This summary is based on the second quarter fiscal 2008 earnings call conducted by TD Ameritrade Holdings Corp. (AMTD: chart) on April 17, 2008.

Management:

- CEO: Joe Moglia
- EVP and CFO: Bill Gerber

Key Investors Issues

- Revenues rose 19% to $623 million from $525 million in 2007.
- Net income was up 19% to $187 million or 31 cents a share.
- The firm used $29 million to buyback 1.7 million shares of stock.

Half Year Highlights:

- Revenues were up to almost $1.3 billion, a 19% increase from the same period last year.
- Earnings increased over 50% to $428 million or 71 cents per share.
- New accounts opened increased to 363,000 from 275,000 in the prior year.

Second Quarter Highlights

Net revenues were $623 million, up 19%, from $525 million in the prior year with 60% of these driven by assets.

- Income was $187 million or 31 cents a share, up 35% from $141 million or 24 cents a share in 2007 on revenue growth.
- The firm had client assets and cash and money market funds both coming in at records at $306 billion and $50 billion and client funds includes the $25 billion received from Fiserv.
- The RAA business has about $100 billion in assets, and the firm is a little over 4,500 in actual RIAs.

Transaction based revenue was up 24%, and the asset based revenue is up 15%, with the firm continuing to see a legitimate involvement on the part of the individual investor and averaged 312,000 trades a day, up 23% from a year ago.

- It continues to have the number one market position with regards to trading activity.
- Client assets were $306 billion, that''s up 8% year-over-year versus the S&P being down 7% and excluding Fiserv; client assets are flat versus the S&P being down 7% over the same period.
Net new assets are $16 billion, almost double where they would have been over the same period a year ago.
- As of the March quarter a year ago, total revenue earnings assets were around $77.5 billion, and these increased 16% to $90 billion.

Transaction based revenue of $245 million increased $50 million year-over-year as clients remained engaged in the markets.

- Increased trading activity was the primary reason for the additional revenue as a result of trading 312,000 trades per day or a 4.7% activity rate up 58,000 trades or 23% from the same quarter last year.
- Additionally the average commission rate was up 24 cents to $12.86 as the percentage of option trades continues to increase and payment for order flow remained strong.
- Asset based revenue, which is a combination of fee-based and spread-based revenues came in at $372 million up $49 million year-over-year.

There was a $22 million or 39% increase in fee-based revenue, 85% of which is due to organic growth and the remainder due to Fiserv.

- The added balances for Fiserv earned a slightly lower rate as compared to legacy business driving the blended rate down to 43 basis points.
- Mutual funds, money markets funds, Amerivest and other products are the drivers of fee-based revenues.
- Spread-based revenues were up $27 million or 10% to $294 million from the same quarter last year and these as are primarily MMDA program, margin loans and stock borrow, stock loan business.
- About 85% of the 27 million increase year-over-year is organic growth, split two-thirds net interest margin related and one-third balances related.

In the prior year, the firm consolidated the legacy Waterhouse clearing platform on to the current platform resulting in the last of the synergies, however these expense reductions have been offset by the investments for growth.

- Expenses have also been driven by the accelerated sales efforts and operating with a full sales team.
- The firm also had 58,000 additional trades per day versus last year, thus expenses excluding advertising are up $19 million or 7% year-over-year.
- The principle element of the expense fluctuation is employee compensation, which was up $23 million, primarily as the firm added new associates from the investments for growth and as it continues to reward people for their performance.

Clearing and execution was down $13 million as a direct result of the conversion as is communications, which was down $7 million for the same reason.

- Interest-owned borrowing is also down by approximately $9 million as a result of debt payments and lower interest rates in the last 12 months.
- Offsetting these decreases were increases in occupancy and equipment of $8 million professional services, primarily technology contractors helping to get new product and functionality to market, and other expense increased $6 million primarily from bad debt, half of which is the result of Bear Stearns'' stock drop.

The firm used $29 million to buyback 1.7 million shares of stock, leaving $517 million in liquid assets.