Letter to Shareholders
Dear Shareholders,
Our first full year as TD AMERITRADE was nothing short of fantastic. The Company delivered record earnings per share for the fifth consecutive year and successfully completed the largest client integration in the history of the U.S. retail brokerage industry.
Promises Kept
We were ambitious when we set our synergy goals for the TD Waterhouse acquisition — goals that left Wall Street more than a little skeptical and our Associates more than a little motivated. We targeted $578 million in value. We delivered over $700 million. That’s a testament to 4,600 men and women who, when forced to deal with adversity and lofty expectations, never blinked. That kind of character is enough to leave any CEO inspired.
I’m also happy to report that TD AMERITRADE moved back above the 50 percent threshold for pre-tax margin during the fourth quarter of fiscal 2007 — something you grew accustomed to prior to the TD Waterhouse acquisition. Maintaining those margins is a priority for us going forward.
A Year of Accolades
2007 also saw TD AMERITRADE receive its share of honors. As you know, it has been the vision of this management team and our board of directors to become the retail investment firm of choice for independent-minded investors and traders in the United States. The world is beginning to recognize that, as we not only earned four stars and ranked as the number one Web-based online broker in Barron’s 2007 Review of Online Brokers, we were also listed as one of Forbes 2007 Best Big Companies.1
Executing on Our Client - Focused Strategy
Our long-term growth strategy is to increase our market share of client assets by providing superior offerings to three client segments: the long-term investor, the registered investment advisor and the active trader. This year we introduced long-term investor solutions, which included a comprehensive suite of products and services. To further assist our clients in making more informed long-term investment decisions and in achieving their financial goals for the future, we also provided them with objective guidance, education and easy-to-use tools. The results of our efforts are already measurable with over 80 percent of our 2007 revenue growth being asset-based.
Commitment to Our Shareholders
On another level, the measure of our success and stability in the past few years is a reflection of a management team and board of directors resolved to do what’s best for the Company and our shareholders. They never circumvent a challenge. In fact, they welcome it. But they also have the wisdom and foresight to position TD AMERITRADE in a way that upholds what we are good at — providing securities brokerage services and technology-based financial services to retail investors, traders and business partners.
One fine example of their resolve can be found in their purposeful decision to avoid taking on the inherent credit risk of expanding our business to include mortgage lending. As a result, TD AMERITRADE has not been impacted by recent credit market turbulence. Like we always say, if an opportunity benefits the Company and our shareholders, we’ll do it, and if it doesn’t, we won’t. It’s been a simple and sensible strategy that has proven extremely effective.
In 2008 we will endeavor to deliver organic growth by attracting a greater share of client assets, earning greater yields and continuing to execute our client-focused strategy. We are very proud of what we’ve accomplished this year and we look forward to delivering on our promises in the coming year.
Sincerely,
Joe Moglia | Chief Executive Officer
1 "The Best Web Browser-Based Online Broker" by Barron's, 3/5/2007 based on Trade Experience, Trading Technology, Usability, Range of Offerings, Research Amenities, Portfolio Analysis & Reports, Customer Service & Access, and Costs. Barron's is a registered trademark of Dow Jones, L.P. More info on the Forbes award is available at www.forbes.com/platinum.