory net capital 369
263 431 346
211 Liquid assets available for corporate investing and
financing activities $ 813 $ 728 $ 713 $ 584
$ 530 Note: The term "GAAP" in the following
explanation refers to generally accepted accounting principles in
the United States. (1) EBITDA (earnings before
interest, taxes, depreciation and amortization) is considered a
non-GAAP financial measure as defined by SEC Regulation G. We
consider EBITDA an important measure of our financial performance
and of our ability to generate cash flows to service debt, fund
capital expenditures and fund other corporate investing and
financing activities. EBITDA is used as the denominator in the
consolidated leverage ratio calculation for covenant purposes under
our senior revolving credit facility. EBITDA eliminates the
non-cash effect of tangible asset depreciation and amortization and
intangible asset amortization. EBITDA should be considered in
addition to, rather than as a substitute for, pre-tax income, net
income and cash flows from operating activities. (2) Liquid
assets available for corporate investing and financing activities
is considered a non-GAAP financial measure as defined by SEC
Regulation G. We consider "liquid assets available for corporate
investing and financing activities" to be an important measure of
our liquidity. We include the excess capital of our broker-dealer
subsidiaries in the calculation of liquid assets available for
corporate investing and financing activities, rather than simply
including broker-dealer cash and cash equivalents, because capital
requirements may limit the amount of cash available for dividend
from the broker-dealer subsidiaries to the parent company. Excess
capital, as defined below, is generally available for dividend from
the broker-dealer subsidiaries to the parent company. Liquid assets
available for corporate investing and financing activities should
be considered as a supplemental measure of liquidity, rather than
as a substitute for cash and cash equivalents. We define
liquid assets available for corporate investing and financing
activities as the sum of (a) corporate cash and cash equivalents
and investments, excluding an amount that is being maintained to
provide liquidity for operational contingencies, including lending
to our broker-dealer, futures commission merchant and forex dealer
member subsidiaries under intercompany credit agreements and (b)
regulatory net capital of (i) our clearing broker-dealer subsidiary
in excess of 10% of aggregate debit items and (ii) our introducing
broker-dealer subsidiaries in excess of a minimum operational
target established by management ($50 million in the case of our
primary introducing broker-dealer, TD Ameritrade, Inc.). Liquid
assets available for corporate investing and financing activities
is based on more conservative measures of broker-dealer net capital
than regulatory requirements because we generally manage to higher
levels of net capital at the broker-dealer subsidiaries than the
regulatory thresholds require.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161024005547/en/
TD Ameritrade Holding CorporationFor Media:Kim Hillyer,
402-574-6523Director, Communications & Public
Affairskim.hillyer@tdameritrade.com@TDAmeritradePRorFor
Stockholders and Analysts:Jeff Goeser, 402-597-8464Director,
Investor Relations & Financejeffrey.goeser@tdameritrade.com
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