x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 82-0543156 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page No. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
December 31, 2016 | September 30, 2016 | |||||||
(In millions) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 1,662 | $ | 1,855 | ||||
Cash and investments segregated and on deposit for regulatory purposes | 9,263 | 8,729 | ||||||
Receivable from brokers, dealers and clearing organizations | 959 | 1,190 | ||||||
Receivable from clients, net | 12,039 | 11,941 | ||||||
Receivable from affiliates | 143 | 106 | ||||||
Other receivables, net | 136 | 160 | ||||||
Securities owned, at fair value | 177 | 331 | ||||||
Investments available-for-sale, at fair value | 747 | 757 | ||||||
Property and equipment at cost, net | 531 | 526 | ||||||
Goodwill | 2,467 | 2,467 | ||||||
Acquired intangible assets, net | 556 | 575 | ||||||
Other assets | 154 | 181 | ||||||
Total assets | $ | 28,834 | $ | 28,818 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Liabilities: | ||||||||
Payable to brokers, dealers and clearing organizations | $ | 2,028 | $ | 2,040 | ||||
Payable to clients | 19,062 | 19,055 | ||||||
Accounts payable and other liabilities | 484 | 565 | ||||||
Payable to affiliates | 8 | 9 | ||||||
Long-term debt | 1,769 | 1,817 | ||||||
Deferred income taxes | 284 | 281 | ||||||
Total liabilities | 23,635 | 23,767 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $0.01 par value; 100 million shares authorized, none issued | — | — | ||||||
Common stock, $0.01 par value; one billion shares authorized; 631 million shares issued; December 31, 2016 - 528 million shares outstanding; September 30, 2016 - 526 million shares outstanding | 6 | 6 | ||||||
Additional paid-in capital | 1,689 | 1,670 | ||||||
Retained earnings | 5,640 | 5,518 | ||||||
Treasury stock, common, at cost: December 31, 2016 - 103 million shares; September 30, 2016 - 105 million shares | (2,110 | ) | (2,121 | ) | ||||
Deferred compensation | 1 | — | ||||||
Accumulated other comprehensive loss | (27 | ) | (22 | ) | ||||
Total stockholders' equity | 5,199 | 5,051 | ||||||
Total liabilities and stockholders' equity | $ | 28,834 | $ | 28,818 |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
(In millions, except per share amounts) | ||||||||
Revenues: | ||||||||
Transaction-based revenues: | ||||||||
Commissions and transaction fees | $ | 355 | $ | 328 | ||||
Asset-based revenues: | ||||||||
Insured deposit account fees | 245 | 227 | ||||||
Net interest revenue | 151 | 154 | ||||||
Investment product fees | 94 | 92 | ||||||
Total asset-based revenues | 490 | 473 | ||||||
Other revenues | 14 | 11 | ||||||
Net revenues | 859 | 812 | ||||||
Operating expenses: | ||||||||
Employee compensation and benefits | 214 | 201 | ||||||
Clearing and execution costs | 36 | 30 | ||||||
Communications | 35 | 32 | ||||||
Occupancy and equipment costs | 44 | 43 | ||||||
Depreciation and amortization | 24 | 22 | ||||||
Amortization of acquired intangible assets | 19 | 22 | ||||||
Professional services | 53 | 37 | ||||||
Advertising | 57 | 62 | ||||||
Other | 24 | 20 | ||||||
Total operating expenses | 506 | 469 | ||||||
Operating income | 353 | 343 | ||||||
Other expense: | ||||||||
Interest on borrowings | 14 | 12 | ||||||
Total other expense | 14 | 12 | ||||||
Pre-tax income | 339 | 331 | ||||||
Provision for income taxes | 123 | 119 | ||||||
Net income | $ | 216 | $ | 212 | ||||
Earnings per share - basic | $ | 0.41 | $ | 0.39 | ||||
Earnings per share - diluted | $ | 0.41 | $ | 0.39 | ||||
Weighted average shares outstanding - basic | 527 | 537 | ||||||
Weighted average shares outstanding - diluted | 530 | 540 | ||||||
Dividends declared per share | $ | 0.18 | $ | 0.17 |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
(In millions) | ||||||||
Net income | $ | 216 | $ | 212 | ||||
Other comprehensive income (loss), before tax: | ||||||||
Investments available-for-sale: | ||||||||
Unrealized loss | (10 | ) | — | |||||
Cash flow hedging instruments: | ||||||||
Reclassification adjustment for portion of realized loss amortized to net income | 1 | 1 | ||||||
Total other comprehensive income (loss), before tax | (9 | ) | 1 | |||||
Income tax effect | 4 | — | ||||||
Total other comprehensive income (loss), net of tax | (5 | ) | 1 | |||||
Comprehensive income | $ | 211 | $ | 213 |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
(In millions) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 216 | $ | 212 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 24 | 22 | ||||||
Amortization of acquired intangible assets | 19 | 22 | ||||||
Deferred income taxes | 7 | 12 | ||||||
Stock-based compensation | 10 | 9 | ||||||
Excess tax benefits on stock-based compensation | (9 | ) | (15 | ) | ||||
Other, net | 1 | 2 | ||||||
Changes in operating assets and liabilities: | ||||||||
Cash and investments segregated and on deposit for regulatory purposes | (534 | ) | 265 | |||||
Receivable from brokers, dealers and clearing organizations | 231 | (160 | ) | |||||
Receivable from clients, net | (98 | ) | 361 | |||||
Receivable from/payable to affiliates, net | (38 | ) | (34 | ) | ||||
Other receivables, net | 24 | 1 | ||||||
Securities owned, at fair value | 154 | 162 | ||||||
Other assets | (21 | ) | (46 | ) | ||||
Payable to brokers, dealers and clearing organizations | (12 | ) | (658 | ) | ||||
Payable to clients | 7 | 70 | ||||||
Accounts payable and other liabilities | (71 | ) | (74 | ) | ||||
Net cash provided by (used in) operating activities | (90 | ) | 151 | |||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (29 | ) | (43 | ) | ||||
Purchase of short-term investments | — | (201 | ) | |||||
Net cash used in investing activities | (29 | ) | (244 | ) | ||||
Cash flows from financing activities: | ||||||||
Payment of cash dividends | (95 | ) | (91 | ) | ||||
Proceeds from exercise of stock options: Three months ended December 31, 2016 - 1.3 million shares | 23 | — | ||||||
Purchase of treasury stock: Three months ended December 31, 2015 - 1.1 million shares | — | (38 | ) | |||||
Purchase of treasury stock for income tax withholding on stock-based compensation: Three months ended December 31, 2016 - 0.3 million shares; 2015 - 0.7 million shares | (11 | ) | (27 | ) | ||||
Payment for future treasury stock purchases under accelerated stock repurchase agreement | — | (9 | ) | |||||
Excess tax benefits on stock-based compensation | 9 | 15 | ||||||
Net cash used in financing activities | (74 | ) | (150 | ) | ||||
Net decrease in cash and cash equivalents | (193 | ) | (243 | ) | ||||
Cash and cash equivalents at beginning of period | 1,855 | 1,978 | ||||||
Cash and cash equivalents at end of period | $ | 1,662 | $ | 1,735 | ||||
Supplemental cash flow information: | ||||||||
Interest paid | $ | 19 | $ | 20 | ||||
Income taxes paid | $ | 99 | $ | 138 |
December 31, 2016 | September 30, 2016 | |||||||
Broker-dealer subsidiaries | $ | 904 | $ | 1,153 | ||||
Corporate | 442 | 460 | ||||||
Trust company subsidiary | 163 | 85 | ||||||
Futures commission merchant and forex dealer member subsidiary | 136 | 125 | ||||||
Investment advisory subsidiaries | 17 | 32 | ||||||
Total | $ | 1,662 | $ | 1,855 |
December 31, 2016 | September 30, 2016 | |||||||
U.S. government debt securities | $ | 6,214 | $ | 6,523 | ||||
Cash in demand deposit accounts | 2,064 | 657 | ||||||
Reverse repurchase agreements (collateralized by U.S. government debt securities) | 700 | 1,288 | ||||||
Cash on deposit with futures commission merchants | 210 | 186 | ||||||
U.S. government debt securities on deposit with futures commission merchant | 75 | 75 | ||||||
Total | $ | 9,263 | $ | 8,729 |
December 31, 2016 | Face Value | Unamortized Discounts and Debt Issuance Costs | Fair Value Adjustment (1) | Net Carrying Value | ||||||||||||
Senior Notes: | ||||||||||||||||
5.600% Notes due 2019 | $ | 500 | $ | (1 | ) | $ | 22 | $ | 521 | |||||||
2.950% Notes due 2022 | 750 | (6 | ) | — | 744 | |||||||||||
3.625% Notes due 2025 | 500 | (4 | ) | 8 | 504 | |||||||||||
Total long-term debt | $ | 1,750 | $ | (11 | ) | $ | 30 | $ | 1,769 |
September 30, 2016 | Face Value | Unamortized Discounts and Debt Issuance Costs | Fair Value Adjustment (1) | Net Carrying Value | ||||||||||||
Senior Notes: | ||||||||||||||||
5.600% Notes due 2019 | $ | 500 | $ | (2 | ) | $ | 33 | $ | 531 | |||||||
2.950% Notes due 2022 | 750 | (6 | ) | — | 744 | |||||||||||
3.625% Notes due 2025 | 500 | (4 | ) | 46 | 542 | |||||||||||
Total long-term debt | $ | 1,750 | $ | (12 | ) | $ | 79 | $ | 1,817 |
(1) | Fair value adjustments relate to changes in the fair value of the debt while in a fair value hedging relationship. See "Fair Value Hedging" below. |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
Gain (loss) on fair value of interest rate swaps | $ | (49 | ) | $ | (17 | ) | ||
Gain (loss) on fair value of hedged fixed-rate debt | 49 | 17 | ||||||
Net gain (loss) recorded in interest on borrowings | $ | — | $ | — |
Balance Sheet Location | December 31, 2016 | September 30, 2016 | ||||||||
Interest rate contracts: | ||||||||||
Pay-variable interest rate swaps designated as fair value hedges | Other assets | $ | 30 | $ | 79 |
TD Ameritrade Clearing, Inc. | |||||||||||||||
Date | Net Capital | Required Net Capital (2% of Aggregate Debit Balances) | Net Capital in Excess of Required Net Capital | Ratio of Net Capital to Aggregate Debit Balances | |||||||||||
December 31, 2016 | $ | 1,768 | $ | 290 | $ | 1,478 | 12.21 | % | |||||||
September 30, 2016 | $ | 1,719 | $ | 288 | $ | 1,431 | 11.95 | % |
TD Ameritrade, Inc. | ||||||||||||
Date | Net Capital | Required Net Capital (Minimum Dollar Requirement) | Net Capital in Excess of Required Net Capital | |||||||||
December 31, 2016 | $ | 215 | $ | 0.25 | $ | 215 | ||||||
September 30, 2016 | $ | 139 | $ | 0.25 | $ | 138 |
TD Ameritrade Futures & Forex LLC | ||||||||||||
Date | Adjusted Net Capital | Required Adjusted Net Capital ($20 Million Plus 5% of All Foreign Exchange Liabilities Owed to Forex Clients in Excess of $10 Million) | Adjusted Net Capital in Excess of Required Adjusted Net Capital | |||||||||
December 31, 2016 | $ | 122 | $ | 22 | $ | 100 | ||||||
September 30, 2016 | $ | 117 | $ | 22 | $ | 95 |
December 31, 2016 | September 30, 2016 | |||||||
Client margin securities | $ | 16.5 | $ | 16.5 | ||||
Stock borrowings | 0.8 | 1.1 | ||||||
Total collateral available | $ | 17.3 | $ | 17.6 | ||||
Collateral loaned | $ | 2.0 | $ | 2.0 | ||||
Collateral repledged | 2.9 | 2.7 | ||||||
Total collateral loaned or repledged | $ | 4.9 | $ | 4.7 |
Assets | Balance Sheet Classification | December 31, 2016 | September 30, 2016 | |||||||
Cash | Receivable from brokers, dealers and clearing organizations | $ | 137 | $ | 116 | |||||
U.S. government debt securities | Securities owned, at fair value | 165 | 220 | |||||||
Total | $ | 302 | $ | 336 |
• | Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. This category includes active exchange-traded funds, money market mutual funds, mutual funds and equity securities. |
• | Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Such inputs include quoted prices in markets that are not active, quoted prices for similar assets and liabilities in active and inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. This category includes most debt securities and other interest-sensitive financial instruments. |
• | Level 3 — Unobservable inputs for the asset or liability, where there is little, if any, observable market activity or data for the asset or liability. |
As of December 31, 2016 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market mutual funds | $ | 1,391 | $ | — | $ | — | $ | 1,391 | ||||||||
Investments segregated for regulatory purposes: | ||||||||||||||||
U.S. government debt securities | — | 6,289 | — | 6,289 | ||||||||||||
Securities owned: | ||||||||||||||||
U.S. government debt securities | — | 165 | — | 165 | ||||||||||||
Other | 7 | 5 | — | 12 | ||||||||||||
Subtotal - Securities owned | 7 | 170 | — | 177 | ||||||||||||
Investments available-for-sale: | ||||||||||||||||
U.S. government debt securities | — | 747 | — | 747 | ||||||||||||
Other assets: | ||||||||||||||||
Pay-variable interest rate swaps(1) | — | 30 | — | 30 | ||||||||||||
U.S. government debt securities | — | 4 | — | 4 | ||||||||||||
Auction rate securities | — | — | 1 | 1 | ||||||||||||
Subtotal - Other assets | — | 34 | 1 | 35 | ||||||||||||
Total assets at fair value | $ | 1,398 | $ | 7,240 | $ | 1 | $ | 8,639 | ||||||||
Liabilities: | ||||||||||||||||
Accounts payable and other liabilities: | ||||||||||||||||
Securities sold, not yet purchased: | ||||||||||||||||
Equity securities | $ | 9 | $ | — | $ | — | $ | 9 |
(1) | See "Fair Value Hedging" in Note 6 for details. |
As of September 30, 2016 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market mutual funds | $ | 1,658 | $ | — | $ | — | $ | 1,658 | ||||||||
Investments segregated for regulatory purposes: | ||||||||||||||||
U.S. government debt securities | — | 6,598 | — | 6,598 | ||||||||||||
Securities owned: | ||||||||||||||||
U.S. government debt securities | — | 320 | — | 320 | ||||||||||||
Other | 6 | 5 | — | 11 | ||||||||||||
Subtotal - Securities owned | 6 | 325 | — | 331 | ||||||||||||
Investments available-for-sale: | ||||||||||||||||
U.S. government debt securities | — | 757 | — | 757 | ||||||||||||
Other assets: | ||||||||||||||||
Pay-variable interest rate swaps(1) | — | 79 | — | 79 | ||||||||||||
U.S. government debt securities | — | 4 | — | 4 | ||||||||||||
Auction rate securities | — | — | 1 | 1 | ||||||||||||
Subtotal - Other assets | — | 83 | 1 | 84 | ||||||||||||
Total assets at fair value | $ | 1,664 | $ | 7,763 | $ | 1 | $ | 9,428 | ||||||||
Liabilities: | ||||||||||||||||
Accounts payable and other liabilities: | ||||||||||||||||
Securities sold, not yet purchased: | ||||||||||||||||
Equity securities | $ | 6 | $ | — | $ | — | $ | 6 |
(1) | See "Fair Value Hedging" in Note 6 for details. |
December 31, 2016 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||||
Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset in the Condensed Consolidated Balance Sheet | Net Amounts Presented in the Condensed Consolidated Balance Sheet | Financial Instruments(4) | Collateral Received or Pledged (Including Cash)(5) | Net Amount(6) | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments segregated for regulatory purposes: | ||||||||||||||||||||||||
Reverse repurchase agreements | $ | 700 | $ | — | $ | 700 | $ | — | $ | (700 | ) | $ | — | |||||||||||
Receivable from brokers, dealers and clearing organizations: | ||||||||||||||||||||||||
Deposits paid for securities borrowed(1) | 801 | — | 801 | (59 | ) | (721 | ) | 21 | ||||||||||||||||
Other assets: | ||||||||||||||||||||||||
Pay-variable interest rate swaps | 30 | — | 30 | — | (30 | ) | — | |||||||||||||||||
Total | $ | 1,531 | $ | — | $ | 1,531 | $ | (59 | ) | $ | (1,451 | ) | $ | 21 | ||||||||||
Liabilities: | ||||||||||||||||||||||||
Payable to brokers, dealers and clearing organizations: | ||||||||||||||||||||||||
Deposits received for securities loaned(2)(3) | $ | 1,964 | $ | — | $ | 1,964 | $ | (59 | ) | $ | (1,706 | ) | $ | 199 |
September 30, 2016 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||||
Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset in the Condensed Consolidated Balance Sheet | Net Amounts Presented in the Condensed Consolidated Balance Sheet | Financial Instruments(4) | Collateral Received or Pledged (Including Cash)(5) | Net Amount(6) | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments segregated for regulatory purposes: | ||||||||||||||||||||||||
Reverse repurchase agreements | $ | 1,288 | $ | — | $ | 1,288 | $ | — | $ | (1,288 | ) | $ | — | |||||||||||
Receivable from brokers, dealers and clearing organizations: | ||||||||||||||||||||||||
Deposits paid for securities borrowed(1) | 1,051 | — | 1,051 | (172 | ) | (862 | ) | 17 | ||||||||||||||||
Other assets: | ||||||||||||||||||||||||
Pay-variable interest rate swaps | 79 | — | 79 | — | (79 | ) | — | |||||||||||||||||
Total | $ | 2,418 | $ | — | $ | 2,418 | $ | (172 | ) | $ | (2,229 | ) | $ | 17 | ||||||||||
Liabilities: | ||||||||||||||||||||||||
Payable to brokers, dealers and clearing organizations: | ||||||||||||||||||||||||
Deposits received for securities loaned(2)(3) | $ | 1,990 | $ | — | $ | 1,990 | $ | (172 | ) | $ | (1,638 | ) | $ | 180 |
(1) | Included in the gross amounts of deposits paid for securities borrowed is $449 million and $590 million as of December 31, 2016 and September 30, 2016, respectively, transacted through a risk-sharing program with the OCC, which guarantees the return of cash to the Company. See "General Contingencies" in Note 8 for a discussion of the potential risks associated with securities borrowing transactions and how the Company mitigates those risks. |
(2) | Included in the gross amounts of deposits received for securities loaned is $1.35 billion and $1.07 billion as of December 31, 2016 and September 30, 2016, respectively, transacted through a risk-sharing program with the OCC, which guarantees the return of securities to the Company. See "General Contingencies" in Note 8 for a discussion of the potential risks associated with securities lending transactions and how the Company mitigates those risks. |
(3) | Substantially all of the Company's securities lending transactions have a continuous contractual term and, upon notice by either party, may be terminated within three business days. The following table summarizes the Company's gross liability for securities lending transactions by the class of securities loaned (dollars in millions): |
December 31, 2016 | September 30, 2016 | |||||||
Deposits received for securities loaned: | ||||||||
Equity securities | $ | 1,659 | $ | 1,652 | ||||
Exchange-traded funds | 191 | 216 | ||||||
Closed-end funds | 50 | 73 | ||||||
Other | 64 | 49 | ||||||
Total | $ | 1,964 | $ | 1,990 |
(4) | Amounts represent recognized assets and liabilities that are subject to enforceable master agreements with rights of setoff. |
(5) | Represents the fair value of collateral the Company had received or pledged under enforceable master agreements, limited for table presentation purposes to the net amount of the recognized assets due from or liabilities due to each counterparty. At December 31, 2016 and September 30, 2016, the Company had received total collateral with a fair value of $1.52 billion and $2.44 billion, respectively, and pledged total collateral with a fair value of $1.76 billion and $1.81 billion, respectively. |
(6) | Represents the amount for which, in the case of net recognized assets, the Company had not received collateral, and in the case of net recognized liabilities, the Company had not pledged collateral. |
Three Months Ended December 31, | ||||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||||
Before Tax | Tax Effect | Net of Tax | Before Tax | Tax Effect | Net of Tax | |||||||||||||||||||
Investments available-for-sale: | ||||||||||||||||||||||||
Unrealized loss | $ | (10 | ) | $ | 4 | $ | (6 | ) | $ | — | $ | — | $ | — | ||||||||||
Cash flow hedging instruments: | ||||||||||||||||||||||||
Reclassification adjustment for portion of realized loss amortized to net income(1) | 1 | — | 1 | 1 | — | 1 | ||||||||||||||||||
Other comprehensive income (loss) | $ | (9 | ) | $ | 4 | $ | (5 | ) | $ | 1 | $ | — | $ | 1 |
(1) | The before tax reclassification amounts and the related tax effects are included in interest on borrowings and provision for income taxes, respectively, on the Condensed Consolidated Statements of Income. |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
Investments available-for-sale: | ||||||||
Beginning balance | $ | — | $ | — | ||||
Other comprehensive loss before reclassification | (6 | ) | — | |||||
Ending balance | $ | (6 | ) | $ | — | |||
Cash flow hedging instruments: | ||||||||
Beginning balance | $ | (22 | ) | $ | (25 | ) | ||
Amount reclassified from accumulated other comprehensive loss | 1 | 1 | ||||||
Ending balance | $ | (21 | ) | $ | (24 | ) | ||
Total accumulated other comprehensive loss: | ||||||||
Beginning balance | $ | (22 | ) | $ | (25 | ) | ||
Current period change | (5 | ) | 1 | |||||
Ending balance | $ | (27 | ) | $ | (24 | ) |
Revenues from TD and Affiliates | ||||||||||
Statement of Income Classification | Three months ended December 31, | |||||||||
Description | 2016 | 2015 | ||||||||
Insured Deposit Account Agreement | Insured deposit account fees | $ | 245 | $ | 227 | |||||
Referral and Strategic Alliance Agreement | Various | 3 | 3 | |||||||
Mutual Fund Agreements | Investment product fees | 4 | 1 | |||||||
Other | Various | 2 | 1 | |||||||
Total revenues | $ | 254 | $ | 232 |
Expenses to TD and Affiliates | ||||||||||
Statement of Income Classification | Three months ended December 31, | |||||||||
Description | 2016 | 2015 | ||||||||
Canadian Call Center Services Agreement | Professional services(1) | $ | 4 | $ | 4 | |||||
Other | Various | — | 1 | |||||||
Total expenses | $ | 4 | $ | 5 |
(1) | On September 30, 2016, the Company notified TD of its intent to not extend or renew the Canadian Call Center Services Agreement. The Company expects that services with the Canadian Call Center will be completed by September 30, 2017. |
December 31, 2016 | September 30, 2016 | |||||||
Assets: | ||||||||
Receivable from affiliates | $ | 143 | $ | 106 | ||||
Liabilities: | ||||||||
Payable to brokers, dealers and clearing organizations | $ | 35 | $ | 72 | ||||
Payable to affiliates | 8 | 9 |
Parent | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 290 | $ | 2 | $ | 1,370 | $ | — | $ | 1,662 | ||||||||||
Cash and investments segregated and on deposit for regulatory purposes | — | — | 9,263 | — | 9,263 | |||||||||||||||
Receivable from brokers, dealers and clearing organizations | — | — | 959 | — | 959 | |||||||||||||||
Receivable from clients, net | — | — | 12,039 | — | 12,039 | |||||||||||||||
Receivable from affiliates | 9 | — | 144 | (10 | ) | 143 | ||||||||||||||
Investments available-for-sale, at fair value | 747 | — | — | — | 747 | |||||||||||||||
Investments in subsidiaries | 5,888 | 5,773 | — | (11,661 | ) | — | ||||||||||||||
Goodwill | — | — | 2,467 | — | 2,467 | |||||||||||||||
Acquired intangible assets, net | — | 146 | 410 | — | 556 | |||||||||||||||
Other, net | 105 | 21 | 944 | (72 | ) | 998 | ||||||||||||||
Total assets | $ | 7,039 | $ | 5,942 | $ | 27,596 | $ | (11,743 | ) | $ | 28,834 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Payable to brokers, dealers and clearing organizations | $ | — | $ | — | $ | 2,028 | $ | — | $ | 2,028 | ||||||||||
Payable to clients | — | — | 19,062 | — | 19,062 | |||||||||||||||
Accounts payable and other liabilities | 70 | — | 433 | (19 | ) | 484 | ||||||||||||||
Payable to affiliates | 1 | — | 17 | (10 | ) | 8 | ||||||||||||||
Long-term debt | 1,769 | — | — | — | 1,769 | |||||||||||||||
Deferred income taxes | — | 54 | 283 | (53 | ) | 284 | ||||||||||||||
Total liabilities | 1,840 | 54 | 21,823 | (82 | ) | 23,635 | ||||||||||||||
Stockholders' equity | 5,199 | 5,888 | 5,773 | (11,661 | ) | 5,199 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 7,039 | $ | 5,942 | $ | 27,596 | $ | (11,743 | ) | $ | 28,834 |
Parent | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 248 | $ | 2 | $ | 1,605 | $ | — | $ | 1,855 | ||||||||||
Cash and investments segregated and on deposit for regulatory purposes | — | — | 8,729 | — | 8,729 | |||||||||||||||
Receivable from brokers, dealers and clearing organizations | — | — | 1,190 | — | 1,190 | |||||||||||||||
Receivable from clients, net | — | — | 11,941 | — | 11,941 | |||||||||||||||
Receivable from affiliates | 8 | — | 138 | (40 | ) | 106 | ||||||||||||||
Investments available-for-sale, at fair value | 757 | — | — | — | 757 | |||||||||||||||
Investments in subsidiaries | 5,894 | 5,779 | — | (11,673 | ) | — | ||||||||||||||
Goodwill | — | — | 2,467 | — | 2,467 | |||||||||||||||
Acquired intangible assets, net | — | 146 | 429 | — | 575 | |||||||||||||||
Other, net | 163 | 21 | 1,083 | (69 | ) | 1,198 | ||||||||||||||
Total assets | $ | 7,070 | $ | 5,948 | $ | 27,582 | $ | (11,782 | ) | $ | 28,818 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Payable to brokers, dealers and clearing organizations | $ | — | $ | — | $ | 2,040 | $ | — | $ | 2,040 | ||||||||||
Payable to clients | — | — | 19,055 | — | 19,055 | |||||||||||||||
Accounts payable and other liabilities | 171 | — | 413 | (19 | ) | 565 | ||||||||||||||
Payable to affiliates | 31 | — | 18 | (40 | ) | 9 | ||||||||||||||
Long-term debt | 1,817 | — | — | — | 1,817 | |||||||||||||||
Deferred income taxes | — | 54 | 277 | (50 | ) | 281 | ||||||||||||||
Total liabilities | 2,019 | 54 | 21,803 | (109 | ) | 23,767 | ||||||||||||||
Stockholders' equity | 5,051 | 5,894 | 5,779 | (11,673 | ) | 5,051 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 7,070 | $ | 5,948 | $ | 27,582 | $ | (11,782 | ) | $ | 28,818 |
Parent | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net revenues | $ | 9 | $ | — | $ | 857 | $ | (7 | ) | $ | 859 | |||||||||
Operating expenses | 7 | — | 506 | (7 | ) | 506 | ||||||||||||||
Operating income | 2 | — | 351 | — | 353 | |||||||||||||||
Other expense | 14 | — | — | — | 14 | |||||||||||||||
Income (loss) before income taxes and equity in income of subsidiaries | (12 | ) | — | 351 | — | 339 | ||||||||||||||
Provision for (benefit from) income taxes | (5 | ) | 1 | 127 | — | 123 | ||||||||||||||
Income (loss) before equity in income of subsidiaries | (7 | ) | (1 | ) | 224 | — | 216 | |||||||||||||
Equity in income of subsidiaries | 223 | 224 | — | (447 | ) | — | ||||||||||||||
Net income | $ | 216 | $ | 223 | $ | 224 | $ | (447 | ) | $ | 216 |
Parent | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net revenues | $ | 4 | $ | — | $ | 813 | $ | (5 | ) | $ | 812 | |||||||||
Operating expenses | 4 | — | 470 | (5 | ) | 469 | ||||||||||||||
Operating income | — | — | 343 | — | 343 | |||||||||||||||
Other expense | 12 | — | — | — | 12 | |||||||||||||||
Income (loss) before income taxes and equity in income of subsidiaries | (12 | ) | — | 343 | — | 331 | ||||||||||||||
Provision for (benefit from) income taxes | (7 | ) | — | 126 | — | 119 | ||||||||||||||
Income (loss) before equity in income of subsidiaries | (5 | ) | — | 217 | — | 212 | ||||||||||||||
Equity in income of subsidiaries | 217 | 217 | — | (434 | ) | — | ||||||||||||||
Net income | $ | 212 | $ | 217 | $ | 217 | $ | (434 | ) | $ | 212 |
Parent | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Total | |||||||||||||
(In millions) | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | (114 | ) | $ | — | $ | 24 | $ | (90 | ) | ||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property and equipment | — | — | (29 | ) | (29 | ) | ||||||||||
Net cash used in investing activities | — | — | (29 | ) | (29 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||||
Payment of cash dividends | (95 | ) | — | — | (95 | ) | ||||||||||
Purchase of treasury stock for income tax withholding on stock-based compensation | (11 | ) | — | — | (11 | ) | ||||||||||
Other | 32 | — | — | 32 | ||||||||||||
Net cash used in financing activities | (74 | ) | — | — | (74 | ) | ||||||||||
Intercompany investing and financing activities, net | 230 | — | (230 | ) | — | |||||||||||
Net increase (decrease) in cash and cash equivalents | 42 | — | (235 | ) | (193 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 248 | 2 | 1,605 | 1,855 | ||||||||||||
Cash and cash equivalents at end of period | $ | 290 | $ | 2 | $ | 1,370 | $ | 1,662 |
Parent | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Total | |||||||||||||
(In millions) | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | (55 | ) | $ | — | $ | 206 | $ | 151 | |||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property and equipment | — | — | (43 | ) | (43 | ) | ||||||||||
Purchase of short-term investments | (201 | ) | — | — | (201 | ) | ||||||||||
Net cash used in investing activities | (201 | ) | — | (43 | ) | (244 | ) | |||||||||
Cash flows from financing activities: | ||||||||||||||||
Payment of cash dividends | (91 | ) | — | — | (91 | ) | ||||||||||
Purchase of treasury stock | (38 | ) | — | — | (38 | ) | ||||||||||
Purchase of treasury stock for income tax withholding on stock-based compensation | (27 | ) | — | — | (27 | ) | ||||||||||
Other, net | 6 | — | — | 6 | ||||||||||||
Net cash used in financing activities | (150 | ) | — | — | (150 | ) | ||||||||||
Intercompany investing and financing activities, net | 175 | — | (175 | ) | — | |||||||||||
Net decrease in cash and cash equivalents | (231 | ) | — | (12 | ) | (243 | ) | |||||||||
Cash and cash equivalents at beginning of period | 920 | 2 | 1,056 | 1,978 | ||||||||||||
Cash and cash equivalents at end of period | $ | 689 | $ | 2 | $ | 1,044 | $ | 1,735 |
Three months ended December 31, | ||||||||||||||
2016 | 2015 | |||||||||||||
$ | % of Net Revenues | $ | % of Net Revenues | |||||||||||
Net income - GAAP | $ | 216 | 25.1 | % | $ | 212 | 26.1 | % | ||||||
Add: | ||||||||||||||
Depreciation and amortization | 24 | 2.8 | % | 22 | 2.7 | % | ||||||||
Amortization of acquired intangible assets | 19 | 2.2 | % | 22 | 2.7 | % | ||||||||
Interest on borrowings | 14 | 1.6 | % | 12 | 1.5 | % | ||||||||
Provision for income taxes | 123 | 14.3 | % | 119 | 14.7 | % | ||||||||
EBITDA - non-GAAP | $ | 396 | 46.1 | % | $ | 387 | 47.7 | % |
Three months ended December 31, | Increase/ (Decrease) | |||||||||||
2016 | 2015 | |||||||||||
Average insured deposit account balances | $ | 93,263 | $ | 80,345 | $ | 12,918 | ||||||
Average interest-earning assets | 24,454 | 22,187 | 2,267 | |||||||||
Average spread-based balances | $ | 117,717 | $ | 102,532 | $ | 15,185 | ||||||
Insured deposit account fee revenue | $ | 245 | $ | 227 | $ | 18 | ||||||
Net interest revenue | 151 | 154 | (3 | ) | ||||||||
Spread-based revenue | $ | 396 | $ | 381 | $ | 15 | ||||||
Avg. annualized yield—insured deposit account fees | 1.03 | % | 1.10 | % | (0.07 | )% | ||||||
Avg. annualized yield—interest-earning assets | 2.42 | % | 2.71 | % | (0.29 | )% | ||||||
Net interest margin (NIM) | 1.32 | % | 1.45 | % | (0.13 | )% |
Interest Revenue (Expense) | Increase/ (Decrease) | |||||||||||
Three months ended December 31, | ||||||||||||
2016 | 2015 | |||||||||||
Segregated cash | $ | 7 | $ | 1 | $ | 6 | ||||||
Client margin balances | 108 | 111 | (3 | ) | ||||||||
Securities lending/borrowing, net | 33 | 41 | (8 | ) | ||||||||
Other cash and interest-earning investments | 3 | 1 | 2 | |||||||||
Client credit balances | — | — | — | |||||||||
Net interest revenue | $ | 151 | $ | 154 | $ | (3 | ) |
Average Balance | % Change | ||||||||||
Three months ended December 31, | |||||||||||
2016 | 2015 | ||||||||||
Segregated cash | $ | 8,723 | $ | 6,171 | 41 | % | |||||
Client margin balances | 11,898 | 12,262 | (3 | )% | |||||||
Securities borrowing | 955 | 784 | 22 | % | |||||||
Other cash and interest-earning investments | 2,878 | 2,970 | (3 | )% | |||||||
Interest-earning assets | $ | 24,454 | $ | 22,187 | 10 | % | |||||
Client credit balances | $ | 16,106 | $ | 14,043 | 15 | % | |||||
Securities lending | 1,886 | 2,373 | (21 | )% | |||||||
Interest-bearing liabilities | $ | 17,992 | $ | 16,416 | 10 | % |
Avg. Annualized Yield (Cost) | Net Yield Increase/ (Decrease) | ||||||||
Three months ended December 31, | |||||||||
2016 | 2015 | ||||||||
Segregated cash | 0.30 | % | 0.09 | % | 0.21 | % | |||
Client margin balances | 3.56 | % | 3.54 | % | 0.02 | % | |||
Other cash and interest-earning investments | 0.44 | % | 0.05 | % | 0.39 | % | |||
Client credit balances | (0.01 | )% | (0.01 | )% | 0.00 | % | |||
Net interest revenue | 2.42 | % | 2.71 | % | (0.29 | )% |
Fee Revenue | Increase/ (Decrease) | |||||||||||
Three months ended December 31, | ||||||||||||
2016 | 2015 | |||||||||||
Money market mutual fund | $ | 3 | $ | 1 | $ | 2 | ||||||
Market fee-based investment balances | 91 | 91 | — | |||||||||
Total investment product fees | $ | 94 | $ | 92 | $ | 2 |
Average Balance | % Change | ||||||||||
Three months ended December 31, | |||||||||||
2016 | 2015 | ||||||||||
Money market mutual fund | $ | 3,701 | $ | 5,753 | (36 | )% | |||||
Market fee-based investment balances | 166,749 | 152,882 | 9 | % | |||||||
Total fee-based investment balances | $ | 170,450 | $ | 158,635 | 7 | % |
Average Annualized Yield | Increase/ (Decrease) | ||||||||
Three months ended December 31, | |||||||||
2016 | 2015 | ||||||||
Money market mutual fund | 0.38 | % | 0.06 | % | 0.32 | % | |||
Market fee-based investment balances | 0.21 | % | 0.23 | % | (0.02 | )% | |||
Total investment product fees | 0.22 | % | 0.23 | % | (0.01 | )% |
Three months ended December 31, | % Change | ||||||||||
2016 | 2015 | ||||||||||
Total trades (in millions) | 30.43 | 27.60 | 10 | % | |||||||
Average client trades per day | 486,801 | 438,108 | 11 | % | |||||||
Trading days | 62.5 | 63.0 | (1 | )% | |||||||
Average commissions and transaction fees per trade | $ | 11.65 | $ | 11.90 | (2 | )% | |||||
Order routing revenue (in millions) | $ | 79 | $ | 70 | 13 | % | |||||
Average order routing revenue per trade(1) | $ | 2.59 | $ | 2.54 | 2 | % |
(1) | Average order routing revenue per trade is included in average commissions and transaction fees per trade. |
Three months ended December 31, | % Change | ||||||||||
2016 | 2015 | ||||||||||
Funded accounts (beginning of period) | 6,950,000 | 6,621,000 | 5 | % | |||||||
Funded accounts (end of period) | 7,046,000 | 6,686,000 | 5 | % | |||||||
Percentage change during period | 1 | % | 1 | % | |||||||
Client assets (beginning of period, in billions) | $ | 773.8 | $ | 667.4 | 16 | % | |||||
Client assets (end of period, in billions) | $ | 797.0 | $ | 695.3 | 15 | % | |||||
Percentage change during period | 3 | % | 4 | % | |||||||
Net new assets (in billions) | $ | 18.7 | $ | 17.5 | 7 | % | |||||
Net new assets annualized growth rate | 10 | % | 10 | % |
Three months ended December 31, | % Change | ||||||||||
2016 | 2015 | ||||||||||
Revenues: | |||||||||||
Transaction-based revenues: | |||||||||||
Commissions and transaction fees | $ | 355 | $ | 328 | 8 | % | |||||
Asset-based revenues: | |||||||||||
Insured deposit account fees | 245 | 227 | 8 | % | |||||||
Net interest revenue | 151 | 154 | (2 | )% | |||||||
Investment product fees | 94 | 92 | 2 | % | |||||||
Total asset-based revenues | 490 | 473 | 4 | % | |||||||
Other revenues | 14 | 11 | 27 | % | |||||||
Net revenues | 859 | 812 | 6 | % | |||||||
Operating expenses: | |||||||||||
Employee compensation and benefits | 214 | 201 | 6 | % | |||||||
Clearing and execution costs | 36 | 30 | 20 | % | |||||||
Communications | 35 | 32 | 9 | % | |||||||
Occupancy and equipment costs | 44 | 43 | 2 | % | |||||||
Depreciation and amortization | 24 | 22 | 9 | % | |||||||
Amortization of acquired intangible assets | 19 | 22 | (14 | )% | |||||||
Professional services | 53 | 37 | 43 | % | |||||||
Advertising | 57 | 62 | (8 | )% | |||||||
Other | 24 | 20 | 20 | % | |||||||
Total operating expenses | 506 | 469 | 8 | % | |||||||
Operating income | 353 | 343 | 3 | % | |||||||
Other expense: | |||||||||||
Interest on borrowings | 14 | 12 | 17 | % | |||||||
Total other expense | 14 | 12 | 17 | % | |||||||
Pre-tax income | 339 | 331 | 2 | % | |||||||
Provision for income taxes | 123 | 119 | 3 | % | |||||||
Net income | $ | 216 | $ | 212 | 2 | % | |||||
Other information: | |||||||||||
Effective income tax rate | 36.3 | % | 36.0 | % | |||||||
Average debt outstanding | $ | 1,749 | $ | 1,748 | 0 | % | |||||
Effective interest rate incurred on borrowings | 3.19 | % | 2.85 | % |
Net Capital | Early Warning Threshold | Net Capital in Excess of Early Warning Threshold | ||||||||||
TD Ameritrade Clearing, Inc. | $ | 1,768 | $ | 724 | $ | 1,044 | ||||||
TD Ameritrade, Inc. | $ | 215 | $ | 0.3 | $ | 215 |
Adjusted Net Capital | Early Warning Threshold | Adjusted Net Capital in Excess of Early Warning Threshold | ||||||||||
TD Ameritrade Futures & Forex LLC | $ | 122 | $ | 24 | $ | 98 |
Dec. 31, | Sept. 30, | |||||||||||
2016 | 2016 | Change | ||||||||||
Cash and cash equivalents - GAAP | $ | 1,662 | $ | 1,855 | $ | (193 | ) | |||||
Less: Non-corporate cash and cash equivalents | (1,220 | ) | (1,395 | ) | 175 | |||||||
Corporate cash and cash equivalents | 442 | 460 | (18 | ) | ||||||||
Corporate investments | 747 | 757 | (10 | ) | ||||||||
Less: Corporate liquidity maintained for operational contingencies | (773 | ) | (773 | ) | — | |||||||
Excess corporate cash and cash equivalents and investments | 416 | 444 | (28 | ) | ||||||||
Excess broker-dealer regulatory net capital | 485 | 369 | 116 | |||||||||
Liquid assets available for corporate investing and financing activities - non-GAAP | $ | 901 | $ | 813 | $ | 88 |
Liquid assets available for corporate investing and financing activities as of September 30, 2016 | $ | 813 | ||
Plus: EBITDA(1) | 396 | |||
Proceeds from exercise of stock options | 23 | |||
Change in net capital related to daily futures client cash sweep | 18 | |||
Less: Income taxes paid | (99 | ) | ||
Payment of cash dividends | (95 | ) | ||
Purchase of property and equipment | (29 | ) | ||
Interest paid | (19 | ) | ||
Purchase of treasury stock for income tax withholding on stock-based compensation | (11 | ) | ||
Additional net capital requirement due to increase in aggregate debits | (9 | ) | ||
Other changes in working capital and regulatory net capital | (87 | ) | ||
Liquid assets available for corporate investing and financing activities as of December 31, 2016 | $ | 901 |
(1) | See "Financial Performance Metrics" earlier in this section for a description of EBITDA. |
Description | Date Issued | Maturity Date | Aggregate Principal | Interest Rate | ||||
2019 Notes | November 25, 2009 | December 1, 2019 | $500 | 5.600% | ||||
2022 Notes | March 4, 2015 | April 1, 2022 | $750 | 2.950% | ||||
2025 Notes | October 17, 2014 | April 1, 2025 | $500 | 3.625% |
Borrower Subsidiary | Committed Facility | Uncommitted Facility(1) | Termination Date | |||
TD Ameritrade Clearing, Inc. | $700 | $300 | March 1, 2022 | |||
TD Ameritrade, Inc. | $50 | $300 | March 1, 2022 | |||
TD Ameritrade Futures & Forex LLC | $22.5 | N/A | August 11, 2021 |
(1) | The Parent is permitted, but under no obligation, to make loans under uncommitted facilities. |
ISSUER PURCHASES OF EQUITY SECURITIES | |||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Number of Shares that May Yet Be Purchased Under the Program | |||||||||
October 1, 2016 – October 31, 2016 | 12,772 | $ | 35.71 | — | 25,979,986 | ||||||||
November 1, 2016 – November 30, 2016 | 180,335 | $ | 40.87 | — | 25,979,986 | ||||||||
December 1, 2016 – December 31, 2016 | 83,746 | $ | 43.47 | — | 25,979,986 | ||||||||
Total – Three months ended December 31, 2016 | 276,853 | $ | 41.42 | — | 25,979,986 |
2.1^ | Agreement and Plan of Merger, dated as of October 24, 2016, by and among Scottrade Financial Services, Inc., Rodger O. Riney, as Voting Trustee of the Rodger O. Riney Family Voting Trust U/A/D 12/31/2012, TD Ameritrade Holding Corporation and Alto Acquisition Corp. (incorporated by reference to Exhibit 2.1 of the Company's Form 8-K filed on October 28, 2016) | |
3.1 | Amended and Restated Certificate of Incorporation of TD Ameritrade Holding Corporation, dated January 24, 2006 (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed on January 27, 2006) | |
3.2 | Amended and Restated By-Laws of TD Ameritrade Holding Corporation, effective February 12, 2014 (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed on February 19, 2014) | |
4.1 | Form of Certificate for Common Stock (incorporated by reference to Exhibit 4.1 of the Company's Form 8-A filed on September 5, 2002) | |
4.2 | First Supplemental Indenture, dated November 25, 2009, among TD Ameritrade Holding Corporation, TD Ameritrade Online Holdings Corp., as guarantor, and The Bank of New York Mellon Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company's Form 8-K filed on November 25, 2009) | |
4.3 | Form of 5.600% Senior Note due 2019 (included in Exhibit 4.2) | |
4.4 | Indenture, dated October 22, 2014, between TD Ameritrade Holding Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company's Form 8-K filed on October 23, 2014) | |
4.5 | Form of 3.625% Senior Note due 2025 (included in Exhibit 4.4) | |
4.6 | Supplemental Indenture, dated October 22, 2014, between TD Ameritrade Holding Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 of the Company's Form 8-K filed on October 23, 2014) | |
4.7 | Second Supplemental Indenture, dated March 9, 2015, between TD Ameritrade Holding Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 of the Company's Form 8-K filed on March 9, 2015) | |
4.8 | Form of 2.950% Senior Note due 2022 (included in Exhibit 4.7) | |
10.1 | Separation and Release of Claims Agreement, dated September 22, 2016, between Fredric J. Tomczyk and TD Ameritrade Holding Corporation (incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K filed on November 18, 2016) | |
10.2 | Separation Agreement and Release of Claims, dated August 1, 2016, between Marvin W. Adams and TD Ameritrade Holding Corporation (incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K filed on November 18, 2016) | |
10.3 | Form of Performance-Based Restricted Stock Unit Agreement for Tim Hockey | |
10.4 | Form of Performance-Based Restricted Stock Unit Agreement for Employees | |
10.5 | Letter Agreement, dated as of October 24, 2016, by and among TD Ameritrade Holding Corporation, The Toronto-Dominion Bank and TD Luxembourg International Holdings S.à.r.l. (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on October 28, 2016) | |
10.6 | Subscription Agreement, dated as of October 24, 2016, by and among TD Ameritrade Holding Corporation, The Toronto-Dominion Bank and TD Luxembourg International Holdings S.à.r.l. (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K filed on October 28, 2016) | |
10.7 | Amendment No. 1, dated as of October 24, 2016, to the Insured Deposit Account Agreement by and among TD Bank USA, N.A., TD Bank, N.A., TD Ameritrade, Inc., TD Ameritrade Clearing, Inc., TD Ameritrade Trust Company and solely for purposes of Sections 7(b), 14 and 15(c), The Toronto-Dominion Bank, effective as of January 1, 2013 (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed on October 28, 2016) | |
15.1 | Awareness Letter of Independent Registered Public Accounting Firm | |
31.1 | Certification of Tim Hockey, Principal Executive Officer, as required pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 | |
31.2 | Certification of Stephen J. Boyle, Principal Financial Officer, as required pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 | |
32.1 | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
99.1 | Form of Registration Rights Agreement, by and among TD Ameritrade Holding Corporation, Rodger O. Riney, as Voting Trustee of the Rodger O. Riney Family Voting Trust U/A/D 12/31/2012, The Toronto-Dominion Bank and the other stockholders described therein (incorporated by reference to Exhibit 99.1 of the Company's Form 8-K filed on October 28, 2016) | |
99.2 | Form of Stockholders Agreement by and among TD Ameritrade Holding Corporation and Rodger O. Riney, as Voting Trustee of the Rodger O. Riney Family Voting Trust U/A/D 12/31/2012 (incorporated by reference to Exhibit 99.2 of the Company's Form 8-K filed on October 28, 2016) |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation | |
101.LAB | XBRL Taxonomy Extension Label | |
101.PRE | XBRL Taxonomy Extension Presentation | |
101.DEF | XBRL Taxonomy Extension Definition |
^ | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule upon request. |
TD Ameritrade Holding Corporation | |||
(Registrant) | |||
By: | /s/ TIM HOCKEY | ||
Tim Hockey | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
By: | /s/ STEPHEN J. BOYLE | ||
Stephen J. Boyle | |||
Executive Vice President, Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
Grant Date: | [GRANTDATE] |
Target Number of Performance-Based Restricted Stock Units ("Target"): | [SHARESGRANTED] This reflects the target number of Performance-Based Restricted Stock Units granted to you on the Grant Date. The actual number of Shares that vest under this Award, if any, may be higher or lower than Target and will depend on the extent to which the vesting schedule is satisfied. The Performance-Based Restricted Stock Units ("PRSUs") shall be increased as of any date by the cumulative number of additional PRSUs, if any, credited by this Agreement through such date in payment of Dividend Equivalent Rights as described in paragraph 25 of Appendix A (attached). |
Performance Period: | [PERIOD] |
Scheduled Vesting: | The PRSUs will vest based on satisfaction of the performance-based vesting schedule and other conditions set forth in Appendix A and B (attached) and provisions of the Plan and this Agreement. |
Settlement Date: | One Share will be issued for each PRSU that has vested on the date (the "Vesting Date") specified in Appendix A and B (or on a date as soon as practicable, and no more than thirty (30) days, thereafter). |
Acceptance: | You must accept this grant of PRSUs prior to the Acceptance Deadline, which is sixty (60) days from the Grant Date. |
Company TSR Rank within the Index | Percent of Target Number of PRSUs that are Earned (that is, that become Eligible RSUs) | |
1 (best TSR) | 120.00 | % |
2 | 117.65 | % |
3 | 115.29 | % |
4 | 112.94 | % |
5 | 110.59 | % |
6 | 108.24 | % |
7 | 105.88 | % |
8 | 103.53 | % |
9 | 101.18 | % |
10 | 98.82 | % |
11 | 96.47 | % |
12 | 94.12 | % |
13 | 91.76 | % |
14 | 89.41 | % |
15 | 87.06 | % |
16 | 84.71 | % |
17 | 82.35 | % |
18 (worst TSR) | 80.00 | % |
1. | Ameriprise Financial, Inc. |
2. | TD Ameritrade Holding Corporation (the Company) |
3. | BGC Partners, Inc. |
4. | Cowen Group, Inc. |
5. | E*TRADE Financial Corporation |
6. | The Goldman Sachs Group, Inc. |
7. | Interactive Brokers Group, Inc. |
8. | Investment Technology Group Inc. |
9. | KCG Holdings, Inc. |
10. | LPL Financial Holdings Inc. |
11. | MarketAxess Holdings Inc. |
12. | Morgan Stanley |
13. | Nomura Holdings, Inc. |
14. | Piper Jaffray Companies |
15. | Raymond James Financial, Inc. |
16. | The Charles Schwab Corporation |
17. | Stifel Financial Corp. |
18. | Virtu Financial, Inc. |
Grant Date: | [GRANTDATE] |
Target Number of Performance-Based Restricted Stock Units ("Target"): | [SHARESGRANTED] This reflects the target number of Performance-Based Restricted Stock Units granted to you on the Grant Date. The actual number of Shares that vest under this Award, if any, may be higher or lower than Target and will depend on the extent to which the vesting schedule is satisfied. The Performance-Based Restricted Stock Units ("PRSUs") shall be increased as of any date by the cumulative number of additional PRSUs, if any, credited by this Agreement through such date in payment of Dividend Equivalent Rights as described in paragraph 25 of Appendix A (attached). |
Performance Period: | [PERIOD] |
Scheduled Vesting: | The PRSUs will vest based on satisfaction of the performance-based vesting schedule and other conditions set forth in Appendix A and B (attached) and provisions of the Plan and this Agreement. |
Settlement Date: | One Share will be issued for each PRSU that has vested on the date (the "Vesting Date") specified in Appendix A and B (or on a date as soon as practicable, and no more than thirty (30) days, thereafter). |
Acceptance: | You must accept this grant of PRSUs prior to the Acceptance Deadline, which is sixty (60) days from the Grant Date. |
Company TSR Rank within the Index | Percent of Target Number of PRSUs that are Earned (that is, that become Eligible RSUs) | |
1 (best TSR) | 120.00 | % |
2 | 117.65 | % |
3 | 115.29 | % |
4 | 112.94 | % |
5 | 110.59 | % |
6 | 108.24 | % |
7 | 105.88 | % |
8 | 103.53 | % |
9 | 101.18 | % |
10 | 98.82 | % |
11 | 96.47 | % |
12 | 94.12 | % |
13 | 91.76 | % |
14 | 89.41 | % |
15 | 87.06 | % |
16 | 84.71 | % |
17 | 82.35 | % |
18 (worst TSR) | 80.00 | % |
1. | Ameriprise Financial, Inc. |
2. | TD Ameritrade Holding Corporation (the Company) |
3. | BGC Partners, Inc. |
4. | Cowen Group, Inc. |
5. | E*TRADE Financial Corporation |
6. | The Goldman Sachs Group, Inc. |
7. | Interactive Brokers Group, Inc. |
8. | Investment Technology Group Inc. |
9. | KCG Holdings, Inc. |
10. | LPL Financial Holdings Inc. |
11. | MarketAxess Holdings Inc. |
12. | Morgan Stanley |
13. | Nomura Holdings, Inc. |
14. | Piper Jaffray Companies |
15. | Raymond James Financial, Inc. |
16. | The Charles Schwab Corporation |
17. | Stifel Financial Corp. |
18. | Virtu Financial, Inc. |
(1) | Registration Statement (Form S-8 No. 333-132016), |
(2) | Registration Statement (Form S-8 No. 333-105336), |
(3) | Registration Statement (Form S-8 No. 333-86164), |
(4) | Registration Statement (Form S-8 No. 333-160073), |
(5) | Registration Statement (Form S-3 No. 333-163211), and |
(6) | Registration Statement (Form S-3 No. 333-185286); |
1. | I have reviewed this quarterly report on Form 10-Q of TD Ameritrade Holding Corporation; |
2. | Based on my knowledge, this 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
/S/ TIM HOCKEY | |
Tim Hockey | |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of TD Ameritrade Holding Corporation; |
2. | Based on my knowledge, this 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
/s/ STEPHEN J. BOYLE | |
Stephen J. Boyle | |
Executive Vice President, Chief Financial Officer |
Dated: | February 6, 2017 | /s/ TIM HOCKEY |
Tim Hockey | ||
President and Chief Executive Officer | ||
Dated: | February 6, 2017 | /s/ STEPHEN J. BOYLE |
Stephen J. Boyle | ||
Executive Vice President, Chief Financial Officer | ||
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 30, 2017 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q1 | |
Trading Symbol | AMTD | |
Entity Registrant Name | TD AMERITRADE HOLDING CORPORATION | |
Entity Central Index Key | 0001173431 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 527,824,288 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 631,000,000 | 631,000,000 |
Common stock, shares outstanding | 528,000,000 | 526,000,000 |
Treasury stock, shares | 103,000,000 | 105,000,000 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 216 | $ 212 |
Cash flow hedging instruments: | ||
Total other comprehensive income (loss), before tax | (9) | 1 |
Income tax effect | 4 | 0 |
Total other comprehensive income (loss), net of tax | (5) | 1 |
Comprehensive income | $ 211 | $ 213 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Statement of Cash Flows [Abstract] | ||
Proceeds from exercise of stock options, shares | 1.3 | 0.0 |
Purchase of treasury stock, shares | 0.0 | 1.1 |
Purchase of treasury stock for income tax withholding on stock-based compensation, shares | 0.3 | 0.7 |
Basis of Presentation |
3 Months Ended |
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Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of TD Ameritrade Holding Corporation (the "Parent") and its wholly-owned subsidiaries (collectively, the "Company"). 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 U.S. generally accepted accounting principles ("GAAP"). 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 30, 2016. Recently Issued Accounting Pronouncements ASU 2016-18 — In November 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-18, Restricted Cash. This ASU will amend the guidance in Accounting Standards Codification ("ASC") Topic 230, Statement of Cash Flows, and is intended to reduce the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments within this ASU will require that the reconciliation of the beginning-of-period and end-of-period cash and cash equivalents amounts shown on the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash and restricted cash equivalents are presented separately from cash and cash equivalents on the balance sheet, an entity will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. An entity will also be required to disclose information regarding the nature of the restrictions. ASU 2016-18 requires retrospective application and is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted. ASU 2016-18 will be effective for the Company's fiscal year beginning October 1, 2018. The adoption of ASU 2016-18 will change the manner in which restricted cash and restricted cash equivalents are presented in the Company's financial statements. ASU 2016-16 — In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. This ASU will amend the guidance in ASC Topic 740, Income Taxes. The amendments in this ASU are intended to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory by requiring an entity to recognize the income tax consequences when a transfer occurs, instead of when the asset is sold to a third party. ASU 2016-16 requires modified retrospective adoption and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2016-16 will be effective for the Company's fiscal year beginning October 1, 2018. The Company is currently assessing the impact this ASU will have on the Company's financial statements. ASU 2014-09 — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles of recognizing revenue from contracts with customers and to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards. This ASU will supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. Entities are required to apply the following steps when recognizing revenue under ASU 2014-09: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and, (5) recognize revenue when (or as) the entity satisfies a performance obligation. This ASU also requires additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. An entity may apply the amendments by using one of the following two methods: (1) retrospective application to each prior reporting period presented or (2) a modified retrospective approach, requiring the standard be applied only to the most current period presented, with the cumulative effect of initially applying the standard recognized at the date of initial application. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Therefore, ASU 2014-09 will be effective for the Company's fiscal year beginning October 1, 2018. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. Subsequent to issuing ASU 2014-09, the FASB has issued additional standards for the purpose of clarifying certain aspects of ASU 2014-09. The subsequently issued ASUs have the same effective date and transition requirements as ASU 2014-09. The Company is currently assessing the impact that these revenue recognition standards will have on the Company's financial statements and is evaluating which adoption method to apply. |
Business Acquisition Business Acquisition |
3 Months Ended |
---|---|
Dec. 31, 2016 | |
Business Acquisition [Abstract] | |
Business Acquisition Disclosure [Text Block] | BUSINESS ACQUISITION On October 24, 2016, the Company entered into an Agreement and Plan of Merger with Scottrade Financial Services, Inc. ("Scottrade"), Rodger O. Riney, as Voting Trustee of the Rodger O. Riney Family Voting Trust U/A/D 12/31/2012, and Alto Acquisition Corp., a wholly-owned subsidiary of the Company, pursuant to which the Company agreed to acquire Scottrade in a cash and equity transaction valued at $4 billion. The transaction will take place in two, consecutive steps. First, and as a condition precedent to the Company's acquisition of Scottrade, The Toronto-Dominion Bank ("TD") will purchase Scottrade Bank from Scottrade for $1.3 billion in cash, subject to closing adjustments. Under the terms of the planned acquisition, Scottrade Bank will merge with and into TD Bank, N.A., an indirect wholly-owned subsidiary of TD. Additionally, the Company expects TD to purchase $400 million in new common equity, or approximately 11 million shares, from the Company in connection with the planned transaction. Immediately following TD's acquisition of Scottrade Bank, the Company will acquire Scottrade for $4 billion less the proceeds from the sale of Scottrade Bank, which is subject to closing adjustments. The Company intends to fund the acquisition of Scottrade with $1 billion in new common equity, or approximately 28 million shares, issued to Scottrade shareholders, cash on hand, proceeds from the sale of the Company's common stock to TD, as described above, and debt financing. The transaction is subject to regulatory approvals and customary closing conditions and is expected to close by September 30, 2017. On December 8, 2016, the U.S. Federal Trade Commission notified the Company that early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 was granted, effective immediately. Following the transaction's close, Scottrade Founder and CEO, Rodger Riney, will be appointed to the Company's board of directors. |
Cash and Cash Equivalents |
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Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS The Company's cash and cash equivalents is summarized in the following table (dollars in millions):
Capital requirements may limit the amount of cash available for dividend from the broker-dealer, futures commission merchant ("FCM")/forex dealer member ("FDM") and trust company subsidiaries to the Parent. Most of the trust company cash and cash equivalents arises from client transactions in the process of settlement, and therefore is generally not available for corporate purposes. Cash and cash equivalents of the investment advisory subsidiaries is generally not available for corporate purposes. |
Cash and Investments Segregated and on Deposit for Regulatory Purposes |
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Restricted Cash and Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Investments Segregated and on Deposit for Regulatory Purposes | CASH AND INVESTMENTS SEGREGATED AND ON DEPOSIT FOR REGULATORY PURPOSES Cash and investments segregated and on deposit for regulatory purposes consists of the following (dollars in millions):
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Income Taxes |
3 Months Ended |
---|---|
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company's effective income tax rate for the three months ended December 31, 2016 was 36.3%, compared to 36.0% for the three months ended December 31, 2015. The provision for income taxes for the three months ended December 31, 2016 included $7 million of favorable resolutions of state income tax matters. This favorably impacted the Company's earnings for the three months ended December 31, 2016 by approximately one cent per share. The provision for income taxes for the three months ended December 31, 2015 included $7 million of net favorable resolutions of state income tax matters and $2 million of net favorable adjustments to uncertain tax positions and related deferred income tax assets. These items had a net favorable impact on the Company's earnings for the three months ended December 31, 2015 of approximately two cents per share. |
Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | LONG-TERM DEBT Long-term debt consists of the following (dollars in millions):
Fair Value Hedging – The Company is exposed to changes in the fair value of its fixed-rate Senior Notes resulting from interest rate fluctuations. To hedge a portion of this exposure, the Company has entered into fixed-for-variable interest rate swaps on the 2019 Notes and the 2025 Notes. Each fixed-for-variable interest rate swap has a notional amount of $500 million and a maturity date matching the maturity date of the respective Senior Notes. The interest rate swaps effectively change the fixed-rate interest on the 2019 Notes and 2025 Notes to variable-rate interest. Under the terms of the interest rate swap agreements, the Company receives semi-annual fixed-rate interest payments based on the same rates applicable to the Senior Notes, and makes quarterly variable-rate interest payments based on three-month LIBOR plus (a) 2.3745% for the swap on the 2019 Notes and (b) 1.1022% for the swap on the 2025 Notes. As of December 31, 2016, the weighted average effective interest rate on the aggregate principal balance of the 2019 Notes and 2025 Notes was 2.63%. The interest rate swaps are accounted for as fair value hedges and qualify for the shortcut method of accounting. Changes in the payment of interest resulting from the interest rate swaps are recorded in interest on borrowings on the Condensed Consolidated Statements of Income. Changes in fair value of the interest rate swaps are completely offset by changes in fair value of the related notes, resulting in no effect on net income. The following table summarizes gains and losses resulting from changes in the fair value of interest rate swaps designated as fair value hedges and the hedged fixed-rate debt for the periods indicated (dollars in millions):
Balance Sheet Impact of Hedging Instruments — The following table summarizes the fair value of outstanding derivatives designated as hedging instruments on the Condensed Consolidated Balance Sheets (dollars in millions):
The interest rate swaps are subject to counterparty credit risk. Credit risk is managed by limiting activity to approved counterparties that meet a minimum credit rating threshold, by entering into credit support agreements, or by utilizing approved central clearing counterparties registered with the Commodity Futures Trading Commission ("CFTC"). The interest rate swaps require daily collateral coverage, in the form of cash or U.S. Treasury securities, for the aggregate fair value of the interest rate swaps (including accrued interest). As of December 31, 2016 and September 30, 2016, the pay-variable interest rate swap counterparties had pledged $32 million and $93 million of collateral, respectively, to the Company in the form of cash. A liability for collateral pledged to the Company in the form of cash is recorded in accounts payable and other liabilities on the Condensed Consolidated Balance Sheets. |
Capital Requirements |
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Regulatory Capital Requirements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Requirements | CAPITAL REQUIREMENTS The Company's broker-dealer subsidiaries are subject to the SEC Uniform Net Capital Rule (Rule 15c3-1 under the Securities Exchange Act of 1934, or the "Exchange Act"), administered by the SEC and the Financial Industry Regulatory Authority ("FINRA"), which requires the maintenance of minimum net capital, as defined. Net capital and the related net capital requirement may fluctuate on a daily basis. TD Ameritrade Clearing, Inc. ("TDAC"), the Company's clearing broker-dealer subsidiary, and TD Ameritrade, Inc., the Company's introducing broker-dealer subsidiary, compute net capital under the alternative method as permitted by Rule 15c3-1. TDAC is required to maintain minimum net capital of the greater of $1.5 million, which is based on the type of business conducted by the broker-dealer, or 2% of aggregate debit balances arising from client transactions. TD Ameritrade, Inc. is required to maintain minimum net capital of the greater of $250,000 or 2% of aggregate debit balances. In addition, under the alternative method, a broker-dealer may not repay any subordinated borrowings, pay cash dividends or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than (a) 5% of aggregate debit balances or (b) 120% of its minimum dollar requirement. TD Ameritrade Futures & Forex LLC ("TDAFF"), the Company's FCM and FDM subsidiary registered with the CFTC, is subject to CFTC Regulations 1.17 and 5.7 under the Commodity Exchange Act, administered by the CFTC and the National Futures Association ("NFA"). As an FCM, TDAFF is required to maintain minimum adjusted net capital under CFTC Regulation 1.17 of the greater of (a) $1.0 million or (b) its futures risk-based capital requirement, equal to 8% of the total risk margin requirement for all futures positions carried by the FCM in client and nonclient accounts. As an FDM, TDAFF is also subject to the net capital requirements under CFTC Regulation 5.7, which requires TDAFF to maintain minimum adjusted net capital of the greater of (a) any amount required under CFTC Regulation 1.17 as described above or (b) $20.0 million plus 5% of all foreign exchange liabilities owed to forex clients in excess of $10.0 million. In addition, an FCM and FDM must provide notice to the CFTC if its adjusted net capital amounts to less than (a) 110% of its risk-based capital requirement under CFTC Regulation 1.17, (b) 150% of its $1.0 million minimum dollar requirement, or (c) 110% of $20.0 million plus 5% of all foreign exchange liabilities owed to forex clients in excess of $10.0 million. Net capital and net capital requirements for the Company's broker-dealer subsidiaries are summarized in the following tables (dollars in millions):
Adjusted net capital and adjusted net capital requirements for the Company's FCM and FDM subsidiary are summarized in the following table (dollars in millions):
The Company's non-depository trust company subsidiary, TD Ameritrade Trust Company ("TDATC"), is subject to capital requirements established by the State of Maine, which require TDATC to maintain minimum Tier 1 capital, as defined. TDATC's Tier 1 capital was $38 million and $37 million as of December 31, 2016 and September 30, 2016, respectively, which exceeded the required Tier 1 capital by $21 million and $21 million, respectively. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal and Regulatory Matters Order Routing Matters – Five putative class action complaints were filed between August and October 2014 regarding TD Ameritrade's routing of client orders. The cases were filed in, or transferred to, the U.S. District Court for the District of Nebraska: Jay Zola et al. v. TD Ameritrade, Inc., et al.; Tyler Verdieck v. TD Ameritrade, Inc.; Bruce Lerner v. TD Ameritrade, Inc.; Michael Sarbacker v. TD Ameritrade Holding Corporation, et al.; Gerald Klein v. TD Ameritrade Holding Corporation, et al. The complaints in Zola, Klein and Sarbacker allege that the defendants failed to provide clients with "best execution" and routed orders to the market venue that paid the most for its order flow. The complaints in Verdieck and Lerner allege that the defendant routed its clients' non-marketable limit orders to the venue paying the highest rates of maker rebates, and that clients did not receive best execution on these kinds of orders. The complaints variously include claims of breach of contract, breach of fiduciary duty, breach of the duty of best execution, fraud, negligent misrepresentation, violations of Section 10(b) and 20 of the Exchange Act and SEC Rule 10b-5, violation of Nebraska's Consumer Protection Act, violation of Nebraska's Uniform Deceptive Trade Practices Act, aiding and abetting, unjust enrichment and declaratory judgment. The complaints seek various kinds of relief including damages, restitution, disgorgement, injunctive relief, equitable relief and other relief. The Company moved to dismiss each of the five putative class action complaints. The Magistrate Judge subsequently entered Findings and Recommendations with respect to each of the five actions, recommending that the District Judge dismiss each of the five lawsuits. On March 23, 2016, the District Judge entered an order dismissing all of the state law claims in the five actions, denying the motion to dismiss the federal securities claims in the Klein case, and permitting the plaintiffs in the other four actions to amend their complaints to assert a federal securities claim. None of the plaintiffs in the other four actions filed an amended complaint. The plaintiffs in the Zola, Sarbacker and Verdieck cases filed notices of appeal. The plaintiff in the Lerner case did not file a notice of appeal and that case is considered closed. The Klein case is proceeding in the District Court. The Company intends to vigorously defend against these lawsuits. The Company is unable to predict the outcome or the timing of the ultimate resolution of these lawsuits, or the potential losses, if any, that may result. Certain regulatory authorities are conducting examinations and investigations regarding the routing of client orders. TD Ameritrade, Inc. and TDAC have received requests for documents and information from the regulatory authorities. TD Ameritrade, Inc. and TDAC are cooperating with the requests. Other Legal and Regulatory Matters – The Company is subject to a number of other lawsuits, arbitrations, claims and other legal proceedings in connection with its business. Some of these legal actions include claims for substantial or unspecified compensatory and/or punitive damages. In addition, in the normal course of business, the Company discusses matters with its regulators raised during regulatory examinations or otherwise subject to their inquiry. These matters could result in censures, fines, penalties or other sanctions. ASC 450, Loss Contingencies, governs the recognition and disclosure of loss contingencies, including potential losses from legal and regulatory matters. ASC 450 categorizes loss contingencies using three terms based on the likelihood of occurrence of events that result in a loss: "probable" means that "the future event or events are likely to occur;" "remote" means that "the chance of the future event or events occurring is slight;" and "reasonably possible" means that "the chance of the future event or events occurring is more than remote but less than likely." Under ASC 450, the Company accrues for losses that are considered both probable and reasonably estimable. The Company may incur losses in addition to the amounts accrued where the losses are greater than estimated by management, or for matters for which an unfavorable outcome is considered reasonably possible, but not probable. The Company estimates that the aggregate range of reasonably possible losses in excess of amounts accrued is from $0 to $55 million as of December 31, 2016. This estimated aggregate range of reasonably possible losses is based upon currently available information for those legal and regulatory matters in which the Company is involved, taking into account the Company's best estimate of reasonably possible losses for those matters as to which an estimate can be made. For certain matters, the Company does not believe an estimate can currently be made, as some matters are in preliminary stages and some matters have no specific amounts claimed. The Company's estimate involves significant judgment, given the varying stages of the proceedings and the inherent uncertainty of predicting outcomes. The estimated range will change from time to time as the underlying matters, stages of proceedings and available information change. Actual losses may vary significantly from the current estimated range. The Company believes, based on its current knowledge and after consultation with counsel, that the ultimate disposition of these legal and regulatory matters, individually or in the aggregate, is not likely to have a material adverse effect on the financial condition or cash flows of the Company. However, in light of the uncertainties involved in such matters, the Company is unable to predict the outcome or the timing of the ultimate resolution of these matters, or the potential losses, fines, penalties or equitable relief, if any, that may result, and it is possible that the ultimate resolution of one or more of these matters may be material to the Company's results of operations for a particular reporting period. Income Taxes The Company's federal and state income tax returns are subject to examination by taxing authorities. Because the application of tax laws and regulations to many types of transactions is subject to varying interpretations, amounts reported in the condensed consolidated financial statements could be significantly changed at a later date upon final determinations by taxing authorities. General Contingencies In the ordinary course of business, there are various contingencies that are not reflected in the condensed consolidated financial statements. These include the Company's broker-dealer and FCM/FDM subsidiaries' client activities involving the execution, settlement and financing of various client securities, options, futures and foreign exchange transactions. These activities may expose the Company to credit risk in the event the clients are unable to fulfill their contractual obligations. The Company extends margin credit and leverage to its clients. 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 routes client orders for execution and clears client transactions involving the sale of securities not yet purchased ("short sales"). Such margin-related transactions may expose the Company to credit risk in the event a client's assets are not sufficient to fully cover losses that the client may incur. Leverage involves securing a large potential future obligation with a lesser amount of collateral. The risks associated with margin credit and leverage increase during periods of rapid market movements, or in cases where leverage or collateral is concentrated and market movements occur. In the event the client fails to satisfy its obligations, the Company has the authority to liquidate certain positions in the client's account at prevailing market prices in order to fulfill the client's obligations. However, during periods of rapid market movements, clients who utilize margin credit or leverage and who have collateralized their obligations with securities may find that the securities have a rapidly depreciating value and may not be sufficient to cover their obligations in the event of liquidation. The Company seeks to mitigate the risks associated with its client margin and leverage activities by requiring clients to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels throughout each trading day and, pursuant to such guidelines, requires clients to deposit additional collateral, or to reduce positions, when necessary. The Company contracts with unaffiliated FCM, FDM and broker-dealer entities to clear and execute futures and foreign exchange transactions for its clients. This can result in concentrations of credit risk with one or more of these counterparties. This risk is partially mitigated by the counterparties' obligation to comply with rules and regulations governing FCMs, FDMs and broker-dealers in the United States. These rules generally require maintenance of net capital and segregation of client funds and securities. In addition, the Company manages this risk by requiring credit approvals for counterparties and by utilizing account funding and sweep arrangement agreements that generally specify that all client cash in excess of futures funding requirements be transferred back to the clients' securities brokerage account at the Company on a daily basis. 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 mitigates this risk by requiring credit approvals for counterparties, by monitoring the market value of securities loaned on a daily basis and requiring additional cash as collateral when necessary, and by participating in a risk-sharing program offered through the Options Clearing Corporation ("OCC"). 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 mitigates this risk by requiring credit approvals for counterparties, by monitoring the collateral values on a daily basis and requiring collateral to be returned by the counterparties when necessary, and by participating in a risk-sharing program offered through the OCC. The Company transacts in reverse repurchase agreements (securities purchased under agreements to resell) in connection with its broker-dealer business. The Company's policy is to take possession or control of securities with a market value in excess of the principal amount loaned, plus accrued interest, in order to collateralize resale agreements. The Company monitors the market value of the underlying securities that collateralize the related receivable on resale agreements on a daily basis and may require additional collateral when deemed appropriate. The Company has accepted collateral in connection with client margin loans and securities borrowed. Under applicable agreements, the Company is generally permitted to repledge securities held as collateral and use them to enter into securities lending arrangements. The following table summarizes the fair values of client margin securities and stock borrowings that were available to the Company to utilize as collateral on various borrowings or for other purposes, and the amount of that collateral loaned or repledged by the Company (dollars in billions):
The Company is subject to cash deposit and collateral requirements with clearinghouses based on its clients' trading activity. The following table summarizes cash deposited with and securities pledged to clearinghouses by the Company (dollars in millions):
Guarantees The Company is a member of and provides guarantees to securities clearinghouses and exchanges in connection with client trading activities. Under related agreements, the Company is generally required to guarantee the performance of other members. Under these agreements, if a member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet shortfalls. The Company's liability under these arrangements is not quantifiable and could exceed the cash and securities it has posted to the clearinghouse as collateral. However, the potential for the Company to be required to make payments under these agreements is considered remote. Accordingly, no contingent liability is carried on the Condensed Consolidated Balance Sheets for these guarantees. The Company clears its clients' futures transactions on an omnibus account basis through unaffiliated clearing firms. The Company also contracts with an external provider to facilitate foreign exchange trading for its clients. The Company has agreed to indemnify these unaffiliated clearing firms and the external provider for any loss that they may incur for the client transactions introduced to them by the Company. See "Insured Deposit Account Agreement" in Note 13 for a description of a guarantee included in that agreement. |
Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | FAIR VALUE DISCLOSURES Fair Value Measurement — Definition and Hierarchy ASC 820-10, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:
The following tables present the Company's fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and September 30, 2016 (dollars in millions):
There were no transfers between any levels of the fair value hierarchy during the periods covered by this report. Valuation Techniques In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to the Company's Level 1 assets and liabilities. If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology applies to the Company's Level 2 assets and liabilities. Level 2 Measurements: Debt Securities – Fair values for debt securities are based on prices obtained from an independent pricing vendor. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. The Company validates the vendor pricing by periodically comparing it to pricing from another independent pricing service. The Company has not adjusted prices obtained from the independent pricing vendor for any periods presented in the condensed consolidated financial statements because no significant pricing differences have been observed. Interest Rate Swaps – These derivatives are valued by the Company using a valuation model provided by a third party service that incorporates interest rate yield curves, which are observable for substantially the full term of the contract. The valuation model is widely accepted in the financial services industry and does not involve significant judgment because most of the inputs are observable in the marketplace. Credit risk is not an input to the valuation because in each case the Company or counterparty has possession of collateral, in the form of cash or U.S. Treasury securities, in amounts equal to or exceeding the fair value of the interest rate swaps. The Company validates the third party service valuations by comparing them to valuation models provided by the swap counterparties. Level 3 Measurements: The Company has no material assets or liabilities classified as Level 3 of the fair value hierarchy. Fair Value of Financial Instruments Not Recorded at Fair Value Receivable from/payable to brokers, dealers and clearing organizations, receivable from/payable to clients, receivable from/payable to affiliates, other receivables and accounts payable and other liabilities are short-term in nature and accordingly are carried at amounts that approximate fair value. Receivable from/payable to brokers, dealers and clearing organizations, receivable from/payable to clients, receivable from/payable to affiliates, other receivables and accounts payable and other liabilities are recorded at or near their respective transaction prices and historically have been settled or converted to cash at approximately that value (categorized as Level 2 of the fair value hierarchy). Cash and investments segregated and on deposit for regulatory purposes includes reverse repurchase agreements (securities purchased under agreements to resell). Reverse repurchase agreements are treated as collateralized financing transactions and are carried at amounts at which the securities will subsequently be resold, plus accrued interest. The Company's reverse repurchase agreements generally have a maturity of seven days and are collateralized by U.S. Treasury securities in amounts exceeding the carrying value of the resale agreements. Accordingly, the carrying value of reverse repurchase agreements approximates fair value (categorized as Level 2 of the fair value hierarchy). In addition, this category includes cash held in demand deposit accounts and on deposit with futures commission merchants, for which the carrying values approximate the fair value (categorized as Level 1 of the fair value hierarchy). See Note 4 for a summary of cash and investments segregated and on deposit for regulatory purposes. Long-term debt – As of December 31, 2016, the Company's Senior Notes had an aggregate estimated fair value, based on quoted market prices (categorized as Level 1 of the fair value hierarchy), of approximately $1.81 billion, compared to the aggregate carrying value of the Senior Notes on the Condensed Consolidated Balance Sheet of $1.77 billion. As of September 30, 2016, the Company's Senior Notes had an aggregate estimated fair value, based on quoted market prices, of approximately $1.87 billion, compared to the aggregate carrying value of the Senior Notes on the Condensed Consolidated Balance Sheet of $1.82 billion. |
Offsetting Assets and Liabilities |
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Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting Assets and Liabilities | OFFSETTING ASSETS AND LIABILITIES Substantially all of the Company's reverse repurchase agreements, securities borrowing and securities lending activity and derivative financial instruments are transacted under master agreements that may allow for net settlement in the ordinary course of business, as well as offsetting of all contracts with a given counterparty in the event of default by one of the parties. However, for financial statement purposes, the Company does not net balances related to these financial instruments. The following tables present information about the potential effect of rights of setoff associated with the Company's recognized assets and liabilities as of December 31, 2016 and September 30, 2016 (dollars in millions):
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents the net change in fair value recorded for each component of other comprehensive income (loss) before and after income tax for the periods indicated (dollars in millions):
The following table presents after-tax changes in each component of accumulated other comprehensive loss for the periods indicated (dollars in millions):
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Earnings Per Share |
3 Months Ended |
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Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The difference between the numerator and denominator used in the computation of basic and diluted earnings per share consists of common stock equivalent shares related to stock-based compensation for all periods presented. There were no material antidilutive awards for the three months ended December 31, 2016 and 2015. |
Related Party Transactions |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | RELATED PARTY TRANSACTIONS Transactions with TD and Affiliates As a result of the Company's acquisition of TD Waterhouse Group, Inc. during fiscal 2006, TD became an affiliate of the Company. TD owned approximately 42% of the Company's common stock as of December 31, 2016. Pursuant to the stockholders agreement between TD and the Company, TD has the right to designate five of twelve members of the Company's board of directors. The Company transacts business and has extensive relationships with TD and certain of its affiliates. Transactions with TD and its affiliates are discussed and summarized below. Insured Deposit Account Agreement The Company is party to an insured deposit account ("IDA") agreement with TD Bank USA, N.A. ("TD Bank USA"), TD Bank, N.A. and TD. Under the IDA agreement, TD Bank USA and TD Bank, N.A. (together, the "TD Depository Institutions") make available to clients of the Company FDIC-insured money market deposit accounts as either designated sweep vehicles or as non-sweep deposit accounts. The Company provides marketing, recordkeeping and support services for the TD Depository Institutions with respect to the money market deposit accounts. In exchange for providing these services, the TD Depository Institutions pay the Company an aggregate marketing fee based on the weighted average yield earned on the client IDA assets, less the actual interest paid to clients, a servicing fee to the TD Depository Institutions and the cost of FDIC insurance premiums. The current IDA agreement became effective as of January 1, 2013 and has an initial term expiring July 1, 2018. It is automatically renewable for successive five-year terms, provided that it may be terminated by either the Company or the TD Depository Institutions by providing written notice of non-renewal at least two years prior to the initial expiration date or the expiration date of any subsequent renewal period. As of July 1, 2016, notice of non-renewal was not provided by either party, therefore the IDA agreement will automatically renew on July 1, 2018. The fee earned on the IDA agreement is calculated based on two primary components: (a) the yield on fixed-rate "notional" investments, based on prevailing fixed rates for identical balances and maturities in the interest rate swap market (generally LIBOR-based) at the time such investments were added to the IDA portfolio (including any adjustments required to adjust the variable rate leg of such swaps to a one-month reset frequency and the overall swap payment frequency to monthly) and (b) the yield on floating-rate investments. As of December 31, 2016, the IDA portfolio was comprised of approximately 74% fixed-rate notional investments and 26% floating-rate investments. The IDA agreement provides that the Company may designate amounts and maturity dates for the fixed-rate notional investments in the IDA portfolio, subject to certain limitations. For example, if the Company designates that $100 million of deposits be invested in 5-year fixed-rate investments, and on the day such investment is confirmed by the TD Depository Institutions the prevailing fixed yield for the applicable 5-year U.S. dollar LIBOR-based swaps is 1.45%, then the Company will earn a gross fixed yield of 1.45% on that portion of the portfolio (before any deductions for interest paid to clients, the servicing fee to the TD Depository Institutions and the cost of FDIC insurance premiums). In the event that (1) the federal funds effective rate is established at 0.75% or greater and (2) the rate on 5-year U.S. dollar interest rate swaps is equal to or greater than 1.50% for 20 consecutive business days, then the rate earned by the Company on new fixed-rate notional investments will be reduced by 20% of the excess of the 5-year U.S. dollar swap rate over 1.50%, up to a maximum of 0.10%. The yield on floating-rate investments is calculated daily based on the greater of the following rates published by the Federal Reserve: (1) the interest rate paid by Federal Reserve Banks on balances held in excess of required reserve balances and contractual clearing balances under Regulation D and (2) the daily effective federal funds rate. The interest rates paid to clients are set by the TD Depository Institutions and are not linked to any index. The servicing fee to the TD Depository Institutions under the IDA agreement is equal to 25 basis points on the aggregate average daily balance in the IDA accounts, subject to adjustment as it relates to deposits of less than or equal to $20 billion kept in floating-rate investments or in fixed-rate notional investments with a maturity of up to 24 months ("short-term fixed-rate investments"). For such floating-rate and short-term fixed-rate investments, the servicing fee is equal to the difference of the interest rate earned on the investments less the FDIC premiums paid (in basis points), divided by two. The servicing fee has a floor of 3 basis points (subject to adjustment from time to time to reflect material changes to the TD Depository Institutions' leverage costs) and a maximum of 25 basis points. In the event the marketing fee computation results in a negative amount, the Company must pay the TD Depository Institutions the negative amount. This effectively results in the Company guaranteeing the TD Depository Institutions revenue equal to the servicing fee on the IDA agreement, plus the reimbursement of FDIC insurance premiums. The marketing fee computation under the IDA agreement is affected by many variables, including the type, duration, principal balance and yield of the fixed-rate and floating-rate investments, the prevailing interest rate environment, the amount of client deposits and the yield paid on client deposits. Because a negative marketing fee computation would arise only if there were extraordinary movements in many of these variables, the maximum potential amount of future payments the Company could be required to make under this arrangement cannot be reasonably estimated. Management believes the potential for the marketing fee calculation to result in a negative amount is remote. Accordingly, no contingent liability is carried on the Condensed Consolidated Balance Sheets for the IDA agreement. In addition, the Company has various other services agreements and transactions with TD and its affiliates. The following tables summarize revenues and expenses resulting from transactions with TD and its affiliates for the periods indicated (dollars in millions):
The following table summarizes the classification and amount of receivables from and payables to TD and its affiliates on the Condensed Consolidated Balance Sheets resulting from related party transactions (dollars in millions):
Payables to brokers, dealers and clearing organizations primarily relate to securities lending activity and are settled in accordance with customary contractual terms. Receivables from and payables to TD affiliates resulting from client cash sweep activity are generally settled in cash the next business day. Other receivables from and payables to affiliates of TD are generally settled in cash on a monthly basis. |
Condensed Consolidating Financial Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information | CONDENSED CONSOLIDATING FINANCIAL INFORMATION The 2019 Senior Notes are jointly and severally and fully and unconditionally guaranteed by TD Ameritrade Online Holdings Corp. ("TDAOH"), a wholly-owned subsidiary of the Company. Presented below is condensed consolidating financial information for the Company, its guarantor subsidiary and its non-guarantor subsidiaries for the periods indicated. Because all other comprehensive income (loss) activity occurred on the parent company for all periods presented, condensed consolidating statements of comprehensive income are not presented. CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (Unaudited)
CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2016 (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF INCOME THREE MONTHS ENDED DECEMBER 31, 2016 (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF INCOME THREE MONTHS ENDED DECEMBER 31, 2015 (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS THREE MONTHS ENDED DECEMBER 31, 2016 (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS THREE MONTHS ENDED DECEMBER 31, 2015 (Unaudited)
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Basis of Presentation (Policies) |
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Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of TD Ameritrade Holding Corporation (the "Parent") and its wholly-owned subsidiaries (collectively, the "Company"). Intercompany balances and transactions have been eliminated. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements ASU 2016-18 — In November 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-18, Restricted Cash. This ASU will amend the guidance in Accounting Standards Codification ("ASC") Topic 230, Statement of Cash Flows, and is intended to reduce the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments within this ASU will require that the reconciliation of the beginning-of-period and end-of-period cash and cash equivalents amounts shown on the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash and restricted cash equivalents are presented separately from cash and cash equivalents on the balance sheet, an entity will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. An entity will also be required to disclose information regarding the nature of the restrictions. ASU 2016-18 requires retrospective application and is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted. ASU 2016-18 will be effective for the Company's fiscal year beginning October 1, 2018. The adoption of ASU 2016-18 will change the manner in which restricted cash and restricted cash equivalents are presented in the Company's financial statements. ASU 2016-16 — In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. This ASU will amend the guidance in ASC Topic 740, Income Taxes. The amendments in this ASU are intended to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory by requiring an entity to recognize the income tax consequences when a transfer occurs, instead of when the asset is sold to a third party. ASU 2016-16 requires modified retrospective adoption and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2016-16 will be effective for the Company's fiscal year beginning October 1, 2018. The Company is currently assessing the impact this ASU will have on the Company's financial statements. ASU 2014-09 — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles of recognizing revenue from contracts with customers and to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards. This ASU will supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. Entities are required to apply the following steps when recognizing revenue under ASU 2014-09: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and, (5) recognize revenue when (or as) the entity satisfies a performance obligation. This ASU also requires additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. An entity may apply the amendments by using one of the following two methods: (1) retrospective application to each prior reporting period presented or (2) a modified retrospective approach, requiring the standard be applied only to the most current period presented, with the cumulative effect of initially applying the standard recognized at the date of initial application. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Therefore, ASU 2014-09 will be effective for the Company's fiscal year beginning October 1, 2018. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. Subsequent to issuing ASU 2014-09, the FASB has issued additional standards for the purpose of clarifying certain aspects of ASU 2014-09. The subsequently issued ASUs have the same effective date and transition requirements as ASU 2014-09. The Company is currently assessing the impact that these revenue recognition standards will have on the Company's financial statements and is evaluating which adoption method to apply. |
Loss Contingencies (ASC) 450 | ASC 450, Loss Contingencies, governs the recognition and disclosure of loss contingencies, including potential losses from legal and regulatory matters. ASC 450 categorizes loss contingencies using three terms based on the likelihood of occurrence of events that result in a loss: "probable" means that "the future event or events are likely to occur;" "remote" means that "the chance of the future event or events occurring is slight;" and "reasonably possible" means that "the chance of the future event or events occurring is more than remote but less than likely." Under ASC 450, the Company accrues for losses that are considered both probable and reasonably estimable. |
Fair Value Measurement (ASC) 820-10 | ASC 820-10, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. |
Cash and Cash Equivalents (Tables) |
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Cash and Cash Equivalents | The Company's cash and cash equivalents is summarized in the following table (dollars in millions):
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Cash and Investments Segregated and on Deposit for Regulatory Purposes (Tables) |
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Restricted Cash and Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Investments Segregated and on Deposit for Regulatory Purposes | Cash and investments segregated and on deposit for regulatory purposes consists of the following (dollars in millions):
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt consists of the following (dollars in millions):
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Gains And Losses Resulting From Changes In Fair Value Of Interest Rate Swaps And Hedged Fixed Rate Debt Table [Text Block] | The following table summarizes gains and losses resulting from changes in the fair value of interest rate swaps designated as fair value hedges and the hedged fixed-rate debt for the periods indicated (dollars in millions):
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table summarizes the fair value of outstanding derivatives designated as hedging instruments on the Condensed Consolidated Balance Sheets (dollars in millions):
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Capital Requirements (Tables) |
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Regulatory Capital Requirements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Capital and Net Capital Requirements for Company's Broker-dealer Subsidiaries | Net capital and net capital requirements for the Company's broker-dealer subsidiaries are summarized in the following tables (dollars in millions):
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Net Capital and Net Capital Requirements for Company's FCM Subsidiary |
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateral Available, Loaned or Repledged | The following table summarizes the fair values of client margin securities and stock borrowings that were available to the Company to utilize as collateral on various borrowings or for other purposes, and the amount of that collateral loaned or repledged by the Company (dollars in billions):
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Summary of Cash Deposited with and Securities Pledged To Clearinghouses | The following table summarizes cash deposited with and securities pledged to clearinghouses by the Company (dollars in millions):
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Fair Value Disclosures (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Hierarchy for Assets and Liabilities Measured on Recurring Basis | The following tables present the Company's fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and September 30, 2016 (dollars in millions):
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Offsetting Assets and Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Rights of Setoff Associated with Company's Recognized Assets and Liabilities | The following tables present information about the potential effect of rights of setoff associated with the Company's recognized assets and liabilities as of December 31, 2016 and September 30, 2016 (dollars in millions):
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Disaggregation of Gross Secured Lending Transactions | The following table summarizes the Company's gross liability for securities lending transactions by the class of securities loaned (dollars in millions):
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Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) | The following table presents the net change in fair value recorded for each component of other comprehensive income (loss) before and after income tax for the periods indicated (dollars in millions):
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Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents after-tax changes in each component of accumulated other comprehensive loss for the periods indicated (dollars in millions):
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Related Party Transactions (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | The following tables summarize revenues and expenses resulting from transactions with TD and its affiliates for the periods indicated (dollars in millions):
The following table summarizes the classification and amount of receivables from and payables to TD and its affiliates on the Condensed Consolidated Balance Sheets resulting from related party transactions (dollars in millions):
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Condensed Consolidating Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Consolidating Balance Sheet (Unaudited) | CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (Unaudited)
CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2016 (Unaudited)
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Schedule of Condensed Consolidating Statement of Income (Unaudited) | CONDENSED CONSOLIDATING STATEMENT OF INCOME THREE MONTHS ENDED DECEMBER 31, 2016 (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF INCOME THREE MONTHS ENDED DECEMBER 31, 2015 (Unaudited)
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Schedule of Condensed Consolidating Statement of Cash Flows (Unaudited) | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS THREE MONTHS ENDED DECEMBER 31, 2016 (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS THREE MONTHS ENDED DECEMBER 31, 2015 (Unaudited)
|
Business Acquisition Business Acquisition (Details) shares in Millions, $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
shares
| |
Business Acquisition [Abstract] | |
Business Acquisition, Date of Acquisition Agreement | Oct. 24, 2016 |
Planned Acquisition Total Transaction Value | $ 4,000 |
Planned Acquisition Condition Precedent Transaction Cash Amount | 1,300 |
Planned Acquisition New Common Equity Amount To Affiliate | $ 400 |
Planned Acquisition New Common Equity Shares To Affiliate | shares | 11 |
Planned Acquisition New Common Equity Issued Amount To Seller | $ 1,000 |
Planned Acquisition New Common Equity Issued Shares To Seller | shares | 28 |
Planned Acquisition Date Expected To Close By | Sep. 30, 2017 |
Cash and Cash Equivalents - Summary of Cash and Cash Equivalents (Detail) - USD ($) $ in Millions |
Dec. 31, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 1,662 | $ 1,855 | $ 1,735 | $ 1,978 |
Broker-dealer subsidiaries [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 904 | 1,153 | ||
Corporate [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 442 | 460 | ||
Trust company subsidiary [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 163 | 85 | ||
Futures commission merchant and forex dealer member subsidiary [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 136 | 125 | ||
Investment advisory subsidiaries [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 17 | $ 32 |
Income Taxes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 36.30% | 36.00% |
Net favorable resolutions of state income tax matters | $ 7 | $ 7 |
Net favorable adjustments to uncertain tax positions and related deferred income tax assets | $ 2 | |
Favorable per share impact on earnings | $ 0.01 | $ 0.02 |
Long-Term Debt - Fair Value Hedging - Additional Information (Detail) |
3 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
2019 and 2025 Notes [Member] | |
Debt Instrument [Line Items] | |
Weighted-average effective interest rate | 2.63% |
Pay Variable Interest Rate Swap [Member] | 5.600% Notes due 2019 [Member] | |
Debt Instrument [Line Items] | |
Variable interest rate on swaps in excess of LIBOR rate, percentage | 2.3745% |
Pay Variable Interest Rate Swap [Member] | 3.625% Notes due 2025 [Member] | |
Debt Instrument [Line Items] | |
Variable interest rate on swaps in excess of LIBOR rate, percentage | 1.1022% |
Pay Variable Interest Rate Swap [Member] | 2019 and 2025 Notes [Member] | |
Debt Instrument [Line Items] | |
Notional amount of interest rate swaps on Notes | $ 500,000,000 |
Interest rate swap, variable rate basis | three-month LIBOR |
Long-Term Debt - Gains and Losses Resulting from Changes in Fair Value of Interest Rate Swaps and Hedged Fixed Rate Debt (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Debt Disclosure [Abstract] | ||
Gain (loss) on fair value of interest rate swaps | $ (49) | $ (17) |
Gain (loss) on fair value of hedged fixed-rate debt | 49 | 17 |
Net gain (loss) recorded in interest on borrowings | $ 0 | $ 0 |
Long-Term Debt - Fair Value of Outstanding Derivatives Designated as Hedging Instruments (Detail) - USD ($) $ in Millions |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Derivatives recorded under the caption Other assets | ||
Pay-variable interest rate swaps designated as fair value hedges | $ 30 | $ 79 |
Long-Term Debt - Balance Sheet Impact of Hedging Instruments - Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Cash [Member] | Pay Variable Interest Rate Swap [Member] | ||
Debt Instrument [Line Items] | ||
Pledged Collateral From Interest Rate Swap Counter Party Aggregate Fair Value | $ 32 | $ 93 |
Capital Requirements - Net Capital and Net Capital Requirements for Company's Subsidiaries (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
TD Ameritrade Clearing, Inc. [Member] | ||
Net Capital and Net Capital Requirements For Company's Subsidiaries [Line Items] | ||
Net Capital | $ 1,768,000 | $ 1,719,000 |
Required Net Capital | 290,000 | 288,000 |
Excess Net Capital | $ 1,478,000 | $ 1,431,000 |
Ratio of Net Capital to Aggregate Debit Balances | 12.21% | 11.95% |
TD Ameritrade, Inc. [Member] | ||
Net Capital and Net Capital Requirements For Company's Subsidiaries [Line Items] | ||
Net Capital | $ 215,000 | $ 139,000 |
Required Net Capital | 250 | 250 |
Net Capital in Excess of Required Net Capital | 215,000 | 138,000 |
TD Ameritrade Futures & Forex LLC [Member] | ||
Net Capital and Net Capital Requirements For Company's Subsidiaries [Line Items] | ||
Net Capital under Commodity Exchange Act | 122,000 | 117,000 |
Required Net Capital under Commodity Exchange Act | 22,000 | 22,000 |
Net Capital in Excess of Required Net Capital | $ 100,000 | $ 95,000 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Contingencies And Commitments [Line Items] | ||
Contingent liability for guarantees to securities clearinghouses and exchanges | $ 0 | $ 0 |
Minimum [Member] | ||
Contingencies And Commitments [Line Items] | ||
Aggregate range of reasonably possible losses in excess of amounts accrued | 0 | |
Maximum [Member] | ||
Contingencies And Commitments [Line Items] | ||
Aggregate range of reasonably possible losses in excess of amounts accrued | $ 55,000,000 |
Commitments and Contingencies - Collateral Available, Loaned or Repledged (Detail) - USD ($) $ in Billions |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Client margin securities | $ 16.5 | $ 16.5 |
Stock borrowings | 0.8 | 1.1 |
Total collateral available | 17.3 | 17.6 |
Collateral loaned | 2.0 | 2.0 |
Collateral repledged | 2.9 | 2.7 |
Total collateral loaned or repledged | $ 4.9 | $ 4.7 |
Commitments and Contingencies - Summary of Cash Deposited with and Securities Pledged to Clearinghouses (Detail) - USD ($) $ in Millions |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Cash Deposited with and Securities Pledged to Clearinghouses [Line Items] | ||
Cash deposited and securities pledged | $ 302 | $ 336 |
Cash [Member] | Receivable from brokers, dealers and clearing organizations [Member] | ||
Cash Deposited with and Securities Pledged to Clearinghouses [Line Items] | ||
Cash deposited and securities pledged | 137 | 116 |
U.S. Government Debt Securities [Member] | Securities owned, at fair value [Member] | ||
Cash Deposited with and Securities Pledged to Clearinghouses [Line Items] | ||
Cash deposited and securities pledged | $ 165 | $ 220 |
Fair Value Disclosures - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
|
Fair Value Disclosures [Abstract] | ||
Reverse repurchase agreements generally have a maturity | 7 days | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,769 | $ 1,817 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate estimated fair value of the Senior Notes | 1,810 | 1,870 |
Long-term debt | $ 1,770 | $ 1,820 |
Offsetting Assets and Liabilities Offsetting Assets and Liabilities - Disaggregation of Secured Lending Transactions (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Disaggregation of Gross Securities Lending Transactions [Line Items] | ||
Deposits received for securities loaned, gross | $ 1,964 | $ 1,990 |
Equity Securities [Member] | ||
Disaggregation of Gross Securities Lending Transactions [Line Items] | ||
Deposits received for securities loaned, gross | 1,659 | 1,652 |
Exchange Traded Funds [Member] | ||
Disaggregation of Gross Securities Lending Transactions [Line Items] | ||
Deposits received for securities loaned, gross | 191 | 216 |
Closed-end Funds [Member] | ||
Disaggregation of Gross Securities Lending Transactions [Line Items] | ||
Deposits received for securities loaned, gross | 50 | 73 |
Other Securities [Member] | ||
Disaggregation of Gross Securities Lending Transactions [Line Items] | ||
Deposits received for securities loaned, gross | $ 64 | $ 49 |
Offsetting Assets and Liabilities - Effect of Rights of Setoff Associated with Company's Recognized Assets and Liabilities Additional Information (Detail) - USD ($) $ in Millions |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Offsetting Assets And Liabilities [Line Items] | ||
Fair value of collateral the Company has received under enforceable master agreements | $ 1,520 | $ 2,440 |
Fair value of collateral the Company has pledged under enforceable master agreements | 1,760 | 1,810 |
Transacted Through The Option Clearing Corporation [Member] | ||
Offsetting Assets And Liabilities [Line Items] | ||
Gross amounts of deposits paid for securities borrowed | 449 | 590 |
Gross amounts of deposits received for securities loaned | $ 1,350 | $ 1,070 |
Accumulated Other Comprehensive Income (Loss) Net Change (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Income tax effect | $ 4 | $ 0 |
Total other comprehensive income (loss), net of tax | (5) | 1 |
Total other comprehensive income (loss), before tax | (9) | 1 |
Available-for-sale Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized loss | (10) | 0 |
Income tax effect | 4 | 0 |
Total other comprehensive income (loss), net of tax | (6) | 0 |
Forward Starting Interest Rate Swap [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification adjustment for portion of realized loss amortized to net income | 1 | 1 |
Reclassification adjustment for portion of realized loss amortized to net income, tax effect | 0 | 0 |
Reclassification adjustment for portion of realized loss amortized to net income, net of tax | $ 1 | $ 1 |
Accumulated Other Comprehensive Income (Loss) Balance Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accumulated Other Comprehensive Income (Loss) Balance Rollforward [Line Items] | ||
Beginning balance | $ (22) | $ (25) |
Total other comprehensive income (loss), net of tax | (5) | 1 |
Ending balance | (27) | (24) |
Forward Starting Interest Rate Swap [Member] | ||
Accumulated Other Comprehensive Income (Loss) Balance Rollforward [Line Items] | ||
Beginning balance | (22) | (25) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 1 | 1 |
Ending balance | (21) | (24) |
Available-for-sale Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) Balance Rollforward [Line Items] | ||
Beginning balance | 0 | 0 |
Total other comprehensive income (loss), net of tax | (6) | 0 |
Ending balance | $ (6) | $ 0 |
Earnings Per Share - Additional Information (Detail) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from the calculation of diluted EPS | 0.0 | 0.0 |
Accelerated Stock Repurchase Agreements Accelerated Stock Repurchase Agreements - Additional Information (Detail) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Forward Contract Indexed to Issuer's Equity [Line Items] | ||
Common stock initial shares repurchased under accelerated stock repurchase program | 0.0 | 1.1 |
Related Party Transactions - Summary of Revenues Resulting from Transactions with Related Parties (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Related Party Transaction [Line Items] | ||
Revenues from TD and Affiliates | $ 254 | $ 232 |
Insured Deposit Account Fees [Member] | Insured Deposit Account Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues from TD and Affiliates | 245 | 227 |
Various [Member] | Referral and Strategic Alliance Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues from TD and Affiliates | 3 | 3 |
Various [Member] | Other [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues from TD and Affiliates | 2 | 1 |
Investment Product Fees [Member] | Mutual Fund Agreements [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues from TD and Affiliates | $ 4 | $ 1 |
Related Party Transactions - Summary of Expenses Resulting from Transactions with Related Parties (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Related Party Transaction [Line Items] | ||
Expenses to TD and Affiliates | $ 4 | $ 5 |
Professional Services [Member] | Canadian Call Center Services Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Expenses to TD and Affiliates | 4 | 4 |
Various [Member] | Other [Member] | ||
Related Party Transaction [Line Items] | ||
Expenses to TD and Affiliates | $ 0 | $ 1 |
Related Party Transactions - Summary of Classification and Amount of Receivables from and Payables to Affiliates of Company (Detail) - USD ($) $ in Millions |
Dec. 31, 2016 |
Sep. 30, 2016 |
---|---|---|
Assets: | ||
Receivable from brokers, dealers and clearing organizations | $ 959 | $ 1,190 |
Receivable from affiliates | 143 | 106 |
Liabilities: | ||
Payable to brokers, dealers and clearing organizations | 2,028 | 2,040 |
Payable to affiliates | 8 | 9 |
Affiliated Entity [Member] | ||
Assets: | ||
Receivable from affiliates | 143 | 106 |
Liabilities: | ||
Payable to brokers, dealers and clearing organizations | 35 | 72 |
Payable to affiliates | $ 8 | $ 9 |
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