SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

(X)	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended March 28, 2003
	OR
(  )	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: 0-49992

AMERITRADE HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 82-0543156
(I.R.S. Employer
Identification Number)

4211 South 102nd Street, Omaha, Nebraska
68127
(Address of principal executive offices)
(Zip Code)
(402) 331-7856
(Registrant’s telephone number, including area code)

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 twelve months, and (2) has been subject to such filing requirements for the past ninety days. Yes (X) No (  )

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes (X) No (  )

As of April 25, 2003, there were 423,318,692 outstanding shares of the registrant’s Common Stock.

TABLE OF CONTENTS

Part I — FINANCIAL INFORMATION
	Item 1. — Condensed Consolidated Financial Statements
		INDEPENDENT ACCOUNTANTS’ REVIEW REPORT
		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statements of Operations
		Condensed Consolidated Statements of Cash Flows
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. — Quantitative and Qualitative Disclosures about Market Risk
	Item 4. — Controls and Procedures
Part II — OTHER INFORMATION
	Item 1. — Legal Proceedings
	Item 4. — Submission of Matters to a Vote of Security Holders
	Item 5. — Other Information
	Item 6. — Exhibits and Reports on Form 8-K
		(a) Exhibits:
		(b) Reports on Form 8-K:
Signatures
CERTIFICATION
1996 Directors Incentive Plan
Employment Agreement for Michael Feigeles
Master Terms and Conditions
ISDA Master Agreement
ISDA Credit Support
Prepaid Share Forward Transaction Confirmation
Independent Accountants' Awareness Letter
Written Statement of Certification of CEO and CFO
Notice of Blackout Period

AMERITRADE HOLDING CORPORATION

INDEX

				Page No.
		Part I — FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements:
	Independent Accountants’ Review Report				3
	Balance Sheets				4
	Statements of Operations				5
	Statements of Cash Flows				6
	Notes to Financial Statements				7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations				14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk				20
Item 4.	Controls and Procedures				21
			Part II — OTHER INFORMATION
Item 1.	Legal Proceedings				21
Item 4.	Submission of Matters to a Vote of Security Holders				21
Item 5.	Other Information				22
Item 6.	Exhibits and Reports on Form 8-K:
	(a) Exhibits				22
	(b) Reports on Form 8-K				23
	Signatures				24
	Certifications				25

2

Part I — FINANCIAL INFORMATION

Item 1. — Condensed Consolidated Financial Statements

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

To the Board of Directors
Ameritrade Holding Corporation
Omaha, Nebraska

We have reviewed the accompanying condensed consolidated balance sheet of Ameritrade Holding Corporation and subsidiaries (collectively, the “Company”) as of March 28, 2003, and the related condensed consolidated statements of operations for the three-month and six-month periods ended March 28, 2003 and March 29, 2002 and cash flows for the six-month periods ended March 28, 2003 and March 29, 2002. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Ameritrade Holding Corporation and subsidiaries as of September 27, 2002, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated October 24, 2002, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of September 27, 2002 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Deloitte & Touche LLP

May 7, 2003
Omaha, Nebraska

3

Ameritrade Holding Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share amounts)

		March 28,			September 27,
		2003			2002
ASSETS
Cash and cash equivalents		$	151,385		$	198,398
Cash and investments segregated in compliance with federal regulations			6,902,554			5,665,109
Receivable from brokers, dealers and clearing organizations			1,660,628			1,397,862
Receivable from clients and correspondents — net of allowance for doubtful accounts			1,350,949			1,414,598
Property and equipment — net of accumulated depreciation and amortization			39,797			57,219
Goodwill			717,314			708,030
Acquired intangible assets — net of accumulated amortization			242,771			256,949
Investments			33,895			34,684
Other assets			63,563			67,992
	Total assets	$	11,162,856		$	9,800,841
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations		$	1,721,920		$	1,917,482
Payable to clients and correspondents			8,031,538			6,374,644
Accounts payable and accrued liabilities			162,978			228,396
Prepaid variable forward contract obligation			21,393			—
Convertible subordinated notes			46,295			47,645
Income taxes payable			14,897			78,481
Deferred income taxes			66,656			55,794
	Total liabilities		10,065,677			8,702,442
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $0.01 par value; 100,000,000 shares authorized, none issued			—			—
Common Stock, $0.01 par value; 650,000,000 shares authorized; Mar. 28, 2003 — 433,937,397 shares issued; Sept. 27, 2002 — 433,598,239 shares issued			4,339			4,336
Additional paid-in capital			1,167,786			1,160,200
Accumulated deficit			(46,811	)		(78,470	)
Treasury stock, Common, at cost — Mar. 28, 2003 — 11,089,295 shares; Sept. 27, 2002 — 1,491,747 shares			(50,423	)		(7,317	)
Deferred compensation			1,499			967
Accumulated other comprehensive income			20,789			18,683
	Total stockholders’ equity		1,097,179			1,098,399
	Total liabilities and stockholders’ equity	$	11,162,856		$	9,800,841

See notes to condensed consolidated financial statements.

4

Ameritrade Holding Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

			Three Months Ended					Six Months Ended
			March 28,			March 29,		March 28,			March 29,
			2003			2002		2003			2002
Revenues:
	Commissions and clearing fees		$	92,696		$	63,789	$	208,880		$	129,448
	Interest revenue			37,704			27,647		79,501			56,773
	Other			21,889			17,873		50,233			34,373
		Total revenues		152,289			109,309		338,614			220,594
	Client interest expense			4,655			2,573		10,453			5,668
		Net revenues		147,634			106,736		328,161			214,926
Expenses:
	Employee compensation and benefits			53,721			33,659		99,471			66,584
	Communications			11,942			8,902		25,071			18,862
	Occupancy and equipment costs			16,047			14,733		32,223			28,298
	Depreciation and amortization			7,629			7,054		16,354			13,791
	Professional services			8,293			6,721		19,614			11,519
	Interest on borrowings			1,118			1,065		2,306			2,891
	(Gain)/loss on disposal of property			(5,527	)		23		(5,118	)		216
	Other			10,762			6,318		25,764			12,191
	Advertising			26,990			24,833		59,018			41,905
		Total expenses		130,975			103,308		274,703			196,257
Pre-tax income				16,659			3,428		53,458			18,669
Provision for income taxes				7,042			1,481		21,799			7,719
Net income			$	9,617		$	1,947	$	31,659		$	10,950
Basic earnings per share			$	0.02		$	0.01	$	0.07		$	0.05
Diluted earnings per share			$	0.02		$	0.01	$	0.07		$	0.05
Weighted average shares outstanding — basic				427,765			215,917		428,834			215,722
Weighted average shares outstanding — diluted				430,557			216,890		431,297			216,631

See notes to condensed consolidated financial statements.

5

Ameritrade Holding Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

				Six Months Ended
				March 28, 2003			March 29, 2002
Cash flows from operating activities:
	Net income			$	31,659		$	10,950
	Adjustments to reconcile net income to net cash from operating activities:
		Depreciation and amortization			7,161			13,411
		Deferred income taxes			11,364			6,691
		(Gain)/loss on disposal of property			(5,118	)		216
		Amortization of intangible assets			9,193			380
		Other non-cash expenses, net			195			—
		Changes in operating assets and liabilities:
			Cash and investments segregated in compliance with federal regulations		(1,237,445	)		(515,840	)
			Brokerage receivables		(199,117	)		(730,848	)
			Other assets		7,822			(12,185	)
			Brokerage payables		1,461,332			1,258,815
			Accounts payable and accrued liabilities		(73,690	)		(905	)
			Income taxes payable		(61,801	)		—
			Net cash flows from operating activities		(48,445	)		30,685
Cash flows from investing activities:
	Purchase of property and equipment				(4,687	)		(1,653	)
	Proceeds from sale of property and equipment				23,992			632
	Cash paid in business combinations, net				(1,855	)		(3,560	)
			Net cash flows from investing activities		17,450			(4,581	)
Cash flows from financing activities:
	Proceeds from prepaid variable forward contract				21,331			—
	Principal payments on debt				(1,168	)		(22,500	)
	Proceeds from exercise of stock options and other				7,571			154
	Purchase of treasury stock				(53,687	)		(18	)
	Payments received on stockholder loans				9,935			—
			Net cash flows from financing activities		(16,018	)		(22,364	)
Net increase (decrease) in cash and cash equivalents					(47,013	)		3,740
Cash and cash equivalents at beginning of period					198,398			24,134
Cash and cash equivalents at end of period				$	151,385		$	27,874
Supplemental cash flow information:
	Interest paid			$	13,254		$	8,376
	Income taxes paid			$	72,237		$	991
Noncash investing and financing activities:
	Tax benefit on exercise of stock options			$	2,254		$	37
	Issuance of Common Stock in acquisition of subsidiaries			$	—		$	3,553

See notes to condensed consolidated financial statements.

6

AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Columnar amounts in thousands, except per share amounts)

1.     BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of Ameritrade Holding Corporation and its wholly owned subsidiaries (collectively, the “Company”). All intercompany balances and transactions have been eliminated.

These financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments, which are all of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report filed on Form 10-K for the fiscal year ended September 27, 2002.

Certain items in prior year condensed consolidated financial statements have been reclassified to conform to the current presentation.

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of FASB Statement No. 123. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation, to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The disclosure requirements of SFAS No. 148 are effective for fiscal years ending after December 15, 2002 and for interim periods beginning after December 15, 2002. The Company is evaluating whether to adopt the fair value based method of accounting for stock-based compensation, and the alternative methods of transition for such a change. If the Company were to elect to change to the fair value based method using the retroactive restatement alternative under SFAS No. 148, the Company estimates the additional compensation expense associated with stock-based compensation would reduce earnings by approximately $0.04 per share for fiscal 2003. Actual results may differ.

In November 2002, the FASB issued FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN No. 45”). The initial recognition and measurement provisions of FIN No. 45 are effective for guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN No. 45 are effective for interim or annual periods ending after December 15, 2002. There was no impact on the Company’s financial statements as a result of adopting FIN No. 45.

In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN No. 46”). FIN No. 46 applies to variable interest entities created after January 31, 2003 and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds an interest that it acquired before February 1, 2003. The Company currently has no interests in variable interest entities, and therefore does not expect adoption of FIN No. 46 to have an impact on its consolidated financial statements.

7

2.     BUSINESS COMBINATIONS, GOODWILL AND ACQUIRED INTANGIBLE ASSETS

The Company has recorded goodwill for purchase business combinations to the extent the purchase price of each acquisition exceeded the fair value of the net identifiable assets of the acquired company. The following table summarizes changes in the carrying amount of goodwill for the six months ended March 28, 2003:

	Private			Institutional
	Client			Client		Total
Balance as of September 27, 2002	$	707,941		$	89	$	708,030
Purchase accounting adjustments, net of income taxes (1)		10,804			—		10,804
Tax benefit of option exercises (2)		(1,520	)		—		(1,520	)
Balance as of March 28, 2003	$	717,225		$	89	$	717,314

(1)

Purchase accounting adjustments consist of approximately $5.8 million of adjustments to liabilities relating to the Company’s merger with Datek Online Holdings Corp. (“Datek”) on September 9, 2002, and an adjustment to reclassify approximately $5.0 million of the Datek purchase price which was initially allocated to an intangible asset for the value of a contract associated with Datek’s Watcher Technologies LLC (“Watcher”) subsidiary. The Company intends to dispose of Watcher during the second half of fiscal 2003 and accordingly has reduced the purchase price allocated to the Watcher contract to zero.

(2)

Represents tax benefit of exercises of replacement stock options that were issued in connection with the Datek merger. The tax benefit of these option exercises was recorded as a reduction of goodwill to the extent the Company recorded fair value of the replacement options in the purchase accounting. The tax benefit of gains realized by the optionee in excess of the fair value recorded in the purchase accounting was recorded as additional paid-in capital.

The following table summarizes the major classes and carrying amounts of acquired intangible assets as of March 28, 2003:

	Gross					Net
	Carrying		Accumulated			Carrying
	Amount		Amortization			Amount
Client relationships	$	246,213	$	(6,796	)	$	239,417
Noncompete agreements		7,583		(4,229	)		3,354
	$	253,796	$	(11,025	)	$	242,771

The Company expects amortization expense on acquired intangible assets to be $8.8 million for the remainder of fiscal 2003 and $10.8 million for each of the five succeeding fiscal years.

3.     PROPERTY AND EQUIPMENT

On January 7, 2003, the Company completed the sale of its Kansas City, Missouri data center facility for $23.5 million in cash. In connection with the sale, the Company leased back approximately 20 percent of the facility for a minimum five-year period. The Company realized a gain on the sale of approximately $9.4 million. In accordance with sale-leaseback accounting, approximately $5.3 million of gain was recognized in earnings as of the sale date and the remaining $4.1 million was deferred to be recognized over the term of the leaseback.

4.     INVESTMENTS

The Company’s investments consist primarily of ownership of approximately 7.9 million shares of Knight Trading Group, Inc. (“Knight”), representing approximately seven percent of Knight’s outstanding shares. Knight is a publicly held company that is a market maker in equity securities. The Company accounts for its investment in Knight as a marketable equity security available for sale. As of March 28, 2003 and September 27, 2002, the Company’s investment in Knight was valued at $31.9 million. The Company’s cost basis is $0.7 million; therefore, the gross unrealized gain was $31.2 million at March 28, 2003 and September 27, 2002.

Effective February 27, 2003, the Company and a counterparty entered into a four-year prepaid variable forward contract (the “forward contract”) with a notional amount of approximately $24.8 million on 5.2 million underlying Knight shares. The forward contract contains a zero-cost embedded collar on the value of the Knight shares, with a floor price of $4.77 per share

8

and a cap price of $5.724 per share. At the inception of the forward contract, the Company received cash of approximately $21.3 million, equal to 86 percent of the notional amount. At maturity, the Company may settle the forward contract in shares of Knight or in cash, at the Company’s option. If the market price of the Knight stock at maturity is equal to or less than the floor price, the counterparty will be entitled to receive one share of Knight or its cash equivalent for each underlying share. If the market price of the Knight stock at maturity is greater than or equal to the cap price, the counterparty will be entitled to receive the number of Knight shares or its cash equivalent equal to the ratio of the floor price plus the excess of the market price over the cap price, divided by the market price, for each underlying share. If the market price at maturity is greater than the floor price but less than the cap price, the counterparty will be entitled to receive the number of Knight shares or its cash equivalent equal to the ratio of the floor price divided by the market price for each underlying share. Regardless of whether the forward contract is settled in Knight shares or in cash, the Company intends to sell the underlying Knight shares at maturity.

The Company has designated the forward contract as a cash flow hedge of the forecasted future sale of 5.2 million Knight shares. The forward contract is expected to be perfectly effective against changes in the cash flows associated with the forecasted future sale outside the price range of the collar. Accordingly, all changes in the fair value of the embedded collar are recorded in other comprehensive income, net of income taxes. As of March 28, 2003, the fair value of the embedded collar was approximately $3.4 million and was included in other assets on the condensed consolidated balance sheet.

The $21.3 million of cash received on the forward contract is accounted for as a debt obligation on the condensed consolidated balance sheet. The Company is accreting interest on the debt obligation to the notional maturity amount of $24.8 million over the term of the forward contract using an effective interest rate of approximately 3.8 percent. Upon settlement of the forward contract, the fair value of the collar and the realized gain or loss on the Knight stock delivered to the counterparty or otherwise sold will be reclassified from other comprehensive income into earnings.

5.     RESTRUCTURING AND EXIT LIABILITIES

The following table summarizes activity in the Company’s restructuring and acquisition exit liabilities for the three-month and six-month periods ended March 28, 2003:

		Three Months Ended March 28, 2003
						Paid and
		Balance at		Restructuring		Charged Against			Balance at
		Dec. 31, 2002		Charges		Liability			Mar. 28, 2003
Restructuring liabilities:
Employee compensation and benefits		$	—	$	4,020	$	(648	)	$	3,372
Occupancy and equipment costs			4,735		1,027		(1,026	)		4,736
Professional services			1,663		—		—			1,663
Other			3,519		—		(78	)		3,441
	Total restructuring liabilities	$	9,917	$	5,047	$	(1,752	)	$	13,212
Datek exit liabilities:
Employee compensation and benefits		$	16,928	$	—	$	(6,327	)	$	10,601
Occupancy and equipment costs			11,802		—		(1,389	)		10,413
Other			4,805		—		(2,360	)		2,445
	Total Datek exit liabilities	$	33,535	$	—	$	(10,076	)	$	23,459

9

		Six Months Ended March 28, 2003
						Paid and
		Balance at		Restructuring		Charged Against			Balance at
		Sept. 27, 2002		Charges		Liability			Mar. 28, 2003
Restructuring liabilities:
Employee compensation and benefits		$	—	$	4,020	$	(648	)	$	3,372
Occupancy and equipment costs			5,719		1,027		(2,010	)		4,736
Professional services			1,835		—		(172	)		1,663
Other			3,800		—		(359	)		3,441
	Total restructuring liabilities	$	11,354	$	5,047	$	(3,189	)	$	13,212
Datek exit liabilities:
Employee compensation and benefits		$	25,619	$	—	$	(15,018	)	$	10,601
Occupancy and equipment costs			14,128		—		(3,715	)		10,413
Other			5,107		—		(2,662	)		2,445
	Total Datek exit liabilities	$	44,854	$	—	$	(21,395	)	$	23,459

The restructuring charges during the second quarter of fiscal 2003 consist primarily of severance pay and benefits for approximately 110 employees in connection with the Company’s closing of its TradeCast business and consolidation of the Ameritrade and Datek technology organizations, and non-cancelable lease costs in connection with the closing of the TradeCast business. The Company expects to pay most employee compensation restructuring liabilities during fiscal 2003, with any remaining amounts to be paid in fiscal 2004. The Company expects to utilize the remaining occupancy and equipment, professional services and other restructuring liabilities over the respective lease periods through fiscal 2005. Most Datek employee compensation and other costs are expected to be paid during fiscal 2003, with any remaining amounts to be paid in fiscal 2004. Remaining Datek occupancy and equipment exit liabilities are expected to be utilized over the respective lease periods through fiscal 2011.

6.     NOTES PAYABLE

On December 16, 2002, the Company entered into a second amended and restated revolving credit agreement. The revolving credit agreement permits borrowings of up to $50 million through December 15, 2003, and is secured primarily by the Company’s stock in its subsidiaries. The interest rate on borrowings, determined on a monthly basis, initially is equal to the lesser of (i) the national prime rate or (ii) one month LIBOR plus 2.75 percent. The interest rate will be decreased if the Company achieves certain levels of consolidated net income during the term of the agreement. At March 28, 2003, the interest rate on the revolving credit agreement would have been 4.06 percent. The Company also pays a commitment fee of 0.375 percent of the unused borrowings through the maturity date. The Company had no outstanding indebtedness under the revolving credit agreement at March 28, 2003 and no outstanding indebtedness under the prior revolving credit agreement at September 27, 2002. The revolving credit agreement contains certain covenants and restrictions, including a minimum net worth requirement, and prohibits the payment of cash dividends to stockholders. The Company was in compliance with or obtained waivers for all covenants under the revolving credit agreements for all periods presented in the condensed consolidated financial statements.

The Company, through Ameritrade, Inc. and iClearing LLC (“iClearing”), its wholly owned securities clearing subsidiaries, had access to credit facilities with financial institutions of up to $160 million and $245 million as of March 28, 2003 and September 27, 2002, respectively. The financial institutions may make loans under line of credit arrangements or, in some cases, issue letters of credit under these facilities. Letters of credit in the amount of $40 million as of March 28, 2003 and September 27, 2002 have been issued on behalf of the Company by several financial institutions and reduce the amount available under these credit facilities. The letters of credit, which are for the benefit of a securities clearinghouse, have been issued for the contingent purpose of financing and supporting margin requirements. As of March 28, 2003 and September 27, 2002, no amounts were outstanding under line of credit arrangements and approximately $120 million and $205 million, respectively, was available to the Company for either loans or, in some cases, letters of credit. The Company is generally required to pledge client securities to secure outstanding obligations under these credit facilities.

7.     CONVERTIBLE SUBORDINATED NOTES

In October 2002, the Company repurchased and retired approximately $1.4 million of its 5.75 percent convertible subordinated notes for approximately $1.2 million in cash, resulting in a gain on debt retirement of approximately $0.2 million. As of March 

10

28, 2003, the Company had approximately $46.3 million of convertible subordinated notes outstanding, which are due August 1, 2004. These notes are convertible into approximately 1.4 million shares of Common Stock at a conversion rate of 30.7137 shares of Common Stock per $1,000 principal amount of notes (equivalent to an approximate conversion price of $32.56 per share).

8. NET CAPITAL

The Company’s broker-dealer subsidiaries are subject to the SEC Uniform Net Capital Rule (Rule 15c3-1 of the Securities Exchange Act of 1934), which requires the maintenance of minimum net capital, as defined. Net capital and the related net capital requirement may fluctuate on a daily basis.

The Company’s broker-dealer subsidiaries had aggregate net capital of $228.8 million and $183.2 million as of March 28, 2003 and September 27, 2002, respectively, which exceeded aggregate minimum net capital requirements by $193.9 million and $150.3 million, respectively. Subsidiary net capital in the amount of $34.9 million and $32.9 million as of March 28, 2003 and September 27, 2002, respectively, was not available for transfer to Ameritrade Holding Corporation.

9. STOCK OPTION AND INCENTIVE PLANS

As permitted by SFAS No. 123, the Company accounts for its stock-based compensation on the intrinsic-value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based employee compensation expense related to the Company’s stock option plans is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant, with the exception of replacement options granted in connection with business combinations. Pro forma information regarding net income (loss) and earnings (loss) per share is required by SFAS No. 148. This information is presented as if the Company had accounted for its stock-based awards under the fair value method:

		Three Months Ended						Six Months Ended
		March 28,			March 29,			March 28,			March 29,
		2003			2002			2003			2002
Net income, as reported		$	9,617		$	1,947		$	31,659		$	10,950
Less: Stock-based compensation determined under the fair value based method, net of related income tax effects			(2,442	)		(3,304	)		(5,657	)		(6,607	)
Pro forma net income (loss)		$	7,175		$	(1,357	)	$	26,002		$	4,343
Basic and diluted earnings (loss) per share:
	As reported	$	0.02		$	0.01		$	0.07		$	0.05
	Pro forma	$	0.02			(0.01	)	$	0.06		$	0.02

10. COMMITMENTS AND CONTINGENCIES

Legal — In September 1998, a putative class action complaint was filed against the Company by Zannini, et al. in the District Court of Douglas County, Nebraska, claiming the Company was not able to handle the volume of subscribers to its Internet brokerage services. The complaint, as amended, seeks injunctive relief enjoining alleged deceptive, fraudulent and misleading practices, equitable relief compelling the Company to increase capacity, and unspecified compensatory damages. In May 2001, the Company filed a motion for summary judgment in the matter, which the plaintiffs opposed. The court granted summary judgment for the Company on January 2, 2002. The plaintiffs have appealed.

The nature of the Company’s business subjects it to lawsuits, arbitrations, claims and other legal proceedings. Management cannot predict with certainty the outcome of pending legal proceedings. A substantial adverse judgment or other resolution regarding these proceedings could have a material adverse effect on the Company’s financial condition, results of operations and cash flows. However, in the opinion of management, after consultation with legal counsel, the Company has adequate legal defenses with respect to the legal proceedings to which it is a defendant or respondent and the outcome of these proceedings is not likely to have a material adverse effect on the financial condition, results of operations or cash flows of the Company.

NASD Matter — In August 2002, NASD (formerly, the National Association of Securities Dealers, Inc.) directed our broker-dealer subsidiaries, iClearing and Ameritrade, Inc., to cease permitting cash account clients to utilize the proceeds from the sale of fully-paid for securities to purchase other securities in advance of the actual receipt of proceeds from the settlement of the sale of the fully-paid for securities (the “specified trades”). NASD maintains that the specified trades violate Regulation T of the Board of Governors of the Federal Reserve System. NASD is conducting an inquiry related to the specified trades. NASD may elect to bring disciplinary proceedings against iClearing or Ameritrade, Inc. seeking censures, fines, suspensions or other sanctions. The Company is unable to predict the outcome of the inquiry.

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Patent Matter — An owner of a large patent portfolio relating to interactive voice response systems has sent correspondence to the Company in which he alleges infringement of one of his patents. The Company has not admitted any infringement. In July 2002, the Company commenced negotiations with the patent owner to resolve this issue. If an agreement is reached, it is probable that the Company would be required to pay a fee for the past use of this technology, which, the Company estimates, would amount to approximately $3.4 million for usage through March 2003. If an agreement is not reached and the patent owner succeeds in establishing infringement in a lawsuit, the Company may be liable to pay damages in an unknown amount to be established at trial, which could be higher than a negotiated amount. If the Company were found to have engaged in willful infringement, a court would have the discretion to increase damages by up to three times, and to award attorneys’ fees. The Company had approximately $3.4 million and $2.5 million accrued for this matter as of March 28, 2003 and September 27, 2002, respectively.

General Contingencies — In the ordinary course of business, there are various contingencies which are not reflected in the condensed consolidated financial statements. These include Ameritrade, Inc. and iClearing client activities involving the execution, settlement and financing of various client securities transactions. These activities may expose the Company to off-balance-sheet credit risk in the event the clients are unable to fulfill their contracted obligations.

Client securities activities are transacted on either a cash or margin basis. In margin transactions, the Company extends credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. In connection with these activities, the Company also executes and clears client transactions involving the sale of securities not yet purchased (“short sales”). Such margin-related transactions may expose the Company to off-balance-sheet risk in the event each client’s assets are not sufficient to fully cover losses which clients may incur. In the event the client fails to satisfy its obligations, the Company has the authority to purchase or sell financial instruments in the client’s account at prevailing market prices in order to fulfill the client’s obligations.

The Company seeks to control the risks associated with its client activities by requiring clients to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requires clients to deposit additional collateral, or to reduce positions, when necessary.

The Company loans securities temporarily to other broker-dealers in connection with its broker-dealer business. The Company receives cash as collateral for the securities loaned. Increases in securities prices may cause the market value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to these transactions does not return the loaned securities, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its client obligations. The Company controls this risk by requiring credit approvals for counterparties, by monitoring the market value of securities loaned on a daily basis, and by requiring additional cash as collateral when necessary.

The Company borrows securities temporarily from other broker-dealers in connection with its broker-dealer business. The Company deposits cash as collateral for the securities borrowed. Decreases in securities prices may cause the market value of the securities borrowed to fall below the amount of cash deposited as collateral. In the event the counterparty to these transactions does not return the cash deposited, the Company may be exposed to the risk of selling the securities at prevailing market prices. The Company controls this risk by requiring credit approvals for counterparties, by monitoring the collateral values on a daily basis, and by requiring collateral to be returned by the counterparties when necessary.

     As of March 28, 2003, client margin securities of approximately $1.9 billion and stock borrowings of approximately $1.1 billion were available to the Company to utilize as collateral on various borrowings or for other purposes. The Company had sold or repledged approximately $1.9 billion of that collateral as of March 28, 2003.

Employment Agreements — The Company has entered into employment agreements with several of its key executive officers. These employment agreements generally provide for annual base salary compensation, stock option acceleration and severance payments in the event of termination of employment under certain defined circumstances or changes in control of the Company. Salaries are subject to adjustments according to the Company’s financial performance and other factors.

11. SEGMENT INFORMATION

Beginning in the second quarter of fiscal 2002, the Company had two reportable operating segments: a Private Client Division and an Institutional Client Division. Both divisions provide multiple service offerings tailored to specific clients and their respective investing and trading preferences. The Private Client Division provides brokerage services directly to individual investors. The Institutional Client Division provides clearing services, brokerage capabilities and advisor tools as co-branded or private-label products to business partners and their customers. The Datek merger on September 9, 2002 resulted in a substantial increase in Private Client Division business. As a result, beginning with the first quarter of fiscal 2003, the Institutional Client Division no longer met the quantitative thresholds to be considered a reportable segment. In addition, the components of the Company’s TradeCast business were no longer included in the Private Client Division and Institutional

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Client Division and the Company’s Watcher business was no longer included in the Institutional Client Division. The Company closed the TradeCast business in February 2003 and intends to dispose of the Watcher business. The Company considers TradeCast and Watcher separate segments, although they do not meet the quantitative thresholds for reportable segments.

Financial information for the Company’s Private Client Division and all other segments is presented in the following table. The totals are equal to the Company’s consolidated amounts as reported in the condensed consolidated statements of operations. Information for the three months and six months ended March 29, 2002 has been restated to conform to the current presentation.

	Three Months Ended March 28, 2003							Six Months Ended March 28, 2003
	Private		All					Private		All
	Client		Other			Total		Client		Other			Total
Non-interest revenues	$	109,497	$	5,088		$	114,585	$	243,709	$	15,405		$	259,114
Interest revenue, net		31,882		1,167			33,049		66,657		2,390			69,047
Net revenues	$	141,379	$	6,255		$	147,634	$	310,366	$	17,795		$	328,161
Pre-tax income (loss)	$	22,197	$	(5,538	)	$	16,659	$	63,024	$	(9,566	)	$	53,458

	Three Months Ended March 29, 2002							Six Months Ended March 29, 2002
	Private		All					Private		All
	Client		Other			Total		Client		Other			Total
Non-interest revenues	$	77,763	$	3,899		$	81,662	$	156,042	$	7,779		$	163,821
Interest revenue, net		24,350		724			25,074		49,766		1,339			51,105
Net revenues	$	102,113	$	4,623		$	106,736	$	205,808	$	9,118		$	214,926
Pre-tax income (loss)	$	7,392	$	(3,964	)	$	3,428	$	28,076	$	(9,407	)	$	18,669

12. COMPREHENSIVE INCOME (LOSS)

     Comprehensive income (loss) is as follows:

		Three Months Ended						Six Months Ended
		March 28, 2003			March 29, 2002			March 28, 2003			March 29, 2002
Net income		$	9,617		$	1,947		$	31,659		$	10,950
Other comprehensive income (loss) Net unrealized holding losses on investment securities available-for-sale arising during the period			(6,010	)		(30,681	)		—			(4,507	)
	Net unrealized holding gains on derivative instrument arising during the period		3,393			—			3,393			—
	Adjustment for deferred income taxes		1,047			12,272			(1,357	)		1,803
	Foreign currency translation adjustment		75			—			70			—
Total other comprehensive income (loss), net of tax			(1,495	)		(18,409	)		2,106			(2,704	)
Comprehensive income (loss)		$	8,122		$	(16,462	)	$	33,765		$	8,246

13. SUBSEQUENT EVENT

On April 22, 2003, the Company announced a definitive agreement with SWS Group, Inc. and Mydiscountbroker.com, Inc., its subsidiary, to purchase the approximately 20,000 online retail accounts of Mydiscountbroker.com. The purchase price is expected to range from $3 million to $5 million based on account characteristics and the number of accounts transferred. The closing of the transaction, which is subject to regulatory and other approvals, is expected to occur in the summer of 2003.

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Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the Selected Financial Data and the Consolidated Financial Statements and Notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended September 27, 2002. This discussion contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. Important factors that may cause such differences include, but are not limited to: general economic and political conditions, volatility in the stock market, competition, systems failures and capacity constraints, regulatory and legal uncertainties and the other risks and uncertainties set forth under the heading “Risk Factors” in Item 7 of the Company’s annual report on Form 10-K for the fiscal year ended September 27, 2002. The forward-looking statements contained in this report speak only as of the date on which the statements were made. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise.

In particular, the following statements contained in this discussion are forward-looking statements: our plans for the integration of Datek and anticipated synergies resulting from the Datek merger; our expectations regarding the effect of our new pricing schedule on commissions and clearing fees per trade; our expectations regarding the effect on our revenues and profitability of restrictions by NASD on specified trading in cash accounts; our expectations regarding growth of net interest revenue; our expectation of reductions in the number of employees resulting from the Datek merger integration; our expectations regarding decreases in occupancy and equipment costs resulting from the Datek merger integration; our expected amount of advertising expenses; our anticipated capital and liquidity needs and our plans to finance such needs; our expectations regarding our stock repurchase program; and our expectations regarding the impact of recently issued accounting pronouncements.

Our significant accounting policies are disclosed in the Notes to Consolidated Financial Statements for the fiscal year ended September 27, 2002. In the opinion of management, we do not have any critical accounting policies which routinely involve unusually difficult, subjective or complex judgments.

Unless otherwise indicated, the terms “we”, “us” or “Company” in this report refer to Ameritrade Holding Corporation and its wholly owned subsidiaries.

BUSINESS COMBINATION

On September 9, 2002, we completed our merger with Datek. Pursuant to the merger agreement, Ameritrade Online Holdings Corp. (“AOH”) (formerly Ameritrade Holding Corporation) and Datek each became wholly owned subsidiaries of a newly formed holding company, which was renamed Ameritrade Holding Corporation. Upon the closing of the transaction, stockholders of AOH and Datek each received shares of a single class of common stock of the new holding company, with the stockholders of AOH and the stockholders of Datek each receiving approximately 50 percent of the total outstanding common stock.

We are currently in the process of integrating Datek’s business with ours. As part of the integration planning process, we have formed an integration planning organization comprised of representatives of both companies and a former Datek stockholder. Integration planning teams were assigned to determine the product and service features, functionality for clearing settlement services, call center organization and services, technology platforms and order routing for the combined company. Datek’s client call center function was moved to call centers in Omaha, Nebraska and Ft. Worth, Texas shortly after completion of the merger. Website enhancements to both Ameritrade’s and Datek’s front-end websites, along with a new pricing schedule, were implemented on October 19, 2002. Effective March 14, 2003, we consolidated the clearing function performed by Datek into the Ameritrade, Inc. clearing platform. Near the end of fiscal 2003, we intend to phase-in a combined website, which will be a single point of entry to the trading platform for both Ameritrade and Datek clients. The integration plans for the operations of Ameritrade and Datek are subject to change.

At the time of the merger, we anticipated synergies from the merger resulting from cost savings programs, estimated to be approximately $100 million on an annualized, after-tax basis (approximately $174 million pre-tax), including $10 million of annualized pre-tax advertising synergies. We currently estimate we will achieve approximately $99 million of annualized after-tax synergies (approximately $165 million pre-tax) for fiscal 2003, excluding advertising synergies. We expect to realize approximately $115 million of annualized after-tax synergies (approximately $193 million pre-tax) for fiscal 2004, excluding advertising synergies.

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RESULTS OF OPERATIONS

Three-Month Periods Ended March 28, 2003 and March 29, 2002

Net Revenues. Commissions and clearing fees increased 45 percent to $92.7 million in the second quarter of fiscal 2003 from $63.8 million in the second quarter of fiscal 2002, primarily due to the addition of 876,000 core accounts in the fourth quarter of fiscal 2002 resulting from the Datek merger. Core client accounts increased to approximately 2,907,000 at March 28, 2003 from approximately 1,877,000 at March 29, 2002. Average trades per day increased 30 percent to 116,246 in the second quarter of fiscal 2003 from 89,129 in the second quarter of fiscal 2002. Clients averaged approximately 2.4 trades per account during the second quarter of fiscal 2003, compared to approximately 2.9 trades per account during the second quarter of fiscal 2002. Commissions and clearing fees per trade increased to $13.29 in the second quarter of fiscal 2003 from $11.93 in the second quarter of fiscal 2002, due primarily to the implementation of a new pricing schedule effective October 19, 2002, partially offset by slightly lower payment for order flow revenue per trade during the second quarter of fiscal 2003 compared to the second quarter of fiscal 2002. Under the new pricing schedule, commissions for online equity trades are $10.99 for both market and limit orders, regardless of the number of shares bought or sold with no additional order handling fees. Under the previous pricing schedule, commissions for online equity market orders were $8.00, while online equity limit orders were $13.00. Flat commission pricing was also implemented for Interactive Voice Response system trades, at $14.99 per trade (previously $12.00 for market orders and $17.00 for limit orders). Broker-assisted trades are now $24.99 for market orders, with an additional $5.00 fee for limit orders. We expect that average commissions and clearing fees per trade will continue to be higher for the remainder of fiscal 2003, compared to the same period of fiscal 2002, as a result of the new pricing schedule.

In August 2002, NASD directed our broker-dealer subsidiaries, iClearing and Ameritrade, Inc., to cease permitting cash account clients to utilize the proceeds from the sale of fully-paid for securities to purchase other securities in advance of the actual receipt of proceeds from the settlement of the sale of the fully-paid for securities (the “specified trades”). NASD maintains that such trading violates Regulation T of the Board of Governors of the Federal Reserve System. We have made and continue to make changes to our systems and procedures to address this restriction. Since mid-December 2002, when we implemented some of the changes, trading activity in cash accounts that we had identified as engaging in some specified trades has decreased substantially, some of the cash accounts have converted to margin accounts, and a small number of the cash accounts have been closed. These trends reflect observations over a short period of time covering a segment of the cash accounts in which specified trading has occurred; however, we expect these trends to continue with respect to these cash accounts. We cannot predict with any degree of certainty the impact of this restriction on our revenues and profitability because we cannot adequately forecast the manner in which or extent to which clients that have engaged in specified trades will adjust their trading activity, close cash accounts or convert to margin accounts, nor can we predict the impact of future market conditions and other factors over which we have no control. Although its impact is dependent on many factors that we cannot predict, this restriction on specified trades could have a material adverse effect on our revenues and profitability.

We intend to conduct our business in conformity with all applicable laws, rules and regulations and expect to continue working cooperatively with NASD to address any future issues of interpretation or implementation that may arise. However, NASD may elect to bring disciplinary proceedings against iClearing or Ameritrade, Inc. seeking censures, fines, suspensions or other sanctions. We may seek a ruling or interpretation by the Board of Governors of the Federal Reserve System or its staff to obtain relief from this restriction, although no assurance can be given that such relief would be granted.

Net interest revenue (interest revenue less client interest expense) increased 31 percent to $33.0 million in the second quarter of fiscal 2003 from $25.1 million in the second quarter of fiscal 2002. Average client and correspondent receivables increased 11 percent in the second quarter of fiscal 2003 compared to the second quarter of fiscal 2002, due primarily to the Datek merger. Average cash and investments segregated in compliance with federal regulations (“segregated cash”) increased by 152 percent in the second quarter of fiscal 2003 from the second quarter of fiscal 2002. The increased interest income resulting from the higher client and correspondent receivables and segregated cash was partially offset by a decrease of 67 basis points in the average interest rate charged on client receivables, a decrease of 49 basis points in the average interest rate earned on segregated cash and an increase of 107 percent in average amounts payable to clients and correspondents in the second quarter of fiscal 2003 from the second quarter of fiscal 2002. We generally expect net interest revenue to grow as our account base grows. However, it will also be affected by changes in interest rates and fluctuations in the levels of client margin borrowing and deposits.

Other revenues increased 22 percent to $21.9 million in the second quarter of fiscal 2003 from $17.9 million in the second quarter of fiscal 2002, due primarily to increased account maintenance, clearing and other fee income resulting from the Datek merger.

Expenses. Employee compensation and benefits expense increased 60 percent to $53.7 million in the second quarter of fiscal 2003 from $33.7 million in the second quarter of fiscal 2002, due primarily to the Datek merger. Full-time equivalent employees increased 16 percent to 1,938 at the end of March 2003 from 1,670 at the end of March 2002. The number of temporary employees also increased 129 percent from March 2002 to March 2003, due to the transition of Datek business to

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Ameritrade call centers. We expect the number of full-time equivalent employees to decrease to approximately 1,700 by the end of fiscal 2003 as the merger integration continues. In the second quarter of fiscal 2003, we also incurred approximately $4.8 million in severance costs related to the closing of TradeCast and the integration of the Datek and Ameritrade technology organizations, and $0.7 million of compensation expense for stock appreciation rights (“SARs”) assumed in the Datek merger, due to costs of a cash-out offer to SAR holders during the quarter. As of March 28, 2003, there were approximately 75,000 SARs outstanding with a weighted average exercise price of $4.74 per share, compared with 4.0 million SARs outstanding at September 27, 2002. Due to the variable accounting required for SARs, fluctuations in our stock price will cause fluctuations in the related compensation expense in future periods for the remaining SARs outstanding.

Communications expense increased 34 percent to $11.9 million in the second quarter of fiscal 2003 compared to $8.9 million in the second quarter of fiscal 2002, due primarily to increased expense for quotes, market information and postage associated with additional accounts and transaction processing volumes resulting from the Datek merger.

Occupancy and equipment costs increased nine percent to $16.0 million in the second quarter of fiscal 2003 from $14.7 million in the second quarter of fiscal 2002, due to facilities added in the Datek merger. We expect occupancy and equipment costs to decrease somewhat by the end of fiscal 2003 as the merger integration progresses and facilities are consolidated.

Depreciation and amortization increased eight percent to $7.6 million in the second quarter of fiscal 2003 from $7.1 million in the second quarter of fiscal 2002, due primarily to amortization of intangible assets recorded in the Datek merger.

Professional services expense increased 23 percent to $8.3 million in the second quarter of fiscal 2003 from $6.7 million in the second quarter of fiscal 2002. This increase was primarily due to increased usage of consulting services during the second quarter of fiscal 2003 in connection with the Datek merger integration.

Interest on borrowings was approximately $1.1 million for the second quarters of both fiscal 2003 and fiscal 2002. Interest expense associated with the forward contract on our Knight investment was partially offset by lower average borrowings on our revolving credit agreement. We had no borrowings outstanding on our revolving credit agreement during the second quarter of fiscal 2003.

(Gain)/loss on disposal of property includes approximately $5.3 million of gain recognized on the sale/leaseback of our Kansas City data center facility in the second quarter of fiscal 2003. The remaining $4.1 million of gain on the sale/leaseback was deferred and will be recognized over the five-year term of the leaseback in accordance with sale/leaseback accounting.

Other operating expenses increased 70 percent to $10.8 million in the second quarter of fiscal 2003 compared to $6.3 million in the second quarter of fiscal 2002, due primarily to increased clearing, execution and account maintenance expenses resulting from the transaction volume and accounts added through the Datek merger.

Advertising expenses increased nine percent to $27.0 million in the second quarter of fiscal 2003 from $24.8 million in the second quarter of fiscal 2002. The increased level of advertising expenditures was principally due to our introduction of a new suite of products and services and new pricing schedule during the first quarter of fiscal 2003. We have budgeted approximately $28 million to $36 million for advertising for the remainder of fiscal 2003.

Income tax expense was $7.0 million in the second quarter of fiscal 2003 compared to $1.5 million in the second quarter of fiscal 2002. The effective income tax rate in the second quarter of fiscal 2003 decreased to approximately 42 percent compared to approximately 43 percent in the second quarter of fiscal 2002, due primarily to the effect nondeductible items on a relatively small amount of pre-tax income in the second quarter of fiscal 2002.

Six-Month Periods Ended March 28, 2003 and March 29, 2002

Net Revenues. Commissions and clearing fees increased 61 percent to $208.9 million in the first half of fiscal 2003 from $129.4 million in the first half of fiscal 2002, primarily due to the addition of 876,000 core accounts in the fourth quarter of fiscal 2002 resulting from the Datek merger. Average trades per day increased 47 percent to 128,962 in the first half of fiscal 2003 from 87,529 in the first half of fiscal 2002. Clients averaged approximately 5.6 trades per account during the first half of fiscal 2003, compared to approximately 5.9 trades per account during the first half of fiscal 2002. Commissions and clearing fees per trade increased to $12.96 in the first half of fiscal 2003 from $11.93 in the first half of fiscal 2002, due primarily to the implementation of a new pricing schedule effective October 19, 2002, partially offset by slightly lower payment for order flow revenue per trade during the first half of fiscal 2003 compared to the first half of fiscal 2002. We expect that average commissions and clearing fees per trade will continue to be higher for the remainder of fiscal 2003, compared to the same period of fiscal 2002, as a result of the new pricing schedule.

Net interest revenue increased 35 percent to $69.0 million in the first half of fiscal 2003 from $51.1 million in the first half of fiscal 2002. Average client and correspondent receivables increased 12 percent in the first half of fiscal 2003 compared to the first half of fiscal 2002, due primarily to the Datek merger. Average segregated cash increased by 159 percent in the first half of fiscal 2003 from the first half of fiscal 2002. The increased interest income resulting from the higher client and

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correspondent receivables and segregated cash was partially offset by a decrease of 62 basis points in the average interest rate charged on client receivables, a decrease of 59 basis points in the average interest rate earned on segregated cash and an increase of 104 percent in average amounts payable to clients and correspondents in the first half of fiscal 2003 from the first half of fiscal 2002. We generally expect net interest revenue to grow as our account base grows. However, it will also be affected by changes in interest rates and fluctuations in the levels of client margin borrowing and deposits.

Other revenues increased 46 percent to $50.2 million in the first half of fiscal 2003 from $34.4 million in the first half of fiscal 2002, due primarily to increased account maintenance, clearing and other fee income resulting from the Datek merger.

Expenses. Employee compensation and benefits expense increased 49 percent to $99.5 million in the first half of fiscal 2003 from $66.6 million in the first half of fiscal 2002, due primarily to the Datek merger. Full-time equivalent employees increased 16 percent to 1,938 at the end of March 2003 from 1,670 at the end of March 2002. The number of temporary employees also increased 129 percent from March 2002 to March 2003, due to the transition of Datek business to Ameritrade call centers. We expect the number of full-time equivalent employees to decrease to approximately 1,700 by the end of fiscal 2003 as the merger integration continues. In the first half of fiscal 2003, we also incurred approximately $4.8 million in severance costs related to the closing of TradeCast and the integration of the Datek and Ameritrade technology organizations, and $4.2 million of compensation expense for SARs assumed in the Datek merger, due to increases in our stock price and costs of a cash-out offer to SAR holders during fiscal 2003. As of March 28, 2003, there were approximately 75,000 SARs outstanding with a weighted average exercise price of $4.74 per share, compared with 4.0 million SARs outstanding at September 27, 2002. Due to the variable accounting required for SARs, fluctuations in our stock price will cause fluctuations in the related compensation expense in future periods for the remaining SARs outstanding.

Communications expense increased 33 percent to $25.1 million in the first half of fiscal 2003 compared to $18.9 million in the first half of fiscal 2002, due primarily to increased expense for quotes, market information and postage associated with additional accounts and transaction processing volumes resulting from the Datek merger.

Occupancy and equipment costs increased 14 percent to $32.2 million in the first half of fiscal 2003 from $28.3 million in the first half of fiscal 2002, due to facilities added in the Datek merger. We expect occupancy and equipment costs to decrease somewhat by the end of fiscal 2003 as the merger integration progresses and facilities are consolidated.

Depreciation and amortization increased 19 percent to $16.4 million in the first half of fiscal 2003 from $13.8 million in the first half of fiscal 2002, due primarily to amortization of intangible assets recorded in the Datek merger.

Professional services expense increased 70 percent to $19.6 million in the first half of fiscal 2003 from $11.5 million in the first half of fiscal 2002. This increase was primarily due to increased usage of consulting services during the first half of fiscal 2003 in connection with the Datek merger integration.

Interest on borrowings decreased 20 percent to $2.3 million for the first half of fiscal 2003 from $2.9 million for the first half of fiscal 2002, due primarily to lower average borrowings on our revolving credit agreement. We had no borrowings outstanding on our revolving credit agreement during the first half of fiscal 2003.

(Gain)/loss on disposal of property includes approximately $5.3 million of gain recognized on the sale/leaseback of our Kansas City data center facility in the first half of fiscal 2003. The remaining $4.1 million of gain on the sale/leaseback was deferred and will be recognized over the five-year term of the leaseback in accordance with sale/leaseback accounting.

Other operating expenses increased 111 percent to $25.8 million in the first half of fiscal 2003 compared to $12.2 million in the first half of fiscal 2002, due primarily to increased clearing, execution and account maintenance expenses resulting from the transaction volume and accounts added through the Datek merger.

Advertising expenses increased 41 percent to $59.0 million in the first half of fiscal 2003 from $41.9 million in the first half of fiscal 2002. The increased level of advertising expenditures was principally due to our introduction of a new suite of products and services and new pricing schedule during the first quarter of fiscal 2003. We have budgeted approximately $28 million to $36 million for advertising for the remainder of fiscal 2003.

Income tax expense was $21.8 million in the first half of fiscal 2003 compared to $7.7 million in the first half of fiscal 2002. The effective income tax rate was approximately 41 percent for the first half of both fiscal 2003 and fiscal 2002.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed our liquidity and capital needs primarily through the use of funds generated from operations and from borrowings under our credit agreements. We have also issued Common Stock to finance mergers and acquisitions. Our liquidity needs during the first half of fiscal 2003 were financed primarily from our earnings and cash on hand. We also received approximately $21.3 million of proceeds on a prepaid variable forward contract (see “Prepaid Variable Forward Contract”) on 5.2 million shares of our investment in Knight Trading Group, Inc. (“Knight”), and approximately $23.2 million

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of net proceeds from the sale/leaseback of our Kansas City data center facility. We plan to finance our capital and liquidity needs for the remainder of fiscal 2003 primarily from our earnings and cash on hand. In addition, we may utilize our revolving credit facility or issue equity or debt securities. In April 2003, we received approximately $0.8 million of proceeds on a separate three-year prepaid variable forward contract on an additional 0.2 million Knight shares. We may also consider selling, or entering into a forward contract to sell, some or all of our additional 2.5 million shares of Knight that are not subject to a prepaid variable forward contract.

If additional funds are raised through the issuance of equity securities, the percentage ownership of the stockholders may be reduced, stockholders may experience additional dilution in net book value per share or such equity securities may have rights, preferences or privileges senior to those of the holders of our Common Stock. There can be no assurance that additional financing will be available if needed on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to develop or enhance our services and products, take advantage of future opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and operating results.

Dividends from our subsidiaries are another source of liquidity for the holding company. Some of our subsidiaries are subject to requirements of the SEC and NASD relating to liquidity, capital standards, and the use of client funds and securities, which limit funds available for the payment of dividends to the holding company.

Under the SEC’s Uniform Net Capital Rule (Rule 15c3-1 under the Securities Exchange Act of 1934), our broker-dealer subsidiaries are required to maintain at all times at least the minimum level of net capital required under Rule 15c3-1. This minimum net capital level is determined based upon an involved calculation described in Rule 15c3-1, but takes account of, among other things, each broker-dealer’s “net debit items”, which primarily are a function of client margin receivables at our broker-dealer subsidiaries. Since our net debit items may fluctuate significantly, our minimum net capital requirements may also fluctuate significantly from period to period. The holding company may make cash capital contributions to broker-dealer subsidiaries, if necessary, to meet net capital requirements.

Cash Flow

Cash used in operating activities was $48.4 million in the first half of fiscal 2003, compared to cash provided by operations of $30.7 million in the first half of fiscal 2002. The decrease in cash flows from operations was primarily due to a substantial reduction in accounts payable and accrued liabilities and payment of approximately $72.2 million in income taxes during the first half of fiscal 2003, partially offset by higher pre-tax income compared to the same period of the previous year. The large payment of income taxes was primarily due to taxes owed by Datek resulting from a gain on the distribution of Island Holding Company, Inc. (“Island”) stock to Datek stockholders prior to the Datek merger. The payment of taxes on the Island distribution was funded by a cash holdback amount established in connection with the Datek merger.

Cash provided by investing activities was $17.5 million in the first half of fiscal 2003, compared to cash used in investing activities of $4.6 million in the first half of fiscal 2002, due primarily to $23.2 million of proceeds from the sale/leaseback of our Kansas City data center facility in the first half of fiscal 2003, partially offset by higher net capital expenditures for software development during the first half of fiscal 2003 compared to the same period of the previous year.

Cash used in financing activities was $16.0 million in the first half of fiscal 2003, compared to $22.4 million in the first half of fiscal 2002. The financing activities consisted mainly of $53.7 million of stock repurchases and $1.2 million of repurchases of our convertible subordinated notes (see “Convertible Subordinated Notes”), partly offset by $21.3 million of proceeds on the Knight prepaid variable forward contract, $7.6 million of proceeds from stock option exercises and $9.9 million of payments received on stockholder loans in the first half of fiscal 2003; and $22.5 million of payments on our revolving credit facility in the first half of fiscal 2002.

Loan Agreement

On December 16, 2002, we entered into a second amended and restated revolving credit agreement. The revolving credit agreement permits borrowings of up to $50 million through December 15, 2003, and is secured primarily by our stock in our subsidiaries. The interest rate on borrowings, determined on a monthly basis, initially is equal to the lesser of (i) the national prime rate or (ii) one month LIBOR plus 2.75 percent. The interest rate will be decreased if we achieve certain levels of consolidated net income during the term of the agreement. At March 28, 2003, the interest rate on the revolving credit agreement would have been 4.06 percent. We also pay a commitment fee of 0.375 percent of the unused borrowings through the maturity date. We had no outstanding indebtedness under the revolving credit agreement at March 28, 2003 and no outstanding indebtedness under the prior revolving credit agreement at September 27, 2002. The revolving credit agreement contains certain covenants and restrictions, including a minimum net worth requirement, and prohibits the payment of cash dividends to stockholders. We were in compliance with or obtained waivers for all covenants under the revolving credit agreements for all periods presented in the condensed consolidated financial statements.

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Convertible Subordinated Notes

In August 1999, we issued $200 million of 5.75 percent convertible subordinated notes due August 1, 2004. The holders of the notes may convert the notes into shares of Common Stock at any time prior to the close of business on the maturity date of the notes, unless previously redeemed or repurchased, at a conversion rate of 30.7137 shares per $1,000 principal amount of notes (equivalent to an approximate conversion price of $32.56 per share), subject to adjustment in certain circumstances. Interest on the notes is payable on February 1 and August 1 of each year. We may redeem the notes at a premium on or after August 6, 2002, in whole or in part, upon notice to each holder not less than 30 days nor more than 60 days prior to the redemption date.

In February 2001, $152.4 million of our convertible subordinated notes were converted for approximately 4.7 million shares of Class A Common Stock and $58.7 million of cash. In October 2002, we repurchased and retired approximately $1.4 million of our convertible subordinated notes for approximately $1.2 million in cash, resulting in a gain on debt retirement of approximately $0.2 million. As of March 28, 2003, we had approximately $46.3 million of convertible subordinated notes outstanding. These notes are convertible into approximately 1.4 million shares of Common Stock.

Prepaid Variable Forward Contract

Effective February 27, 2003, we entered into a four-year prepaid variable forward contract with a counterparty with a notional amount of approximately $24.8 million on 5.2 million underlying Knight shares. The forward contract contains a zero-cost embedded collar on the value of the Knight shares, with a floor price of $4.77 per share and a cap price of $5.724 per share. At the inception of the forward contract, we received cash of approximately $21.3 million, equal to 86 percent of the notional amount. At maturity, we may settle the forward contract in shares of Knight or in cash, at our option. If the market price of the Knight stock at maturity is equal to or less than the floor price, the counterparty will be entitled to receive one share of Knight, or its cash equivalent, for each underlying share. If the market price of the Knight stock at maturity is greater than or equal to the cap price, the counterparty will be entitled to receive the number of Knight shares or its cash equivalent equal to the ratio of the floor price plus the excess of the market price over the cap price, divided by the market price, for each underlying share. If the market price at maturity is greater than the floor price but less than the cap price, the counterparty will be entitled to receive the number of Knight shares, or its cash equivalent, equal to the ratio of the floor price divided by the market price for each underlying share. Regardless of whether the forward contract is settled in Knight shares or in cash, we intend to sell the underlying Knight shares at maturity.

We have designated the forward contract as a cash flow hedge of the forecasted future sale of 5.2 million Knight shares. The forward contract is expected to be perfectly effective against changes in the cash flows associated with the forecasted future sale outside the price range of the collar. Accordingly, all changes in the fair value of the embedded collar are recorded in other comprehensive income, net of income taxes. As of March 28, 2003, the fair value of the embedded collar was approximately $3.4 million and was included in other assets on the condensed consolidated balance sheet.

The $21.3 million of cash received on the forward contract is accounted for as a debt obligation on the condensed consolidated balance sheet. We are accreting interest on the debt obligation to the notional maturity amount of $24.8 million over the term of the forward contract using an effective interest rate of approximately 3.8 percent. Upon settlement of the forward contract, the fair value of the collar and the realized gain or loss on the Knight stock delivered to the counterparty or otherwise sold will be reclassified from other comprehensive income into earnings.

Stock Repurchase Program

On September 9, 2002, our Board of Directors authorized a program to repurchase up to 40 million shares of our Common Stock from time to time over a two-year period beginning September 19, 2002. Through the first quarter of fiscal 2003, we funded our purchases with cash on hand. In the second quarter of fiscal 2003, we funded our purchases with cash on hand and the proceeds of the Knight prepaid variable forward contract. We expect to fund any future purchases primarily with operating profits or cash on hand. Through March 28, 2003, we repurchased approximately 13.3 million shares at a weighted average purchase price of $4.41 per share.

Other Contractual Obligations

We are obligated to pay our Chief Executive Officer (“CEO”) $15.6 million in deferred compensation, adjusted for investment income or losses on the $15.6 million, pursuant to our employment agreement with the CEO. This payment will be made not sooner than the day after the CEO’s employment with the Company terminates. At December 31, 2002 and September 27, 2002, we had an equity index swap arrangement with a notional amount of $15.6 million for the purpose of hedging our obligation under this deferred compensation plan. Changes in the fair value of this instrument are offset by changes in our obligation to our CEO.

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We also have contractual obligations under operating leases for facilities and equipment. The following table summarizes future payments under our contractual obligations. Amounts are in thousands.

			Payments Due for Fiscal Years Ending:
Contractual Obligations	Total		2003		2004-05		2006-07		After 2007
Operating leases, net of sublease proceeds	$	83,631	$	12,641	$	24,450	$	13,334	$	33,206
Deferred compensation (1)		15,550		15,550		—		—		—
Convertible subordinated notes		46,295		—		46,295		—		—
Total contractual cash obligations	$	145,476	$	28,191	$	70,745	$	13,334	$	33,206

(1)  Our obligation to our CEO for deferred compensation will become payable not sooner than the day after the CEO’s employment with the Company terminates. The obligation is presented in the fiscal 2003 column as that is the year in which the entire amount of the compensation has been earned by the CEO.

NEW ACCOUNTING PRONOUNCEMENTS

SFAS No. 148 — In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of FASB Statement No. 123. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The disclosure requirements of SFAS No. 148 are effective for fiscal years ending after December 15, 2002 and for interim periods beginning after December 15, 2002. We are evaluating whether to adopt the fair value based method of accounting for stock-based compensation, and the alternative methods of transition for such a change. If we were to elect to change to the fair value based method using the retroactive restatement alternative under SFAS No. 148, we estimate the additional compensation expense associated with stock-based compensation would reduce our earnings by approximately $0.04 per share for fiscal 2003. Actual results may differ.

FIN No. 45 — In November 2002, the FASB issued FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN No. 45”). The initial recognition and measurement provisions of FIN No. 45 are effective for guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN No. 45 are effective for interim or annual periods ending after December 15, 2002. There was no impact on our financial statements as a result of adopting FIN No. 45.

FIN No. 46 — In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN No. 46”). FIN No. 46 applies to variable interest entities created after January 31, 2003 and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds an interest that it acquired before February 1, 2003. We currently have no interests in variable interest entities, and therefore do not expect adoption of FIN No. 46 to have an impact on our consolidated financial statements.

Item 3. — Quantitative and Qualitative Disclosures about Market Risk

Market risk generally represents the risk of loss that may result from the potential change in the value of a financial instrument as a result of fluctuations in interest rates and market prices. We have established policies, procedures and internal processes governing our management of market risks in the normal course of our business operations. We do not hold any market risk-sensitive instruments for trading purposes.

We seek to control the risks associated with our client activities by requiring clients to maintain margin collateral in compliance with various regulatory and internal guidelines. We monitor required margin levels daily and, pursuant to such guidelines, require our clients to deposit additional collateral, or to reduce positions, when necessary.

As a fundamental part of our brokerage business, we hold short-term interest earning assets, mainly funds required to be segregated in compliance with federal regulations for clients. These funds totaled $6.9 billion at March 28, 2003 and $5.7 billion at September 27, 2002. We invest these funds primarily in short-term fixed-rate U.S. Treasury Bills and repurchase agreements. Our interest earning assets are financed primarily by short-term interest bearing liabilities, totaling $8.0 billion at March 28, 2003 and $6.4 billion at September 27, 2002, in the form of client cash balances. We earn a net interest spread on the difference between amounts earned on client margin loans and amounts paid on client credit balances. Because we establish the rate paid on client cash balances, a substantial portion of our interest rate risk is under our direct management.

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At March 28, 2003 and September 27, 2002, we had $46.3 million and $47.6 million, respectively, of convertible subordinated notes outstanding, which bear interest at a fixed rate of 5.75 percent. We had no borrowings outstanding under our $50 million revolving credit agreement, which bears interest at a floating rate, as of March 28, 2003 and September 27, 2002.

We hold a marketable equity security, our investment in 7.9 million shares of Knight, which was recorded at fair value of $31.9 million ($19.4 million net of tax) at March 28, 2003 and has exposure to market price risk. The same security was also recorded at fair value of $31.9 million ($19.4 million net of tax) at September 27, 2002. The potential loss in fair value resulting from a hypothetical 10 percent adverse change in prices quoted by the stock exchanges was approximately $3.2 million at March 28, 2003. Effective February 27, 2003, we entered into a four-year prepaid variable forward contract with a notional amount of approximately $24.8 million on 5.2 million underlying Knight shares. The forward contract contains an embedded collar on the value of the Knight shares, with a floor price of $4.77 per share and a cap price of $5.724 per share. We have designated the forward contract as a cash flow hedge of the forecasted future sale of 5.2 million Knight shares. As of March 28, 2003, the fair value of the embedded collar was approximately $3.4 million and was included in other assets on the condensed consolidated balance sheet. The forward contract is expected to be perfectly effective against changes in cash flows associated with changes in the value of Knight shares outside the price range of the collar.

At March 28, 2003 and September 27, 2002, we had an equity index swap arrangement with a notional amount of $15.6 million for the purpose of hedging our obligation under our deferred compensation plan for our CEO. Changes in the fair value of this instrument are offset by changes in our obligation to our CEO.

     Our revenues and financial instruments are denominated in U.S. dollars, and we generally do not invest, except for hedging purposes, in derivative financial instruments or derivative commodity instruments.

Item 4. — Controls and Procedures

Management, including the Chief Executive Officer and Chief Financial Officer, within 90 days before the filing date of this quarterly report on Form 10-Q for the fiscal quarter ended March 28, 2003, performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures. Based on that evaluation, management, including the Chief Executive Officer and Chief Financial Officer, have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in its periodic reports is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Part II — OTHER INFORMATION

Item 1. — Legal Proceedings

The nature of the Company’s business subjects it to lawsuits, arbitrations, claims and other legal proceedings. We cannot predict with certainty the outcome of pending legal proceedings. A substantial adverse judgment or other resolution regarding these proceedings could have a material adverse effect on the Company’s financial condition, results of operations and cash flows. However, in the opinion of management, after consultation with legal counsel, the Company has adequate legal defenses with respect to the legal proceedings to which it is a defendant or respondent and the outcome of these proceedings is not likely to have a material adverse effect on the financial condition, results of operations or cash flows of the Company.

Item 4. — Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Stockholders on February 12, 2003. Three persons were nominated by the Board of Directors to serve as Class I directors for terms of three years. The Board of Directors consists of three classes, with three Directors per class and each class being elected to a staggered three-year term. There was no solicitation in opposition to the nominees proposed to be elected in the Proxy Statement. The following sets forth the results of the election of directors:

Name of Nominee	FOR		WITHHELD
Michael D. Fleisher		383,697,201		3,964,144
Glenn H. Hutchins		384,023,337		3,638,008
Thomas S. Ricketts		380,760,565		6,900,780

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The proposal to ratify the appointment of Deloitte & Touche LLP as independent auditors for the fiscal year ending September 26, 2003, was approved as follows:

					ABSTENTIONS
					AND BROKER
	FOR		AGAINST		NON-VOTES
Votes		384,023,408		3,555,644		82,293

The proposal to amend the Company’s 1996 Directors Incentive Plan to increase the maximum aggregate number of shares the Company may issue under the plan was approved as follows:

					ABSTENTIONS
					AND BROKER
	FOR		AGAINST		NON-VOTES
Votes		372,912,173		11,016,022		3,733,150

Item 5. — Other Information

On April 8, 2003, the Company received a notice from the administrator of the Ameritrade Holding Corporation Associates 401(k) Profit Sharing Plan (the “Plan”) in accordance with Section 101(i)(2)(E) of the Employment Retirement Income Security Act of 1974. This notice advised the Company that a “blackout period” would be required to implement a change in the Plan to a late-day trading environment. During this blackout period, no participant in the Plan may direct or diversify any investment in his or her Plan account, obtain a loan from the Plan or obtain a Plan distribution. On April 11, 2003, the Company notified each director and executive officer of the blackout period in accordance with Section 104 of Regulation BTR. A copy of this notice has been filed as an exhibit to this report and is incorporated herein by reference. The blackout period is expected to begin May 6, 2003 and end late evening of May 9, 2003. During this time, directors and executive officers will generally be prohibited from, directly or indirectly, purchasing, selling or otherwise acquiring or transferring any equity security that they acquired or acquire in connection with their service as a director or their employment as an executive officer of the Company. Inquiries regarding the blackout period may be directed by phone to Kurt Halvorson at 402-597-7713 or Tom Marsh at 402-827-8664, or in writing to either of them at Ameritrade Holding Corporation, 4211 South 102nd Street, Omaha, Nebraska 68127.

Item 6. — Exhibits and Reports on Form 8-K

(a)  Exhibits:

3.1	Restated Certificate of Incorporation of Ameritrade Holding Corporation (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-A filed on September 5, 2002)
3.2	By-Laws of Ameritrade Holding Corporation (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-A filed on September 5, 2002)
10.1	1996 Directors Incentive Plan, as amended and restated, effective as of February 12, 2003
10.2	Employment Agreement, dated as of February 28, 2003, between Michael Feigeles and Ameritrade Holding Corporation
10.3	Master Terms And Conditions For Pre-Paid Share Forward Transactions Between Citibank, N.A. And Ameritrade Holding Corporation, dated as of April 25, 2003
10.4	ISDA Master Agreement dated as of November 1, 2001 between Citibank, N.A. and Ameritrade Holding Corporation
10.5	ISDA Credit Support Annex to the Schedule to the Master Agreement dated as of November 1, 2001 between Citibank, N.A. and Ameritrade Holding Corporation
10.6	Prepaid Share Forward Transaction Confirmation, dated as of February 28, 2003, between Citibank, N.A. and Ameritrade Holding Corporation
15.1	Independent accountants’ awareness letter
99.1	Written Statement of Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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99.2 Notice of Blackout Period given to Directors and Executive Officers, dated April 11, 2003

(b)  Reports on Form 8-K:

     None.

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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: May 8, 2003

Ameritrade Holding Corporation (Registrant)
by:	/s/ Joseph H. Moglia Joseph H. Moglia Chief Executive Officer (Principal Executive Officer)
by:	/s/ John R. MacDonald John R. MacDonald Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

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CERTIFICATION

I, Joseph H. Moglia, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Ameritrade Holding Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.     The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 8, 2003

/s/ Joseph H. Moglia

Joseph H. Moglia
Chief Executive Officer

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CERTIFICATION

I, John R. MacDonald, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Ameritrade Holding Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.     The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 8, 2003

/s/ John R. MacDonald

John R. MacDonald
Executive Vice President, Chief Financial Officer and Treasurer

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