AMTD TD Ameritrade Holding Corporation

GAAP Diluted EPS $1.05; Non-GAAP Diluted EPS $1.09(1)

Net New Client Assets of $33 Billion

Record Daily Average Revenue Trades of 3.4 Million

Key Milestones Reached, Schwab Deal on Track for Second Half of 2020

TD Ameritrade Holding Corporation (Nasdaq: AMTD) has released results for the third quarter of fiscal 2020.

Financial results for the quarter ended June 30, 2020 include the following:(2)

• Net new client assets of $33 billion, split 61 percent retail and 39 percent institutional, an annualized growth rate of 11 percent
• Record gross new funded retail accounts of 661,000
• Record daily average revenue trades, DARTs, of 3.4 million
• Total client assets of $1.5 trillion
• Net revenues of $1.6 billion
• Pre-tax GAAP income of $753 million, or 47 percent of net revenues
• $1.05 in GAAP earnings per diluted share, on net income of $569 million
• $1.09 in Non-GAAP earnings per diluted share(1)

Steve Boyle, interim president and chief executive officer, commented, “Our results were exceptional. We’re very pleased with the growth in clients and assets which is indicative of the strength of our value proposition in an ‘all else equal’ marketplace. Earnings increased year-over-year despite the move to zero for most trades and zero interest rates. We again delivered double-digit net new client asset growth reflecting the appeal of our offerings to both retail and institutional clients. In the quarter, we launched thinkorswim Web with access to equity and derivative trading from any modern internet browser, fulfilling clients’ desire to access our award-winning trading technology with a fully synchronized experience on any device, wherever they may be. With one quarter still to go, we are approaching 2 million new funded accounts fiscal year-to-date, breaking our previous record of 1.3 million new funded accounts in fiscal year 2018. Retail continued its strong momentum as new and existing clients rewarded us with increased business and satisfaction scores. On the institutional side of the business, our new account pipeline slowed in the quarter as expected as the merger closing nears, while client retention remained strong along with net advocate and client experience scores.”

Boyle added, “Unprecedented trading volume continued in the third quarter averaging a record 3.4 million DARTs, more than four times last year’s level and up 62 percent from the prior quarter. Zero commissions and sustained volatility drove new and existing client engagement, leading to record trading levels. This quarter includes the top 15 trading volume days in our firm’s history with 10 of these days in June and a new all-time high of more than 5 million DARTs on June 11. Client engagement continues to accelerate this month, with margin balances increasing to $22.9 billion and trading remaining strong, averaging 3.8 million DARTs as of July 20. We also helped our clients execute four times the number of shares and more than double the number of options contracts versus a year ago. These remarkable accomplishments took all of our 10,000 employees working together to meet client needs amid record volumes. We are actively recruiting for more than 1,000 new full-time client services positions in response to sustained elevated levels of growth and client engagement.”

Boyle continued, “One of the things that makes our culture so special is our employees’ eagerness to give back to their communities and to express their support for causes that matter to them. It’s what drove our decision in the quarter to support charities addressing two very pressing issues: a massive health crisis and longstanding racial injustice. We were proud to donate $1 million to the CDC Foundation’s Combat Coronavirus Fund; $500,000 to Feeding America’s Covid-19 Response Fund; and $500,000 to the National Urban League. We were even prouder of how our employees stepped up when we announced we would double their usual 1:1 company match to the charities of their choice. In just two months, our 2:1 employee match campaign raised more than $1 million to be disbursed across more than 850 unique charities and causes.”

Boyle concluded, “During our June 4 virtual special meeting of shareholders, TD Ameritrade shareholders overwhelmingly approved the merger agreement with Schwab, with more than 99 percent of the votes cast being voted in favor of the proposal. The shareholder vote came on the heels of the June 3 announcement that the Antitrust Division of the United States Department of Justice (DOJ) had decided to close its investigation of the proposed merger. Integration planning is in full swing, and we still expect the transaction will close in the second half of this calendar year. We remain committed to delivering a strong finish to our fiscal year, taking care of our clients and employees, and ensuring a smooth transition to Schwab.”

Interim chief financial officer Jon Peterson commented, “We delivered strong results in the quarter driven by continued high client engagement and operating leverage. Options, futures and mobile DARTs were all at record levels. Ending Bank Deposit Account (BDA) balances were $152 billion, up 38 percent versus prior year, but relatively flat sequentially as increases from retail clients were essentially offset by decreases from institutional clients. As of July 20, BDA balances are holding steady at $154 billion. Asset-based revenue declined sequentially with the lower rate environment as expected. However, stock lending revenue was at record levels and margin revenue was aided by a recovery in balances and less pricing pressures than expected. Of note, we recorded a net $0.02 EPS benefit related to a $26 million mark-to-market benefit impacting other revenue, offset by $10 million of deal-related professional services expense.”

Peterson continued, “With three months to go in the fiscal year, we are generally trending favorably relative to our full year guidance metrics. Of note, NNA growth rates year-to-date are above the high end of the range and revenue is on-pace to be above the high end. Regarding expenses, we expect to be slightly higher than the range due to volume-related increases. The impact of the new employees in our service centers will depend on how quickly they can be onboarded. The expense impact of this additional headcount is expected to be $35 million to $45 million annually.”

Peterson concluded, “Year-to-date results have been impressive, and the management team is extremely proud of our employees during these unprecedented times. Our workforce remains engaged and productive working from home, supporting our clients through uncertainty and sustained market volatility.”

$0 commission applies to online U.S. exchange-listed stocks, ETFs, and option trades. $0.65 per options contract fee applies to options trades, with no exercise or assignment fees. A $6.95 commission applies to online trades of over-the-counter (OTC) stocks which includes stocks not listed on a U.S. exchange.

Capital Management

The company paid $168 million in cash dividends during its third fiscal quarter, or $0.31 per share.

The company has declared a $0.31 per share quarterly cash dividend, payable on August 21, 2020 to all holders of record of common stock as of August 7, 2020.

More information about TD Ameritrade’s upcoming corporate events is available via the company’s Calendar which is located on the "Investor Relations" page of www.amtd.com.

Interested parties should visit or subscribe to newsfeeds at www.amtd.com for the most up-to-date information on corporate financial reports, press releases, SEC filings and events. The company also communicates this information via Twitter, @TDAmeritradePR. Website links, corporate titles and telephone numbers provided in this release, although correct when published, may change in the future.

Source: TD Ameritrade Holding Corporation

About TD Ameritrade Holding Corporation

TD Ameritrade provides investing services and education to approximately 13 million client accounts totaling approximately $1.5 trillion in assets, and custodial services to more than 7,000 registered investment advisors. We are a leader in U.S. retail trading, executing more than 3 million daily average revenue trades per day for our clients, one-third of which come from mobile devices. We have a proud history of innovation, dating back to our start in 1975, and today our team of nearly 10,000-strong is committed to carrying it forward. Together, we are leveraging the latest in cutting edge technologies and one-on-one client care to transform lives, and investing, for the better. Learn more by visiting TD Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh Accounts.

Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) / SIPC (www.SIPC.org)

Safe Harbor

This press release contains forward-looking statements relating to the proposed merger, including timing of closing and integration, and stockholder and client benefits. Achievement of these expectations is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations. Important transaction-related factors that may cause such differences include, but are not limited to, failure of the parties to satisfy the closing conditions in the merger agreement in a timely manner or at all, including regulatory approvals; litigation challenging the merger; the risk that expected revenue, expense and other synergies from the transaction may not be fully realized or may take longer to realize than expected; the parties being unable to successfully implement their integration strategies; and disruptions to the parties’ businesses as a result of the announcement and pendency of the merger. Other important factors include general market conditions, including the level of interest rates, equity valuations and trading activity; the parties’ ability to attract and retain clients and registered investment advisors and grow those relationships and client assets; competitive pressures on pricing, including deposit rates; the parties’ ability to develop and launch new and enhanced products, services, and capabilities, as well as enhance their infrastructure, in a timely and successful manner; client use of the parties’ advisory solutions and other products and services; client sensitivity to rates; the level of client assets, including cash balances; capital and liquidity needs and management; the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities to contain the spread of the virus and the economic impact; regulatory guidance; litigation or regulatory matters; any adverse impact of financial reform legislation and related regulations; and other factors set forth in Schwab’s and TD Ameritrade’s definitive joint proxy statement/prospectus dated May 4, 2020, as supplemented, and Schwab’s and TD Ameritrade’s most recent reports on Form 10-K and Form 10-Q.

1 See attached reconciliation of non-GAAP financial measures.

2 For more information on how these metrics are calculated, please see the Glossary of Terms, by clicking on “Read Our Glossary” under the “Earnings” heading located in the “Investor Relations” section of www.amtd.com.

Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org).

Advisory services are provided by TD Ameritrade Investment Management, LLC (“TD Ameritrade Investment Management”), a registered investment advisor. Brokerage services provided by TD Ameritrade, Inc. TD Ameritrade Investment Management provides discretionary advisory services for a fee. Risks applicable to any portfolio are those associated with its underlying securities. For more information, please see the Disclosure Brochure (Form ADV Part 2A) http://www.tdameritrade.com/forms/TDA4855.pdf

TD AMERITRADE HOLDING CORPORATION CONSOLIDATED STATEMENTS OF INCOME In millions, except per share amounts (Unaudited)   Quarter Ended Nine Months Ended June 30, 2020 Mar. 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019

Revenues:

Asset-based revenues:

Bank deposit account fees

$

391

$

444

$

421

 

$

1,289

 

$

1,280

 

Net interest revenue

 

303

 

332

 

383

 

 

994

 

 

1,120

 

Investment product fees

 

128

 

144

 

151

 

 

418

 

 

431

 

Total asset-based revenues

 

822

 

920

 

955

 

 

2,701

 

 

2,831

 

Transaction-based revenues:

Transaction fees and commissions

 

652

 

481

 

477

 

 

1,438

 

 

1,500

 

Other revenues

 

112

 

79

 

59

 

 

219

 

 

126

 

Net revenues

 

1,586

 

1,480

 

1,491

 

 

4,358

 

 

4,457

 

 

Operating expenses:

Employee compensation and benefits

 

366

 

377

 

325

 

 

1,073

 

 

982

 

Clearing and execution costs

 

88

 

75

 

59

 

 

212

 

 

161

 

Communications

 

38

 

38

 

39

 

 

114

 

 

119

 

Occupancy and equipment costs

 

64

 

65

 

67

 

 

195

 

 

199

 

Depreciation and amortization

 

43

 

43

 

38

 

 

127

 

 

109

 

Amortization of acquired intangible assets

 

29

 

30

 

31

 

 

90

 

 

93

 

Professional services

 

86

 

69

 

71

 

 

253

 

 

218

 

Advertising

 

59

 

87

 

80

 

 

227

 

 

213

 

Other

 

35

 

65

 

61

 

 

137

 

 

142

 

Total operating expenses

 

808

 

849

 

771

 

 

2,428

 

 

2,236

 

 

Operating income

 

778

 

631

 

720

 

 

1,930

 

 

2,221

 

 

Other expense (income):

Interest on borrowings

 

25

 

31

 

37

 

 

88

 

 

107

 

Gain on business-related divestiture

 

-

 

-

 

(60

)

 

-

 

 

(60

)

Other expense (income), net

 

-

 

1

 

-

 

 

(1

)

 

(14

)

Total other expense (income), net

 

25

 

32

 

(23

)

 

87

 

 

33

 

 

Pre-tax income

 

753

 

599

 

743

 

 

1,843

 

 

2,188

 

Provision for income taxes

 

184

 

153

 

188

 

 

450

 

 

530

 

Net income

$

569

$

446

$

555

 

$

1,393

 

$

1,658

 

 

Earnings per share - basic

$

1.05

$

0.82

$

1.01

 

$

2.57

 

$

2.97

 

Earnings per share - diluted

$

1.05

$

0.82

$

1.00

 

$

2.57

 

$

2.96

 

Weighted average shares outstanding - basic

 

541

 

541

 

552

 

 

541

 

 

558

 

Weighted average shares outstanding - diluted

 

543

 

543

 

554

 

 

543

 

 

560

 

Dividends declared per share

$

0.31

$

0.31

$

0.30

 

$

0.93

 

$

0.90

 

TD AMERITRADE HOLDING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS In millions (Unaudited)   June 30, 2020 Sept. 30, 2019 Assets: Cash and cash equivalents

$

2,577

$

2,852

Segregated cash and investments

 

18,316

 

8,684

Broker/dealer receivables

 

1,732

 

2,439

Client receivables, net

 

22,100

 

20,618

Investments available-for-sale, at fair value

 

1,798

 

1,668

Goodwill and intangible assets

 

5,341

 

5,431

Other

 

2,530

 

2,094

Total assets

$

54,394

$

43,786

  Liabilities and stockholders' equity: Liabilities: Broker/dealer payables

$

3,415

$

3,308

Client payables

 

35,882

 

27,067

Long-term debt

 

3,736

 

3,594

Other

 

1,793

 

1,117

Total liabilities

 

44,826

 

35,086

Stockholders' equity

 

9,568

 

8,700

Total liabilities and stockholders' equity

$

54,394

$

43,786

TD AMERITRADE HOLDING CORPORATION SELECTED OPERATING DATA (Unaudited)   Quarter Ended Nine Months Ended June 30, 2020 Mar. 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Key Metrics: Net new assets (in billions)

$32.8

$45.4

$19.5

$106.9

$71.0

Net new asset growth rate (annualized)

11%

13%

6%

11%

7%

Average client trades per day

3,395,970

2,101,804

824,600

2,175,729

870,744

  Profitability Metrics: Operating margin

49.1%

42.6%

48.3%

44.3%

49.8%

Pre-tax margin

47.5%

40.5%

49.8%

42.3%

49.1%

Return on average stockholders' equity (annualized)

24.4%

19.9%

26.5%

20.6%

26.5%

Net profit margin

35.9%

30.1%

37.2%

32.0%

37.2%

EBITDA(1) as a percentage of net revenues

53.6%

47.5%

56.9%

49.3%

56.0%

  Liquidity Metrics: Interest on borrowings (in millions)

$25

$31

$37

$88

$107

Interest coverage ratio (EBITDA(1)/interest on borrowings)

34.0

22.7

22.9

24.4

23.3

Cash and cash equivalents (in billions)

$2.6

$3.7

$3.0

$2.6

$3.0

Liquid assets(1) (in billions)

$3.6

$3.7

$2.8

$3.6

$2.8

  Transaction-Based Revenue Metrics: Total trades (in millions)

213.9

130.3

51.9

409.0

162.0

Average commissions per trade

$1.46

$2.00

$6.92

$1.82

$7.01

Trading days

63.0

62.0

63.0

188.0

186.0

Order routing revenue (in millions)

$340

$220

$117

$695

$365

  Spread-Based Asset Metrics: Average bank deposit account balances (in billions)

$152.5

$126.3

$110.3

$131.5

$113.1

Average interest-earning assets (in billions)

45.4

36.8

32.6

39.3

31.2

Average spread-based balances (in billions)

$197.9

$163.1

$142.9

$170.8

$144.3

Bank deposit account fee revenue (in millions)

$391

$444

$421

$1,289

$1,280

Net interest revenue (in millions)

303

332

383

994

1,120

Spread-based revenue (in millions)

$694

$776

$804

$2,283

$2,400

Avg. annualized yield - bank deposit account fees

1.01%

1.39%

1.51%

1.29%

1.49%

Avg. annualized yield - interest-earning assets

2.65%

3.56%

4.65%

3.32%

4.73%

Net interest margin (NIM)

1.39%

1.88%

2.23%

1.76%

2.19%

  (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 Nine Months Ended June 30, 2020 Mar. 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Client Account and Client Asset Metrics: Funded accounts (beginning of period)

12,671,000

12,109,000

11,763,000

11,971,000

11,514,000

Funded accounts (end of period)

13,292,000

12,671,000

11,876,000

13,292,000

11,876,000

Percentage change during period

5%

5%

1%

11%

3%

  Client assets (beginning of period, in billions)

$1,231.8

$1,430.2

$1,297.1

$1,327.7

$1,297.5

Client assets (end of period, in billions)

$1,461.0

$1,231.8

$1,306.6

$1,461.0

$1,306.6

Percentage change during period

19%

(14%)

1%

10%

1%

  Net Interest Revenue: Segregated cash: Average balance (in billions)

$19.2

$9.3

$5.7

$12.3

$4.8

Average annualized yield

0.25%

1.22%

2.37%

0.85%

2.25%

Interest revenue (in millions)

$12

$29

$34

$80

$82

  Client margin balances: Average balance (in billions)

$18.3

$20.4

$20.6

$19.7

$20.7

Average annualized yield

3.88%

4.18%

5.19%

4.15%

5.19%

Interest revenue (in millions)

$179

$216

$271

$623

$816

  Securities borrowing/lending: Average securities borrowing balance (in billions)

$0.9

$0.7

$1.3

$1.1

$0.9

Average securities lending balance (in billions)

$2.3

$2.5

$3.0

$2.5

$2.7

Net interest revenue - securities borrowing/lending (in millions)

$100

$67

$54

$243

$158

  Other cash and interest-earning investments: Average balance (in billions)

$7.0

$6.4

$5.0

$6.2

$4.8

Average annualized yield

0.75%

1.31%

2.03%

1.19%

1.97%

Interest revenue - net (in millions)

$13

$21

$26

$56

$71

  Client credit balances: Average balance (in billions)

$31.0

$23.9

$19.0

$25.2

$19.2

Average annualized cost

0.01%

0.02%

0.05%

0.04%

0.05%

Interest expense (in millions)

($1)

($1)

($2)

($8)

($7)

  Average interest-earning assets (in billions)

$45.4

$36.8

$32.6

$39.3

$31.2

Average annualized yield

2.65%

3.56%

4.65%

3.32%

4.73%

Net interest revenue (in millions)

$303

$332

$383

$994

$1,120

  Investment Product Fee Revenue: Fee-based investment balances: Average balance (in billions)

$164.8

$176.8

$290.6

$173.7

$275.9

Average annualized yield

0.31%

0.32%

0.21%

0.32%

0.21%

Investment product fee revenue (in millions)

$128

$144

$151

$418

$431

  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, except per share amounts (Unaudited)   Quarter Ended Nine Months Ended June 30, 2020 Mar. 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Non-GAAP Net Income and Non-GAAP Diluted EPS (1) Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS   Net income and diluted EPS - (GAAP)

$

569

 

$

1.05

 

$

446

 

$

0.82

 

$

555

 

$

1.00

 

$

1,393

 

$

2.57

 

$

1,658

 

$

2.96

 

Non-GAAP adjustments: Amortization of acquired intangible assets

 

29

 

 

0.05

 

 

30

 

 

0.06

 

 

31

 

 

0.06

 

 

90

 

 

0.17

 

 

93

 

 

0.17

 

Income tax effect of above adjustments

 

(7

)

 

(0.01

)

 

(8

)

 

(0.02

)

 

(8

)

 

(0.02

)

 

(23

)

 

(0.05

)

 

(24

)

 

(0.05

)

Non-GAAP net income and non-GAAP diluted EPS

$

591

 

$

1.09

 

$

468

 

$

0.86

 

$

578

 

$

1.04

 

$

1,460

 

$

2.69

 

$

1,727

 

$

3.08

 

    Quarter Ended Nine Months Ended June 30, 2020 Mar. 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019

$

 

% of Net Rev.

 

$

 

% of Net Rev.

 

$

 

% of Net Rev.

 

$

 

% of Net Rev.

 

$

 

% of Net Rev.

EBITDA (2) Net income - (GAAP)

$

569

 

 

35.9

%

$

446

 

 

30.1

%

$

555

 

 

37.2

%

$

1,393

 

 

32.0

%

$

1,658

 

 

37.2

%

Add: Depreciation and amortization

 

43

 

 

2.7

%

 

43

 

 

2.9

%

 

38

 

 

2.5

%

 

127

 

 

2.9

%

 

109

 

 

2.4

%

Amortization of acquired intangible assets

 

29

 

 

1.8

%

 

30

 

 

2.0

%

 

31

 

 

2.1

%

 

90

 

 

2.1

%

 

93

 

 

2.1

%

Interest on borrowings

 

25

 

 

1.6

%

 

31

 

 

2.1

%

 

37

 

 

2.5

%

 

88

 

 

2.0

%

 

107

 

 

2.4

%

Provision for income taxes

 

184

 

 

11.6

%

 

153

 

 

10.3

%

 

188

 

 

12.6

%

 

450

 

 

10.3

%

 

530

 

 

11.9

%

EBITDA - (non-GAAP)

$

850

 

 

53.6

%

$

703

 

 

47.5

%

$

849

 

 

56.9

%

$

2,148

 

 

49.3

%

$

2,497

 

 

56.0

%

    As of June 30, Mar. 31, Dec. 31, Sept. 30, June 30,

2020

 

2020

 

2019

 

2019

 

2019

Liquid Assets (3) Cash and cash equivalents - (GAAP)

$

2,577

 

$

3,729

 

$

2,551

 

$

2,852

 

$

2,953

 

Less: non-corporate cash and cash equivalents

 

(1,857

)

 

(2,019

)

 

(2,257

)

 

(2,478

)

 

(2,004

)

Corporate cash and cash equivalents

 

720

 

 

1,710

 

 

294

 

 

374

 

 

949

 

Corporate investments

 

1,798

 

 

574

 

 

1,636

 

 

1,668

 

 

1,129

 

Excess regulatory net capital over management targets

 

1,053

 

 

1,432

 

 

891

 

 

859

 

 

689

 

Liquid assets - (non-GAAP)

$

3,571

 

$

3,716

 

$

2,821

 

$

2,901

 

$

2,767

 

Note: The term "GAAP" in the following explanation refers to generally accepted accounting principles in the United States.

(1)

Non-GAAP net income and non-GAAP diluted earnings per share (EPS) are non-GAAP financial measures as defined by SEC Regulation G. We define non-GAAP net income as net income adjusted to remove the after-tax effect of: (1) amortization of acquired intangible assets and (2) acquisition-related expenses associated with the Company's business acquisitions. We consider non-GAAP net income and non-GAAP diluted EPS as important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook and may be useful in evaluating the operating performance of the business and facilitating a meaningful comparison of our results in the current period to those in prior and future periods. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of our underlying business performance. Acquisition-related expenses are excluded as these costs are not representative of the costs of running the Company’s on-going business. Non-GAAP net income and non-GAAP diluted EPS should be considered in addition to, rather than as a substitute for, GAAP net income and GAAP diluted EPS.

(2)

EBITDA (earnings before interest, taxes, depreciation and amortization) is considered a non-GAAP financial measure as defined by SEC Regulation G. We consider EBITDA to be 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, GAAP pre-tax income, net income and cash flows from operating activities.

(3)

Liquid assets is considered a non-GAAP financial measure as defined by SEC Regulation G. Liquid assets represents available capital, including any capital from our regulated subsidiaries in excess of established management operational targets. We include the excess capital of our regulated subsidiaries in the calculation of liquid assets, rather than simply including regulated subsidiaries' cash and cash equivalents, because capital requirements may limit the amount of cash available for dividend from the regulated subsidiaries to the parent company. Excess capital, as defined below, is generally available for dividend from the regulated subsidiaries to the parent company. Liquid assets should be considered as a supplemental measure of liquidity, rather than as a substitute for GAAP cash and cash equivalents. Liquid assets may be utilized for general corporate purposes and is defined as the sum of (1) corporate cash and cash equivalents, (2) corporate investments, less securities sold under agreements to repurchase and (3) our regulated subsidiaries' net capital in excess of minimum operational targets established by management. Corporate cash and cash equivalents includes cash and cash equivalents from our investment advisory subsidiaries. Liquid assets is based on more conservative measures of net capital than regulatory requirements because we generally manage to higher levels of net capital at our regulated subsidiaries than the regulatory thresholds require.

 

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Becky Niiya Director, Corporate Communications (402) 574-6652 rebecca.niiya@tdameritrade.com

Jeff Goeser Managing Director, Investor Relations (402) 597-8464 jeffrey.goeser@tdameritrade.com