2500000.0200.08P2DP1DP1M0.00250.0003P5YP5YP3Yfalse--09-30FY20190001173431000.720.841.200.010.01100000000010000000006700000006700000005630000005440000000.0560.03300000000.010.0110000000010000000000P7YP3Y00P4YP1YP3YP1YP3Y000107000000126000000 0001173431 2018-10-01 2019-09-30 0001173431 2019-03-29 0001173431 2019-11-01 0001173431 2019-09-30 0001173431 2018-09-30 0001173431 2017-10-01 2018-09-30 0001173431 2016-10-01 2017-09-30 0001173431 us-gaap:AdditionalPaidInCapitalMember 2017-10-01 2018-09-30 0001173431 amtd:DeferredCompensationMember 2016-09-30 0001173431 us-gaap:AdditionalPaidInCapitalMember 2016-09-30 0001173431 us-gaap:CommonStockMember 2016-10-01 2017-09-30 0001173431 us-gaap:CommonStockMember 2017-10-01 2018-09-30 0001173431 us-gaap:AdditionalPaidInCapitalMember 2016-10-01 2017-09-30 0001173431 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0001173431 us-gaap:RetainedEarningsMember 2016-09-30 0001173431 amtd:DeferredCompensationMember 2016-10-01 2017-09-30 0001173431 us-gaap:RetainedEarningsMember 2018-09-30 0001173431 amtd:DeferredCompensationMember 2017-10-01 2018-09-30 0001173431 us-gaap:TreasuryStockMember 2016-09-30 0001173431 us-gaap:CommonStockMember 2018-09-30 0001173431 us-gaap:TreasuryStockMember 2017-10-01 2018-09-30 0001173431 us-gaap:RetainedEarningsMember 2016-10-01 2017-09-30 0001173431 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-09-30 0001173431 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0001173431 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-10-01 2017-09-30 0001173431 us-gaap:TreasuryStockMember 2018-09-30 0001173431 us-gaap:CommonStockMember 2017-09-30 0001173431 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-10-01 2018-09-30 0001173431 us-gaap:CommonStockMember 2016-09-30 0001173431 amtd:DeferredCompensationMember 2017-09-30 0001173431 us-gaap:RetainedEarningsMember 2017-09-30 0001173431 2017-09-30 0001173431 us-gaap:RetainedEarningsMember 2017-10-01 2018-09-30 0001173431 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-09-30 0001173431 us-gaap:TreasuryStockMember 2016-10-01 2017-09-30 0001173431 amtd:DeferredCompensationMember 2018-09-30 0001173431 us-gaap:TreasuryStockMember 2017-09-30 0001173431 us-gaap:AdditionalPaidInCapitalMember 2017-09-30 0001173431 2016-09-30 0001173431 us-gaap:TreasuryStockMember 2019-09-30 0001173431 us-gaap:TreasuryStockMember 2018-10-01 2019-09-30 0001173431 us-gaap:RetainedEarningsMember 2019-09-30 0001173431 us-gaap:CommonStockMember 2019-09-30 0001173431 us-gaap:CommonStockMember 2018-10-01 2019-09-30 0001173431 us-gaap:AdditionalPaidInCapitalMember 2018-10-01 2019-09-30 0001173431 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001173431 amtd:DeferredCompensationMember 2018-10-01 2019-09-30 0001173431 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001173431 us-gaap:RetainedEarningsMember 2018-10-01 2019-09-30 0001173431 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-10-01 2019-09-30 0001173431 amtd:DeferredCompensationMember 2019-09-30 0001173431 amtd:LongLivedAssetsHeldforsaleMember 2018-09-30 0001173431 us-gaap:AccountingStandardsUpdate201618Member 2016-10-01 2017-09-30 0001173431 srt:MaximumMember us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2018-10-01 2019-09-30 0001173431 us-gaap:AccountingStandardsUpdate201618Member 2017-10-01 2018-09-30 0001173431 srt:MaximumMember 2018-10-01 2019-09-30 0001173431 srt:ScenarioForecastMember us-gaap:AccountingStandardsUpdate201602Member us-gaap:SubsequentEventMember 2019-10-01 0001173431 srt:MinimumMember 2018-10-01 2019-09-30 0001173431 srt:MaximumMember amtd:BuildingAndBuildingComponentsMember 2018-10-01 2019-09-30 0001173431 amtd:LongLivedAssetsHeldforsaleMember 2019-09-30 0001173431 2019-06-28 2019-06-28 0001173431 srt:MinimumMember amtd:BuildingAndBuildingComponentsMember 2018-10-01 2019-09-30 0001173431 srt:MinimumMember us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2018-10-01 2019-09-30 0001173431 amtd:RodgerO.RineyFamilyVotingTrustUAD12312012Member amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:CommonStockMember 2017-09-18 2017-09-18 0001173431 amtd:TheTorontoDominionBankMember amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:CommonStockMember 2017-09-18 0001173431 amtd:TheTorontoDominionBankMember amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:CommonStockMember 2017-09-18 2017-09-18 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2017-09-18 2017-09-18 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2017-09-18 0001173431 amtd:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2017-04-27 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2016-10-01 2017-09-30 0001173431 amtd:BrokerDealerSubsidiariesMember 2019-09-30 0001173431 amtd:InvestmentAdvisorySubsidiariesMember 2019-09-30 0001173431 amtd:TrustCompanySubsidiaryMember 2018-09-30 0001173431 amtd:TrustCompanySubsidiaryMember 2019-09-30 0001173431 amtd:BrokerDealerSubsidiariesMember 2018-09-30 0001173431 amtd:FuturesCommissionMerchantandForexDealerMemberSubsidiaryMember 2019-09-30 0001173431 amtd:FuturesCommissionMerchantandForexDealerMemberSubsidiaryMember 2018-09-30 0001173431 us-gaap:CorporateMember 2019-09-30 0001173431 us-gaap:CorporateMember 2018-09-30 0001173431 amtd:InvestmentAdvisorySubsidiariesMember 2018-09-30 0001173431 amtd:USGovernmentAgenciesDebtSecuritiesMortgagebackedSecuritiesMember 2019-09-30 0001173431 us-gaap:USGovernmentDebtSecuritiesMember 2018-09-30 0001173431 us-gaap:USGovernmentDebtSecuritiesMember 2019-09-30 0001173431 amtd:UsGovernmentDebtSecuritiesOnDepositWithFuturesCommissionMerchantMember 2018-09-30 0001173431 amtd:UsGovernmentDebtSecuritiesOnDepositWithFuturesCommissionMerchantMember 2019-09-30 0001173431 amtd:ReverseRepurchaseAgreementsMember 2018-09-30 0001173431 us-gaap:DemandDepositsMember 2018-09-30 0001173431 amtd:CashOnDepositWithFuturesCommissionMerchantMember 2019-09-30 0001173431 amtd:CashOnDepositWithFuturesCommissionMerchantMember 2018-09-30 0001173431 amtd:USGovernmentAgenciesDebtSecuritiesMortgagebackedSecuritiesMember 2018-09-30 0001173431 amtd:ReverseRepurchaseAgreementsMember 2019-09-30 0001173431 us-gaap:DemandDepositsMember 2019-09-30 0001173431 us-gaap:USTreasurySecuritiesMember 2019-09-30 0001173431 us-gaap:USTreasurySecuritiesMember 2018-09-30 0001173431 us-gaap:LandMember 2019-09-30 0001173431 us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2018-09-30 0001173431 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2019-09-30 0001173431 us-gaap:LeaseholdImprovementsMember 2019-09-30 0001173431 amtd:BuildingAndBuildingComponentsMember 2019-09-30 0001173431 amtd:BuildingAndBuildingComponentsMember 2018-09-30 0001173431 us-gaap:LandMember 2018-09-30 0001173431 us-gaap:ComputerEquipmentMember 2019-09-30 0001173431 us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2019-09-30 0001173431 us-gaap:LeaseholdImprovementsMember 2018-09-30 0001173431 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2018-09-30 0001173431 us-gaap:ComputerEquipmentMember 2018-09-30 0001173431 us-gaap:TrademarksMember 2019-09-30 0001173431 us-gaap:TradeNamesMember 2018-09-30 0001173431 us-gaap:TradeNamesMember 2019-09-30 0001173431 us-gaap:TrademarksMember 2018-09-30 0001173431 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-09-30 0001173431 us-gaap:CustomerRelationshipsMember 2018-09-30 0001173431 us-gaap:TechnologyBasedIntangibleAssetsMember 2018-09-30 0001173431 us-gaap:CustomerRelationshipsMember 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ClearingAndExecutionCostsMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeCompensationandBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ClearingAndExecutionCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:CommunicationsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:OccupancyandEquipmentCostsMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:OtherNonoperatingIncomeExpenseMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:OccupancyandEquipmentCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:OtherOperatingIncomeExpenseMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:OtherOperatingIncomeExpenseMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ProfessionalServicesMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:OtherNonoperatingIncomeExpenseMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:OtherNonoperatingIncomeExpenseMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ProfessionalServicesMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ClearingAndExecutionCostsMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeCompensationandBenefitsMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeCompensationandBenefitsMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ProfessionalServicesMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:CommunicationsMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember us-gaap:OtherOperatingIncomeExpenseMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:CommunicationsMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-18 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:OccupancyandEquipmentCostsMember amtd:ContractTerminationandOtherCostsMember 2017-09-18 2019-09-30 0001173431 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2018-10-01 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2017-10-01 2018-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2018-10-01 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ContractTerminationandOtherCostsMember 2017-10-01 2018-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-10-01 2018-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2018-10-01 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2018-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2017-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember 2017-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ContractTerminationandOtherCostsMember 2018-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ContractTerminationandOtherCostsMember 2018-10-01 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ContractTerminationandOtherCostsMember 2019-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:ContractTerminationandOtherCostsMember 2017-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2018-09-30 0001173431 amtd:ScottradeFinancialServicesInc.AcquisitionMember amtd:EmployeeSeveranceandOtherTerminationBenefitsMember 2019-09-30 0001173431 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2017-10-01 2018-09-30 0001173431 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2016-10-01 2017-09-30 0001173431 amtd:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2018-09-30 0001173431 us-gaap:SeniorNotesMember 2018-09-30 0001173431 amtd:SeniorNotesDue2022Member us-gaap:SeniorNotesMember 2018-09-30 0001173431 amtd:SeniorNotesDue2019Member us-gaap:SeniorNotesMember 2018-09-30 0001173431 amtd:SeniorNotesDue2025Member us-gaap:SeniorNotesMember 2018-09-30 0001173431 us-gaap:SecuritiesSoldUnderAgreementsToRepurchaseMember 2018-09-30 0001173431 amtd:SeniorNotesDue2029Member us-gaap:SeniorNotesMember 2019-09-30 0001173431 amtd:SeniorNotesDue2024Member us-gaap:SeniorNotesMember 2019-09-30 0001173431 amtd:SeniorNotesDue2021Member us-gaap:SeniorNotesMember 2019-09-30 0001173431 amtd:SeniorNotesDue2025Member us-gaap:SeniorNotesMember 2019-09-30 0001173431 amtd:SeniorNotesDue2022Member us-gaap:SeniorNotesMember 2019-09-30 0001173431 amtd:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2019-09-30 0001173431 us-gaap:OtherAssetsMember amtd:PayVariableInterestRateSwapMember 2018-09-30 0001173431 us-gaap:AccountsPayableAndAccruedLiabilitiesMember amtd:PayVariableInterestRateSwapMember 2019-09-30 0001173431 us-gaap:OtherAssetsMember amtd:PayVariableInterestRateSwapMember 2019-09-30 0001173431 us-gaap:AccountsPayableAndAccruedLiabilitiesMember amtd:PayVariableInterestRateSwapMember 2018-09-30 0001173431 us-gaap:SecuritiesSoldUnderAgreementsToRepurchaseMember 2019-09-30 0001173431 srt:ParentCompanyMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember amtd:ABRLoansMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember us-gaap:RevolvingCreditFacilityMember 2019-09-30 0001173431 amtd:PayVariableInterestRateSwapMember us-gaap:CashMember 2019-09-30 0001173431 srt:ParentCompanyMember us-gaap:RevolvingCreditFacilityMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember amtd:EurodollarLoansMember 2018-10-01 2019-09-30 0001173431 amtd:IntercompanyCreditFacilityMember 2019-09-30 0001173431 amtd:PayVariableInterestRateSwapMember us-gaap:CashMember 2018-09-30 0001173431 amtd:TDAmeritradeClearingIncMember us-gaap:RevolvingCreditFacilityMember amtd:RevolvingFacility600MillionDollarsMember 2019-09-30 0001173431 us-gaap:SeniorNotesMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember amtd:RevolvingFacility850MillionDollarsMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember us-gaap:RevolvingCreditFacilityMember amtd:RevolvingFacility850MillionDollarsMember 2018-10-01 2019-09-30 0001173431 amtd:SeniorNotesDue2027Member amtd:PayVariableInterestRateSwapMember us-gaap:SeniorNotesMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember amtd:TotalSeniorUnsecuredRevolvingCreditFacilitiesMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember us-gaap:RevolvingCreditFacilityMember amtd:TDACEurodollarLoansMember us-gaap:LondonInterbankOfferedRateLIBORMember 2018-10-01 2019-09-30 0001173431 amtd:HedgedSeniorNotestoVariableRateInterestMember amtd:PayVariableInterestRateSwapMember us-gaap:SeniorNotesMember us-gaap:LondonInterbankOfferedRateLIBORMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember us-gaap:RevolvingCreditFacilityMember amtd:ABRLoansMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember us-gaap:RevolvingCreditFacilityMember amtd:RevolvingFacility850MillionDollarsMember 2019-09-30 0001173431 amtd:SeniorNotesDue2025Member amtd:PayVariableInterestRateSwapMember us-gaap:SeniorNotesMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember us-gaap:RevolvingCreditFacilityMember amtd:PriorRevolvingFacility850MillionDollarMember 2017-04-21 0001173431 srt:ParentCompanyMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember amtd:EurodollarLoansMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember amtd:TotalSeniorUnsecuredRevolvingCreditFacilitiesMember 2019-09-30 0001173431 amtd:DebtInstrumentRedemptionTimePeriodOnorAfterSpecifiedDateMember us-gaap:SeniorNotesMember 2018-10-01 2019-09-30 0001173431 amtd:ForwardStartingInterestRateSwapMember 2014-01-17 0001173431 srt:ParentCompanyMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember amtd:EurodollarLoansMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember us-gaap:RevolvingCreditFacilityMember amtd:ABRLoansMember us-gaap:EurodollarMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember 2018-10-01 2019-09-30 0001173431 amtd:ForwardStartingInterestRateSwapMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember us-gaap:LineOfCreditMember 2019-09-30 0001173431 amtd:SeniorNotesDue2022Member amtd:PayVariableInterestRateSwapMember us-gaap:SeniorNotesMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-09-30 0001173431 amtd:SeniorNotesDue2019Member us-gaap:SeniorNotesMember 2019-09-01 2019-09-30 0001173431 amtd:DebtInstrumentRedemptionTimePeriodPriortoSpecifiedDateMember us-gaap:SeniorNotesMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember amtd:ABRLoansMember 2018-10-01 2019-09-30 0001173431 amtd:SeniorNotesDue2025Member us-gaap:SeniorNotesMember 2014-10-17 0001173431 amtd:TDAmeritradeClearingIncMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember amtd:RevolvingFacility850MillionDollarsMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember us-gaap:RevolvingCreditFacilityMember amtd:ABRLoansMember us-gaap:FederalFundsEffectiveSwapRateMember 2018-10-01 2019-09-30 0001173431 amtd:ForwardStartingInterestRateSwapMember 2014-10-17 0001173431 srt:ParentCompanyMember us-gaap:RevolvingCreditFacilityMember amtd:EurodollarLoansMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember us-gaap:RevolvingCreditFacilityMember amtd:RevolvingFacility600MillionDollarsMember 2018-10-01 2019-09-30 0001173431 amtd:SeniorNotesDue2029Member amtd:PayVariableInterestRateSwapMember us-gaap:SeniorNotesMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember amtd:EurodollarLoansMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeFuturesandForexLLCMember amtd:CommittedIntercompanyCreditFacilityMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember amtd:CommittedIntercompanyCreditFacilityMember 2019-09-30 0001173431 amtd:TDAmeritradeIncMember amtd:UncommittedIntercompanyCreditFacilityMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember amtd:UncommittedIntercompanyCreditFacilityMember 2019-09-30 0001173431 amtd:SeniorNotesDue2019Member us-gaap:SeniorNotesMember 2019-09-30 0001173431 amtd:IntercompanyCreditFacilityMember 2018-09-30 0001173431 srt:ParentCompanyMember us-gaap:RevolvingCreditFacilityMember 2018-09-30 0001173431 amtd:TDAmeritradeFuturesandForexLLCMember 2018-09-30 0001173431 amtd:TDAmeritradeFuturesandForexLLCMember 2019-09-30 0001173431 amtd:TDAmeritradeIncMember 2018-09-30 0001173431 amtd:TDAmeritradeIncMember 2019-09-30 0001173431 amtd:TDAmeritradeClearingIncMember 2018-09-30 0001173431 amtd:TDAmeritradeClearingIncMember 2019-09-30 0001173431 amtd:TDAmeritradeTrustCompanyMember 2018-09-30 0001173431 amtd:TDAmeritradeTrustCompanyMember 2019-09-30 0001173431 amtd:ScottradeInc.Member 2018-09-30 0001173431 us-gaap:PerformanceSharesMember 2018-10-01 2019-09-30 0001173431 us-gaap:PerformanceSharesMember 2016-10-01 2017-09-30 0001173431 srt:MaximumMember us-gaap:PerformanceSharesMember 2018-10-01 2019-09-30 0001173431 us-gaap:EmployeeStockOptionMember 2018-10-01 2019-09-30 0001173431 us-gaap:PerformanceSharesMember 2019-09-30 0001173431 us-gaap:RestrictedStockUnitsRSUMember 2017-10-01 2018-09-30 0001173431 amtd:A2006DirectorsIncentivePlanMember 2019-09-30 0001173431 us-gaap:PerformanceSharesMember 2017-10-01 2018-09-30 0001173431 us-gaap:RestrictedStockUnitsRSUMember 2019-09-30 0001173431 us-gaap:RestrictedStockUnitsRSUMember 2016-10-01 2017-09-30 0001173431 us-gaap:RestrictedStockUnitsRSUMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeHoldingCorporationLongTermIncentivePlanMember 2019-09-30 0001173431 srt:MinimumMember us-gaap:PerformanceSharesMember 2018-10-01 2019-09-30 0001173431 us-gaap:PerformanceSharesMember 2018-09-30 0001173431 us-gaap:RestrictedStockUnitsRSUMember 2018-09-30 0001173431 srt:MaximumMember us-gaap:EmployeeStockOptionMember 2018-10-01 2019-09-30 0001173431 amtd:EmployeesMember us-gaap:RestrictedStockUnitsRSUMember 2018-10-01 2019-09-30 0001173431 srt:MinimumMember us-gaap:EmployeeStockOptionMember 2018-10-01 2019-09-30 0001173431 amtd:NonEmployeeDirectorMember us-gaap:RestrictedStockUnitsRSUMember 2018-10-01 2019-09-30 0001173431 amtd:SecuritiesOwnedMember us-gaap:USGovernmentDebtSecuritiesMember 2018-09-30 0001173431 amtd:SecuritiesOwnedMember us-gaap:USGovernmentDebtSecuritiesMember 2019-09-30 0001173431 amtd:ReceivableFromBrokersDealersAndClearingOrganizationsMember us-gaap:CashMember 2019-09-30 0001173431 amtd:ReceivableFromBrokersDealersAndClearingOrganizationsMember us-gaap:CashMember 2018-09-30 0001173431 amtd:CiuffitelliClassActionMember 2019-07-09 0001173431 amtd:CiuffitelliClassActionMember 2019-05-31 0001173431 amtd:ScottradeInc.Member amtd:OrderRoutingMattersMember 2018-10-01 2019-09-30 0001173431 srt:MinimumMember 2019-09-30 0001173431 amtd:AequitasSecuritiesLitigationMember amtd:CiuffitelliClassActionMember 2018-10-01 2019-09-30 0001173431 amtd:AequitasSecuritiesLitigationMember 2018-10-01 2019-09-30 0001173431 amtd:OrderRoutingMattersMember 2018-10-01 2019-09-30 0001173431 srt:MaximumMember 2019-09-30 0001173431 amtd:CiuffitelliClassActionMember 2019-07-09 2019-07-09 0001173431 amtd:TDAmeritradeIncMember amtd:OrderRoutingMattersMember 2018-10-01 2019-09-30 0001173431 amtd:OrderRoutingMattersMember 2019-09-30 0001173431 amtd:ClientMarginSecuritiesMember 2018-09-30 0001173431 amtd:ClientMarginSecuritiesMember 2019-09-30 0001173431 amtd:StockBorrowingsMember 2018-09-30 0001173431 amtd:StockBorrowingsMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember amtd:USGovernmentAgenciesDebtSecuritiesMortgagebackedSecuritiesMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2018-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember amtd:OtherSecuritiesMember 2018-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember amtd:PayVariableInterestRateSwapMember 2018-09-30 0001173431 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember amtd:OtherSecuritiesMember 2018-09-30 0001173431 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2018-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember amtd:USGovernmentAgenciesDebtSecuritiesMortgagebackedSecuritiesMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember amtd:PayVariableInterestRateSwapMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember amtd:OtherSecuritiesMember 2018-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember us-gaap:AuctionRateSecuritiesMember 2018-09-30 0001173431 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AuctionRateSecuritiesMember 2018-09-30 0001173431 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember amtd:OtherSecuritiesMember 2019-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember amtd:PayVariableInterestRateSwapMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember amtd:USGovernmentAgenciesDebtSecuritiesMortgagebackedSecuritiesMember 2019-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember amtd:PayVariableInterestRateSwapMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember amtd:OtherSecuritiesMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001173431 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember amtd:OtherSecuritiesMember 2019-09-30 0001173431 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001173431 us-gaap:FairValueMeasurementsRecurringMember amtd:USGovernmentAgenciesDebtSecuritiesMortgagebackedSecuritiesMember 2019-09-30 0001173431 us-gaap:SecuritiesSoldUnderAgreementsToRepurchaseMember 2018-09-30 0001173431 amtd:PayableToBrokerDealerMember 2018-09-30 0001173431 amtd:ReceivableFromBrokerDealerMember 2018-09-30 0001173431 us-gaap:AccountsPayableAndAccruedLiabilitiesMember 2018-09-30 0001173431 us-gaap:OtherAssetsMember 2018-09-30 0001173431 amtd:InvestmentsSegregatedForRegulatoryPurposesMember 2018-09-30 0001173431 us-gaap:AccountsPayableAndAccruedLiabilitiesMember 2019-09-30 0001173431 amtd:ReceivableFromBrokerDealerMember 2019-09-30 0001173431 amtd:PayableToBrokerDealerMember 2019-09-30 0001173431 amtd:InvestmentsSegregatedForRegulatoryPurposesMember 2019-09-30 0001173431 us-gaap:OtherAssetsMember 2019-09-30 0001173431 amtd:TransactedThroughTheOptionClearingCorporationMember 2018-09-30 0001173431 amtd:TransactedThroughTheOptionClearingCorporationMember 2019-09-30 0001173431 us-gaap:EquitySecuritiesMember 2019-09-30 0001173431 amtd:RealEstateInvestmentTrustsMember 2019-09-30 0001173431 amtd:ClosedendFundsMember 2019-09-30 0001173431 amtd:OtherSecuritiesMember 2018-09-30 0001173431 us-gaap:ExchangeTradedFundsMember 2018-09-30 0001173431 amtd:RealEstateInvestmentTrustsMember 2018-09-30 0001173431 amtd:ClosedendFundsMember 2018-09-30 0001173431 us-gaap:EquitySecuritiesMember 2018-09-30 0001173431 amtd:OtherSecuritiesMember 2019-09-30 0001173431 us-gaap:ExchangeTradedFundsMember 2019-09-30 0001173431 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-09-30 0001173431 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2016-10-01 2017-09-30 0001173431 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-10-01 2018-09-30 0001173431 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2016-09-30 0001173431 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2017-10-01 2018-09-30 0001173431 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2017-09-30 0001173431 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-09-30 0001173431 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-10-01 2019-09-30 0001173431 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2016-10-01 2017-09-30 0001173431 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-10-01 2019-09-30 0001173431 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-09-30 0001173431 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2016-09-30 0001173431 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-09-30 0001173431 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-09-30 0001173431 amtd:AcceleratedStockRepurchaseAgreementOneMember 2019-03-28 2019-03-28 0001173431 amtd:AcceleratedStockRepurchaseAgreementOneMember 2019-03-26 0001173431 amtd:AcceleratedStockRepurchaseAgreementThreeMember 2018-09-12 2018-10-16 0001173431 amtd:AcceleratedStockRepurchaseAgreementOneMember 2019-08-07 2019-08-07 0001173431 amtd:AcceleratedStockRepurchaseAgreementTwoMember 2018-11-30 2018-11-30 0001173431 amtd:AcceleratedStockRepurchaseAgreementTwoMember 2019-03-05 2019-03-05 0001173431 amtd:AcceleratedStockRepurchaseAgreementThreeMember 2018-09-12 0001173431 amtd:AcceleratedStockRepurchaseAgreementTwoMember 2018-11-27 0001173431 amtd:AcceleratedStockRepurchaseAgreementThreeMember 2018-09-13 2018-09-13 0001173431 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member 2018-10-01 2019-09-30 0001173431 us-gaap:AccountingStandardsUpdate201409Member us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member 2018-10-01 2019-09-30 0001173431 amtd:MutualFundServiceFeesMember 2016-10-01 2017-09-30 0001173431 amtd:InvestmentProgramFeesMember 2016-10-01 2017-09-30 0001173431 amtd:InvestmentProgramFeesMember 2018-10-01 2019-09-30 0001173431 amtd:OtherInvestmentProductFeesMember 2016-10-01 2017-09-30 0001173431 amtd:MutualFundServiceFeesMember 2017-10-01 2018-09-30 0001173431 amtd:OtherInvestmentProductFeesMember 2017-10-01 2018-09-30 0001173431 amtd:MutualFundServiceFeesMember 2018-10-01 2019-09-30 0001173431 amtd:InvestmentProgramFeesMember 2017-10-01 2018-09-30 0001173431 amtd:OtherInvestmentProductFeesMember 2018-10-01 2019-09-30 0001173431 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member 2019-09-30 0001173431 us-gaap:AccountingStandardsUpdate201409Member us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member 2019-09-30 0001173431 amtd:CommissionsMember 2018-10-01 2019-09-30 0001173431 amtd:OrderRoutingRevenueMember 2017-10-01 2018-09-30 0001173431 amtd:OtherTransactionBasedRevenuesMember 2018-10-01 2019-09-30 0001173431 amtd:CommissionsMember 2016-10-01 2017-09-30 0001173431 amtd:CommissionsMember 2017-10-01 2018-09-30 0001173431 amtd:OtherTransactionBasedRevenuesMember 2017-10-01 2018-09-30 0001173431 amtd:OrderRoutingRevenueMember 2016-10-01 2017-09-30 0001173431 amtd:OtherTransactionBasedRevenuesMember 2016-10-01 2017-09-30 0001173431 amtd:OrderRoutingRevenueMember 2018-10-01 2019-09-30 0001173431 amtd:OtherReceivablesMember 2018-09-30 0001173431 amtd:OtherReceivablesMember 2018-10-01 2019-09-30 0001173431 amtd:OtherReceivablesMember 2019-09-30 0001173431 amtd:ReceivableFromClientsMember 2018-09-30 0001173431 amtd:ReceivableFromClientsMember 2019-09-30 0001173431 amtd:ReceivableFromAffiliatesMember 2019-09-30 0001173431 amtd:ReceivableFromClientsMember 2018-10-01 2019-09-30 0001173431 amtd:ReceivableFromAffiliatesMember 2018-09-30 0001173431 amtd:ReceivableFromAffiliatesMember 2018-10-01 2019-09-30 0001173431 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member 2018-09-30 0001173431 us-gaap:AccountingStandardsUpdate201409Member us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member 2018-10-01 0001173431 2018-10-01 0001173431 us-gaap:OtherExpenseMember amtd:OrderRoutingAgreementMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 amtd:VariousMember amtd:CanadianCallCenterServicesAgreementMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 us-gaap:PrincipalOwnerMember 2017-10-01 2018-09-30 0001173431 amtd:VariousMember amtd:OtherRelatedPartiesMember us-gaap:PrincipalOwnerMember 2016-10-01 2017-09-30 0001173431 us-gaap:OtherExpenseMember amtd:OrderRoutingAgreementMember us-gaap:PrincipalOwnerMember 2017-10-01 2018-09-30 0001173431 us-gaap:OtherExpenseMember amtd:OrderRoutingAgreementMember us-gaap:PrincipalOwnerMember 2016-10-01 2017-09-30 0001173431 amtd:VariousMember amtd:OtherRelatedPartiesMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 amtd:VariousMember amtd:CanadianCallCenterServicesAgreementMember us-gaap:PrincipalOwnerMember 2017-10-01 2018-09-30 0001173431 amtd:VariousMember amtd:OtherRelatedPartiesMember us-gaap:PrincipalOwnerMember 2017-10-01 2018-09-30 0001173431 amtd:VariousMember amtd:CanadianCallCenterServicesAgreementMember us-gaap:PrincipalOwnerMember 2016-10-01 2017-09-30 0001173431 us-gaap:PrincipalOwnerMember 2016-10-01 2017-09-30 0001173431 amtd:BankDepositAccountFeesMember amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 amtd:BankDepositAccountFeesMember amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2017-10-01 2018-09-30 0001173431 amtd:BankDepositAccountFeesMember amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2016-10-01 2017-09-30 0001173431 amtd:OtherRevenuesMember amtd:OrderRoutingAgreementMember us-gaap:PrincipalOwnerMember 2017-10-01 2018-09-30 0001173431 amtd:OtherRevenuesMember amtd:OrderRoutingAgreementMember us-gaap:PrincipalOwnerMember 2016-10-01 2017-09-30 0001173431 amtd:OtherRevenuesMember amtd:OrderRoutingAgreementMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 us-gaap:PrincipalOwnerMember 2018-09-30 0001173431 us-gaap:PrincipalOwnerMember 2019-09-30 0001173431 srt:MaximumMember amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2019-09-30 0001173431 amtd:NewFixedRateNotionalInvestmentsMember amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2019-09-30 0001173431 amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 amtd:TDAmeritradeHoldingCorporationandTDAmeritradeClearingInc.Member amtd:SeniorRevolvingCreditFacilitiesMember 2019-09-30 0001173431 amtd:TDAmeritradeHoldingCorporationandTDAmeritradeClearingInc.Member amtd:SeniorRevolvingCreditFacilitiesMember 2018-09-30 0001173431 amtd:NewFixedRateNotionalInvestmentsMember amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 amtd:InsuredDepositAccountAgreementFeeExampleMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 amtd:DebtIssuanceCostsMember us-gaap:PrincipalOwnerMember 2018-10-01 2019-09-30 0001173431 srt:ManagementMember 2018-09-30 0001173431 amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2018-07-01 2018-07-01 0001173431 srt:MaximumMember amtd:InsuredDepositAccountAgreementMember 2018-10-01 2019-09-30 0001173431 srt:MinimumMember amtd:InsuredDepositAccountAgreementMember 2018-10-01 2019-09-30 0001173431 amtd:InsuredDepositAccountAgreementMember us-gaap:PrincipalOwnerMember 2018-09-30 0001173431 srt:ParentCompanyMember 2018-10-01 2019-09-30 0001173431 srt:ParentCompanyMember 2017-10-01 2018-09-30 0001173431 srt:ParentCompanyMember 2016-10-01 2017-09-30 0001173431 srt:ParentCompanyMember 2018-09-30 0001173431 srt:ParentCompanyMember 2019-09-30 0001173431 srt:ParentCompanyMember 2016-09-30 0001173431 srt:ParentCompanyMember 2017-09-30 0001173431 2019-01-01 2019-03-31 0001173431 2018-10-01 2018-12-31 0001173431 2019-07-01 2019-09-30 0001173431 2019-04-01 2019-06-30 0001173431 2017-10-01 2017-12-31 0001173431 2018-04-01 2018-06-30 0001173431 2018-01-01 2018-03-31 0001173431 2018-07-01 2018-09-30 0001173431 us-gaap:SubsequentEventMember 2019-10-03 0001173431 srt:MinimumMember us-gaap:SubsequentEventMember 2019-10-03 2019-10-03 0001173431 us-gaap:SubsequentEventMember 2019-10-02 0001173431 srt:MaximumMember us-gaap:SubsequentEventMember 2019-10-03 2019-10-03 iso4217:USD xbrli:shares iso4217:USD xbrli:pure xbrli:shares amtd:litigation_case amtd:investor amtd:bank amtd:facility amtd:stock_incentive_plan amtd:board_of_directors_member iso4217:USD amtd:trade iso4217:USD amtd:contract amtd:Component iso4217:USD amtd:option

Table of Contents    

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended
September 30, 2019
 
 
 
 
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                 to                     
 
 
 
 
 
Commission file number: 1-35509
TD Ameritrade Holding Corporation
(Exact name of registrant as specified in its charter)
Delaware
 
82-0543156
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
200 South 108th Avenue, Omaha, Nebraska 68154
(Address of principal executive offices) (Zip Code)
(800) 669-3900
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock — $0.01 par value
AMTD
The Nasdaq Stock Market LLC
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
 
 
 
(Title of class)
 
 
 
 
 
 
None
 
 
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer
Smaller reporting company
Non-accelerated filer
(Do not check if a smaller reporting company)
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of the common stock held by non-affiliates of the registrant was approximately $27.7 billion computed by reference to the closing sale price of the stock on the Nasdaq Global Select Market on March 29, 2019, the last trading day of the registrant's most recently completed second fiscal quarter.
The number of shares of common stock outstanding as of November 1, 2019 was 541,646,393 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Definitive Proxy Statement relating to the registrant's 2020 Annual Meeting of Stockholders to be filed hereafter (incorporated into Part III hereof).
 



Table of Contents    

TD AMERITRADE HOLDING CORPORATION
INDEX
 
 
 
Page No.
 
 
 
 
 
 
 
Item 1.
 
Item 1A.
 
Item 1B.
 
Item 2.
 
Item 3.
 
Item 4.
 
 
 
 
 
 
 
 
Item 5.
 
Item 6.
 
Item 7.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 7A.
 
Item 8.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 9.
 
Item 9A.
 
Item 9B.
 
 
 
 
 
 
 
 
Item 10.
 
Item 11.
 
Item 12.
 
Item 13.
 
Item 14.
 
 
 
 
 
 
 
 
Item 15.
 
 
 
 
 


2


Table of Contents    

Unless otherwise indicated, references to "we," "us," "our," "Company," or "TD Ameritrade" mean TD Ameritrade Holding Corporation and its subsidiaries, and references to "fiscal" mean the Company's fiscal year ended September 30. References to the "parent company" mean TD Ameritrade Holding Corporation.
PART I
Item 1.    Business
Organization
The Company was established as a local investment banking firm in 1971 and began operations as a retail discount securities brokerage firm in 1975. The parent company is a Delaware corporation.
Operations
We are a leading provider of securities brokerage services and related technology-based financial services to retail clients and independent registered investment advisors ("RIAs"). We provide our services to individual retail investors and traders and to RIAs predominantly through the Internet, a national branch network and relationships with RIAs. We use our platform to offer brokerage services to retail investors and traders under a simple, low cost structure and brokerage custodial services to RIAs.
We have been an innovator in electronic brokerage services since entering the retail securities brokerage business in 1975. We believe that we were the first brokerage firm to offer the following products and services to retail clients: touch-tone trading; trading over the Internet; mobile trading; unlimited, streaming, free real-time quotes; extended trading hours; direct access to market destinations; commitment on the speed of order execution and trading of select securities 24 hours a day, five days a week. Over the years the number of brokerage accounts, RIA relationships, average daily trading volume and total assets in client accounts have substantially increased. We have also built, and continue to invest in, a proprietary trade processing platform that is both cost-efficient and highly scalable, significantly lowering our operating costs per trade. In addition, we have made significant investments in building the TD Ameritrade brand.
Strategy
We intend to capitalize on the growth and consolidation of the retail brokerage industry in the United States and leverage our low-cost infrastructure to grow our market share and profitability. Our long-term growth objective is to increase our market share of total assets in client accounts, while maintaining a leadership position in client trading, by providing a best-in-class client experience. We strive to enhance the client experience by providing asset management products and services, enhanced trading tools and capabilities and a superior, proprietary, single-platform system to support RIAs. The key elements of our strategy are as follows:
Focus on brokerage services.    We continue to focus on attracting retail investors and traders and RIAs to our brokerage services. This focused strategy is designed to enable us to maintain our low operating cost structure while offering our clients outstanding products and services. We primarily route orders for execution of client trades on an agency, rather than on a principal, basis, although we maintain an inventory of fixed income securities to meet client demand.
Provide a comprehensive investor solution.    We continue to expand our suite of diversified investment products and services to best serve investors' needs. We help clients make investment decisions by providing investment tools, guidance, education and objective third-party research.
Continue to be a leader in the RIA industry.    We provide RIAs with comprehensive brokerage and custody services supported by our robust integrated technology platform, customized personal service and practice management solutions.
Leverage our infrastructure to add incremental revenue.    Through our proprietary technology, we deliver a robust online experience for retail investors and traders, providing speed, reliability and quality trade execution services. The scalable capacity of our trading system allows us to process a significant number of additional transactions while incurring minimal additional fixed costs.

3


Table of Contents    

Continue to be a low-cost provider of quality services.    We achieve low operating costs per trade by creating economies of scale, utilizing our proprietary transaction-processing systems, continuing to automate processes and locating much of our operations in low-cost areas. This low fixed-cost infrastructure gives us significant financial flexibility. In addition, our bank deposit account arrangements with The Toronto-Dominion Bank ("TD") and other third-party financial institutions enable our clients to invest in an FDIC-insured deposit product without the need for us to establish the significant levels of capital that would be required to maintain our own bank charter.
Continue to differentiate our offerings through innovative technologies and service enhancements.    We have been an innovator in our industry for over 40 years. We continually strive to provide our clients with the ability to customize their investing and trading experience with our suite of products and services and ongoing new initiatives. We provide our clients greater choice by offering features and functionality to meet their specific needs.
Leverage the TD Ameritrade brand.    We believe that we have a superior brand identity and that our advertising has established TD Ameritrade as a leading brand in the retail brokerage market.
Continue to evaluate opportunities for growth through acquisitions.    When evaluating potential acquisitions, we look for transactions that will give us operational leverage, technological leverage, increased market share or other strategic opportunities.     
Products and Services
We are committed to providing and enhancing a best-in-class client experience. Our products and services include:
Common and preferred stock.    Clients can purchase common and preferred stocks, American Depository Receipts and closed-end funds traded on any United States exchange or quotation system.
Exchange-Traded Funds ("ETFs"). Our ETF Market Center offers our clients more than 2,300 ETFs from leading providers, providing exposure to many asset classes and diverse investment strategies.
Mutual funds.    Clients can compare and select from a portfolio of over 13,000 mutual funds from leading fund families, including a broad range of no-transaction-fee funds. Clients can also easily exchange funds within the same mutual fund family.
Options.    We offer a full range of option trades, including complex and multi-leg option strategies.
Futures.    We offer futures trades, as well as options on futures, in a wide variety of commodities, stock indices and currencies.
Foreign exchange.    We offer access to trading in over 75 different currency pairs.
Fixed income.    We offer our clients access to a variety of Treasury, corporate, government agency and municipal bonds, as well as certificates of deposit.
Annuities.    We offer access to competitively priced fixed and variable annuities provided by highly-rated insurance carriers.
Education. We offer our clients a suite of free education for beginner, intermediate and advanced investors that is designed to teach investors how to approach the selection process for investment securities and actively manage their investment portfolios.
New and secondary issue securities.    We offer primary and secondary offerings of fixed income securities, closed-end funds, common stock and preferred stock.
Margin lending.    We extend credit to clients who maintain margin accounts. Portfolio margin, which bases margin requirements on the net exposure of all positions in an account rather than just on individual positions, is also available for certain qualifying accounts with net liquidating values of at least $125,000.
Cash management services.    Through third-party banking relationships, we offer FDIC-insured deposit accounts and money market mutual funds to our clients as cash sweep alternatives. Through these relationships, we also offer free standard checking, free online bill pay and ATM services with unlimited ATM fee reimbursements at any machine nationwide.

4


Table of Contents    

U.S. Market access in Asia.    We offer clients in Singapore and Hong Kong access to U.S. markets and the ability to trade stocks, ETFs, options, futures and options on futures.
We provide our clients with an array of channels to access our products and services. These include the Internet, our network of retail branches, mobile trading applications, chatbot, interactive voice response and registered representatives via telephone.
Prior to October 3, 2019, we earned commissions and transaction fees on client trades in common and preferred stock, certain ETFs, exchange-traded notes, closed-end funds, options, futures, foreign exchange, mutual funds, fixed income securities and annuities. Effective October 3, 2019, we introduced: (1) $0 commissions on online exchange-listed stock, ETF (domestic and Canadian) and option trades and (2) a fee of $0.65 per contract on listed stock and ETF option trades with no additional exercise and assignment fees. Order routing revenue generated from payments and/or rebates received from market centers is a component of commissions and transaction fees. Margin lending, securities borrowed and loaned transactions and client cash generate net interest revenue. Cash management services generate bank deposit account fees. Fees earned from mutual funds, investment program fees and referrals generate investment product fee revenues. Other revenues include proxy income, solicit and tender fees and other fees charged for ancillary services provided to clients. The following table presents the percentage of net revenues contributed by each class of similar services during the last three fiscal years:
 
 
Percentage of Net Revenues
Fiscal Year Ended September 30,
Class of Service
 
2019
 
2018
 
2017
Commissions and transaction fees
 
33.3
%
 
36.1
%
 
37.6
%
Bank deposit account fees
 
28.5
%
 
28.3
%
 
30.1
%
Net interest revenue
 
25.5
%
 
23.3
%
 
18.8
%
Investment product fees
 
9.7
%
 
10.2
%
 
11.5
%
Other revenues
 
3.0
%
 
2.1
%
 
2.0
%
Net revenues
 
100.0
%
 
100.0
%
 
100.0
%
Client Service and Support
We strive to provide the best client service in the industry, as measured by speed of response time to telephone calls, turnaround time responding to client inquiries and client satisfaction with the account relationship. We are committed to delivering a meaningful investing experience to our diverse client base.
We endeavor to optimize our client service by:
assuring prompt response to client service calls through adequate staffing with properly trained and motivated personnel in our client service departments, a majority of whom hold the Financial Industry Regulatory Authority ("FINRA") Series 7 license; tailoring client service to the particular expectations of clients; and expanding our use of technology to provide automated responses to the most typical inquiries generated in the course of clients' trading, investing and related activities.
We provide client service and support through the following means:
Websites.    Our websites provide information on how to use our services, a variety of self-service capabilities and an in-depth education center that includes a selection of online investing courses. Clients also have access to a virtual agent, enabling them to ask questions about our products, tools and services, as well as access to live agents through chat capabilities.
Branches.    We offer a nationwide network of retail branch offices, with more than 275 retail branches located in 47 states and the District of Columbia.
Email.   Our operating standards require a response within 24 hours of receipt of the email, but we strive to respond within four hours after receiving the original message.
Telephone.   We provide a toll-free number that connects to advanced call handling systems, which provide automated processing of calls. Our systems also allow linkage between caller identification and the client

5


Table of Contents    

database to give the client service representative immediate access to the client's account data when the call is received. Client service representatives are available 24 hours a day, seven days a week.
Mobile app. Support on the TD Ameritrade Mobile Trader App allows clients to text with a trading specialist for immediate answers to questions or share their screens for help.
TTY services for the hearing impaired. We provide sign language and oral interpreters and/or other auxiliary aids and services free of charge for the hearing impaired.
Technology and Information Systems
Our technological capabilities and systems are central to our business and are critical to our goal of providing the best execution at the best value for our clients. Our operations require reliable, scalable systems that can handle complex financial transactions for our clients with speed and accuracy. We maintain sophisticated and proprietary technology that automates securities transactions. Our ability to effectively leverage and adopt new technology to improve our services is a key component of our success.
We continue to make investments in technology and information systems. We have spent a significant amount of resources to increase capacity and improve speed, reliability and security. To provide for system continuity during potential power outages, we have equipped our data centers with uninterruptible power supply units and back-up generators. We invest annually in our cybersecurity capabilities and utilize the industry standard, National Institute of Standards and Technology framework, as well as leading risk mitigation approaches to benchmark ourselves and to continually enhance client and systems protection.
Advertising and Marketing
We intend to continue to grow and increase our market share by advertising online, on television, in print, on our own websites and utilizing various forms of social media. We invest heavily in advertising programs designed to bring greater brand recognition to our services, and we intend to continue to aggressively advertise. From time to time, we may choose to increase our advertising to targeted groups of investors or increase or decrease our advertising in response to market conditions.
Advertising for retail clients is generally conducted through digital, search and social media, financial news networks and other television and cable networks. We also place print advertisements in a broad range of business publications. Advertising for institutional clients is significantly less than for retail clients and is generally conducted through highly-targeted media.
To monitor the success of our various marketing efforts, we utilize a media mix model that uses robust data to analyze the return on investment of our marketing expenses. This model also supports decisions on spending levels and helps us determine the point at which we begin to experience diminishing returns. Additionally, our advanced data and analytics capabilities enable a more targeted, personalized experience for prospective and existing clients. How we share client information is disclosed in our privacy statement.
All of our securities brokerage-related communications with the public are regulated by FINRA. All of our futures and foreign exchange brokerage-related communications with the public are regulated by the National Futures Association ("NFA").
Clearing Operations
Our subsidiary, TD Ameritrade Clearing, Inc. ("TDAC"), provides clearing and execution services for our securities brokerage business. Clearing services include the confirmation, receipt, settlement, delivery and record-keeping functions involved in processing securities transactions. TDAC:
maintains client accounts;
extends credit in margin accounts to clients;
engages in securities lending and borrowing;
settles securities transactions with clearinghouses such as The Depository Trust & Clearing Corporation ("DTCC") and The Options Clearing Corporation ("OCC");

6


Table of Contents    

settles commissions and transaction fees;
prepares client trade confirmations and statements;
performs designated cashiering functions (including delivery and receipt of funds and securities to and from clients);
possesses, controls and safeguards funds and securities in client accounts;
processes cash sweep transactions to and from bank deposit accounts and money market mutual funds;
transmits tax accounting information to clients and to the applicable tax authorities; and
forwards prospectuses, proxy materials and other shareholder information to clients.
We contract with external providers for futures clearing. We also contract with an external provider to facilitate foreign exchange trading for our clients.
Competition
We believe that the principal determinants of success in the retail brokerage market are brand recognition, size of client base and client assets, ability to attract new clients and client assets, client trading activity, efficiency of operations, technology infrastructure and advancements and access to financial resources. We also believe that the principal factors considered by clients in choosing a brokerage firm are reputation, client service quality, price, convenience, product offerings, quality of trade execution, platform capabilities, innovation and overall value. Based on our experience, focus group research and the success we have enjoyed to date, we believe that we presently compete successfully in each of these categories.
The market for brokerage services, particularly electronic brokerage services, continues to evolve and is highly competitive. We experience significant competition and expect this competitive environment to continue. We encounter direct competition from numerous other brokerage firms, many of which provide online brokerage services. These competitors include E*TRADE Financial Corporation, The Charles Schwab Corporation and Fidelity Investments. We also encounter competition from the broker-dealer affiliates of established full-commission brokerage firms, such as Merrill Lynch and Morgan Stanley, as well as from banks, mutual fund sponsors, online wealth management services (including so-called "robo-advisors") and other financial institutions and organizations, some of which provide online brokerage services.
Regulation
The securities, futures and foreign exchange industries are subject to extensive regulation under federal and state law. Our broker-dealers, TD Ameritrade, Inc. and TDAC, are required to register with the U.S. Securities and Exchange Commission ("SEC") and to be members of FINRA and the Municipal Securities Rulemaking Board ("MSRB"). Our futures commission merchant ("FCM") and forex dealer member ("FDM") subsidiary, TD Ameritrade Futures & Forex LLC ("TDAFF"), is registered with the Commodity Futures Trading Commission ("CFTC") and is a member of, and the corresponding services functions are regulated by, the NFA. Our broker-dealer subsidiaries are subject to the requirements of the Securities Exchange Act of 1934 (the "Exchange Act") relating to broker-dealers, including, among other things, minimum net capital requirements under the SEC Uniform Net Capital Rule (Rule 15c3-1), best execution requirements for client trades under SEC guidelines and FINRA rules and segregation of client funds under the SEC Customer Protection Rule (Rule 15c3-3), administered by the SEC and FINRA. TDAFF is subject to regulations under the Commodity Exchange Act, administered by the CFTC and NFA, including CFTC Regulations 1.17 and 5.7, which require the maintenance of minimum adjusted net capital, and CFTC Regulation 1.20, which requires segregation of client funds.
Net capital rules are designed to protect clients, counterparties and creditors by requiring a broker-dealer, an FCM or an FDM to have sufficient liquid resources available to satisfy its financial obligations. Net capital is a measure of a broker-dealer's, an FCM's or an FDM's readily available liquid assets, reduced by its total liabilities other than approved subordinated debt. Under the SEC Uniform Net Capital Rule, a broker-dealer may not repay any subordinated borrowings, pay cash dividends or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount below required levels. A broker-dealer is required to provide notice to the SEC and FINRA if its net capital is below certain required levels. Likewise, an FCM and

7


Table of Contents    

an FDM, such as TDAFF, must provide notice to the CFTC if its adjusted net capital amounts are below required levels.
Certain of our subsidiaries are also registered as investment advisors under the Investment Advisers Act of 1940. We are also subject to regulation in all 50 states, the District of Columbia and Puerto Rico, including registration requirements. TD Ameritrade Trust Company is chartered in the state of Maine as a state-regulated non-depository trust company. TD Ameritrade Singapore Pte. Ltd. is licensed by the Monetary Authority of Singapore and TD Ameritrade Hong Kong Ltd. is licensed by the Securities and Futures Commission of Hong Kong.
In its capacity as a securities clearing firm, TDAC is a member of the DTCC and the OCC, each of which is registered as a clearing agency with the SEC. As a member of these clearing agencies, TDAC is required to comply with the rules of such clearing agencies, including rules relating to possession or control of client funds and securities, margin lending and execution and settlement of transactions.
Margin lending activities are subject to limitations imposed by regulations of the Federal Reserve System and FINRA. In general, these regulations provide that, in the event of a significant decline in the value of securities collateralizing a margin account, we are required to obtain additional collateral from the borrower or liquidate security positions.
Because TD owns more than 25% of our common stock, we are considered a non-bank subsidiary of TD under the Bank Holding Company Act of 1956 (the "BHC Act").  As a result, we are subject to the supervision and regulation of the Federal Reserve.  These banking regulations limit the activities and the types of businesses that we may conduct and the types of companies we may acquire. Under these regulations, the Federal Reserve could impose significant limitations on our current business and operations.  TD is currently regulated as a "financial holding company" under the BHC Act, which allows TD and us to engage in a much broader set of activities than would otherwise be permitted under the BHC Act.
We are subject to a number of state, federal and foreign laws applicable to companies conducting business on the Internet that address client privacy, system security and safeguarding practices and the use of client information.
For additional, important information relating to government regulation, please review the information set forth under the heading "Risk Factors Relating to the Regulatory and Legislative Environment" in Item 1A — Risk Factors.
Risk Management
Our business activities expose us to various risks. Identifying and measuring our risks is critical to our ability to manage risk within acceptable tolerance levels in order to minimize the effect on our business, results of operations and financial condition.
Our management team is responsible for managing risk. It is overseen by our board of directors, primarily through the board's Risk Committee. We use risk management processes and have policies and procedures for identifying, measuring and managing risks, including establishing threshold levels for our most significant risks. Our risk management, compliance, internal audit, and legal departments assist in identifying and managing risks. Our management team's Enterprise Risk Committee ("ERC") is responsible for reviewing risk exposures and risk mitigation. Subcommittees of the ERC have been established to assist in identifying and managing specific areas of risk.
Our business exposes us to the following broad categories of risk:
Operational Risk — Operational risk is the risk of loss resulting from inadequate or failed internal processes or controls, human error or misconduct, systems and technology problems or from external events. It also involves compliance with regulatory and legal requirements. Operational risk is the most prevalent form of risk in our risk profile. We manage operational risk by establishing policies and procedures to accomplish timely and efficient processing, obtaining periodic internal control attestations from management and conducting internal audit reviews to evaluate the effectiveness of internal controls.
Cybersecurity Risk  Cybersecurity risk is the risk of a malicious technological attack intended to impact the confidentiality, availability, or integrity of our systems and data, including, but not limited to, sensitive client data. Our technology and security teams rely on a layered system of preventive and detective technologies, practices, and

8


Table of Contents    

policies to detect, mitigate, and neutralize cybersecurity threats. In addition to the ERC, our management team's Security Executive Oversight Committee regularly assesses our cybersecurity risks and mitigation efforts. Cyber attacks can also result in financial and reputational risk.
Market Risk — Market risk is the risk of loss resulting from adverse movements in market factors, such as asset prices, foreign exchange rates and interest rates. Our market risk related to asset prices is mitigated by us routing client trades for execution, primarily on an agency rather than on a principal basis, and our maintenance of fixed-income securities to meet client requirements. Interest rate risk is our most prevalent form of market risk. For more information about our interest rate risk and how we manage it, see Item 7A — Quantitative and Qualitative Disclosures About Market Risk.
Credit Risk — Credit risk is the risk of loss resulting from failure of obligors to honor their payment obligations. Our exposure to credit risk mainly arises from client margin lending and leverage activities, securities lending activities and other counterparty credit risks. For more information about our credit risk and how we manage it, see Item 7A – Quantitative and Qualitative Disclosures About Market Risk.
Liquidity Risk — Liquidity risk is the risk of loss resulting from the inability to meet current and future cash flow needs. We actively monitor our liquidity position at the holding company and at the broker-dealer and FCM/FDM subsidiary levels. For more information, see Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.
Strategic Risk — Strategic risk is the risk of loss arising from ineffective business strategies, improper implementation of business strategies, or lack of responsiveness to changes in the business and competitive environment. Our executive management is responsible for establishing an appropriate corporate strategy intended to create value for stockholders, clients and employees, with oversight by our board of directors. Our management is responsible for defining the priorities, initiatives and resources necessary to execute the strategic plan, the success of which is regularly evaluated by the board of directors.
Reputational Risk — Reputational risk is the risk arising from possible negative perceptions, whether true or not, of the Company among our clients, counterparties, stockholders, suppliers, employees and regulators. The potential for either enhancing or damaging our reputation is inherent in almost all aspects of business activity. We manage this risk through our commitment to a set of core values that emphasize and reward high standards of ethical behavior, maintaining a culture of compliance and by being responsive to client and regulatory requirements.
Risk is inherent in our business, and therefore, despite our efforts to manage risk, there can be no assurance that we will not sustain unexpected losses. For a discussion of the factors that could materially affect our business, financial condition or future results of operations, see Item 1A — Risk Factors.
Intellectual Property Rights
Our success and ability to compete are significantly dependent on our intellectual property. We rely on copyright, trade secret, trademark, domain name, patent and contract laws to protect our intellectual property and have utilized the various methods available to us, including filing applications for patents and trademark registrations with the United States Patent and Trademark Office and entering into written licenses and other technology agreements with third parties. Our patented and patent pending technologies include stock indexing and investor education technologies, as well as innovative trading and analysis tools. Our trademarks include both our primary brand, TD Ameritrade (including the "TD" name through a trademark license agreement with TD), as well as brands for other products and services. A substantial portion of our intellectual property is protected by trade secrets. The source code and object code for our proprietary software are also protected using applicable methods of intellectual property protection and general protections afforded to confidential information. In addition, it is our policy to enter into confidentiality and intellectual property ownership agreements with our employees and confidentiality and noncompetition agreements with our independent contractors and business partners and to control access to and distribution of our intellectual property.
Employees
As of September 30, 2019, we had 9,226 full-time equivalent employees. None of our employees is covered by a collective bargaining agreement. We believe that our relations with our employees are good.

9


Table of Contents    

Websites and Social Media Disclosure
From time to time, the Company may use its website and/or Twitter as distribution channels of material information. The Company's Code of Business Conduct and Ethics, financial data and other important information regarding the Company is accessible through and posted on the Company's website at www.amtd.com and its Twitter account @TDAmeritradePR. We ask that interested parties visit or subscribe to newsfeeds at www.amtd.com/news-and-stories to automatically receive email alerts and other information, including the most up-to-date corporate financial information, presentation announcements, transcripts and archives. The website to access the Company's Twitter account is https://twitter.com/TDAmeritradePR. Website links provided in this report, although correct when published, may change in the future. We make available free of charge on our website at www.amtd.com/investor-relations/sec-filings our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC. Our SEC filings are also available on the SEC's website at http://www.sec.gov.
Item 1A.    Risk Factors
In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition, future results of operations or stock price, and many of which we cannot control. Although the risks described below are those that we believe are the most significant, these are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently do not deem to be material also may materially affect our business, financial condition, future results of operations or stock price.
Risk Factors Relating to Our Business Operations
Economic, social and political conditions and other securities industry risks could adversely affect our business.
Substantially all of our revenues are derived from our securities brokerage business, which generates asset-based revenues and transaction-based revenues. Like other securities brokerage businesses, we are directly affected by economic, social and political conditions, broad trends in business and finance and changes in volume and price levels of securities transactions. Events in global financial markets in recent years resulted in substantial market volatility and increased client trading volume, but any sustained downturn in general economic conditions or U.S. equity markets could result in reduced client trading volume and order routing revenues. Severe market fluctuations or weak economic conditions could reduce our trading volume and net revenues and adversely affect our profitability.
Our exposure to interest rate risk could adversely affect our profitability.
As a fundamental part of our securities brokerage business, we invest in interest-earning assets and are obligated on interest-bearing liabilities. In addition, we earn fees on our FDIC-insured deposit account arrangements with TD Bank USA, N.A., TD Bank N.A. and with other third-party financial institutions, which are subject to interest rate risk. Continued uncertainty resulting from U.S. fiscal and political matters have impacted and may continue to impact the U.S. and global economies. The direction and level of interest rates are important factors in our profitability.
A falling interest rate environment generally results in our earning a smaller net interest spread. Conversely, a rising interest rate environment generally results in our earning a larger net interest spread.
Our most prevalent form of interest rate risk is referred to as "gap" risk. This risk occurs when the interest rates we earn on assets change at a different frequency or amount than the interest rates we pay on liabilities. For example, in a low (but rising) interest rate environment, sharp increases in short-term interest rates could result in net interest spread compression if the yield paid on interest-bearing client balances were to increase faster than our earnings on interest-earning assets. If we are unable to effectively manage our interest rate risk, changes in interest rates could have adverse effects on our profitability.

10


Table of Contents    

Inability to meet the funding needs of our securities brokerage operations for any reason would have a material adverse effect on our business.
Maintaining adequate liquidity is crucial to our securities brokerage operations, including key functions such as transaction settlement and margin lending. We are subject to cash deposit and collateral requirements with clearinghouses such as the DTCC and the OCC, which may fluctuate significantly from time to time based on the nature and size of our clients' trading activity. We satisfy our liquidity needs primarily from working capital and cash generated by client activity, as well as external financing. Our liquidity needs to support interest-earning assets are primarily met by client cash balances or financing created from our securities lending activities. A reduction of funds available from these sources may require us to seek other potentially more expensive forms of financing, such as borrowings on our revolving credit facilities.
Factors which may adversely affect our liquidity positions include subsidiaries having temporary liquidity demands due to timing differences between brokerage transaction settlements and the availability of segregated cash balances, fluctuations in cash held in client accounts, a dramatic increase in our margin lending activities, increased regulatory capital requirements, changes in regulatory guidance or interpretations, other regulatory changes or a loss of market or client confidence resulting in unanticipated withdrawals of client funds.
Reduction in our liquidity could, in itself, reduce client confidence in us, which would result in the transfer of client assets and accounts, or could cause us to fail to satisfy our liquidity requirements. Also, while our regulated subsidiaries currently satisfy regulatory capital requirements, any failure to do so would curtail their operations and their ability to pay dividends to the parent company, which would reduce our liquidity and adversely affect our ability to repay debt and return capital to stockholders. We would then need to provide additional funding to such subsidiaries.
Our liquidity could be constrained if we are unable to obtain financing on acceptable terms, or at all, due to a variety of unforeseen market disruptions. During periods of disruption in the credit and capital markets, borrowing costs may increase and potential sources of external financing may be reduced or even eliminated. In addition, a significant downgrade in our credit ratings could increase our borrowing costs and limit our access to the credit and capital markets. Inability to meet our funding needs on a timely basis would have a material adverse effect on our business.
Our exposure to credit risk with clients and counterparties could result in losses.
We extend margin credit and leverage to clients, which are collateralized by client cash and securities. We also borrow and lend securities in connection with our broker-dealer business. A significant portion of our net revenues is derived from interest on margin loans. By permitting clients to purchase securities on margin and exercise leverage with options and futures positions, we are subject to risks inherent in extending credit, especially during periods of rapidly declining markets in which the value of the collateral held by us could fall below the amount of a client's indebtedness. In addition, in accordance with regulatory guidelines, we collateralize borrowings of securities by depositing cash or securities with lenders. Sharp changes in market values of substantial amounts of securities and the failure by parties to the borrowing transactions to honor their commitments could have adverse effects on our revenues and profitability. We also engage in financial transactions with counterparties, including securities sold under agreements to repurchase, that expose us to credit losses in the event counterparties cannot meet their obligations. We have policies and procedures designed to manage credit risk, but our policies and procedures may not be fully effective.
We need to introduce new products and services and update or enhance existing products and services to remain competitive.
We compete in a technology-intensive industry characterized by rapid innovation. Our future success depends in part on our ability to introduce new products and services or update or enhance our existing products and services. In addition, the adoption of new Internet, networking or telecommunications technologies or other technological changes could require us to incur substantial expenditures to update, enhance or adapt our services or infrastructure.
There are significant technical and financial costs and risks in the development of new or enhanced products and services, including the risk that we might be unable to effectively use new technologies, adapt our services to emerging industry standards or develop, introduce and market updated, enhanced or new products and services. An

11


Table of Contents    

inability to develop new products and services, or to update or enhance existing offerings, could have adverse effects on our business and results of operations.
Our clearing operations expose us to liability for errors in clearing functions.
Our broker-dealer subsidiary, TDAC, provides clearing and execution services for our securities brokerage business. Clearing and execution services include the confirmation, receipt, settlement and delivery functions involved in securities transactions. Clearing brokers also assume direct responsibility for the possession or control of client securities and other assets and the clearing of client securities transactions. However, clearing brokers also must rely on third-party clearing organizations, such as the DTCC and the OCC, in settling client securities transactions. Clearing securities firms, such as TDAC, are subject to substantially more regulatory oversight and examination than introducing brokers that rely on others to perform clearing functions. Errors in performing clearing functions, including clerical and other errors related to the handling of funds and securities held by us on behalf of clients, could lead to regulatory fines and civil penalties as well as losses and liability in related legal proceedings brought by clients and others.
A default by a large financial institution could adversely affect financial markets and our business.
The commercial soundness of many financial institutions are closely interrelated as a result of credit, trading, clearing and other relationships among the institutions. For example, increased centralization of trading activities through clearing houses and clearing agencies has occurred and may continue to occur in the future. This is driven by market forces and legal measures and may increase our concentration of risk with respect to these entities. As a result of this connectedness, concerns about, or a default or threatened default by, one institution can lead to significant market-wide liquidity and credit problems, defaults and losses by others. Sometimes referred to as "systemic risk," this phenomenon may adversely affect financial intermediaries such as clearing houses, clearing agencies, exchanges, banks and securities firms with which we interact daily and could therefore negatively impact our business. Our membership agreements with the DTCC and OCC may require us to contribute capital to the clearing agencies if one or more other members default on their obligations.
Aggressive competition could reduce our market share, revenues and profits.
The market for electronic securities brokerage services is continually evolving and is intensely competitive. The securities brokerage industry has experienced significant consolidation, which may continue in the future, likely increasing competitive pressures in the industry. Consolidation could enable other firms to offer a broader range of products and services than we do, or offer them on better terms, such as higher interest rates paid on cash held in client accounts. We expect this intensely competitive environment to continue in the future. We face direct competition from numerous securities brokerage firms, including E*TRADE Financial Corporation, The Charles Schwab Corporation and Fidelity Investments. We also encounter competition from the broker-dealer affiliates of established full-commission brokerage firms, such as Merrill Lynch and Morgan Stanley, as well as from banks, mutual fund sponsors, online wealth management services (including so-called "robo-advisors") and other financial institutions and organizations, some of which provide online brokerage services. Some of our competitors have greater financial, technical, marketing and other resources, offer a wider range of services and financial products, and have greater name recognition and a more extensive client base than we do. Others offer a narrower range of products and services but benefit from a lower cost structure than we have. We believe that the general financial success of companies within the securities brokerage industry will continue to attract new competitors to the industry, such as software development companies, insurance companies, providers of online financial information and others. These companies may provide a more comprehensive suite of services than we do or offer services at lower prices. Increased competition could have adverse effects on our business such as reducing our market share, revenues and profits.
Our ability to compete successfully in the securities brokerage industry depends on a number of factors, such as:
maintaining and expanding our market position;
attracting and retaining customers;
providing easy to use and innovative financial products and services;
our reputation and the market perception of our brand and overall value;

12


Table of Contents    

maintaining competitive pricing;
competing in a concentrated competitive landscape;
optimizing our costs of doing business;
the effectiveness of our technology (including cybersecurity defenses), products and services;
deploying a secure and scalable technology and back office platform;
complying with the differences in regulatory oversight regimes;
attracting new employees and retaining our existing employees; and
general economic and industry trends, including customer demand for financial products and services.
Our competitive position within the industry could be adversely affected if we were unable to address these factors adequately.
Information system failures, delays and capacity constraints could harm our business.
We receive and process trade orders through a variety of electronic channels, including the Internet, mobile trading applications and our interactive voice response system. These methods of trading are heavily dependent on the integrity of the electronic systems supporting them. Our systems and operations are vulnerable to damage or interruption from natural disasters, power loss, human error, execution error, errors in models (such as those used for asset management, risk management, stress testing and compliance), employee misconduct, unauthorized trading, external fraud, cyber attacks, terrorist attacks, capacity constraints, software flaws, events impacting key vendors, phishing or other attempted unauthorized access, computer viruses, distributed denial of service ("DDOS") attacks, spurious spam attacks, ransomware, intentional acts of vandalism and similar events. It could take several hours or more to restore full functionality following any of these events. Extraordinary trading volumes could cause our computer systems to operate at an unacceptably slow speed or even fail. Extraordinary Internet traffic caused by DDOS, spam attacks or extreme market volatility could cause our website or other trading applications to be unavailable or slow to respond.
We may not be able to project accurately the rate, timing or cost of any increases in our business or to expand and upgrade our systems and infrastructure to accommodate any increases in a timely manner. While we have made significant investments in the reliability and scalability of our systems and added hardware and services to address extraordinary Internet traffic, there can be no assurance that our systems will be sufficient to handle extraordinary circumstances. Systems failures and delays could occur and could cause, among other things, unanticipated disruptions in service to our clients, substantial losses to our clients, slower system response time resulting in transactions not being processed as quickly as our clients desire, decreased levels of client service and client satisfaction and harm to our reputation. Slowness or unavailability may not impact all trading channels evenly, and some trading channels may be impacted while others are not. Social media and media reports may conflate one channel being unavailable with all channels being unavailable. Should our operations be disrupted, we might need to make significant unbudgeted investments to upgrade, repair or replace our technology infrastructure and might not be able to make such investments on a timely basis. As a result of these technological, operational and financial issues, we could suffer unexpected losses, reputational damage and/or regulatory action.
We are also dependent on the integrity and performance of securities exchanges, clearing houses and other intermediaries to which client orders are routed for execution and settlement. Systems failures and constraints and transaction errors at such intermediaries could result in delays and erroneous or unanticipated execution prices, cause substantial losses for us and our clients and subject us to claims from our clients for damages.
Further, a cybersecurity intrusion could occur and persist for an extended period of time without detection, and any investigation of a cybersecurity intrusion could require a substantial amount of time. During all this time we might not know the extent of the harm or how best to remediate it, and errors or omissions could be repeated or compounded before being discovered and remediated, all of which could aggravate the costs and consequences of the intrusion. A cybersecurity intrusion could result in misappropriation of our information or client information, destruction or obfuscation of information, inability to access or use information or impairment of the integrity of information, all of which could result in us being unable to perform our obligations to our clients, which could result in regulatory action and risk of claims for damages from clients.

13


Table of Contents    

As our business model relies heavily on our clients' use of their own personal computers, mobile devices and the Internet, our business and reputation could be harmed by security breaches of our clients and third parties. Computer viruses and other attacks on our clients' personal computer systems, home networks and mobile devices or against the third-party networks and systems of Internet and mobile service providers could create losses for our clients even without any breach in the security of our systems and could thereby harm our business and our reputation. As part of our asset protection guarantee, we may reimburse our clients for losses in their accounts caused by a breach of security of our clients' own computers (through no fault of the client). Such reimbursements may not be covered by applicable insurance and could have an adverse effect on our business, financial condition and results of operations. The occurrence of any of these events could have adverse effects on our business, financial condition and results of operations. There is no guarantee that we will be able to maintain, expand and upgrade our systems and infrastructure to meet future requirements and mitigate future risks on a timely basis or that we will be able to retain all of the skilled information technology employees that we need.
Failure to protect client data or prevent breaches of our information systems could expose us to liability or reputational damage.
We are dependent on information technology networks and systems to securely process, transmit and store electronic information and to communicate among our locations and with our clients and vendors. As the breadth and complexity of this infrastructure continue to grow, the potential risk of security breaches and cyber attacks increases. Developing and enhancing new products and services, which is necessary for us to remain competitive, may involve the use or creation of new technologies, exposes us to cybersecurity and privacy risks that cannot be completely anticipated and increases the risk of security breaches and cyber attacks. As a financial services company, we are continuously subject to cyber attacks, DDOS and ransomware attacks, malicious code and computer viruses by activists, hackers, organized crime, foreign state actors and other third parties. Such breaches could lead to shutdowns or disruptions of our systems, account takeovers and unauthorized gathering, monitoring, misuse, loss, total destruction and disclosure of data and confidential information of ours, our clients, our employees or other third parties, or otherwise materially disrupt our or our clients' or other third parties' network access or business operations. In addition, vulnerabilities of our external service providers and other third parties could pose security risks to client information. The secure transmission of confidential information over public networks is also a critical element of our operations. Despite our efforts to assure the integrity of our systems, we may not be able to anticipate or to implement effective preventive measures against all security breaches, especially because the techniques that are used change frequently or are not recognized until launched and because security attacks can originate from a wide variety of sources. Data security breaches may also result from non-technical means (such as employee misconduct).
We, along with the financial services industry in general, have experienced losses related to clients' login and password information being compromised, generally caused by attacks capturing credentials directly from clients themselves, through phishing attacks, clients' use of non-secure public computers or vulnerabilities of clients' private computers and mobile devices. In 2007, we discovered and eliminated unauthorized code from our computer systems that had allowed an unauthorized third party to retrieve client email addresses, names, addresses and phone numbers from an internal database. Following the incident, we incurred significant remediation costs. In addition, in 2013, Scottrade Financial Services, Inc., which we acquired in September 2017, experienced a database breach. We are aware of subsequent attempts by other attackers to penetrate our systems using similar techniques and similar attacks against other financial institutions. Although we have taken steps to reduce the risk of such threats, our risk and exposure to a cyber attack or related breach remains heightened due to the evolving nature of these threats, our plans to continue to implement mobile access solutions to serve our clients, our routine transmission of sensitive information to third parties, the current global economic and political environment, external extremist parties and other developing factors. If a cyber attack or similar breach were to occur, we could suffer damage to our reputation and incur significant remediation costs and losses.
In providing services to clients, we manage, utilize and store sensitive and confidential client data, including personal data. As a result, we are subject to numerous laws and regulations designed to protect this information, such as U.S. federal and state laws and foreign regulations governing the protection of personally identifiable information. These laws and regulations are increasing in complexity and number, change frequently and sometimes conflict. If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.

14


Table of Contents    

Unauthorized disclosure of sensitive or confidential client data, whether through systems failure, employee negligence, fraud or misappropriation, could damage our reputation and cause us to lose clients. Similarly, unauthorized access to or through our information systems, whether by our employees or third parties, including a cyber attack by third parties who may deploy viruses, worms or other malicious software programs, could result in negative publicity, significant remediation costs, legal liability, regulatory fines, financial responsibility under our asset protection guarantee to reimburse clients for losses in their accounts resulting from unauthorized activity in their accounts (through no fault of the client) and damage to our reputation and could have adverse effects on our results of operations.
Any actual or perceived breach of the security of our technology, or media reports of perceived security vulnerabilities of our systems or the systems of our third-party service providers, could damage our reputation, expose us to the risk of litigation and liability, disrupt our operations, increase our costs with respect to investigations and remediations, reduce our revenues as a result of the theft of intellectual property, and otherwise adversely affect our business. Further, any actual or perceived security breach or cyber attack directed at other financial institutions or financial services companies, whether or not we are impacted, could lead to a general loss of customer confidence in the use of technology to conduct financial transactions, which could negatively impact us. The occurrence of any of these events could have adverse effects on our business and results of operations.
If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and criminal prosecutions.
Although we maintain insurance coverage that we believe is reasonable, prudent and adequate for the purpose of our business, it might be insufficient in type or amount to protect us against all losses and costs stemming from security breaches, cyber attacks and other types of unlawful activity or any resulting disruptions from such events.
We also face risk related to external fraud involving the misappropriation and use of clients' user names, passwords or other personal information to gain access to their accounts. This could occur from the compromise of clients' personal electronic devices or as a result of a data security breach at an unrelated company where clients' personal information is taken and then made available to fraudsters. This risk has grown in recent years due to the increased sophistication and activities of organized crime and other external parties, including foreign state-sponsored parties. Losses in client accounts reimbursed under our asset protection guarantee against unauthorized account activity (through no fault of the client) could have adverse effects on our business, financial condition and results of operations.
Our investment advisory services subject us to additional risks that could result in liability for client losses, fines, penalties and other adverse effects.
We provide investment advisory services to investors through our SEC-registered investment advisors, TD Ameritrade, Inc., TD Ameritrade Investment Management, LLC and TradeWise Advisors, Inc. ("TradeWise"). TD Ameritrade, Inc. offers AdvisorDirect,® a service that refers a client to an independent RIA on the TD Ameritrade institutional platform. TD Ameritrade Investment Management, LLC manages an investment portfolio, through its Essential, Selective or Personalized Portfolios services, based on an investor's objectives, time horizon and risk tolerance. TradeWise provides an option advisory subscription service for self-directed investors. The risks associated with these investment advisory activities include those arising from possible conflicts of interest, unsuitable investment recommendations, inadequate due diligence, inadequate disclosure and fraud. Realization of these risks could lead to liability for client losses, regulatory fines, civil penalties and harm to our reputation and business.
Mergers and acquisitions in which we might engage involve risks that could adversely affect our business.
As part of our growth strategy, we regularly consider, and from time to time engage in, discussions and negotiations regarding transactions, such as mergers, acquisitions and other business combinations within our industry. The purchase price for possible acquisitions of businesses and technologies might be paid in cash, through the issuance of common stock or other securities, borrowings or a combination of these methods.

15


Table of Contents    

Business combinations entail numerous risks, including:
difficulties in the integration of acquired operations, services and products, which can impact retention of client accounts;
failure to achieve expected synergies;
diversion of management's attention from other business concerns;
assumption of unknown material liabilities of acquired companies, which could become material or subject us to litigation or regulatory risks;
amortization of acquired intangible assets, which could reduce future reported earnings; and
potential loss of clients or key employees.
We cannot be certain that we will be able to identify, consummate and successfully integrate business combinations, and no assurance can be given with respect to the timing, likelihood or business effect of any possible transaction. For example, we could begin negotiations that we subsequently decide to suspend or terminate for a variety of reasons. Also, business combinations are typically subject to closing conditions, including regulatory approvals and the absence of a material adverse change. Therefore, if and when we enter into a business combination agreement, there can be no guarantee that the transaction will close when expected, or at all. If a material transaction does not close, our stock price could decline.
Nevertheless, opportunities arise from time to time that we choose to evaluate. Any transactions that we pursue and consummate would involve these risks and uncertainties, as well as others. The risks of a business combination could result in the failure of the anticipated benefits of that particular combination to be realized, which in turn could have adverse effects on our business, financial condition, results of operations and prospects.
At our risk, we rely on external service providers to perform certain key functions.
We rely on a number of external service providers for certain key technology, processing, service and support functions. These include the services of other broker-dealers, market makers, exchanges and clearinghouses to execute and settle client orders. We contract with external providers for futures and foreign exchange clearing. External content providers provide us with financial information, market news, charts, option and stock quotes, research reports and other fundamental data that we offer to clients. These service providers face technological, operational and security risks of their own. A significant failure by any of them, such as improper use or disclosure of our confidential client, employee or Company information, could interrupt our business, subject us to losses and harm our reputation. Also, our external service providers may rely on others, including subcontractors or cloud computing service providers, to provide services to us, subject to similar risks.
We evaluate external service providers to verify that they can support the stability of our operations and systems. There is no assurance, however, that we will not experience business interruption or loss due to an act or omission of such a service provider. Any significant failures or security breaches by or of our external service providers or their subcontractors, including any actual or perceived cyber attacks, security breaches, fraud, phishing attacks, acts of vandalism, information security breaches and computer viruses that could result in unauthorized access, misuse, loss or destruction of data, interruption in service or other similar events, could interrupt our business, cause us to incur losses, subject us to fines or litigation and harm our reputation. An interruption in or the cessation of service by any external service provider and our inability to make alternative arrangements in a timely manner could have a material impact on our ability to offer products and services, cause us to incur losses, and could lead to a general loss of customer confidence in our security measures and technology infrastructure.
There is no assurance that our external service providers or their subcontractors will be able to continue to provide these services to meet our current needs in an efficient, cost-effective manner or that they will be able to adequately expand their services to meet our needs in the future. Some external service providers have assets located outside the United States that are integral to their service to us. Their ability to continue providing these services is subject to the risks of unfavorable political, economic, legal and other developments such as social or political instability, changes in government policies or changes in laws and regulations.
An interruption in or the cessation of service by an external service provider as a result of systems failure, capacity constraint, financial constraint or other financial problem, unanticipated trading market closure or for any other

16


Table of Contents    

reason, coupled with our possible inability to make alternative arrangements in a smooth and timely manner, could have adverse effects on our business, financial condition and results of operations. In this connection, we could incur significant additional costs to implement enhanced protective measures and technology, to investigate and remediate vulnerabilities or other exposures or to make required notifications. Switching to an alternative service provider might require a transition period and result in less efficiency.
Employee misconduct, which can be difficult to detect and deter, could harm our reputation and subject us to significant legal liability.
There have been numerous highly-publicized cases of fraud and other misconduct by financial services industry employees. Our employees could engage in misconduct that adversely affects our business. The precautions that we take to detect and deter employee misconduct might not be effective. If one or more of our employees were to improperly access, use or disclose confidential information or engage in other misconduct, we could be subject to regulatory sanctions and suffer serious harm to our financial condition, reputation, client relationships and prospects of attracting additional clients.
Our risk management practices may leave us exposed to unidentified or unanticipated risk.
Our management team is responsible for managing risk, using risk management processes, policies and procedures to identify, measure and manage risks. The risk committee of our board of directors assists the board in its oversight responsibilities relating to the identification, monitoring and assessment of the key risks of the Company, including the significant policies, procedures and practices employed in risk management. Our risk management methods, however, may not identify future risk exposures and may not be completely effective in mitigating our key risks. Furthermore, our risk management methods may not properly identify and mitigate the aggregation of risks across our organization or the interdependency of our risk mitigation efforts. In addition, some of our risk management methods are based on assumptions that could prove to be inaccurate. Failure to manage risk effectively could adversely affect our business, financial condition and results of operations.
The expected phase-out of LIBOR could negatively impact our net interest income and could have other adverse effects.
Certain of the indentures and credit agreements governing our outstanding indebtedness for borrowed money reference LIBOR as the benchmark rate to determine the applicable interest rate or payment amount. We also use LIBOR in some of our financial models. If LIBOR is discontinued after 2021 as expected, there will be uncertainty or differences in the calculation of the applicable interest rate or payment amount, depending on the terms of the governing instruments, and work will be required to transition to using the new benchmark rates and to implement necessary changes to our financial models. This could result in different financial performance for previously booked transactions and may impact our existing transaction data, products, systems, operations and pricing processes. The calculation of interest rates under the replacement benchmarks could also impact our net interest income. In addition, LIBOR may perform differently during the phase-out period than in the past which could result in different interest payments on our outstanding indebtedness.
Risk Factors Relating to the Regulatory and Legislative Environment
New and changing laws, rules, regulations and guidance may have continuing negative impacts on our business and financial results.
New laws, rules, regulations and guidance, or changes in the interpretation and enforcement of existing federal, state, foreign and self-regulatory organization ("SRO") laws, rules, regulations and guidance may directly affect our business and the profitability of the Company or the operation of specific business lines. In addition, new and changing laws, rules, regulation and guidance could result in limitations on the lines of business we conduct, modifications to our business practices, more stringent capital and liquidity requirements or other costs and could limit our ability to return capital to stockholders.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), enacted in 2010, required many federal agencies to adopt new rules and regulations applicable to the financial services industry and called for many studies regarding various industry practices. In particular, the Dodd-Frank Act gave the SEC discretion to adopt rules regarding standards of conduct for broker-dealers providing investment advice to retail customers.

17


Table of Contents    

The U.S. Department of Labor ("DOL") enacted regulations changing the definition of who is an investment advice fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA) and how such advice can be provided to account holders in retirement accounts such as 401(k) plans and Individual Retirement Arrangements (IRAs). The DOL's final rule defining the term "fiduciary" and exemptions related to it in the context of ERISA and retirement accounts was vacated in June 2018 by the U.S. Court of Appeals for the Fifth Circuit. The SEC and several states then proposed heightened standard of conduct regulations, with the SEC adopting such regulations in June 2019.
The rules and interpretations adopted by the SEC in June 2019 include Regulation Best Interest and the new Form CRS Relationship Summary, which are intended to enhance the quality and transparency of retail investors' relationships with broker-dealers and investment advisers.  Regulation Best Interest enhances the broker-dealer standard of conduct beyond existing suitability obligations, requiring compliance with disclosure, care, conflict of interest and compliance obligations.  The regulation requires that a broker-dealer or natural person who is an associated person of the broker-dealer shall act in the best interest of the retail customer at the time it makes a recommendation of any securities transaction or investment strategy involving securities, prioritizing the interests of the customer above any interests of the broker-dealer or its associated persons. Among other things, this requires the broker-dealer to mitigate conflicts of interest arising from financial incentives in selling securities products.  The compliance date for Regulation Best Interest and Form CRS is June 30, 2020.
It is unclear whether Regulation Best Interest will have any preemptive effect on similar existing or forthcoming state-level standard of conduct regulations.  These regulations may have a material impact on the provision of investment services to retail investors, including imposing additional compliance, reporting and operational requirements, which could negatively affect our business.  These regulations also continue to subject us to an increased risk of class actions and other litigation and regulatory risks. It is not certain what the scope of future rulemaking or interpretive guidance from the SEC and other regulatory agencies may be, how the courts and regulators might interpret these rules and what impact this will have on our compliance costs, business, operations and profitability.
The SEC has adopted National Market System (NMS) Rule 610T to conduct a transaction fee pilot (the “Pilot”) designed to generate data that will help the SEC analyze the effects of exchange transaction fee and rebate pricing models on order routing behavior, execution quality, and market quality generally.  Data from the Pilot will be used to facilitate an empirical evaluation of whether the exchange transaction-based fee and rebate structure is operating effectively to further statutory goals and whether there is a need for any potential regulatory action in this area. In March 2019, the SEC issued an order issuing a stay on parts of Rule 610T and the Pilot pending a court decision regarding certain petitions filed by the New York Stock Exchange, Nasdaq and Cboe Global Markets, Inc. for review and further order of the SEC.  Any changes arising from the Pilot, as well as other potential regulatory actions, may impact certain of our remuneration arrangements with respect to payment for order flow and rebate structure and may impose additional technological, operational and compliance costs on us and creates uncertainty with regard to their effects.
Our profitability could also be affected by new or modified laws that impact the business and financial communities generally, including changes to the laws governing banking, the securities market, fiduciary duties, conflicts of interest, taxation, electronic commerce, client privacy and security of client data. As existing laws are modified and new laws are implemented, we may incur significant additional costs and have to expend a significant amount of time to develop and integrate appropriate systems and procedures to ensure initial and continuing compliance with such laws. These additional costs could have adverse effects on our profitability.
Failure to comply with net capital requirements could adversely affect our business.
The SEC, FINRA, CFTC, NFA and various other regulatory agencies have stringent rules with respect to the maintenance of specific levels of net capital by securities broker-dealers, FCMs and FDMs. Net capital is a measure of a broker-dealer's, an FCM's or an FDM's readily available liquid assets, reduced by its total liabilities other than approved subordinated debt. Our broker-dealer and FCM/FDM subsidiaries are required to comply with net capital requirements. If we fail to maintain the required net capital, the SEC or the CFTC could suspend or revoke our registration, and FINRA or the NFA could expel us from membership, which could ultimately lead to our liquidation, or they could impose censures, fines or other sanctions. If the net capital rules are changed or expanded, or if there is an unusually large charge against net capital, then our operations that require capital could be limited, and we

18


Table of Contents    

may not be able to pay dividends or make stock repurchases. A large operating loss or charge against net capital could have adverse effects on our ability to maintain or expand our business.
Extensive regulation and regulatory uncertainties could harm our business.
The securities industry is subject to extensive regulation by federal, state, international government and self-regulatory agencies, and financial services companies are subject to regulations covering all aspects of the securities business. The costs and uncertainties related to complying with these regulations continue to increase. Regulations are intended to ensure the integrity of financial markets, appropriate capitalization of broker-dealers, FCMs and FDMs and the protection of clients and their assets. These regulations often serve to limit our business activities through capital, client protection and market conduct requirements, as well as restrictions on the activities that we are authorized to conduct. Federal, state and foreign regulators, and SROs, among other things, can censure, fine, issue cease-and-desist orders to, suspend or expel a regulated entity or any of its officers or employees. Despite our efforts to comply with applicable legal requirements, there are a number of risks, including in areas where applicable laws or regulations may be unclear or where regulators could revise their previous guidance, and we could fail to establish and enforce procedures to comply with applicable legal requirements and regulations, which could have adverse effects on our business.
Past turmoil in the financial markets has contributed to changes in laws and regulations, heightened scrutiny of the conduct of financial services firms and increasing penalties for violations of applicable laws and regulations. We may be adversely affected by new laws or regulations, changes in the interpretation of existing laws or regulations or more rigorous enforcement. The new laws and regulations may be complex, and we may not have the benefit of regulatory or federal interpretations to guide us in compliance. Changes in laws and regulations or new interpretations of existing laws and regulations also can have adverse effects on our methods and costs of doing business. We also may be adversely affected by other regulatory changes related to suitability of financial products, supervision, sales practices, application of fiduciary standards, best execution and market structure, which could limit the Company's business. Because TD, among other things, owns more than 25% of our common stock, we are considered a non-bank subsidiary of TD under the Bank Holding Company Act of 1956 (the "BHC Act").  As a result, under the BHC Act, we are subject to the supervision and regulation of the Federal Reserve.  These banking regulations limit the activities and the types of businesses that we may conduct and the types of companies we may acquire, and under these regulations the Federal Reserve could impose significant limitations on our current business and operations.  TD is currently regulated as a "financial holding company" under the BHC Act, which allows TD and us to engage in a much broader set of activities than would otherwise be permitted under the BHC Act.  Any failure of TD to maintain its status as a financial holding company could result in substantial limitations on certain of our activities.
Financial services firms are subject to numerous actual or perceived conflicts of interest, as to which regulators and SROs have increased their scrutiny. Addressing conflicts of interest is a complex and difficult undertaking. Our business and reputation could be harmed if we were to fail, or appear to fail, to address conflicts appropriately.
In addition, we use the Internet as a major distribution channel to provide services to our clients. A number of regulatory agencies have adopted regulations regarding client privacy, system security and safeguarding practices and the use of client information by service providers. Additional laws and regulations relating to the Internet and safeguarding practices could be adopted in the future, including laws related to access, identity theft and regulations regarding the pricing, taxation, content and quality of products and services delivered over the Internet. Complying with these laws and regulations may be expensive and time-consuming and could limit our ability to use the Internet as a distribution channel, which would have adverse effects on our business and profitability.
While we maintain systems and procedures designed to ensure that we comply with applicable laws and regulations, violations could still occur. In addition, some legal and regulatory frameworks provide for the imposition of fines or penalties for non-compliance even though the non-compliance was inadvertent or unintentional and even though systems and procedures reasonably designed to prevent violations were in place at the time. There may be other negative consequences resulting from a finding of non-compliance, including restrictions on certain activities. Such a finding may also damage our reputation and our relationships with regulators and could restrict the ability of institutional investment managers to invest in our securities.

19


Table of Contents    

We are subject to litigation and regulatory investigations and proceedings and may not always succeed in defending against them.
As a participant in the financial services industry, we face substantial litigation and regulatory risks. We are subject to arbitration claims and lawsuits in the ordinary course of our business, as well as class actions and other significant litigation. We also are the subject of inquiries, investigations and proceedings by regulators, other government agencies and SROs. Even if and when we succeed in defending against these actions, the defense may be costly to us.
The SEC, FINRA and other SROs and state securities commissions, among other things, can censure, fine, issue cease-and-desist orders or suspend or expel a broker-dealer or any of its officers or employees. Similarly, state attorneys general can bring legal actions on behalf of the citizens of their states to assure compliance with state laws. Regulatory agencies in countries outside of the U.S. have similar authority. The ability to comply with applicable laws and rules is dependent in part on the establishment and maintenance of a reasonable compliance function. Failure to establish and enforce reasonable compliance procedures, even if unintentional, can subject us to significant losses or disciplinary or other actions.
Actions brought against us may result in settlements, awards, injunctions, fines, penalties and other results adverse to us. Predicting the outcome of such matters is inherently difficult, particularly where claims are brought on behalf of various classes of claimants or by a large number of claimants, when claimants seek substantial or unspecified damages or when investigations or legal proceedings are at an early stage. A substantial judgment, settlement, fine or penalty could be material to our operating results or cash flows for a particular period, depending on our results for that period, or could cause us significant reputational harm, which could harm our business prospects. In market downturns, the volume of legal claims and amount of damages sought in litigation and regulatory proceedings against financial services companies have historically increased.
We also are subject to litigation claims from third parties alleging infringement of their intellectual property rights. Such litigation can require the expenditure of significant resources, regardless of whether the claims have merit. If we were found to have infringed a third-party patent or other intellectual property right, then we could incur substantial liability and in some circumstances could be enjoined from using the relevant technology or providing related products and services, which could have adverse effects on our business and results of operations.
Risk Factors Relating to Owning Our Stock
TD exercises significant influence over us.
As of September 30, 2019, TD owned approximately 43% of our outstanding common stock. As a result, TD generally has the ability to significantly influence the outcome of any matter submitted to a vote of our stockholders and, as a result of its significant share ownership in TD Ameritrade, TD may have the power, subject to applicable law, to significantly influence actions that might be favorable to TD but not necessarily favorable to our other stockholders.
The stockholders agreement provides that TD may designate five of the twelve members of our board of directors, subject to adjustment based on TD's ownership positions in TD Ameritrade. As of September 30, 2019, based on its ownership positions, TD has the right to designate five members of our board of directors. Accordingly, TD is able to significantly influence the outcome of all matters that come before our board.
TD is permitted under the stockholders agreement to exercise voting rights on up to 45% of our outstanding shares of common stock until termination of the stockholders agreement (January 24, 2021). If our stock repurchases cause TD's ownership percentage to exceed 45%, TD is required to use reasonable efforts to sell or dispose of such excess stock, subject to TD's commercial judgment as to the optimal timing, amount and method of sales with a view to maximizing proceeds from such sales. TD has no absolute obligation to reduce its ownership percentage to 45% by the termination of the stockholders agreement. However, prior to and following the termination of the stockholders agreement, TD is required to vote any such excess stock on any matter in the same proportions as all the outstanding shares of stock held by holders other than TD and its affiliates are voted. In no event may TD Ameritrade repurchase shares of its common stock that would result in TD's ownership percentage exceeding 47%. There is no restriction on the number of shares TD may own following the termination of the stockholders agreement.

20


Table of Contents    

The ownership position and governance rights of TD could also discourage a third party from proposing a change of control or other strategic transaction concerning TD Ameritrade. As a result, our common stock could trade at prices that do not reflect a "takeover premium" to the same extent as do the stocks of similarly situated companies that do not have a stockholder with an ownership interest as large as TD's ownership interest.
We have extensive relationships and business transactions with TD and some of its affiliates, which if terminated or adversely modified could have a material adverse effect on our business, financial condition and results of operations.
The insured deposit account agreement between us and affiliates of TD accounts for a significant portion of our revenue. This agreement enables our clients to invest in an FDIC-insured (up to specified limits) deposit product without the need for us to establish the significant levels of capital that would be required to maintain our own bank charter. During fiscal year 2019, net revenues related to this agreement accounted for approximately 27% of our net revenues. This percentage is expected to increase in fiscal year 2020 as a result of the decrease in commissions and transaction fees on client trades. The termination or adverse modification of this agreement without replacing it on comparable terms with different counterparties, which may not be available, could have a material adverse effect on our business, financial condition and results of operations. If this agreement were terminated or adversely modified and we were permitted to establish our own bank charter for purposes of offering an FDIC-insured deposit product, we would be required to establish and maintain significant levels of capital within a bank subsidiary. We would also be subject to various other risks associated with banking, including credit risk on loans and investments, liquidity risk associated with bank balance sheet management, operational risks associated with banking systems and infrastructure and additional regulatory requirements and supervision.
When conflicts of interest arise between TD Ameritrade and TD, they might be resolved in a manner that adversely affects our business, financial condition or results of operations.
Conflicts of interest may arise between us and TD in areas relating to a variety of past, ongoing and future relationships and contracts, including corporate opportunities, potential acquisitions or financing transactions, sales or other dispositions by TD of its interests in TD Ameritrade and the exercise by TD of its influence over our management and affairs. Some of the directors on our board are also officers or directors of TD or its subsidiaries. Service as a director or officer of both TD Ameritrade and TD or its other subsidiaries could create conflicts of interest when such directors or officers are faced with decisions that could have materially different implications for us and for TD. Our amended and restated certificate of incorporation contains provisions relating to the avoidance of direct competition between us and TD. In addition, a committee of our board consisting of outside independent directors reviews and approves or ratifies transactions with TD and its affiliates. There can be no assurance that any of the foregoing potential conflicts would be resolved in a manner that does not adversely affect our business, financial condition or results of operations. In addition, the provisions of the stockholders agreement related to non-competition are subject to numerous exceptions and qualifications and may not prevent us and TD from competing with each other to some degree.
The terms of the stockholders agreement, our charter documents and Delaware law could inhibit a takeover that stockholders may consider favorable.
Provisions in the stockholders agreement between TD and the Company, our certificate of incorporation and bylaws and Delaware law will make it difficult for any party to acquire control of us in a transaction not approved by the requisite number of directors. These provisions include:
the presence of a classified board of directors;
the ability of the board of directors to issue and determine the terms of preferred stock;
advance notice requirements for inclusion of stockholder proposals at stockholder meetings; and
the anti-takeover provisions of Delaware law.
These provisions could delay, deter or prevent a change of control or change in management that might provide stockholders with a premium to the market price of their common stock.

21


Table of Contents    

The market price of our common stock has experienced, and may continue to experience, substantial volatility.
Our common stock, and the U.S. securities markets in general, have been and are subject to substantial price volatility. The price of our common stock has been known to decrease substantially and quickly. Among the factors that may affect our stock price are the following:
speculation in the investment community or the press about, or actual changes in, our competitive position, organizational structure, executive team, operations, financial condition, financial reporting and results, effectiveness of cost reduction initiatives, or strategic transactions;
the announcement of new products, services, acquisitions, or dispositions by us or our competitors;
the pricing structure for products and services offered to customers by us or our competitors;
our exposure to changes in prevailing interest rates;
sales of a substantial number of shares of our common stock by (i) TD or (ii) J. Joe Ricketts, our founder, and certain members of his family and trusts held for their benefit, who currently have registration rights covering approximately 234 million shares and 52 million shares, respectively, of our common stock; and
increases or decreases in revenue or earnings, changes in earnings estimates by the investment community, changes in the interest rate environment or in market expectations regarding the interest rate environment and variations between estimated financial results and actual financial results.
Changes in the stock market generally or as it concerns our industry, as well as geopolitical, economic, and business factors unrelated to us, may also affect our stock price.
Because the market price of our common stock can fluctuate significantly, we could become the object of securities class action litigation, which could result in substantial costs and a diversion of management's attention and resources and could have adverse effects on our business and the price of our common stock.
We are restricted by the terms of our revolving credit facilities and senior notes.
Our senior unsecured revolving credit facilities contain various covenants and restrictions that may, in certain circumstances and subject to carveouts and exceptions, which may be material, limit our ability to:
create liens;
incur additional indebtedness;
change the nature of our business;
merge or consolidate with another entity;
sell all or substantially all of our assets; and
conduct transactions with affiliates.
Under our revolving credit facilities, we are also required to maintain compliance with a maximum consolidated leverage ratio covenant (not to exceed 3.00:1.00) and a minimum consolidated interest coverage ratio covenant (not less than 4.00:1:00). TDAC is required to maintain compliance with a minimum consolidated tangible net worth covenant and our broker-dealer and FCM/FDM subsidiaries are required to maintain compliance with minimum regulatory net capital covenants.
Our senior unsecured notes contain various covenants and restrictions that may, in certain circumstances and subject to carveouts and exceptions, which may be material, limit our ability to:
create liens;
merge or consolidate with another entity; and
sell all or substantially all of our assets.
As a result of the covenants and other restrictions contained in our revolving credit facilities and our senior unsecured note indentures, we are limited in how we conduct our business. We cannot guarantee that we will be able to remain in compliance with these covenants and other restrictions or be able to obtain waivers for noncompliance in the

22


Table of Contents    

future. Failure to comply with the covenants and other restrictions contained in our debt instruments could have material adverse effects on our financial condition and business by impairing our ability to continue financing our business.
Of particular significance, we could be forced to repay immediately and in full any outstanding borrowings under our revolving credit facilities and our senior unsecured notes if we were to breach our covenants and not cure our breach, even if we could otherwise satisfy our debt service obligations. Also, if we experience a change of control, as defined in our revolving credit facilities, we could be required to repay in full all loans outstanding thereunder, plus accrued interest and fees.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition, our results of operations and our ability to receive dividend payments from our subsidiaries, which are subject to business, economic and competitive conditions, regulatory requirements and other factors beyond our control. If our cash flows and capital resources were insufficient to fund our debt service obligations, then we could be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures might not succeed and might not permit us to satisfy our scheduled debt service obligations. In addition, the terms of our existing or future debt instruments could restrict us from adopting some of these alternatives.
Any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to obtain additional financing. In addition, any future indebtedness could be at a higher interest rate or include covenants that are more restrictive than our current covenants.
Our corporate debt level may limit our ability to obtain additional financing.
As of September 30, 2019 we had approximately $3.55 billion of long-term debt, consisting of:
$600 million of variable-rate Senior Notes with principal due in full on November 1, 2021;
$750 million of 2.950% Senior Notes with principal due in full on April 1, 2022;
$400 million of 3.750% Senior Notes with principal due in full on April 1, 2024;
$500 million of 3.625% Senior Notes with principal due in full on April 1, 2025;
$800 million of 3.300% Senior Notes with principal due in full on April 1, 2027; and
$500 million of 2.750% Senior Notes with principal due in full on October 1, 2029.
Our ability to meet our cash requirements, including our debt repayment obligations, is dependent upon our future performance, which will be subject to financial, business and other factors affecting our operations, many of which are or may be beyond our control. We cannot provide assurance that our business will generate sufficient cash flows from operations to fund our cash requirements. If we are unable to meet our cash requirements from operations, we would be required to obtain alternative financing. The degree to which we may be leveraged as a result of the indebtedness we have incurred could materially and adversely affect our ability to obtain financing for working capital, acquisitions or other purposes, could make us more vulnerable to industry downturns and competitive pressures or could limit our flexibility in planning for, or reacting to, changes and opportunities in our industry, which may place us at a competitive disadvantage. There can be no assurance that we would be able to obtain alternative financing, that any such financing would be on acceptable terms or that we would be permitted to do so under the terms of existing financing arrangements. In the absence of such financing, our ability to respond to changing business and economic conditions, make future acquisitions, react to adverse operating results, meet our debt repayment obligations or fund required capital expenditures could be materially and adversely affected.
Our business, financial position, and results of operations could be harmed by adverse rating actions by credit rating agencies.
If our counterparty credit rating or the credit ratings of our outstanding indebtedness are downgraded, or if rating agencies indicate that a downgrade may occur, then perceptions of our financial strength could be damaged and our business, financial condition and results of operations could be adversely affected. A downgrade would have the

23


Table of Contents    

effect of increasing our incremental borrowing costs and could decrease the availability of funds for borrowing. A downgrade also could adversely affect our relationships with clients.
Our future ability to pay regular dividends to holders of our common stock is subject to the discretion of our board of directors and will be limited by our ability to generate sufficient earnings and cash flows.
Payment of future dividends will be at the discretion of our board of directors and will depend upon a number of factors that the board deems relevant, including future earnings, the success of our business activities, capital and liquidity requirements, the general financial condition and future prospects of our business and general business conditions. If we are unable to generate sufficient earnings and cash flows from our business, then we may not be able to pay dividends on our common stock. Even with sufficient earnings and cash flows from our business, our board of directors might exercise its discretion by not declaring dividends, although failure to declare and pay dividends could adversely affect the price of our common stock.
In addition, our ability to pay dividends is subject to statutory and regulatory limitations. In particular, our ability to pay dividends depends on the ability of our subsidiaries to pay dividends. In this connection, some of our subsidiaries are subject to requirements of the SEC, FINRA, the CFTC, the NFA and other regulators relating to liquidity, capital standards and the use of client funds and securities, which may limit funds available for the payment of dividends to the parent company.
Future sales of equity securities could adversely affect the market price of our common stock and result in dilution.
Our certificate of incorporation authorizes our board of directors to issue additional shares of common stock and to issue shares of preferred stock, without stockholder approval. We could issue additional equity securities to raise additional capital or for other purposes. The issuance of additional equity securities could dilute the interests of the holders of our common stock (including TD, except to the extent that TD exercises its right under the stockholders agreement to maintain its proportionate share of our common stock) and could adversely affect the market price of that stock.
Item 1B.    Unresolved Staff Comments
None.
Item 2.    Properties
Our Company-owned corporate headquarters facility is located in Omaha, Nebraska and provides more than 500,000 square feet of building space. Our headquarters facility has earned Leadership in Energy and Environmental Design (LEED) Platinum Certification, the highest level of distinction awarded by the U.S. Green Building Council. We also lease approximately 80,000 square feet of building space on property adjacent to the headquarters for administrative and operational facilities. These leases expire in 2020. We own additional administrative and operational facilities located in St. Louis, Missouri and Southlake, Texas, which provide a total of approximately 600,000 square feet of building space.
We currently lease approximately 195,000 square feet of building space for an additional operation center in Jersey City, New Jersey. During fiscal year 2019, we entered into a new lease of approximately 210,000 square feet of building space in Jersey City, New Jersey. We plan to transition the existing operation center in Jersey City to the new location upon the expiration of the current lease in 2020. We lease smaller administrative and operational facilities in California, Colorado, Illinois, Maryland, Massachusetts, Michigan, Texas and Utah. We own one data center facility, located in Richardson, Texas and we lease two data center facilities located in New Jersey. We also lease more than 275 retail branch offices, located in 47 states and the District of Columbia. We believe that our facilities are suitable and adequate to meet our needs.
Item 3.    Legal Proceedings
For information regarding legal proceedings, see Note 16Commitments and Contingencies – "Legal and Regulatory Matters" under Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements.

24


Table of Contents    


Item 4.    Mine Safety Disclosures
Not applicable.
PART II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Price Range of Common Stock
Our common stock trades on the Nasdaq Global Select Market under the symbol "AMTD." The closing sale price of our common stock as reported on the Nasdaq Global Select Market on November 1, 2019 was $39.21 per share. As of that date there were 576 holders of record of our common stock based on information provided by our transfer agent. The number of stockholders of record does not reflect the number of individual or institutional stockholders that beneficially own our stock because most stock is held in the name of nominees. Based on information available to us, we believe there are approximately 106,000 beneficial holders of our common stock.
Dividends
We declared and paid a $0.30 per share and a $0.21 per share quarterly cash dividend on our common stock during each quarter of fiscal years 2019 and 2018, respectively. We recently declared a $0.31 per share quarterly cash dividend for the first quarter of fiscal 2020. We are scheduled to pay the quarterly cash dividend on November 19, 2019 to all holders of record of our common stock as of November 5, 2019. The payment of any future dividends will be at the discretion of our board of directors and will depend upon a number of factors that the board of directors deems relevant, including future earnings, the success of our business activities, capital requirements, the general financial condition and future prospects of our business and general business conditions.
Our ability to pay cash dividends on our common stock is also dependent on the ability of our subsidiaries to pay dividends to the parent company. Some of our subsidiaries are subject to requirements of the SEC, FINRA, the CFTC, the NFA and other regulators relating to liquidity, capital standards and the use of client funds and securities, which may limit funds available for the payment of dividends to the parent company. See Item 7, Management's Discussion and Analysis of Results of Operations and Financial Condition — "Liquidity and Capital Resources" for further information.
Securities Authorized for Issuance Under Equity Compensation Plans
Information about securities authorized for issuance under the Company's equity compensation plans is contained in Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

25


Table of Contents    

Performance Graph
The following Company common stock performance information is not deemed to be "soliciting material" or to be "filed" with the SEC or subject to the SEC's proxy rules or to the liabilities of Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any prior or subsequent filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act.
The following graph and table set forth information comparing the cumulative total return through the end of the Company's most recent fiscal year from a $100 investment on September 30, 2014 in the Company's common stock, a broad-based stock index and the stocks comprising an industry peer group.
fy19amtdperformancegrapha01.jpg
 
Period Ended
Index
9/30/14
9/30/15
9/30/16
9/30/17
9/30/18
9/30/19
TD Ameritrade Holding Corporation
100.00

97.06

109.83

154.84

170.21

153.97

S&P 500
100.00

99.39

114.72

136.07

160.44

167.27

Peer Group
100.00

100.65

112.14

158.44

181.33

156.01

The Peer Group is comprised of the following companies that have significant retail brokerage operations:
E*TRADE Financial Corporation
The Charles Schwab Corporation



26


Table of Contents    

Purchases of Equity Securities by the Issuer and Affiliated Purchasers
ISSUER PURCHASES OF EQUITY SECURITIES
Period
 
Total
Number of
Shares
Purchased
 
Average Price Paid per
Share
 
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Program
 
Maximum Number
of Shares that May
Yet Be Purchased
Under the Program
July 1, 2019 — July 31, 2019
 
1,676,765

 
$
51.14

 
1,636,846

 
5,765,029

August 1, 2019 — August 31, 2019
 
2,827,815

 
$
51.30

 
2,826,865

 
2,938,164

September 1, 2019 — September 30, 2019
 
1,386,392

 
$
48.01

 
1,383,955

 
31,554,209

Total — Three months ended September 30, 2019
 
5,890,972

 
$
50.48

 
5,847,666

 
31,554,209

On November 20, 2015, our board of directors authorized the repurchase of up to 30 million shares of our common stock. We disclosed this authorization on November 20, 2015 in our annual report on Form 10-K. On September 11, 2019, our board of directors authorized the repurchase of up to an additional 30 million shares of our common stock. We disclosed this authorization in our Form 8-K filed on October 21, 2019. These programs were the only stock repurchase programs in effect and no programs expired during the fourth quarter of fiscal 2019.
During the quarter ended September 30, 2019, 43,306 shares were repurchased primarily from employees for income tax withholding in connection with distributions of stock-based compensation.
Item 6.    Selected Financial Data
 
 
Fiscal Year Ended September 30,
 
 
2019
 
2018*
 
2017
 
2016
 
2015
 
 
(In millions, except per share amounts)
Consolidated Statements of Income Data:
 
 
 
 
 
 
 
 
 
 
Net revenues
 
$
6,016

 
$
5,452

 
$
3,676

 
$
3,327

 
$
3,247

Operating income
 
3,001

 
1,998

 
1,466

 
1,318

 
1,325

Net income
 
2,208

 
1,473

 
872

 
842

 
813

Earnings per share — basic
 
$
3.98

 
$
2.60

 
$
1.65

 
$
1.59

 
$
1.50

Earnings per share — diluted
 
$
3.96

 
$
2.59

 
$
1.64

 
$
1.58

 
$
1.49

Weighted average shares outstanding — basic
 
555

 
567

 
529

 
531

 
543

Weighted average shares outstanding — diluted
 
557

 
569

 
531

 
534

 
547

Dividends declared per share
 
$
1.20

 
$
0.84

 
$
0.72

 
$
0.68

 
$
0.60

 
 
As of September 30,
 
 
2019
 
2018
 
2017*
 
2016
 
2015
 
 
(In millions)
Consolidated Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2,852

 
$
2,690

 
$
1,472

 
$
1,855

 
$
1,978

Investments available-for-sale, at fair value
 
1,668

 
484

 
746

 
757

 

Total assets
 
43,786

 
37,520

 
38,627

 
28,818

 
26,375

Long-term debt and other borrowings
 
3,594

 
2,535

 
2,652

 
1,817

 
1,800

Stockholders' equity
 
8,700

 
8,003

 
7,247

 
5,051

 
4,903

 
* The growth in our Consolidated Balance Sheet as of September 30, 2017 and Statement of Income for the fiscal year ended 2018 was primarily due to our acquisition of Scottrade on September 18, 2017.

27


Table of Contents    

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations
This discussion contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words "may," "could," "would," "should," "believe," "expect," "anticipate," "plan," "estimate," "target," "project," "intend" and similar words or expressions. In particular, forward-looking statements contained in this discussion include our expectations regarding: the effect of client trading activity on our results of operations; the effect of changes in interest rates on our net interest spread; the amount of net revenues; the impact of reducing commissions on our online exchange-listed stock, exchange traded funds ("ETF") (domestic and Canadian) and option trades; the amounts of total operating expenses, amortization of acquired intangible assets and advertising expense; our effective income tax rate; our capital and liquidity needs and our plans to finance such needs; and our plans to return capital to stockholders through cash dividends and share repurchases.
The Company's actual results could differ materially from those anticipated in such forward-looking statements. Important factors that may cause such differences include, but are not limited to: economic, social and political conditions and other securities industry risks; interest rate risks; liquidity risks; client and counterparty credit risks; clearing function risks; systemic risk; aggressive competition; information system risks, network security risks; investment advisory services risks; merger and acquisition risks; external service provider risks; employee misconduct risks; LIBOR phase-out risks; new laws, rules, regulations and regulatory guidance affecting our business; net capital requirements; extensive regulation and regulatory uncertainties; and litigation, investigations and proceedings involving our business. We also are subject to other risks, uncertainties and assumptions set forth under Item 1A  Risk Factors of this Form 10-K, as well as the risk that our risk management practices may leave us exposed to unidentified or unanticipated risks. The forward-looking statements contained in this report speak only as of the date on which they were made. We undertake no obligation to publicly update or revise such statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.
Glossary of Terms
In discussing and analyzing our business, we utilize several metrics and other terms that are defined in the following Glossary of Terms. Italics indicate other defined terms that appear elsewhere in the Glossary. The term "GAAP" refers to U.S. generally accepted accounting principles.
Asset-based revenues — Revenues consisting of (1) bank deposit account fees, (2) net interest revenue and (3) investment product fees. The primary factors driving our asset-based revenues are average balances and average rates. Average balances consist primarily of average client bank deposit account balances, average client margin balances, average segregated cash balances, average client credit balances, average fee-based investment balances and average securities borrowing and securities lending balances. Average rates consist of the average interest rates and fees earned and paid on such balances.
Average client trades per day — Total trades divided by the number of trading days in the period. This metric is also known as daily average revenue trades ("DARTs").
Average commissions per trade  Total commissions and transaction fee revenues as reported on our consolidated financial statements, less order routing revenue, divided by total trades for the period. Commissions and transaction fee revenues primarily consist of trading commissions, order routing revenue and markups on riskless principal transactions in fixed-income securities.
Basis point — When referring to interest rates, one basis point represents one one-hundredth of one percent.
Bank deposit account fees — Revenues generated from a sweep program that is offered to eligible clients of the Company whereby clients' uninvested cash is swept to FDIC-insured (up to specified limits) money market deposit accounts at affiliated and non-affiliated third-party financial institutions participating in the program.
Beneficiary accounts — Brokerage accounts managed by a custodian, guardian, conservator or trustee on behalf of one or more beneficiaries. Examples include accounts maintained under the Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA), guardianship, conservatorship and trust arrangements and pension or profit plan for small business accounts.

28


Table of Contents    

Brokerage accounts  Accounts maintained by us on behalf of clients for securities brokerage activities. The primary types of brokerage accounts are cash accounts, margin accounts, IRA accounts and beneficiary accounts. Futures accounts are sub-accounts associated with a brokerage account for clients who want to trade futures and/or options on futures. Forex accounts are sub-accounts associated with a brokerage account for clients who want to engage in foreign exchange trading.
Cash accounts — Brokerage accounts that do not have margin account approval.
Client assets  The total value of cash and securities in brokerage accounts.
Client cash and money market assets — The sum of all client cash balances, including client credit balances and client cash balances swept into bank deposit accounts or money market mutual funds.
Client credit balances — Client cash held in brokerage accounts, excluding balances generated by client short sales on which no interest is paid. Interest paid on client credit balances is a reduction of net interest revenue. Client credit balances are included in "payable to clients" on our consolidated financial statements.
Client margin balances — The total amount of cash loaned to clients in margin accounts. Such loans are secured by client assets. Interest earned on client margin balances is a component of net interest revenue. Client margin balances are included in "receivable from clients, net" on our consolidated financial statements.
Commissions and transaction fees — Revenues earned on trading commissions, order routing revenue and markups on riskless principal transactions in fixed-income securities. Revenues earned on trading commissions includes client trades in common and preferred stock, ETFs, exchange-traded notes, closed-end funds, options, futures, foreign exchange, mutual funds and fixed income securities.
Consolidated duration — The weighted average remaining years until maturity of our spread-based assets. For purposes of this calculation, floating rate balances are treated as having a one-month duration. Consolidated duration is used in analyzing our aggregate interest rate sensitivity.
Daily average revenue trades ("DARTs") — Total trades divided by the number of trading days in the period. This metric is also known as average client trades per day.
EBITDA  EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP financial measure. 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.
Fee-based investment balances — Client assets invested in money market mutual funds, other mutual funds and our programs such as AdvisorDirect,® Essential Portfolios, Selective Portfolios and Personalized Portfolios on which we earn fee revenues. Fee revenues earned on these balances are included in "investment product fees" on our consolidated financial statements.
Forex accounts — Sub-accounts maintained by us on behalf of clients for foreign exchange trading. Each forex account must be associated with a brokerage account. Forex accounts are not counted separately for purposes of our client account metrics.
Funded accounts — All open client accounts with a total liquidation value greater than zero.
Futures accounts — Sub-accounts maintained by us on behalf of clients for trading in futures and/or options on futures. Each futures account must be associated with a brokerage account. Futures accounts are not counted separately for purposes of our client account metrics.
Insured Deposit Account — We are party to an Insured Deposit Account ("IDA") agreement with TD Bank USA, N.A. ("TD Bank USA"), TD Bank, N.A. and The Toronto-Dominion Bank ("TD"). Under the IDA agreement, TD Bank USA and TD Bank, N.A. (together, the "TD Depository Institutions") make available to our clients FDIC-insured (up to specified limits) money market deposit accounts as either designated sweep vehicles or as non-sweep deposit accounts. We provide marketing, recordkeeping and support services for the TD Depository Institutions with respect to the money market deposit accounts. In exchange for providing these services, the TD Depository

29


Table of Contents    

Institutions pay us an aggregate marketing fee based on the weighted average yield earned on the client IDA assets, less the actual interest paid to clients, a servicing fee to the TD Depository Institutions and the cost of FDIC insurance premiums. Fee revenues earned under this agreement are included in "bank deposit account fees" on our consolidated financial statements.
Interest-earning assets — Consist of client margin balances, segregated cash, deposits paid on securities borrowing and other cash and interest-earning investment balances.
Interest rate-sensitive assets — Consist of spread-based assets and client cash invested in money market mutual funds.
Investment product fees  Revenues earned on fee-based investment balances. Investment product fees consists of fees earned on client assets invested in money market mutual funds, other mutual funds and through investment programs such as AdvisorDirect,® Essential Portfolios, Selective Portfolios and Personalized Portfolios. Investment product fees also includes fees earned on client assets managed by independent registered investment advisors utilizing our trading and investing platforms.
IRA accounts (Individual Retirement Arrangements) — A personal trust account for the exclusive benefit of a U.S. individual (or his or her beneficiaries) that provides tax advantages in accumulating funds to save for retirement or other qualified purposes. These accounts are subject to numerous restrictions on additions to and withdrawals from the account, as well as prohibitions against certain investments or transactions conducted within the account. We offer traditional, Roth, Savings Incentive Match Plan for Employees (SIMPLE) and Simplified Employee Pension (SEP) IRA accounts.
Liquid assets  Liquid assets is a non-GAAP financial measure that we consider to be an important measure of our liquidity. 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 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. Net capital in excess of minimum operational targets established by management is generally available for dividend from the regulated subsidiaries to the parent company. 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. Liquid assets should be considered as a supplemental measure of liquidity, rather than as a substitute for GAAP cash and cash equivalents.
Liquidation value — The net value of a client's account holdings as of the close of a regular trading session. Liquidation value includes client cash and the value of long security positions, less margin balances and the cost to buy back short security positions. It also includes the value of open futures, foreign exchange and options positions.
Margin accounts  Brokerage accounts in which clients may borrow from us to buy securities or for any other purpose, subject to regulatory and Company-imposed limitations.
Net interest margin ("NIM") — A measure of the net yield on our average spread-based assets. Net interest margin is calculated for a given period by dividing the annualized sum of bank deposit account fees and net interest revenue by average spread-based assets.
Net interest revenue — Net interest revenue is interest revenues less brokerage interest expense. Interest revenues are generated by charges to clients on margin balances maintained in margin accounts, the investment of cash from operations and segregated cash and interest earned on securities borrowing/securities lending. Brokerage interest expense consists of amounts paid or payable to clients based on credit balances maintained in brokerage accounts and interest incurred on securities borrowing/securities lending. Brokerage interest expense does not include interest on our non-brokerage borrowings.
Net new assets — Consists 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

30


Table of Contents    

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.
Net new asset growth rate (annualized) — Annualized net new assets as a percentage of client assets as of the beginning of the period.
Non-GAAP Net Income and Non-GAAP Diluted EPS — Non-GAAP net income and non-GAAP diluted earnings per share ("EPS") are non-GAAP financial measures. We define non-GAAP net income as net income adjusted to remove the after-tax effect of amortization of acquired intangible assets and acquisition-related expenses. 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 our 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.
Order routing revenue — Revenues generated from payments and/or rebates received from market centers. Order routing revenue is a component of transaction-based revenues.
Securities borrowing — We borrow securities temporarily from other broker-dealers in connection with our broker-dealer business. We deposit cash as collateral for the securities borrowed, and generally earn interest revenue on the cash deposited with the counterparty. We also incur interest expense for borrowing certain securities.
Securities lending — We loan securities temporarily to other broker-dealers in connection with our broker-dealer business. We receive cash as collateral for the securities loaned, and generally incur interest expense on the cash deposited with us. We also earn revenue for lending certain securities.
Securities sold under agreements to repurchase (repurchase agreements) We sell securities to counterparties with an agreement to repurchase the same or substantially the same securities at a stated price plus interest on a specified date. We utilize repurchase agreements to finance our short-term liquidity and capital needs. Under these financing transactions, we receive cash from counterparties and provide U.S. Treasury securities as collateral.
Segregated cash — Client cash and investments segregated in compliance with Rule 15c3-3 of the Securities Exchange Act of 1934 (the Customer Protection Rule) and other regulations. Interest earned on segregated cash is a component of net interest revenue.
Spread-based assets — Client and brokerage-related asset balances, consisting of bank deposit account balances and interest-earning assets. Spread-based assets is used in the calculation of our net interest margin and our consolidated duration.
Total trades — Revenue-generating client securities trades, which are executed by our broker-dealer and FCM/FDM subsidiaries. Total trades are a significant source of our revenues. Such trades include, but are not limited to, trades in equities, options, futures, foreign exchange, mutual funds and debt instruments. Trades generate revenue from commissions, markups on riskless principal transactions in fixed income securities, transaction fees and/or order routing revenue.
Trading days — Days in which the U.S. equity markets are open for a full trading session. Reduced exchange trading sessions are treated as half trading days.
Transaction-based revenues — Revenues generated from client trade execution, consisting primarily of commissions, markups on riskless principal transactions in fixed income securities, transaction clearing fees and order routing revenue.
Financial Statement Overview
We provide securities brokerage and clearing services to our clients through our introducing and clearing broker-dealer subsidiaries. We also provide futures and foreign exchange trade execution services to our clients through our futures commission merchant ("FCM") and forex dealer member ("FDM") subsidiary. Substantially all of our net revenues are derived from our brokerage activities and clearing and execution services. Our primary focus is

31


Table of Contents    

serving retail investors and traders and independent registered investment advisors by providing services with straightforward, affordable pricing.
Our largest sources of revenues are asset-based revenues and transaction-based revenues. The primary factors driving our asset-based revenues are average balances and average rates. Average balances consist primarily of average client bank deposit account balances, average client margin balances, average segregated cash balances, average client credit balances, average fee-based investment balances and average securities borrowing and lending balances. Average rates consist of the average interest rates and fees earned and paid on such balances. The primary factors driving our transaction-based revenues are total client trades and average commissions per trade. Effective October 3, 2019, we reduced our online exchange-listed stock, exchange traded funds (ETF) (domestic and Canadian) and option trade commissions from $6.95 to $0 per trade (plus $0.65 per contract and no exercise or assignment fees on option trades). For information regarding the expected impact of these price reductions to our net revenues, see "Results of Operations" later in this section. We also receive order routing revenue, which results from arrangements we have with many market centers to receive cash payments and/or rebates in exchange for routing orders to these firms for execution. Order routing revenue is included in commissions and transaction fees on our consolidated financial statements.
Our largest operating expense generally is employee compensation and benefits. Employee compensation and benefits expense includes salaries, bonuses, stock-based compensation, group insurance, contributions to benefit programs, recruitment, severance and other related employee costs.
Clearing and execution costs include incremental third-party expenses that tend to fluctuate as a result of fluctuations in client accounts or trades. Examples of expenses included in this category are outsourced clearing services, statement and confirmation processing and postage costs and clearing expenses paid to the National Securities Clearing Corporation, option exchanges and other market centers. Communications expense includes telecommunications, other postage, news and quote costs. Occupancy and equipment costs include the costs of leasing and maintaining our office spaces, software licensing and maintenance costs and maintenance expenses on computer hardware and other equipment. Depreciation and amortization includes depreciation on property and equipment and amortization of leasehold improvements. Amortization of acquired intangible assets consists of amortization of amounts allocated to the value of intangible assets acquired in business acquisitions.
Professional services expense includes costs paid to outside firms for assistance with legal, accounting, technology, regulatory, marketing and general management issues. Advertising costs include production and placement of advertisements in various media, including online, television, print and email, as well as client promotion and development costs. Advertising expenses may fluctuate significantly from period to period. Other operating expenses include provision for bad debt losses, fraud and error losses, gains or losses on disposal of property, insurance expenses, travel expenses and other miscellaneous expenses. During fiscal year 2018, other operating expenses also included costs incurred related to the integration of Scottrade.
Interest on borrowings consists of interest expense on our long-term debt and other borrowings. Gain on business-related divestiture represents the gain realized on the sale of TD Ameritrade Trust Company's ("TDATC"), an indirect wholly-owned subsidiary of the Company, retirement plan custody and trust assets on June 28, 2019. Loss on sale of investments represents losses realized on corporate (non broker-dealer) investments.
Acquisition of Scottrade
On September 18, 2017, we completed our acquisition of the brokerage business of Scottrade. The transaction combined highly complementary franchises and added significant scale to our retail business with the addition of approximately 3.5 million funded client accounts, extended our leadership in trading, and expanded the size of our branch network.
For additional information regarding this acquisition, see Note 2Business Acquisition under Item 8. Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements.

32


Table of Contents    


Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements requires us to make judgments and estimates that may have a significant impact upon our financial results. Note 1, under Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements, of this Form 10-K contains a summary of our significant accounting policies, many of which require the use of estimates and assumptions. We believe that the following areas are particularly subject to management's judgments and estimates and could materially affect our results of operations and financial position.
Valuation of goodwill and acquired intangible assets
We test goodwill and our indefinite-lived acquired intangible asset for impairment on at least an annual basis, or whenever events occur or changes in circumstances indicate that the carrying values may not be recoverable. In performing the goodwill impairment tests, we utilize quoted market prices of our common stock to estimate the fair value of the Company as a whole. The estimated fair value is then allocated to our reporting unit and is compared with the carrying value of the reporting unit. No impairment charges have resulted from our goodwill impairment tests.
To determine if the indefinite-lived intangible asset is impaired, we first assess certain qualitative factors. Based on this assessment, if it is determined that more likely than not the fair value of the indefinite-lived intangible asset is less than its carrying amount, we perform a quantitative impairment test. No impairment charges have resulted from the indefinite-lived intangible asset impairment tests.
We review our finite-lived acquired intangible assets for impairment whenever events occur or changes in circumstances indicate that the carrying amount of such asset may not be recoverable. We evaluate recoverability by comparing the undiscounted cash flows associated with the asset to the asset's carrying amount. We also evaluate the remaining useful lives of intangible assets each reporting period to determine if events or trends warrant a revision to the remaining period of amortization. We have had no events or trends that have warranted a material revision to the originally estimated useful lives.
Estimates of effective income tax rates, uncertain tax positions, deferred income taxes and related valuation allowances
We estimate our income tax expense based on the various jurisdictions where we conduct business. This requires us to estimate our current income tax obligations and to assess temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities. Temporary differences result in deferred income tax assets and liabilities. We must evaluate the likelihood that deferred income tax assets will be realized. To the extent we determine that realization is not "more likely than not," we establish a valuation allowance. Establishing or increasing a valuation allowance results in a corresponding increase to income tax expense in our consolidated financial statements. Conversely, to the extent circumstances indicate that a valuation allowance can be reduced or is no longer necessary, that portion of the valuation allowance is reversed, reducing income tax expense.
We must make significant judgments to calculate our provision for income taxes, our deferred income tax assets and liabilities and any valuation allowance against our deferred income tax assets. We must also exercise judgment in determining the need for, and amount of, any accruals for uncertain tax positions. Because the application of tax laws and regulations to many types of transactions is subject to varying interpretations, amounts reported in our consolidated financial statements could be significantly changed at a later date upon final determinations by taxing authorities.
Accruals for contingent liabilities
Accruals for contingent liabilities, such as legal and regulatory claims and proceedings, reflect an estimate of probable losses for each matter. In making such estimates, we consider many factors, including the progress of the matter, prior experience and the experience of others in similar matters, available defenses, insurance coverage, indemnification provisions and the advice of legal counsel and other experts. In many matters, such as those in which substantial or indeterminate damages or fines are sought, or where cases or proceedings are in the early stages, it is not possible to determine whether a loss will be incurred, or to estimate the range of that loss, until the matter

33


Table of Contents    

is close to resolution, in which case no accrual is made until that time. Because matters may be resolved over long periods of time, accruals are adjusted as more information becomes available or when an event occurs requiring a change. Significant judgment is required in making these estimates, and the actual cost of resolving a matter may ultimately differ materially from the amount accrued.
Results of Operations
Conditions in the U.S. equity markets significantly impact the volume of our clients' trading activity. There is a relationship between the volume of our clients' trading activity and our results of operations. We cannot predict future trading volumes in the U.S. equity markets. If client trading activity increases, we generally expect that it would have a positive impact on our results of operations. If client trading activity declines, we generally expect that it would have a negative impact on our results of operations.
Changes in average client balances, especially bank deposit account, margin, credit and fee-based investment balances, may significantly impact our results of operations. Changes in interest rates also significantly impact our results of operations. We seek to mitigate interest rate risk by aligning the average duration of our interest-earning assets with that of our interest-bearing liabilities. We cannot predict the direction of interest rates or the levels of client balances. If interest rates rise, we generally expect to earn a larger net interest spread. Conversely, a falling interest rate environment generally would result in us earning a smaller net interest spread.
Effective October 3, 2019, we reduced our online exchange-listed stock, ETFs (domestic and Canadian) and option trade commissions from $6.95 to $0 per trade (plus $0.65 per contract and no exercise or assignment fees on option trades). The expected impact of these price reductions on our net revenues for fiscal year 2020 is discussed later in this section.
Financial Performance Metrics
Net income, diluted earnings per share and EBITDA (earnings before interest, taxes, depreciation and amortization) are key metrics we use in evaluating our financial performance. Net income and diluted earnings per share are GAAP financial measures and EBITDA is a non-GAAP financial measure.
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 the TD Ameritrade Holding Corporation 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.
The following table sets forth net income in dollars and as a percentage of net revenues for the periods indicated, and provides reconciliations to EBITDA (dollars in millions):
 
 
Fiscal Year Ended September 30,
 
 
2019
 
2018
 
2017
 
 
$
 
% of Net
Revenues
 
$
 
% of Net
Revenues
 
$
 
% of Net
Revenues
Net income (GAAP)
 
$
2,208

 
36.7
%
 
$
1,473

 
27.0
%
 
$
872

 
23.7
%
Add:
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
148

 
2.5
%
 
142

 
2.6
%
 
102

 
2.8
%
Amortization of acquired intangible assets
 
125

 
2.1
%
 
141

 
2.6
%
 
79

 
2.1
%
Interest on borrowings
 
144

 
2.4
%
 
99

 
1.8
%
 
71

 
1.9
%
Provision for income taxes
 
721

 
12.0
%
 
414

 
7.6
%
 
522

 
14.2
%
EBITDA (non-GAAP)
 
$
3,346

 
55.6
%
 
$
2,269

 
41.6
%
 
$
1,646

 
44.8
%

34


Table of Contents    

Fiscal Year Ended September 30, 2019 Compared to Fiscal Year Ended September 30, 2018
Our net income increased 50% for fiscal year 2019 compared to fiscal year 2018, primarily due to an increase in net revenues, a decrease in operating expenses and a $60 million gain on a business-related divestiture, partially offset by an increase in the effective income tax rate and interest on borrowings. The effective income tax rate was lower in the prior fiscal year primarily due to the impact from the enactment of the Tax Cuts and Jobs Act (the "Act") on December 22, 2017.
Our EBITDA increased 47% for fiscal year 2019 compared to fiscal year 2018, primarily due to an increase in net revenues, a decrease in operating expenses excluding depreciation and amortization and a $60 million gain on a business-related divestiture.
Our diluted earnings per share increased 53% to $3.96 for fiscal year 2019 compared to $2.59 for fiscal year 2018, due to higher net income and a 2% decrease in the weighted average diluted shares outstanding as a result of our stock repurchase program. Details regarding our fiscal year 2020 expectations for net revenues and expenses are presented later in this discussion.
Fiscal Year Ended September 30, 2018 Compared to Fiscal Year Ended September 30, 2017
Our net income increased 69% for fiscal year 2018 compared to fiscal year 2017, primarily due to an increase in net revenues and a lower effective tax rate, primarily due to the enactment of the Act on December 22, 2017. These increases were partially offset by increases in operating expenses and interest on borrowings, and an $11 million loss on sale of investments during fiscal year 2018. Net revenues and operating expenses increased primarily due to the Scottrade acquisition.
Our EBITDA increased 38% for fiscal year 2018 compared to fiscal year 2017, primarily due to an increase in net revenues, partially offset by an increase in operating expenses excluding depreciation and amortization, and an $11 million loss on sale of investments during fiscal year 2018.
Our diluted earnings per share increased 58% to $2.59 for fiscal year 2018 compared to $1.64 for fiscal year 2017, primarily due to higher net income, partially offset by a 7% increase in the weighted average diluted shares outstanding as a result of the issuance of our common stock in connection with the Scottrade acquisition.
Operating Metrics
Our largest sources of revenues are asset-based revenues and transaction-based revenues. For fiscal year 2019, asset-based revenues and transaction-based revenues accounted for 64% and 33% of our net revenues, respectively. Asset-based revenues consist of (1) bank deposit account fees, (2) net interest revenue and (3) investment product fees. The primary factors driving our asset-based revenues are average balances and average rates. Average balances consist primarily of average client bank deposit account balances, average client margin balances, average segregated cash balances, average client credit balances, average fee-based investment balances and average securities borrowing and lending balances. Average rates consist of the average interest rates and fees earned and paid on such balances. The primary factors driving our transaction-based revenues are total trades and average commissions per trade. We also consider client account and client asset metrics, although we believe they are generally of less significance to our results of operations for any particular period than our metrics for asset-based and transaction-based revenues.

35


Table of Contents    

Asset-Based Revenue Metrics
We calculate the return on our bank deposit account balances and our interest-earning assets using a measure we refer to as net interest margin. Net interest margin is calculated for a given period by dividing the annualized sum of bank deposit account fees and net interest revenue by average spread-based assets. Spread-based assets consist of average bank deposit account balances and average interest-earning assets, which include client margin balances, segregated cash, deposits paid on securities borrowing and other cash and interest-earning investment balances. The following table sets forth net interest margin and average spread-based assets (dollars in millions):
 
 
Fiscal Year
 
'19 vs. '18
Increase/
(Decrease)
 
'18 vs. '17
Increase/
(Decrease)
 
 
2019
 
2018
 
2017
 
Average bank deposit account balances
 
$
112,716

 
$
116,695

 
$
93,922

 
$
(3,979
)
 
$
22,773

Average interest-earning assets
 
32,242

 
30,849

 
25,316

 
1,393

 
5,533

Average spread-based balances
 
$
144,958

 
$
147,544

 
$
119,238

 
$
(2,586
)
 
$
28,306

Bank deposit account fee revenue
 
$
1,717

 
$
1,541

 
$
1,107

 
$
176

 
$
434

Net interest revenue
 
1,533

 
1,272

 
690

 
261

 
582

Spread-based revenue
 
$
3,250

 
$
2,813

 
$
1,797

 
$
437

 
$
1,016

Average yield — bank deposit account fees
 
1.50
%
 
1.30
%
 
1.16
%
 
0.20
%
 
0.14
%
Average yield — interest-earning assets
 
4.69
%
 
4.07
%
 
2.69
%
 
0.62
%
 
1.38
%
Net interest margin (NIM)
 
2.21
%
 
1.88
%
 
1.49
%
 
0.33
%
 
0.39
%
The following tables set forth key metrics that we use in analyzing net interest revenue, which is a component of net interest margin (dollars in millions):
 
 
Interest Revenue (Expense)
Fiscal Year
 
'19 vs. '18
Increase/
(Decrease)
 
'18 vs. '17
Increase/
(Decrease)
 
 
2019
 
2018
 
2017
 
Segregated cash
 
$
123

 
$
95

 
$
49

 
$
28

 
$
46

Client margin balances
 
1,075

 
920

 
482

 
155

 
438

Securities lending/borrowing, net
 
248

 
222

 
139

 
26

 
83

Other cash and interest-earning investments
 
98

 
42

 
22

 
56

 
20

Client credit balances
 
(11
)
 
(7
)
 
(2
)
 
(4
)
 
(5
)
Net interest revenue
 
$
1,533

 
$
1,272

 
$
690

 
$
261

 
$
582

 
 
Average Balance
Fiscal Year
 
'19 vs. '18
%
Change
 
'18 vs. '17
%
Change
 
 
2019
 
2018
 
2017
 
Segregated cash
 
$
5,511

 
$
6,832

 
$
8,282

 
(19
)%
 
(18
)%
Client margin balances
 
20,651

 
19,812

 
12,542

 
4
 %
 
58
 %
Securities borrowing
 
1,125

 
925

 
1,004

 
22
 %
 
(8
)%
Other cash and interest-earning investments
 
4,955

 
3,280

 
3,488

 
51
 %
 
(6
)%
Interest-earning assets
 
$
32,242

 
$
30,849

 
$
25,316

 
5
 %
 
22
 %
Client credit balances
 
$
19,286

 
$
20,438

 
$
16,182

 
(6
)%
 
26
 %
Securities lending
 
2,825

 
2,888

 
2,004

 
(2
)%
 
44
 %
Interest-bearing liabilities
 
$
22,111

 
$
23,326

 
$
18,186

 
(5
)%
 
28
 %

36


Table of Contents    

 
 
Average Yield (Cost)
Fiscal Year
 
'19 vs. '18
Net Yield
Increase/
(Decrease)
 
'18 vs. '17
Net Yield
Increase/
(Decrease)
 
 
2019
 
2018
 
2017
 
Segregated cash
 
2.20
 %
 
1.37
 %
 
0.58
 %
 
0.83
 %
 
0.79
 %
Client margin balances
 
5.14
 %
 
4.58
 %
 
3.79
 %
 
0.56
 %
 
0.79
 %
Other cash and interest-earning investments
 
1.94
 %
 
1.26
 %
 
0.63
 %
 
0.68
 %
 
0.63
 %
Client credit balances
 
(0.06
)%
 
(0.03
)%
 
(0.01
)%
 
(0.03
)%
 
(0.02
)%
Net interest revenue
 
4.69
 %
 
4.07
 %
 
2.69
 %
 
0.62
 %
 
1.38
 %
The following table sets forth key metrics that we use in analyzing investment product fee revenues (dollars in millions):
 
 
Fiscal Year
 
'19 vs. '18
Increase/
(Decrease)
 
'18 vs. '17
Increase/
(Decrease)
 
 
2019
 
2018
 
2017
 
Average fee-based investment balances
 
$
273,728

 
$
252,503

 
$
185,123

 
$
21,225

 
$
67,380

Average yield—investment product fees
 
0.21
%
 
0.22
%
 
0.23
%
 
(0.01
)%
 
(0.01
)%
Investment product fee revenue
 
$
586

 
$
557

 
$
423

 
$
29

 
$
134

Transaction-Based Revenue Metrics
The following table sets forth several key metrics regarding client trading activity, which we utilize in measuring and evaluating performance and the results of our operations:
 
 
Fiscal Year
 
'19 vs. '18
%
Change
 
'18 vs. '17
%
Change
 
 
2019
 
2018
 
2017
 
Total trades (in millions)
 
215.11

 
202.78

 
127.68

 
6
 %
 
59
 %
Average client trades per day
 
862,158

 
811,110

 
510,710

 
6
 %
 
59
 %
Trading days
 
249.5

 
250.0

 
250.0

 
0
 %
 
0
 %
Average commissions per trade
 
$
7.02

 
$
7.45

 
$
8.33

 
(6
)%
 
(11
)%
Order routing revenue (in millions)
 
$
492

 
$
458

 
$
320

 
7
 %
 
43
 %
Client Account and Client Asset Metrics
The following table sets forth certain metrics regarding client accounts and client assets, which we use to analyze growth and trends in our client base:
 
 
Fiscal Year
 
 
2019
 
2018
 
2017
Funded accounts (beginning of year)
 
11,514,000

 
11,004,000

 
6,950,000

Funded accounts (end of year)
 
11,971,000

 
11,514,000

 
11,004,000

Percentage change during year
 
4
%
 
5
%
 
58
%
Client assets (beginning of year, in billions)
 
$
1,297.5

 
$
1,118.5

 
$
773.8

Client assets (end of year, in billions)
 
$
1,327.7

 
$
1,297.5

 
$
1,118.5

Percentage change during year
 
2
%
 
16
%
 
45
%
Net new assets (in billions)
 
$
93.1

 
$
92.3

 
$
80.1

Net new assets growth rate
 
7
%
 
8
%
 
10
%


37


Table of Contents    

Consolidated Statements of Income Data
The following table summarizes certain data from our Consolidated Statements of Income for analysis purposes (dollars in millions):
 
 
Fiscal Year
 
'19 vs. '18
%
Change
 
'18 vs. '17
%
Change
 
 
2019
 
2018
 
2017
 
Revenues:
 
 
 
 
 
 
 
 
 
 
Transaction-based revenues:
 
 
 
 
 
 
 
 
 
 
   Commissions and transaction fees
 
$
2,002

 
$
1,969

 
$
1,384

 
2
 %
 
42
 %
Asset-based revenues:
 
 
 
 
 
 
 
 
 
 
  Bank deposit account fees
 
1,717

 
1,541

 
1,107

 
11
 %
 
39
 %
  Net interest revenue
 
1,533

 
1,272

 
690

 
21
 %
 
84
 %
  Investment product fees
 
586