WIXLIB

2018 Annual ReportThere’sa lot tofeel goodabout.

ContentsLetter to viInnovationviiCorporate social responsibility10- KCorp orate l ead e rsh i pvi i i1ixTim HockeyPresident & CEOJoe MogliaChairman

Letter to shareholdersOur employees outdidthemselves. Again.For two days back in late February, more people than usualwere working the weekend shift at TD Ameritrade. Aheadof those teams, in Omaha, Jersey City, St. Louis, Chicago, andelsewhere, was no small task.results sang, financial and otherwise. So much sothat, as a show of appreciation, we made themall shareholders, awarding 40 shares each to everyfull-time employee, deposited (of course) into theirTD Ameritrade accounts.Rewind to 17 months earlier, and we had justannounced the deal to acquire Scottrade. Our beliefthen was that the combination of our two highlycomplementary organizations would positively alterthe landscape of investing, extend our leadershipposition, and transform the lives of millions ofinvestors for the better.Let’s just say it’s our humble belief that your investmentin TD Ameritrade is backed by one of the bestworkforces around. And, like you, they now have astake in what’s ahead.Lofty expectations to be sure. Absolutely achievable,too. But there were no delusions about the challengefacing us. There is no switch that magically andflawlessly integrates two companies. The real magicis months of preparation, making sacrifices, and ashared belief that this was one of those rare kinds ofevents that, done well, can mean a difference for acompany like ours.About those resultsTD Ameritrade delivered net revenues of 5.5 billionin 2018 , up 48 percent from last year. We endedthe year with net income of 1.47 billion, resulting inGAAP diluted EPS of 2.59 (up 58 percent) andnon- GAAP diluted EPS of 3.34 (up 82 percent).(1) Byany measure, those results are pretty stellar.So it was on that weekend in February that wesuccessfully moved more than 4 million Scottradeaccounts to TD Ameritrade, converting theirassets to the penny.Trading was strong throughout the year, averaginga record 811,000 trades per day, more than ourtwo closest competitors combined. For those counting,we had 16 days at a million trades or more,certainly a barometer for our growth, as well as thehistoric engagement we saw in the markets. (Before2018 , TD Ameritrade had exactly one day wheretrades exceeded 1 million.)There’s a reason we share that story. More so thanany year, the abiding excellence of our employeeswas revealed in 2018. So too was their determinationunder challenging circumstances. We asked a lotof them this year, and it was on their backs that our(1)See reconciliation of non- GAAP financial measures on page 113 .i

Letter to shareholders (continued)This uptick in trading overall amounted to abouta 300 million benefit to income above and beyondwhat we had projected to start the year. We alsogathered a record 92 billion in net new client assetsin the midst of a major integration, driven by recordasset gathering from our Institutional channel andefficient and effective marketing efforts on both sidesof the business. Client assets now total 1.3 trillion,up 16 percent from last year.Let’s talk about the corporate tax cut. The benefitfor TD Ameritrade was just under 300 million,which was significant. Combine that with roughly anadditional 175 million thanks to three Federal Reserveinterest rate hikes, plus significant revenue tailwindsfrom trading and balance growth, and we’ve beengiven some level of flexibility to reinvest back in ourbusiness. Let’s talk about where we’re doing that.Not in the status quoThe thing about tailwinds is that they can disappearjust as quickly as they appear. Even the strongestbusiness models can fall victim to complacency. That’swhy we consider now to be the most urgent timefor TD Ameritrade.So we’re investing in a client experience to makeit better than the restTo start, we’ve tweaked our strategic focus. Thinkof it as an investment in exceptionalism, which, by ourdefinition, amounts to delivering a best-in-class clientexperience. If the Scottrade integration was THEtop priority in 2018 , winning on the client experienceiiis what matters most in 2019 and, frankly, wellbeyond that. If it sounds a little idealistic, rest assuredthat within our walls it’s something our employees cansee and measure with concrete plans to improve,structure, and milestones that keep us all accountable.In our businessWe’ve also been reflecting on a Retail business modelthat’s been successful, but held back to some extentrecently as we’ve tried to be all things to all types ofinvestors. That’s why you’ll start to see a renewedemphasis on investors who are positive, confident, andenjoy managing their own finances. Think of themas the 2020 version of the 1975 self-directed investor someone we won over then and, in no uncertainterms, will CONTINUE to seek to win over today witha relationship that’s high-tech, right touch.Our Institutional business continues to zip right along.We’ve seen growth from all advisor segments,including new, existing, and breakaway brokers, whichcontinues to contribute to strong asset gathering.We will continue to optimize the existing business,expand capabilities, revamp advice based onclient segmentation, and continue to extend ourtechnology advantage with a focus on automation. And,of course, deliver world-class, white-glove service.We have an abundant supplyof energy and smarts, and apassion for innovation.In past letters, we’ve been hesitant to talk too muchabout our international expansion effort becauseof its limited size, but it’s a promising start as partof our five-year growth story. Today we’re inSingapore and Hong Kong, taking our time to learnwhat Asian clients need and want when it comesto trading, research, and education. Judging from theirinitial interest and high engagement levels in theU.S. markets, the potential opportunity is significant.

do business today. We were the first to launchchatbots on Facebook Messenger and Twitter usingartificial intelligence, the first to introduce 24/5trading, and, more recently, we were the firstto offer voice-activated trading via Amazon’s Alexa.And that’s just this year.We also realized that it’s one thing to have ideasand another thing entirely to have a place to incubatethem. So we’ve created a startup studio of sorts todo precisely that.To run the place betterWe’re proud of our scale at TD Ameritrade, but withit comes more than a few challenges that too oftengo unaddressed at big companies. Like the difficultyto respond quickly to competitive pressure,poor communication, fear of failure, even a siloedworkforce all things that put winning in jeopardy.So we’re addressing each of these, with leadership atthe very top of the house focused on removingthe barriers that might keep us from operating likethe nimble company you expect us to be.So we can disruptThere are some who would say that innovation can’treally happen when you’ve reached our level ofmaturity . that somehow it’s for companies “earlyin their lifecycle.”We don’t see it that way.Two things to know about our workforce atTD Ameritrade: They have an abundant supply ofenergy and smarts, and a passion for innovation pretty incalculable competitive advantages if youask us. The hard part for a mature company like oursis eliminating the barriers that get between themand really transforming investing.So we’ve empowered groups to drive innovation. Thisyear alone that decision saw us launch relationshipswith recognized technology powerhouses: A pple,A mazon A lexa, Facebook M essenger, Twitter, andWeC hat (Asia). We’re delivering our products,solutions, and services in channels where our clientsA greater responsibilityIf we exist to transform lives and investing for thebetter, with that comes a responsibility to investin a better tomorrow for people and theircommunities. Through our people, technology, andexpertise, we’re committed to contributing to thegreater good. That means providing greater access tothe markets, inspiring our employees to take action,fostering inclusion, and doing our part to protectthe environment.And we’re also returning capital to youWe increased our quarterly cash dividend by 0.09per share for 2019 to 0.30 , a 43 percent increase.And we paid a total of 477 million in cash dividendsin fiscal 2018 , along with 255 million in cash torepurchase 4.6 million shares.This is the part of the letter where impartiality getsthrown out the window, and we tell you just howspecial it is to be part of TD Ameritrade. But if yousaw what we saw this year 10,000 people intenselyfocused on creating a better experience forinvestors, who respond to the unexpected in thebest possible ways with the best possible attitude,you might share our excitement.Count on us to continue delivering for you.Tim HockeyPresident & CEOJoe MogliaChairmaniii

AccomplishmentsThe 2018highlight reel.Converted 4 million Scottrade clientaccounts while continuing to drive strongorganic growth.Expanded Environmental, Social, andGovernance-focused investing for bothInstitutional and self-directed clients.Named the #1 broker in Kiplinger’sPersonal Finance ranking of bestonline brokers.Launched an enhanced ETF Market Center,tripling the number of commission-freeexchange-traded funds (ETFs) availableto clients.Reintroduced our award-winning ModelMarket Center, one of the industry’sfirst open-architecture model portfoliomarketplaces for RIA s.Became the first U.S . retail broker dealerto offer trading of select securities 24 hoursa day, five days a week.Worked with Amazon, Apple, Twitter,Facebook, and WeChat to provide accountinformation, financial resources, andeducation on the third-party apps andplatforms our clients are already usingevery day.Became one of the first firms tooffer approved clients access to bitcoinfutures contracts.ivConverted more than 80 percent of ourdevelopment teams to Agile methods,up from 18 percent at the end of fiscalyear 2016 .Launched the TD Ameritrade Network,providing eight free hours of livemarket insights and investor educationevery weekday.Introduced Personalized Portfolios, fillinga gap in our advice continuum to addressthe needs of self-directed investors lookingfor an investing experience tailored to theirunique goals.Continued our expansion in Asia byopening a branch in Hong Kong.