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Shareholder Meeting February 10, 2004

Shareholder Meeting February 10, 2004. 1. Safe Harbor Statement.

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Shareholder Meeting February 10, 2004

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  1. Shareholder Meeting February 10, 2004 1

  2. Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws. In particular, any expectations regarding the effect of our acquisitions of Mydiscountbroker.com and Bidwell & Company and the prospective acquisition of BrokerageAmerica.com accounts, and any projections regarding our future revenues, expenses, synergies, earnings or activity rates are forward-looking statements. These statements reflect only our current expectations and are not guarantees of future performance or results. These statements involve risks, uncertainties and assumptions that could cause actual results or performance to differ materially from those contained in the forward-looking statements. These risks, uncertainties and assumptions include market fluctuations and changes in client trading activity, general economic and political conditions, increased competition, systems failures and capacity constraints, regulatory and legal matters and uncertainties and other risk factors described in our latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date on which the statements were made. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

  3. Management Team >> 2003 Highlights >> YTD Highlights >> Strategy – Future – Outlook >>

  4. Management Team Almost 190 years combined financial services experience Phylis Esposito Executive Vice President Chief Strategy Officer Anne Nelson Executive Vice President Chief Marketing Officer Mike Feigeles Executive Vice President Special Projects Ellen Koplow Executive Vice President General Counsel Kurt Halvorson Executive Vice President Chief Administrative Officer Randy MacDonald Executive Vice President Chief Financial Officer Joe Moglia Chief Executive Officer Asiff Hirji Executive Vice President Chief Information Officer Pete Ricketts President, Private Client Division

  5. Record 2003 Highlights $0.32 EPS $264M EBITDA $188M Synergies = $245M Run-Rate $55B Client Assets >> (1) >> >> >> (1) See attached reconciliation of financial measures.

  6. Record Dec 03 QTR Highlights Net income $72M, $0.17 EPS EBITDA $127M, 56% of net revenues Pre-tax income $120M, 53% Operating margin $143M, 63% Net revenues of $226M >> (1) >> >> (1) >> >> (1) See attached reconciliation of financial measures.

  7. Trades Per Day Revenues Expenses(2)ExcludingAdvertising Net Income Market Cap Qtr(1) Expenses(2) ExcludingAdvertising Expenses(2) ExcludingAdvertising Net Income TradesPer Day Trades Per Day Revenues Revenues 87K $108.2M $75.8M $9.0M $1B 12/01 $75.8M $75.8M $9.0M 87K 87K $108.2M $108.2M Trades Per Day Revenues 175K $226.4M $83.4M $71.9M $6B 12/03 $83.4M $83.4M $71.9M 175K 175K $226.4M 87K TradesPer Day 101% $108.2M Revenues 109% 10% 700% 600% 10% 10% 700% Change 101% 101% 109% 109% 175K $226.4M 87K $108.2M 101% 109% 175K $226.4M 101% 109% POWER OF OPERATING LEVERAGE AND SCALABILITY (1) For the quarter ended 12/01 and 12/03 based on Company reports. (2) See attached reconciliation of financial measures

  8. 53% #1 PRE-TAX MARGIN 28% 21% Schwab E*Trade Ameritrade 162K 92K 175K Avg. Daily Trades(1) Note: For the quarter ended 12/31/03 based on Company reports. E*Trade pre-tax income from ongoing operations. (1) ET includes US and International retail trades. SCH includes revenue trades only and excludes mutual fund OneSource trades.

  9. 33.8% STRONG ROE GROWTH 11.9% -5.5% -38.2% FY 02 FY 03 FY 04E(1) FY 01 (1) Annualized earnings for the period October-January FY 04.

  10. 254 #1: RETAIL EQUITY TRADES PER DAY(OOOs) 175 162 119 95 92 ET(1) FIDELITY TD SCH(2) AMTD AMTDJAN 04 (1) E*Trade includes US and International retail trades and excludes professional trades. (2) Schwab includes revenue trades only and excludes mutual fund OneSource trades. Source: Ameritrade, E*Trade, Schwab and Waterhouse from Company reports for the quarter ended 12/31/03. Fidelity Online from Merrill Lynch Online Brokers Report dated 11/7/03.

  11. 95% GROWTH STRONG CLIENT ASSET GROWTH $72.4 ($ IN BILLIONS) $12.9 $37.1 $8.6 $59.5 $28.5 As of Jan. 30, 2004 As of Dec. 31, 2002 Client Cash & Money Market Funds

  12. LEADER IN M&A (1) 5 OF 13 IN INDUSTRY Announced Company NOV. O3 OCT. 03 JUNE 03 APR. 02 JULY 01 Bidwell BrokerageAmerica MDB.com Datek NDB.com (1) M&A transactions in Online Brokerage Industry since 07/31/01.

  13. $245M DATEK PRE-TAX SYNERGIES $164M OriginalEstimate Achieved - Run-Rate 4Q 03 OVER-DELIVERED SYNERGIES

  14. SIGNIFICANT OPERATING LEVERAGE PER TRADE ANALYSIS DEC. 03 QTR. % OF REVENUE • Revenues Commissions Net Interest Spread Other Revenue $ 13.504.751.83 67%24%9% • Net Revenue • Variable Expense • Fixed Expense • Operating Expense Adjusted(1) $ 20.073.014.40 7.41 15%22% 37% Operating Margin(1) Advertising Pre-tax Income $ 12.662.04$ 10.62 63%10%53% (1) See attached reconciliation of financial measures.

  15. GrowthOpportunities Expand Leading Active Trader Position Attract Long-Term Investors >> >>

  16. 91% SHARE REPURCHASE Shares Price Value Repurchased Market Price Shareholder Return 27.3M 27.3M $8.29(1) $15.8(2) $226M $433M $207M (1) Weighted average share price since inception of program on 09/19/02. (2) Share price as of close 1/30/04.

  17. Institutional Investor 37 - JUNE 02 124 - JAN. 04 Daily Avg. Share Volume JUN Q 02: 0.9M shares DEC Q 04: 4.8M shares >> >> >> Note: Excludes the PEIs and Intrust 401(k) provider. Data from 6/30/02 and 1/20/04.

  18. Analyst Firm Recommendation Credit Suisse First Boston Outperform Friedman, Billings, Ramsey Outperform Keefe, Bruyette & Woods Outperform Raymond James Outperform Sandler O’Neill Buy Smith Barney Buy Merrill Lynch Neutral ANALYST COVERAGE Note: data from First Call Report 2/09/04.

  19. $0.79 $0.53 $0.32 $0.12(1) FY 01 FY 02 FY 03 FY 04E ($0.22)(1) (1) Earnings per share is operating EPS, excluding restructuring and asset impairment charges for FY 01 and FY 02. See attached reconciliation of financial measures. Orange dotted lines indicate Company’s earnings guidance. STRONG EPS GROWTH

  20. SHAREHOLDER RETURN: SIGNIFICANT OUTPERFORMANCE 173% AGE LM MER MWD LEH GS RJF BSC SCH JEF 150% 100% 50% ET AMTD Calculation shows the increase in total shareholder value based upon three month average stock prices (to normalize data) at the beginning and end of the calendar year 2003 plus dividends.

  21. Reconciliation of Financial Measures

  22. EPS from Ongoing Operations (1) Earnings (loss) per share from ongoing operations Less: Restructuring and asset impairment charges Less: Debt conversion expense Plus: Gain on sale of investment Basic and diluted earnings (loss) per share RECONCILIATION OF FINANCIAL MEASURES Fiscal Year Ending Sept. 27, Sept. 28, 2002 2001 $ 0.12 $ (0.22) (0.25) (0.10) (0.20) - 0.03 $ (0.13) $ (0.49) Qtr Ended Qtr Ended Operating Expenses, Adjusted (2) Dec. 31, 2003 Dec. 31, 2001 $ Per Trade $ % of Rev. $ 83,418 $ 7.41 36.8% $ 75,845 Operating Expenses, Adjusted Plus: Advertising 23,066 2.04 10.2% 17,105 Total expenses $ 106,484 $ 9.45 47.0% $ 92,950 Fiscal Year Ended Operating Expenses, Adjusted (2) Sept. 26, 2003 Sept. 28, 2001 $ $ % of Rev. % of Rev. Operating Expenses, Adjusted $ 389,512 54.6% $ 362,489 79.7% Less: Gain on sale of investment - - (9,692) -2.1% Plus: Restructuring and asset impairment charges 5,991 0.8% 38,268 8.4% Plus: Debt conversion expense - - 62,082 13.7% Plus: Advertising 90,394 12.7% 147,975 32.5% Total expenses $ 485,897 68.1% $ 601,122 132.2% In thousands, except percentages, per trade measures and EPS

  23. Qtr Ended Dec. 31, 2001 $ RECONCILIATION OF FINANCIAL MEASURES Fiscal Year Ended EBITDA (3) Sept. 26, 2003 $ EBITDA $ 126,750 $ 264,141 Less: Depreciation and amortization (5,957) (31,708) Interest on borrowings (837) (5,076) Pre-tax income $ 119,956 $ 227,357 Operating Margin (4) Qtr Ended Dec. 31, 2003 $ % of Rev. Operating margin $ 142,842 63.1% Less: Advertising (23,066) -10.2% Gain/(loss) on disposal of property 180 0.1% Pre-tax income $ 119,956 53.0% In thousands, except percentages and per trade measures

  24. RECONCILIATION OF FINANCIAL MEASURES • Note: The term "GAAP" in the following explanations refers to generally accepted accounting principles in the United States. • EPS from ongoing operations is considered a Non-GAAP financial measure as defined by SEC Regulation G. We define EPS from ongoing operations as earnings (loss) per share, adjusted to remove any significant unusual gains or charges. We believe EPS from ongoing operations provides an important measure of the financial performance of our ongoing business. Unusual gains and charges are excluded because we believe they are not likely to be indicative of the ongoing operations of our business. EPS from ongoing operations should be considered in addition to, rather than as a substitute for, basic and diluted earnings per share. • Operating expenses, adjusted is considered a Non-GAAP financial measure as defined by SEC Regulation G. Operating expenses, adjusted consists of total expenses, adjusted to remove advertising expense and one time charges and revenues. We believe operating expenses, adjusted provides an important measure of the financial performance of our ongoing business. Advertising spending is excluded because it is largely at the discretion of the Company, varies significantly from period to period based on market conditions and relates to the acquisition of future revenues through new accounts rather than current revenues from existing accounts. Operating expenses, adjusted should be considered in addition to, rather than as a substitute for, total expenses. • EBITDA (earnings before interest, taxes, depreciation and amortization) is considered a Non-GAAP financial measure as defined by SEC Regulation G. We consider EBITDA an important measure of our financial performance and of our ability to generate cash flows to service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA eliminates the non-cash effect of tangible asset depreciation and intangible asset amortization, as well as any non-cash gains or charges. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.

  25. RECONCILIATION OF FINANCIAL MEASURES (4) Operating margin is considered a Non-GAAP financial measure as defined by SEC Regulation G. We define operating margin as pre-tax income, adjusted to remove advertising expense and any unusual gains or charges. We believe operating margin provides an important measure of the financial performance of our ongoing business. Advertising spending is excluded because it is largely at the discretion of the Company, varies significantly from period to period based on market conditions and relates to the acquisition of future revenues through new accounts rather than current revenues from existing accounts. Unusual gains and charges are excluded because we believe they are not likely to be indicative of the ongoing operations of our business. Operating margin should be considered in addition to, rather than as a substitute for, pre-tax income and net income.

  26. www.amtd.com

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