Quarterly results included the following:

• Record net revenues of $277 million
• Net income of $86 million, or $0.21 per diluted share, $0.22 per diluted share excluding unrealized losses on the Company's prepaid variable forward contracts on its investment in Knight Capital Group, Inc.
• Pre-tax income of $140 million, or 51 percent of net revenues
• Operating margin of $178 million, or 64 percent
• EBITDA of $148 million, or 53 percent
• Average client trades per day of approximately 156,000
• Annualized return on equity (ROE) of 22 percent for the quarter
• Client assets of approximately $85.5 billion, including $13.6 billion of client cash and money market funds
• Liquid assets of $490 million; cash and cash equivalents of $188 million
• 61,000 new accounts at an average cost per account of $435; 39,000 closed accounts; 3,739,000 Total Accounts; 1,722,000 Qualified Accounts
• Average client margin balances of approximately $3.7 billion. On Dec. 31, 2005, client margin balances were approximately $3.9 billion.

"Ameritrade has again delivered strong results, illustrated by record net revenues and excellent pre-tax margins," said Joe Moglia, chief executive officer. "We would have had a record quarter if you adjusted the days to our last quarter and excluded the impact of Knight. Moving forward, we expect to continue leveraging our low-cost platform and producing superior financial returns for TD Ameritrade shareholders."

Knight Investment Liquidated

Unrealized losses on the Company's previously disclosed Knight Capital Group, Inc. prepaid variable forward contracts decreased earnings by approximately $12 million, or $0.01 per share, for the quarter ended Dec. 31, 2005. The Company liquidated its position in Knight and the prepaid variable forward contracts on Jan. 17-20, 2006, resulting in a one-time net gain of approximately $79 million that will be recorded in the quarter ending March 31, 2006.



Separately, Ameritrade Holding Corporation (Nasdaq:AMTD) has completed the acquisition of TD Waterhouse Group, Inc., creating the combined company, TD Ameritrade Holding Corporation.

"TD Ameritrade gives us financial strength, accelerates our growth strategy and enhances our position as a leading industry player," said Joe Moglia, chief executive officer. "Shareholders are rewarded with a $6 dividend, one of the largest in U.S. history. Clients win too with a combination that creates a full array of outstanding offerings, from a powerful online experience to branches and a large independent advisor network."

Synergies Increased and Outlook Updated

"We have increased our original revenue expectations by $100 million so our total synergies are now expected to be $678 million," Moglia continued.

The Company has reaffirmed its expectation that the acquisition will be accretive within twelve months and expects to realize approximately $678 million of annualized gross synergies (1), including cost savings and increased revenue opportunities, within six quarters.

As a result of the deal's closing, TD Ameritrade has provided new earnings per share (EPS) guidance for fiscal 2006. Forecasted EPS are as follows: March quarter: $0.22 to $0.28, June quarter: $0.20 to $0.26 and September quarter: $0.19 to $0.25. Full fiscal 2006 and 2007 guidance for TD Ameritrade is $0.82 to $1.00 and $1.03 to $1.27, respectively. An updated Outlook Statement is available at the Company's corporate Web site located at www.amtd.com.

"This guidance is not only higher than Ameritrade stand-alone, but TD Ameritrade will have a more diversified, less volatile revenue stream," Moglia added.

Financing Oversubscribed

The Company has successfully placed a $2.2 billion credit facility in the bank markets. The structure of the credit facility includes $1.65 billion in Term B loans, $250 million in Term A loans and revolving loans of $300 million. The entire facility is priced at Libor +150 basis points (bps). Pricing on the Term B loans was reduced 25 bps, due to subscriptions being double the amount of financing proposed.Download the document now 40.1 kb (Adobe Acrobat Document)