8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 27, 2009

TD AMERITRADE Holding Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-49992	82-0543156
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

4211 South 102nd Street
Omaha, Nebraska	68127
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (402) 331-7856

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On October 27, 2009, the Registrant released its financial results for its fourth fiscal quarter and fiscal year ended September 30, 2009. A copy of the news release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

99.1 News Release issued by the Registrant on October 27, 2009

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: October 27, 2009	TD AMERITRADE HOLDING CORPORATION
	By:	/s/ WILLIAM J. GERBER
		William J. Gerber
		Executive Vice President, Chief Financial Officer

3

EX-99.1

Exhibit 99.1

At the Company
Kim Hillyer	Jeff Goeser
Senior Manager, Communications	Director, Investor Relations and Finance
(402) 574-6523	(402) 597-8464
kim.hillyer@tdameritrade.com	jeffrey.goeser@tdameritrade.com

TD AMERITRADE Delivers Record Organic Growth in Fiscal 2009

Record Net New Assets of $27 billion
Record Gross New Accounts of 737,000
Record Trades Per Day of 372,000⁽¹⁾
Fiscal Year Earnings Per Share of $1.10

OMAHA, Neb., October 27, 2009 — TD AMERITRADE Holding Corporation (NASDAQ: AMTD) has released results for fiscal 2009. Despite facing challenges related to struggling stock markets, a near-zero interest rate environment and an economic recession, the Company delivered a strong financial performance as a result of record organic growth in client assets and trading activity.

The Company’s results for the fiscal year ended Sept. 30, 2009 include the following (year-over-year comparisons): ⁽²⁾

• Net income of $644 million, or $1.10 per diluted share

• Record average client trades per day of approximately 372,000, an increase of 23 percent⁽¹⁾

• Record net new assets of approximately $27 billion, or an annualized growth rate of 10 percent on beginning client assets

• Record gross new accounts of 737,000, an increase of 14 percent

• Record spread-based balances of approximately $32 billion, an increase of 25 percent

• Fee-based balances of approximately $59 billion, a decrease of 16 percent

• Net revenues of $2.4 billion, 46 percent of which were asset-based

• Pre-tax income of $1.1 billion, or 44 percent of net revenues

• EBITDA of $1.2 billion, or 51 percent of net revenues⁽³⁾

• Liquid assets of $1.1 billion⁽³⁾

• Client assets of approximately $302 billion, including $58 billion in client cash

“Over the last year, we have leveraged our strong financial position and client centric business model to deliver record organic growth, despite a very challenging market environment,” said Fred Tomczyk, president and chief executive officer. “Through all of the challenges of the last year, we have remained focused on managing for the other side of the cycle and positioning ourselves for continued growth in 2010 and beyond.”

“In addition to delivering record organic growth, we took several steps to strengthen our financial position in 2009,” said Bill Gerber, executive vice president and chief financial officer. “We utilized 70 percent of our net income to repurchase company stock worth more than $450 million, at a weighted-average purchase price of $11.94 per share. We also acquired a trading technology and education leader in thinkorswim, earned a credit rating upgrade to Investment Grade,⁽⁴⁾ and positioned ourselves for earnings growth in a rising interest-rate environment.”

In addition, the Company has released its results for the quarter ended Sept. 30, 2009, which include the following (year-over-year comparisons): ⁽²⁾

• Record average client trades per day of approximately 411,000, an increase of 35 percent⁽¹⁾

• Net new assets of approximately $5.4 billion, an annualized growth rate of 8 percent

• Record net revenues of $658 million, 41 percent of which were asset-based

• Pre-tax income of $255 million, or 39 percent of net revenues

• Net income of $157 million, or $0.26 per diluted share

• EBITDA of $301 million, or 46 percent of net revenues ⁽³⁾

Fiscal 2010 Outlook

The Company has also released its guidance range for its 2010 fiscal year and expects to earn between $1.10 and $1.40 per share.

More information on the fiscal 2010 forecast is available through the Company’s “Outlook Statement,” located in the “Investor” section of its Web site, www.amtd.com.

Company Hosts Conference Call

TD AMERITRADE will host its September Quarter conference call this morning, Oct. 27, 2009, at 7:00 a.m. CDT. Participants may listen to the call by dialing 877-440-5784. Interested parties may listen to a replay of the call by dialing 888-203-1112 and the passcode 8336314. The Company will Webcast the conference live at www.amtd.com and will make all accompanying materials available for participants to print prior to the call.

AMTD-E

About TD AMERITRADE Holding Corporation

TD AMERITRADE Holding Corporation, through its brokerage subsidiaries,⁽⁵⁾ combines innovative trading technology, easy-to-use and understand investment tools and services, investor education and a client-centric, multi-channel sales and service model to create a market-leading financial services experience. Now home to the award-winning thinkorswim brokerage and dynamic trading platform⁽⁶⁾ and the Investools investor education program, TD AMERITRADE provides millions of retail investors, traders and independent registered investment advisors (RIAs) with the tools, service and support they need to help build confidence in today’s rapidly-changing market environment. The Company’s common stock trades under the ticker symbol AMTD. For more information, please visit www.amtd.com.

Safe Harbor

This document contains forward-looking statements within the meaning of the federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws. In particular, any projections regarding our future revenues, expenses, earnings, capital expenditures, effective tax rates, client trading activity, accounts or stock price, as well as the assumptions on which such expectations are based, are forward-looking statements. These statements reflect only our current expectations and are not guarantees of future performance or results. These statements involve risks, uncertainties and assumptions that could cause actual results or performance to differ materially from those contained in the forward-looking statements. These risks, uncertainties and assumptions include general economic and political conditions, interest rates, market fluctuations and changes in client trading activity, increased competition, systems failures and capacity constraints, ability to service debt obligations, ability to realize the expected benefits from the thinkorswim acquisition, regulatory and legal matters and uncertainties and other risk factors described in our latest Annual Report on Form 10-K, filed with the SEC on Nov. 26, 2008 and amended on May 6, 2009, and our latest Quarterly Report on Form 10-Q filed thereafter. These forward-looking statements speak only as of the date on which the statements were made. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

(1)	Beginning with fiscal 2009, Average Trades Per Day were adjusted to exclude non-revenue-generating mutual fund trades. For comparability purposes, metrics for all periods in fiscal 2008 have been adjusted to account for this change. More information is available on www.amtd.com.
(2)	Results include assets acquired through the Company’s purchase of thinkorswim Group Inc. on June 11, 2009. Please see the Glossary of Terms, located in “Investor” section of www.amtd.com for more information on how these metrics are calculated.
(3)	See attached reconciliation of non-GAAP financial measures.
(4)	Credit rating information based on disclosures from Moody’s Investor Services (Jan. 20, 2009 and April 21, 2009), Standard & Poor’s (Feb. 2, 2009) and Fitch Ratings (April 3, 2009).
(5)	TD AMERITRADE, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org), TD AMERITRADE Clearing, Inc., member FINRA/SIPC, and thinkorswim, Inc., member FINRA/SIPC/NFA (www.nfa.futures.org).
(6)	thinkorswim was rated #1 overall online broker, “best for frequent traders,” and “best for options traders” in Barron’s ranking of online brokers, 3/16/2009. thinkorswim was evaluated versus others in eight total categories, including trade experience/execution, trading technology, usability, range of offerings, research amenities, portfolio analysis & reporting, customer service & access and costs. thinkorswim topped the list in 2009 with the highest weighted-average score. Barron’s is a registered trademark of Dow Jones & Company © 2009.

TD AMERITRADE HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
In thousands, except per share amounts
(Unaudited)

	Quarter Ended									Fiscal Year Ended
	Sept. 30, 2009			June 30, 2009			Sept. 30, 2008			Sept. 30, 2009			Sept. 30, 2008
Revenues:
Transaction-based revenues:
Commissions and transaction fees	$	362,149		$	338,450		$	263,439		$	1,253,154		$	1,017,456
Asset-based revenues:
Interest revenue		98,116			101,204			163,206			362,076			799,189
Brokerage interest expense		(2,089	)		(2,564	)		(32,533	)		(15,165	)		(249,616	)
Net interest revenue		96,027			98,640			130,673			346,911			549,573
Insured deposit account fees		143,198			125,118			161,083			568,084			628,716
Investment product fees		27,995			39,085			86,178			184,341			309,420
Total asset-based revenues		267,220			262,843			377,934			1,099,336			1,487,709
Other revenues		28,562			12,475			7,876			55,436			32,191
Net revenues		657,931			613,768			649,249			2,407,926			2,537,356
Expenses:
Employee compensation and benefits		144,757			128,216			136,130			511,170			503,297
Fair value adjustments of compensation-related derivative instruments		—			—			—			—			764
Clearing and execution costs		24,031			16,141			12,072			70,877			44,620
Communications		25,729			20,795			16,713			83,121			69,564
Occupancy and equipment costs		34,682			29,951			27,530			124,296			101,787
Depreciation and amortization		12,592			11,162			10,475			45,891			36,899
Amortization of acquired intangible assets		25,582			17,551			15,466			73,870			59,275
Professional services		34,215			43,949			31,446			127,572			108,271
Interest on borrowings		7,824			8,365			15,772			40,070			78,447
Other		23,902			14,513			25,475			58,701			62,934
Advertising		55,951			41,376			43,805			197,121			173,296
Losses on money market funds and client guarantees		13,829			—			35,628			13,829			35,628
Total expenses		403,094			332,019			370,512			1,346,518			1,274,782
Income before other income (expense) and income taxes		254,837			281,749			278,737			1,061,408			1,262,574
Other income (expense):
Gain (loss) on sale of investments		—			(2,003	)		—			(2,003	)		928
Pre-tax income		254,837			279,746			278,737			1,059,405			1,263,502
Provision for income taxes		98,097			109,209			106,738			415,700			459,585
Net income	$	156,740		$	170,537		$	171,999		$	643,705		$	803,917
Earnings per share — basic	$	0.27		$	0.30		$	0.29		$	1.11		$	1.35
Earnings per share — diluted	$	0.26		$	0.30		$	0.29		$	1.10		$	1.33
Weighted average shares outstanding — basic		586,544			563,792			592,778			578,972			593,746
Weighted average shares outstanding — diluted		595,052			571,772			602,334			587,252			603,133

Note: Certain reclassifications have been made to prior periods to conform to the current presentation.

TD AMERITRADE HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(Unaudited)

	Sept. 30, 2009		Sept. 30, 2008
Assets:
Cash and cash equivalents	$	791,211	$	674,135
Short-term investments		52,071		369,133
Segregated cash and investments		5,813,862		260,000
Broker/dealer receivables		1,777,741		4,177,149
Client receivables		5,712,261		6,933,926
Goodwill and intangible assets		3,696,820		2,960,781
Other		527,844		576,398
Total assets	$	18,371,810	$	15,951,522
Liabilities and stockholders’ equity:
Liabilities:
Broker/dealer payables	$	2,491,617	$	5,769,676
Client payables		9,914,823		5,070,671
Long-term debt		1,414,900		1,444,000
Other		999,187		742,137
Total liabilities		14,820,527		13,026,484
Stockholders’ equity		3,551,283		2,925,038
Total liabilities and stockholders’ equity	$	18,371,810	$	15,951,522

TD AMERITRADE HOLDING CORPORATION
SELECTED OPERATING DATA

	Quarter Ended									Fiscal Year Ended
	Sept. 30, 2009			June 30, 2009			Sept. 30, 2008			Sept. 30, 2009			Sept. 30, 2008
Key Metrics:
Net new assets (in billions)	$	5.4		$	6.9		$	2.8		$	26.6		$	22.8
Average client trades per day(1)		410,576			391,506			304,663			371,579			301,061
Profitability Metrics:
Pre-tax income as a percentage of net revenues		38.7	%		45.6	%		42.9	%		44.0	%		49.8	%
Return on client assets (annualized)		0.36	%		0.45	%		0.37	%		0.42	%		0.41	%
Return on average stockholders’ equity (annualized)		18.2	%		22.8	%		24.2	%		20.8	%		31.5	%
EBITDA as a percentage of net revenues		45.7	%		51.6	%		49.4	%		50.6	%		56.7	%
Debt Metrics:
Interest on borrowings (in millions)	$	7.8		$	8.4		$	15.8		$	40.1		$	78.4
Average debt outstanding (in billions)	$	1.4		$	1.4		$	1.5		$	1.4		$	1.5
Leverage ratio (average debt/annualized EBITDA)		1.2			1.1			1.1			1.2			1.0
Interest coverage ratio (EBITDA/interest on borrowings)		38.5			37.9			20.3			30.4			18.3
Transaction-Based Revenue Metrics(1):
Total trades (in millions)		26.3			24.7			19.3			93.3			75.7
Average commissions and transaction fees per trade(2)	$	13.53		$	13.66		$	13.62		$	13.35		$	13.44
Average client trades per account (annualized)		13.7			13.5			11.2			12.9			11.4
Activity rate — total accounts		5.5	%		5.4	%		4.4	%		5.1	%		4.5	%
Activity rate — funded accounts		7.8	%		7.6	%		6.2	%		7.3	%		6.3	%
Trading days		64.0			63.0			63.5			251.0			251.5
Spread-Based Asset Metrics:
Average interest-earning assets (excluding conduit business) (in billions)	$	14.7		$	10.0		$	9.6		$	9.9		$	9.9
Average insured deposit account balances (in billions)		28.3			22.5			16.2			22.0			15.6
Average spread-based balance (in billions)	$	43.0		$	32.5		$	25.8		$	31.9		$	25.5
Net interest revenue (excluding conduit business) (in millions)	$	95.7		$	98.2		$	128.2		$	342.7		$	538.1
Insured deposit account fee revenue (in millions)		143.2			125.1			161.1			568.1			628.7
Spread-based revenue (in millions)	$	238.9		$	223.3		$	289.3		$	910.8		$	1,166.8
Avg. annualized yield — interest-earning assets (excluding conduit business)		2.54	%		3.88	%		5.23	%		3.41	%		5.38	%
Avg. annualized yield — insured deposit account fees		1.98	%		2.20	%		3.90	%		2.55	%		3.95	%
Net interest margin (NIM)		2.17	%		2.72	%		4.39	%		2.81	%		4.50	%
Interest days		92			91			92			365			366
Fee-Based Investment Metrics:
Average balance (in billions)	$	57.0		$	59.0		$	75.4		$	59.4		$	70.8
Investment product fee revenue (in millions)	$	28.0		$	39.1		$	86.2		$	184.3		$	309.4
Average annualized yield		0.19	%		0.26	%		0.45	%		0.31	%		0.43	%
Client Account and Client Asset Metrics:
Total accounts (beginning of period)		7,491,000			7,195,000			6,810,000			6,895,000			6,380,000
New accounts opened		151,000			176,000			137,000			737,000			648,000
Accounts purchased		—			197,000			—			197,000			102,000
Accounts closed		(79,000	)		(77,000	)		(52,000	)		(266,000	)		(235,000	)
Total accounts (end of period)		7,563,000			7,491,000			6,895,000			7,563,000			6,895,000
Percentage change during period		1	%		4	%		1	%		10	%		8	%
Funded accounts (beginning of period)		5,291,000			5,105,000			4,868,000			4,918,000			4,597,000
Funded accounts (end of period)		5,279,000			5,291,000			4,918,000			5,279,000			4,918,000
Percentage change during period		(0	%)		4	%		1	%		7	%		7	%
Client assets (beginning of period, in billions)	$	265.0		$	224.9		$	309.2		$	278.0		$	302.7
Client assets (end of period, in billions)	$	302.0		$	265.0		$	278.0		$	302.0		$	278.0
Percentage change during period		14	%		18	%		(10	%)		9	%		(8	%)

(1)	Effective in October 2007, total trades have been revised to exclude non-revenue generating mutual fund trades.
(2)	Average commissions and transaction fees per trade excludes thinkorswim active trader business.
NOTE: See Glossary of Terms on the Company’s web site at www.amtd.com for definitions of the above metrics.

TD AMERITRADE HOLDING CORPORATION
SELECTED OPERATING DATA

	Quarter Ended									Fiscal Year Ended
	Sept. 30, 2009			June 30, 2009			Sept. 30, 2008			Sept. 30, 2009			Sept. 30, 2008
Net Interest Revenue (excluding Conduit Business):
Segregated cash:
Average balance (in billions)	$	7.8		$	4.2		$	0.0		$	3.9		$	0.0
Average annualized yield		0.14	%		0.14	%		1.28	%		0.17	%		2.47	%
Interest revenue (in millions)	$	2.8		$	1.5		$	0.1		$	6.6		$	0.3
Client margin balances:
Average balance (in billions)	$	5.2		$	4.3		$	7.7		$	4.5		$	8.1
Average annualized yield		4.86	%		4.99	%		5.69	%		5.14	%		6.37	%
Interest revenue (in millions)	$	65.0		$	54.7		$	111.9		$	234.2		$	527.1
Securities borrowing/lending (excluding conduit business):
Average securities borrowing balance (in billions)	$	0.7		$	0.6		$	0.4		$	0.4		$	0.5
Average securities lending balance (in billions)	$	1.4		$	1.3		$	2.8		$	1.2		$	3.2
Interest revenue (in millions)	$	29.2		$	42.9		$	17.9		$	105.4		$	56.0
Interest expense (in millions)		(0.4	)		(0.6	)		(7.0	)		(2.9	)		(55.4	)
Net interest revenue (expense) — securities borrowing/lending (excluding conduit business) (in millions)	$	28.8		$	42.3		$	10.9		$	102.5		$	0.6
Other cash and interest earning investments:
Average balance (in billions)	$	1.0		$	0.9		$	1.5		$	1.1		$	1.3
Average annualized yield		0.10	%		0.17	%		2.16	%		0.33	%		2.71	%
Interest revenue — net (in millions)	$	0.2		$	0.4		$	8.3		$	3.5		$	35.0
Client credit balances:
Average balance (in billions)	$	10.3		$	6.1		$	4.4		$	6.2		$	4.3
Average annualized cost		0.04	%		0.05	%		0.27	%		0.07	%		0.58	%
Interest expense (in millions)		($1.1	)		($0.7	)		($3.0	)		($4.1	)		($24.9	)
Average interest-earning assets (excluding conduit business) (in billions)	$	14.7		$	10.0		$	9.6		$	9.9		$	9.9
Average annualized yield (excluding conduit business)		2.54	%		3.88	%		5.23	%		3.41	%		5.38	%
Net interest revenue (excluding conduit business) (in millions)	$	95.7		$	98.2		$	128.2		$	342.7		$	538.1
Conduit Business:
Average balance (in billions)	$	0.8		$	1.2		$	4.4		$	1.2		$	5.4
Securities borrowing — conduit business:
Average annualized yield		0.37	%		0.52	%		2.16	%		0.86	%		3.13	%
Interest revenue (in millions)	$	0.7		$	1.5		$	24.6		$	10.9		$	173.3
Securities lending — conduit business:
Average annualized cost		0.21	%		0.36	%		1.94	%		0.53	%		2.92	%
Interest expense (in millions)		($0.4	)		($1.1	)		($22.1	)		($6.7	)		($161.8	)
Average interest-earning assets — conduit business (in billions)	$	0.8		$	1.2		$	4.4		$	1.2		$	5.4
Average annualized yield — conduit business		0.16	%		0.15	%		0.22	%		0.33	%		0.21	%
Net interest revenue — conduit business (in millions)	$	0.3		$	0.4		$	2.5		$	4.2		$	11.5
Net Interest Revenue (total):
Average interest-earning assets (excluding conduit business) (in billions)	$	14.7		$	10.0		$	9.6		$	9.9		$	9.9
Average interest-earning assets — conduit business (in billions)		0.8			1.2			4.4			1.2			5.4
Average interest-earning assets — total (in billions)	$	15.5		$	11.2		$	14.0		$	11.1		$	15.3
Average annualized yield — total		2.42	%		3.49	%		3.64	%		3.07	%		3.54	%
Net interest revenue (excluding conduit business) (in millions)	$	95.7		$	98.2		$	128.2		$	342.7		$	538.1
Net interest revenue — conduit business (in millions)		0.3			0.4			2.5			4.2			11.5
Net interest revenue — total (in millions)	$	96.0		$	98.6		$	130.7		$	346.9		$	549.6

NOTE: See Glossary of Terms on the Company’s web site at www.amtd.com for definitions of the above metrics.

TD AMERITRADE HOLDING CORPORATION
RECONCILIATION OF FINANCIAL MEASURES
In thousands, except percentages
(Unaudited)

	Quarter Ended																		Fiscal Year Ended
	Sept. 30, 2009						June 30, 2009						Sept. 30, 2008						Sept. 30, 2009						Sept. 30, 2008
	$			% of Rev.			$			% of Rev.			$			% of Rev.			$			% of Rev.			$			% of Rev.
EBITDA (1)
EBITDA	$	300,835			45.7	%	$	316,824			51.6	%	$	320,450			49.4	%	$	1,219,236			50.6	%	$	1,438,123			56.7	%
Less:
Depreciation and amortization		(12,592	)		(1.9	%)		(11,162	)		(1.8	%)		(10,475	)		(1.6	%)		(45,891	)		(1.9	%)		(36,899	)		(1.5	%)
Amortization of acquired intangible assets		(25,582	)		(3.9	%)		(17,551	)		(2.9	%)		(15,466	)		(2.4	%)		(73,870	)		(3.1	%)		(59,275	)		(2.3	%)
Interest on borrowings		(7,824	)		(1.2	%)		(8,365	)		(1.4	%)		(15,772	)		(2.4	%)		(40,070	)		(1.7	%)		(78,447	)		(3.1	%)
Pre-tax income	$	254,837			38.7	%	$	279,746			45.6	%	$	278,737			42.9	%	$	1,059,405			44.0	%	$	1,263,502			49.8	%

	As of
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2009			2009			2009			2008			2008
Liquid Assets (2)
Liquid assets	$	1,142,127		$	1,054,084		$	1,151,346		$	1,308,015		$	788,175
Plus: Broker-dealer cash and cash equivalents		473,996			858,350			565,493			838,061			418,626
Trust company cash and cash equivalents		25,143			65,805			38,203			99,173			61,430
Investment advisory cash and cash equivalents		18,935			15,989			14,273			13,038			9,447
Less: Corporate short-term investments		(49,496	)		(49,496	)		(75,392	)		(83,560	)		(14,491	)
Excess trust Tier 1 capital		(4,658	)		(6,213	)		(7,637	)		(101,253	)		(102,427	)
Excess broker-dealer regulatory net capital		(814,836	)		(818,695	)		(613,644	)		(919,319	)		(486,625	)
Cash and cash equivalents	$	791,211		$	1,119,824		$	1,072,642		$	1,154,155		$	674,135

Note:	The term “GAAP” in the following explanation refers to generally accepted accounting principles in the United States.
(1)	EBITDA (earnings before interest, taxes, depreciation and amortization) is considered a Non-GAAP financial measure as defined by SEC Regulation G. We consider EBITDA an important measure of our financial performance and of our ability to generate cash flows to service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA is used as the denominator in the consolidated leverage ratio calculation for our senior credit facilities. The consolidated leverage ratio determines the interest rate margin charged on the senior credit facilities. EBITDA eliminates the non-cash effect of tangible asset depreciation and amortization and intangible asset amortization. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.
(2)	Liquid assets is considered a Non-GAAP financial measure as defined by SEC Regulation G. We define liquid assets as the sum of (a) corporate cash and cash equivalents, (b) corporate short-term investments, (c) regulatory net capital of (i) our clearing broker-dealer subsidiary in excess of 5% of aggregate debit items and (ii) our introducing broker-dealer subsidiaries in excess of 120% of the minimum dollar net capital requirement or in excess of 8 1/3% of aggregate indebtedness and (d) Tier 1 capital of our trust company in excess of the minimum dollar requirement. We include the excess capital of our broker-dealer and trust company subsidiaries in liquid assets, rather than simply including broker-dealer and trust cash and cash equivalents, because capital requirements may limit the amount of cash available for dividend from the broker-dealer and trust subsidiaries to the parent company. Excess capital, as defined under clauses (c) and (d) above, is generally available for dividend from the broker-dealer and trust subsidiaries to the parent company. We consider liquid assets an important measure of our liquidity and of our ability to fund corporate investing and financing activities. Liquid assets should be considered as a supplemental measure of liquidity, rather than as a substitute for cash and cash equivalents.