Transcript Document

February 2003
Shareholders’ Meeting
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Safe Harbor Statement
This presentation contains forward-looking statements within the meaning of the Federal
securities laws. We intend these forward-looking statements to be covered by the safe
harbor provisions of the Federal securities laws. In particular, any statements or
projections regarding our future synergies, earnings, costs, operating margins or
advertising expenses are forward-looking statements. These statements reflect only our
current expectations and are not guarantees of future performance or results. These
statements involve risks, uncertainties and assumptions that could cause actual results or
performance to differ materially from those contained in the forward-looking statements.
These risks, uncertainties and assumptions include the successful integration of the
operations of Ameritrade and Datek, operational cost savings resulting from the merger of
Ameritrade and Datek, market fluctuations and changes in client trading activity, general
economic conditions, increased competition, regulatory and legal matters and
uncertainties and other risk factors described in our latest Annual Report on Form 10-K.
These forward-looking statements speak only as of the date on which the statements
were made. We undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
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Joe Moglia, CEO
[email protected]
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Executive Management Team
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Phylis Esposito – Chief Strategy Officer
John Grifonetti – Senior Advisor
Kurt Halvorson – Chief Administrative Officer
Ellen Koplow – General Counsel
Randy MacDonald – Chief Financial Officer
John Mullin – Interim Chief of Technology
Anne Nelson – Chief Marketing Officer
Vince Passione – President, ICD
Pete Ricketts – President, PCD
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Ownership as of Datek Merger Closing (9/9/02)
% Ownership
Ricketts Family (Board)
Bain Capital (Board)
TA Associates (Board)
Silver Lake Partners (Board)
Datek Founders
Deutsche Bank
Groupe Arnault
Advent
Executive Officers
28%
12%
10%
8%
6%
5%
4%
3%
2%
77%
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Industry Outlook: Secular Growth
• Investors using the Internet
to execute:
• 15% - ’98
• 31% - ‘02
51.7 M
Accounts
24.7 M
Accounts
Human Behavior
Demographics
2002
2007
What’s our share? 3M to over 6M . . . Or more?
Source: Jupiter, September 2002.
SIA “Equity Ownership in America”, 2002
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When Does the Internet Transform
an Industry?
When it simultaneously improves both the
Client’s experience and the service provider’s
business model.
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Our Mission
To lead by empowering Clients
to pursue their financial goals,
accomplished through integrity,
teamwork and Client-driven innovation.
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Priorities – Resources – Focus
Clients
Shareholders
Associates
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Ameritrade + Datek =
#1 Online Broker
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#1: Online Equity Trades
4Q CY2002 Average Daily Equity Trades
141K
132K
92K
88K
AMTD
Source: Company reports.
SCH
TD
ET
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#1: Net Account Growth (24 Mo.)
1.5 Million
112%
425K
31%
Organic
215K
NDB
876K
Datek
AMTD
Approaching
3 Million
Clients
495K
15%
ET
Net account growth for the 24 months ended 12/31/02.
Source: Derived from company reports.
100K
3%
TD
(100K)
–2%
SCH
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#1: Account Quality
Average online equity trades per account per year
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8
7
6
AMTD
Quarter ended 12/31/02 annualized.
Source: Derived from company reports.
SCH
TD
ET
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#1: Operating Margin
44%
38%
25%
13%
AMTD + Datek
(w/synergies)
AMTD + Datek
Operating Expense excludes advertising. Quarter ended 12/31/02.
Source: Derived from company reports.
ET
SCH
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Expected Synergies
FY 03
Run Rate
Pre-tax
$127
$174
After-tax
$73
$100
EPS
$0.17
$0.23
In millions of dollars, except EPS.
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Trades
Revenue
Clients
Scalability
Better Client
Experience
Services &
Products at
Low Cost
R&D
Innovation
& Operational
Efficiency
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Record Year
(EPS from Ongoing Operations)
$0.32
$0.24
$0.08
$0.12
$0.07
$0.00
‘97
‘98
‘99
‘00
‘01
‘02
‘03 E
($0.08)
($0.22)
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Record First Quarter
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Net Inc.: $22M – 5¢ EPS
Net Rev.: $181M
Operating Margin: $69M – 38%
Pre-tax Margin: $37M – 20%
EBITDA: $47M – 26% of Net Rev.
141,000 TPD
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Clean Balance Sheet
As of
Dec. 31, 2000
Accounts (M)
Bank Debt ($M)
Convertible Notes ($M)
Total Debt
As of
Dec. 31, 2002
1.4
2.9
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200
---46
217
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Stockholders’ Equity ($M)
139
1,123
Debt-to-Equity Ratio
156%
4%
1
68
39
103
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121
108
247
Non Broker/Dealer Cash ($M)
NITE, net of tax ($M)
Excess Net Capital ($M)
Liquid Assets ($M)
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Current Sell-Side Coverage
Firm
Analyst
Current Rating
Bank of America
Sobhani/Manna
Market Performer (3)
Goldman Sachs
Strauss/Tukman
Underperform (4)
Putnam Lovell
Repetto/Halky
Outperform (2)
Raymond James
Vinciquerra
Outperform (2)
Salomon Smith Barney
Moszkowski/Clark
Outperform/Speculative (3)
UBS Warburg
Glossman/Shteyman
Neutral (3)
Jeffries
Justin Hughes
Buy (1)
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Share Buy-Back Program
> 40 million shares authorized
> 5 million shares purchased
Executive & Director Purchases
> 1.9 million shares
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=
Great Levered Play on a
Market Turn around
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www.amtd.com
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