earnings results: september quarter and fiscal...

TD Ameritrade Holding Corporation (Nasdaq: AMTD). Brokerage services provided by TD Ameritrade, Inc., member FINRA/SIPC, and TD Ameritrade Clearing, Inc., member FINRA/SIPC, subsidiaries of TD Ameritrade Holding Corp. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2016 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.

Earnings Results: September Quarter and Fiscal 2016

1

October 24, 2016

Tim Hockey, President and CEO Steve Boyle, EVP and CFO

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.

2

Safe Harbor

*Certain totals may not foot due to rounding. **Changes based on rounding numbers to the nearest $ millions. ***See Appendix for footnotes’ descriptions.

September Quarter 2016 Key Highlights

3

Record client assets of $774B, up 16% year over year

Net new client assets(1) of $15.1B, 8% annualized growth rate(2)

Record fee-based investment balances(3) of $170B, up 12% year over year

Record interest rate sensitive assets(4) of $119B, up 10% year over year

Net revenues of $829M, slightly down year over year

Average client trades per day of 444K, down 7% year over year

Diluted earnings per share of $0.35, down 13% year over year

September Quarter 2016 Summary of Notable Items in the Quarter

4

Notable operating expense items of approximately $46M, impacting earnings per share by $0.05 unfavorably Terminated various projects and contracts Better positioned to implement strategic plans

Notable tax items of approximately $17M, impacting earnings per share by $0.03 favorably Incentives on software development Impacts go-forward tax rate assumptions

Fiscal 2016 Key Highlights

5

Average client trades per day of 463K, up slightly year over year Net new client assets(1) of $60B, 9% annual growth rate(2)

Client assets of $774B, up 16% year over year Fee-based investment balances(3) of $170B, up 12% year over year Interest rate sensitive assets(4) of $119B, up 10% year over year Net revenues of $3.3B, up 2% year over year Record diluted earnings per share of $1.58, up 6% year over year Capital Deployment – returned ~80% of net income excluding amortization

of intangible assets(5) through dividends and share repurchases Paid $0.68 per share in cash dividends ($362M) Repurchased 12.0M shares ($352M) FY17 – increasing quarterly cash dividend by 6% to $0.18/share

Funded account growth and volatility are key drivers

360 374

427

462 463

36%

39% 41%

43% 44%

20%

25%

30%

35%

40%

45%

300

350

400

450

500

550

FY12 FY13 FY14 FY15 FY16 FY17

Avg. Client Trades Per Day (K)

Trading

6

% Derivatives(7) of Total Trades per Day Outlook Range (K)(6)

505

475

Fiscal 2016 Average client trades per

day of 463K Record derivatives - 44%

of DARTS(8)

Record mobile - 19% of DARTS

Sep Q – 1 day with intraday volatility at least 2.0%

Fiscal 2017 Commissions per trade(9)

of $11.50-$11.75(6)

October month-to-date 431K

Growth Rate(2)

Asset Gathering Focused on increasing growth rates

7

Net New Client Assets ($B)(1)

$55 $41

$50 $53

$63 $60

$0

$20

$40

$60

$80

$100


$85

7-11%(6) 10% 10% 10% 11% 9%

Outlook Range ($B)(6)

Fiscal 2016 $60B NNA, 9% growth rate Retail/institutional split

approximately 30/70 Both retail and institutional

solid results and strong client satisfaction scores

Fiscal 2017 Evolution of LTI continuum

$196

$250

$309 $334

$374

$100

$150

$200

$250

$300

$350

$400

$450


Investment Product Fees(10) Continue to Build-out

8

Outlook Range ($M)(6) Investment Product Fees ($M)

CAGR: 18%

Avg. Bal. ($B) $86 $113 $137 $156 $161 $178-$186(6)

$430

$405

Fiscal 2016 Record revenue, up 12% Amerivest and

AdvisorDirect continue to drive revenue growth

Fiscal 2017 Continued focused on

guidance products growth

DOL – New Fiduciary Rule Update

9

Business model well-positioned to adapt to new rules IRA assets represent ~30% of client assets

− Retail - predominantly self-directed − Institutional - operating under fiduciary standard

Working through execution phase to prepare for April 2017

Strategies developed for IRA rollovers and Advisory products

Developing marketing approach

Evolution of LTI guidance model will position us well

Financial impact to FY17 won’t be significant

Strategies developed to comply and capitalize on the potential disruption

Sep Q '16 Sep Q '15 Variance % Variance FY16 FY15 Variance % Variance

1 $336 $364 ($28) (8%) Transaction-Based Revenues $1,372 $1,401 ($29) (2%)2 $479 $455 $24 5% Asset-Based Revenues $1,895 $1,795 $100 6%3 $14 $12 $2 17% Other Revenues $60 $51 $9 18%4 $829 $831 ($2) 0% Net Revenues $3,327 $3,247 $80 2%

5 $487 $422 $65 15% Operating Expenses, excl. Advertising(5) $1,749 $1,674 $75 4%6 $59 $49 $10 20% Advertising $260 $248 $12 5%7 $546 $471 $75 16% Total Operating Expenses $2,009 $1,922 $87 5%

8 $283 $360 ($77) (21%) Operating Income $1,318 $1,325 ($7) (1%)

9 $13 $13 $0 0% Other Expense $53 $37 $16 43%

10 $270 $347 ($77) (22%) Pre-Tax Income $1,265 $1,288 ($23) (2%)11 33% 42% (9%) Pre-Tax Margin 38% 40% (2%)

12 $185 $216 ($31) (14%) Net Income $842 $813 $29 4%13 $0.35 $0.40 ($0.05) (13%) EPS $1.58 $1.49 $0.09 6%14 15% 17% (2%) ROE(11) 17% 17% 0%

Cash-generation statistics:15 $197 $230 ($33) (14%) Net Income excl. Amortization of Intangibles(5) $895 $868 $27 3%16 $0.37 $0.42 ($0.05) (12%) EPS excl. Amortization of Intangibles(5) $1.68 $1.59 $0.09 6%17 $327 $405 ($78) (19%) EBITDA(5) $1,496 $1,512 ($16) (1%)18 39% 49% (10%) EBITDA/Net Revenues 45% 47% (2%)

Financial Overview

10

(Dollars in millions, except per share amounts) Quarter Comparison Full Year Comparison

Balance growth is key

$59

$68 $73 $76

$84 1.37%

1.17% 1.11%

1.09% 1.09%

0.95%

0.80%

1.00%

1.20%

1.40%

$40

$50

$60

$70

$80

$90


IDA(12) Net Revenue

11

Outlook Range ($M)(6) IDA Net Revenue ($M)

Outlook Range ($B) Avg. IDA Balance ($B) Net Yield Outlook Range

$870 $828 $804 $820 $839

$926

$500

$600

$700

$800

$900

$1,000


$955

$90

$94

Fiscal 2016 Record average balances Stable net yields Record client net buying

activity 8 bps decline from Jun Q to

Sep Q including 4 bps due to higher balances and 3 bps due to increased FDIC insurance

Fiscal 2017 Balance growth expected to

compress yields

1.00%

Margin and stock lending the major drivers

$15 $16

$19 $20

$23

2.97%

2.92% 3.09% 3.03%

2.59% 2.50%

2.30%

2.50%

2.70%

2.90%

3.10%

$10

$14

$18

$22

$26


Net Interest Revenue

12

Outlook Range ($M)(6) Net Interest Revenue ($M)

Outlook Range ($B) Avg. Net Interest Balances($B) Net Yield Outlook Range

$585

$450 $469

$581 $622

$595

$300

$400

$500

$600

$700


$710

$23

$25

Fiscal 2016 Record average balances Average margin balances

of $11.8B, down 2% year over year

Fiscal 2017 Balances expected to be

flat-to-up Yield expected to stabilize

2.80%

$63 $73 $75 $80

$90

$15 $17 $19

$22

$25

$5

$5 $6

$6

$4

$0

$20

$40

$60

$80

$100

$120

Sep '12 Sep '13 Sep '14 Sep '15 Sep '16

Money Market Mutual Funds

Interest Earning Assets

IDA

Interest Rate Sensitive Assets(4)

13

Ending Balances ($B)

Immediate benefit with Fed Funds increases

Benefit over time with Yield Curve due to re-pricing of laddered investment portfolio

Float $29B

$100 $108

$96

$119 Balance of $119B, up 10% year over year Ending client cash as % of

client assets 14.6%

Each of the next two 25 basis points Fed rate increases expected to add $0.08-$0.10 EPS annually(14)

(12)

Fixed$61B

$83

(13)

Float $21B

Fixed$59B

Float $18B

Float $16B

Float $5B

Fixed$57B

Fixed$57B

Fixed$58B

Good Stewards of Shareholder Capital

14

Strong Cash Generation and Strong Financial Position

(3)

$0.6 $0.7

$0.8

$0.9 $0.9

$0.3

$0.5

$0.7 $0.7 $0.7

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

FY12 FY13 FY14 FY15 FY16

Net Income excl. Amort. of Intangibles ($B)

Returned/Deployed ($B)

51% 79% 64% 87%

(15)

S&P “A”, Moody’s “A3” Fiscal 2016

Paid $0.68 per share in cash dividends ($362M)

Repurchased 12.0M shares ($352M)

Fiscal 2017 Targeting 40%(6) of net income

excluding amortization of intangible assets • Recurring dividend ~ 40% • No share repurchases

Increased quarterly cash dividend by 6% to $0.18/share

80%

(5)

Fiscal 2017 Outlook Range(6)

Financial Macro Assumptions Key Metrics

High

$1.80 EPS 10% Market Growth NNA(1) $85B / 11%(2)

42% Pre-Tax Margin

Increasing Fed Funds Increasing Yield Curve

TPD 505K

Operating expense growth of 3% NIM(16) 1.38% / IDA(12) 1.00%

Low

$1.50 EPS 0% Market Growth NNA $55B / 7%

38% Pre-Tax Margin

No change in Fed Funds, flattening Yield Curve TPD 475K

Operating expense growth of (1%)

NIM 1.27% / IDA 0.95%

15

Conclusion

16

Plans for fiscal 2017 – scale and speed are key Execution: focused on increased nimbleness, agility and throughput Investments: technology, sales people Priority: organic growth in trades, client assets Key initiative: building out solutions for investment guidance/advice Key opportunity: DOL Fiduciary Rule implications for the industry

FY17 outlook range(6) of $1.50-$1.80

Closing out a good fiscal year, core strategy does not change

Appendix

17

Sensitivity

3K average client trades per day = $0.01

$3.8B fee-based assets(17) = $0.01

$0.6B spread-based assets(18) = $0.01

+25bps interest rate move = +$0.08-$0.10(14)

Estimated annual impact to EPS

18

382

414

492

401 403

457

477

434

479

438

509

462

444

350

375

400

425

450

475

500

525

Sep Q'13

Dec Q'13

Mar Q'14

Jun Q'14

Sep Q'14

Dec Q'14

Mar Q'15

Jun Q'15

Sep Q'15

Dec Q'15

Mar Q'16

Jun Q'16

Sep Q'16

Trades per Day

Thirteen quarter average 446K

13 Qtr. Avg. Trades per Day

446

FY17 Outlook Range(6): Avg. Trades Per Day (K): 475-505

Avg. Trades Per Day (K)

19

$72.5 $74.9 $75.8 $75.0

$76.8

$80.9 $83.6

$85.8

$90.2 $91.6 $91.8 $91.7 $93.7

$95.7 $95.1 $95.1

$99.3 $102.6

$106.0 $106.6

$110.5

18.1%

18.8%

17.6% 16.9% 16.8%

17.1%

16.7% 16.4% 16.7% 15.9%

15.2% 14.5% 14.3% 14.4%

13.9% 13.5% 14.4%

14.8% 15.4%

14.7% 14.6%

10%

15%

20%

25%

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

$115

Sep Q'11

Dec Q'11

Mar Q'12

Jun Q'12

Sep Q'12

Dec Q'12

Mar Q'13

Jun Q'13

Sep Q'13

Dec Q'13

Mar Q'14

Jun Q'14

Sep Q'14

Dec Q'14

Mar Q'15

Jun Q'15

Sep Q'15

Dec Q'15

Mar Q'16

Jun Q'16

Sep Q'16

Cash as % of Client Assets Range 13-18% Based on Current Mix

Avg. Client Cash ($B) Avg. Client Cash as % of Avg. Client Assets

20

NIM(16) compression likely to continue due to mix

$74 $84

$91 $96

$106

1.69%

1.50% 1.51% 1.50%

1.41% 1.27% 1.25%

1.50%

1.75%

2.00%

$50

$70

$90

$110

$130


Spread Based Revenue

21

Outlook Range ($M)(6) Spread-Based Revenue ($M)

$1,278 $1,273

$1,401 $1,461

$1,521

$750

$1,000

$1,250

$1,500

$1,750


$1,665

$1,455

Outlook Range ($B) Spread-Based Balance ($B)(18)

NIM Outlook Range NIM

$113

$119

1.38%

Fiscal 2016 Record revenue and

average balances

Fiscal 2017 Stable-to-declining NIM Balance growth

continuing from record levels

0.13 0.35 0.37 0.41

0.50

0.61 0.66 0.70

0.41 0.41 0.41 0.44

0.40

0.60

0.74 0.86

1.11

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Sep Q'15

Dec Q'15

Mar Q'16

Jun Q'16

Sep Q'16

Dec Q'16

Mar Q'17

Jun Q'17

Sep Q'17

Forwards GI Low GI Base

Fed Funds

0.75

1.18

0.84 0.73

1.07 1.11 1.15 1.19 1.14

1.30 1.43 1.51

1.01

1.26 1.40

1.59

1.77

0.50

0.70

0.90

1.10

1.30

1.50

1.70

1.90

Sep Q'15

Dec Q'15

Mar Q'16

Jun Q'16

Sep Q'16

Dec Q'16

Mar Q'17

Jun Q'17

Sep Q'17


Libor/Swap Yield Curve(19)

Nine quarter trend

22

2 Year Swap

5 Year Swap 7 Year Swap

1.38

1.74

1.17

0.98

1.30 1.34 1.38

1.42

1.21 1.19 1.27

1.50

1.18

1.46

1.61

1.82

2.02

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2.20

Sep Q'15

Dec Q'15

Mar Q'16

Jun Q'16

Sep Q'16

Dec Q'16

Mar Q'17

Jun Q'17

Sep Q'17


1.70

1.95

1.39

1.15

1.45 1.49 1.52 1.56

1.27 1.26 1.33

1.52 1.30

1.57

1.73

1.94

2.12

0.90

1.10

1.30

1.50

1.70

1.90

2.10

2.30

Sep Q'15

Dec Q'15

Mar Q'16

Jun Q'16

Sep Q'16

Dec Q'16

Mar Q'17

Jun Q'17

Sep Q'17


Important Information

23

1. Net new assets (NNA) consist of total client asset inflows, less total client asset outflows, excluding activity from business combinations. Client asset inflows include interest and dividend payments and exclude changes in client assets due to market fluctuations. Net new assets are measured based on the market value of the assets as of the date of the inflows and outflows.

2. NNA growth rate is annualized net new assets as a % of client assets as of the beginning of the period.

3. Market fee-based investment balances plus money market mutual funds. Ending balances as of Sep. 30, 2016.

4. Interest rate sensitive assets consist of spread-based assets and money market mutual funds. Ending balances as of Sep. 30, 2016.

5. See attached reconciliation of non-GAAP financial measures.

6. FY17 forecast per 10/24/16 outlook statement.

7. Derivatives include options, futures and foreign exchange (Forex) trades per day.

8. Total revenue-generating client trades divided by the number of trading days in the period. This metric is also known as average client trades per day.

9. Average commissions and transaction fees per trade.

10. Market fee-based plus money market mutual fund revenue.

11. Return on average stockholders’ equity (annualized).

12. Client cash is held in FDIC-insured deposit accounts (IDA) at TD Bank, N.A. and TD Bank USA, N.A. TD Ameritrade, TD Bank, N.A., and TD Bank USA, N.A. are affiliated through The Toronto-Dominion Bank.

13. Ending balances as of Sep. 30, 2016 consisted of $11.8B in client margin balances, $8.7B in segregated cash, and $4.1B in other balances.

Important Information

24

14. Impact on spread-based and money market mutual fund revenues in the next twelve months following an interest rate increase. Assumes fed funds increase results in a parallel shift to the LIBOR/SWAP yield curve. Range impacted by client sharing assumptions. Over 90% of the benefit in year one is attributable to short-term rates. EPS range corresponds to $65-$80M of revenue. Model updated as of 10/24/16.

15. Cash used for share repurchases and dividends divided by net income excluding amortization of intangible assets. Excludes shares repurchased for payroll taxes on equity award distributions.

16. NIM (net interest margin) is a measure of the net yield on our average spread-based assets.

17. Client assets invested in money market mutual funds, other mutual funds and Company programs such as AdvisorDirect and Amerivest, on which we earn fee revenues.

18. Client and brokerage-related asset balances, including client margin balances, segregated cash, insured deposit account balances, deposits paid on securities borrowing and other cash and interest-earning investment balances

19. Source: Bloomberg end of period rates.

Reconciliation of Non-GAAP Financial Measures

25

26

2016 2015 2016 2015 2014 2013 2012

Net income 185$ 216$ 842$ 813$ 787$ 675$ 586$ Adjustments:

Amortization of acquired intangible assets 20 23 86 90 90 91 92 Income tax effect of above adjustment (8) (9) (33) (35) (35) (35) (35)

Net income excluding amortization of intangible assets 197$ 230$ 895$ 868$ 842$ 731$ 643$

Diluted earnings per share 0.35$ 0.40$ 1.58$ 1.49$ 1.42$ 1.22$ 1.06$ Adjustments on a per share basis:

Amortization of acquired intangible assets 0.04 0.04 0.16 0.16 0.16 0.16 0.17 Income tax effect of above adjustment (0.02) (0.02) (0.06) (0.06) (0.06) (0.06) (0.07)

EPS excluding amortization of intangible assets 0.37$ 0.42$ 1.68$ 1.59$ 1.52$ 1.32$ 1.16$

$ % of Net Rev. $ % of Net Rev. $ % of Net Rev. $ % of Net Rev.

Net income 185$ 22.3% 216$ 26.0% 842$ 25.3% 813$ 25.0%Add:

Depreciation and amortization 24 2.9% 22 2.6% 92 2.8% 91 2.8%Amortization of acquired intangible assets 20 2.4% 23 2.8% 86 2.6% 90 2.8%Interest on borrowings 13 1.6% 13 1.6% 53 1.6% 43 1.3%Provision for income taxes 85 10.3% 131 15.8% 423 12.7% 475 14.6%

EBITDA 327$ 39.4% 405$ 48.7% 1,496$ 45.0% 1,512$ 46.6%

2016 2015 2016 2015

Total operating expenses 546$ 471$ 2,009$ 1,922$ Less: Advertising (59) (49) (260) (248) Operating expenses excluding advertising 487$ 422$ 1,749$ 1,674$

September 30,

Operating Expenses Excluding Advertising (3)

20152015

EBITDA (2)

Quarter EndedSeptember 30,

Fiscal Year Ended

2016 2016

TD AMERITRADE HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Dollars in millions, except per share amounts(Unaudited)

Net Income Excluding Amortization of Intangible Assets (1)

Quarter EndedSeptember 30,

September 30, September 30,

September 30,

Quarter Ended Fiscal Year Ended

Fiscal Year Ended

EPS Excluding Amortization of Intangible Assets (1)

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

(1)

(2)

(3)

Net income and earnings per share (EPS) excluding amortization of intangible assets are non-GAAP financial measures as defined by SEC Regulation G. We define net income excluding amortization of intangible assets as net income adjusted to remove the after-tax effect of amortization of acquired intangible assets. We consider net income and EPS excluding amortization of intangible assets important measures of our financial performance. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of underlying business performance. Net income and EPS excluding amortization of intangible assets should be considered in addition to, rather than as a substitute for, GAAP net income and EPS.

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.

Operating expenses excluding advertising is considered a non-GAAP financial measure as defined by SEC Regulation G. Operating expenses excluding advertising consists of total operating expenses, adjusted to remove advertising expense. We consider operating expenses excluding advertising an important measure of the financial performance of our ongoing business. Advertising spending is excluded because it is largely at the discretion of the Company, varies significantly from period to period based on market conditions and generally relates to the acquisition of future revenues through new accounts rather than current revenues from existing accounts. Operating expenses excluding advertising should be considered in addition to, rather than as a substitute for, total operating expenses.

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