<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
(Mark One)
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly Period Ended June 30, 2000
OR
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from the transition period from ___________
to ___________
Commission file number: 0-22163
------------------
AMERITRADE HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 47-0642657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4211 SOUTH 102ND STREET, OMAHA, NEBRASKA
68127
(Address of principal executive offices)
(Zip Code)
(402) 331-7856
(Registrant's telephone number, including area code)
-------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past ninety days:
Yes (X) No ( )
As of August 10, 2000 there were 175,193,225 outstanding shares of the
registrant's common stock consisting of 158,820,425 outstanding shares of Class
A Common Stock and 16,372,800 outstanding shares of Class B Common Stock.
================================================================================
<PAGE> 2
AMERITRADE HOLDING CORPORATION
INDEX
Page No.
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Independent Accountants' Review Report 3
Balance Sheets 4
Statements of Operations 5
Statements of Cash Flows 6
Notes to Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK 15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 15
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits 16
(b) Reports on Form 8-K 16
Signatures 17
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. - CONSOLIDATED FINANCIAL STATEMENTS
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
Ameritrade Holding Corporation
Omaha, Nebraska
We have reviewed the accompanying condensed consolidated balance sheet of
Ameritrade Holding Corporation and subsidiaries (collectively "the Company") as
of June 30, 2000, and the related condensed consolidated statements of
operations and cash flows for the three-month and nine-month periods ended June
30, 2000 and June 25, 1999. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Ameritrade Holding Corporation and subsidiaries as of September 24, 1999, and
the related consolidated statements of income, stockholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
October 27, 1999, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of September 24, 1999 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
/s/ Deloitte & Touche LLP
August 8, 2000
Omaha, Nebraska
3
<PAGE> 4
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share amounts)
<TABLE>
<CAPTION>
June 30, September 24,
2000 1999
----------- -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 48,773 $ 76,943
Cash and investments segregated in compliance with federal regulations 448,513 942,427
Receivable from brokers, dealers and clearing organizations 98,649 89,958
Receivable from customers and correspondents - net of allowance
for doubtful accounts: Jun. 30, 2000 - $4,522; Sept. 24, 1999 - $2,916 2,771,200 1,526,801
Refundable income taxes -- 15,947
Furniture, equipment and leasehold improvements - net of accumulated
depreciation and amortization: Jun. 30, 2000 - $27,612; Sept. 24, 1999 - $12,901 87,988 68,588
Goodwill - net of accumulated amortization 12,247 12,821
Investments 243,960 230,619
Other assets 61,183 72,979
----------- -----------
Total assets $ 3,772,513 $ 3,037,083
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations $ 520,721 $ 384,960
Payable to customers and correspondents 2,589,956 2,057,346
Accounts payable and accrued liabilities 122,809 73,603
Notes payable 35,000 --
Convertible subordinated notes 200,000 200,000
Income taxes payable 615 --
Deferred income taxes 87,988 100,711
----------- -----------
Total liabilities 3,557,089 2,816,620
----------- -----------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $1 par value; 3,000,000 shares authorized, none issued -- --
Common stock, $0.01 par value:
Class A - 270,000,000 shares authorized; Jun. 30, 2000 - 158,615,086 shares
issued; Sept. 24, 1999 - 158,103,480 shares issued 1,586 1,581
Class B - 18,000,000 shares authorized; 16,372,800 shares issued and
outstanding 164 164
----------- -----------
Total common stock 1,750 1,745
Additional paid-in capital 29,010 24,079
Retained earnings 41,385 55,296
Treasury stock - Class A shares at cost (Jun. 30, 2000 - 27,546 shares;
Sept. 24, 1999 - 39,624 shares) (64) (93)
Accumulated other comprehensive income 143,343 139,436
----------- -----------
Total stockholders' equity 215,424 220,463
----------- -----------
Total liabilities and stockholders' equity $ 3,772,513 $ 3,037,083
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Commissions and clearing fees $ 101,805 $ 56,064 $ 305,365 $ 139,630
Interest revenue 64,930 31,208 176,357 78,924
Other 5,542 2,867 15,823 7,482
--------- --------- --------- ---------
Total revenues 172,277 90,139 497,545 226,036
Interest expense 23,191 12,045 67,303 32,163
--------- --------- --------- ---------
Net revenues 149,086 78,094 430,242 193,873
Expenses excluding interest:
Employee compensation and benefits 34,845 20,025 102,834 47,038
Commissions and clearance 902 1,963 4,753 5,996
Communications 9,234 5,107 26,316 12,998
Occupancy and equipment costs 15,302 5,704 42,233 14,331
Advertising 41,222 12,103 154,645 34,899
Professional services 13,614 10,884 39,425 22,935
OnMoney development 16,242 1,611 54,737 3,703
Other 10,132 6,807 25,849 19,562
--------- --------- --------- ---------
Total expenses excluding interest 141,493 64,204 450,792 161,462
Income (loss) before provision for income taxes 7,593 13,890 (20,550) 32,411
Provision for income taxes (benefit) 2,995 4,973 (6,638) 11,674
--------- --------- --------- ---------
Net income (loss) $ 4,598 $ 8,917 $ (13,912) $ 20,737
========= ========= ========= =========
Basic earnings (loss) per share $ 0.03 $ 0.05 $ (0.08) $ 0.12
Diluted earnings (loss) per share $ 0.03 $ 0.05 $ (0.08) $ 0.12
Weighted average shares outstanding - basic 174,789 174,436 174,651 174,310
Weighted average shares outstanding - diluted 175,867 176,063 174,651 175,689
</TABLE>
5
See notes to condensed consolidated financial statements.
<PAGE> 6
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------
June 30, June 25,
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (13,912) $ 20,737
Adjustments to Reconcile Net Income (Loss) to Net Cash from
Operating Activities:
Depreciation and Amortization 14,711 4,458
Provision for Losses 3,082 2,140
Deferred Income Taxes (15,221) 1,075
Amortization of Goodwill 573 272
Changes in Operating Assets and Liabilities:
Cash and Investments Segregated in Compliance with Federal Regulations 493,914 20,417
Brokerage Receivables (1,256,172) (849,086)
Other Assets 17,611 (23,109)
Brokerage Payables 668,372 883,737
Accounts Payable and Accrued Liabilities 41,256 28,933
Income Taxes Payable 19,617 534
----------- -----------
Net Cash Provided By (Used In) Operating Activities (26,169) 90,108
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Furniture, Equipment and Leasehold Improvements (34,110) (20,412)
Purchase of Investments (3,603) --
----------- -----------
Net Cash Used In Investing Activities (37,713) (20,412)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Notes Payable 120,000 80,000
Principal Payments on Notes Payable (85,000) (33,000)
Proceeds from Exercise of Stock Options 460 507
Issuance of Class A Treasury Stock 252 59
----------- -----------
Net Cash Provided By Financing Activities 35,712 47,566
----------- -----------
Net Increase (Decrease) In Cash And Cash Equivalents (28,170) 117,262
Cash and Cash Equivalents at Beginning of Period 76,943 24,527
----------- -----------
Cash and Cash Equivalents at End of Period $ 48,773 $ 141,789
=========== ===========
Supplemental Cash Flow Information:
Interest Paid $ 7,759 $ 31,227
Income Taxes Paid (Refunded) $ (9,269) $ 14,143
Noncash Investing Activity:
Common stock issued in acquisition of Ten Bagger, Inc. $ 2,937 $ --
See notes to condensed consolidated financial statements
</TABLE>
6
<PAGE> 7
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(COLUMNAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Ameritrade Holding Corporation and its wholly-owned subsidiaries (collectively,
the "Company"). All significant intercompany balances and transactions have been
eliminated.
The Company's Board of Directors have declared stock splits, all effected as
stock dividends, as follows: August 1998 - two-for-one; February 1999 -
two-for-one; and July 1999 - three-for-one. All share data and per share amounts
have been restated to reflect these transactions.
These financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission 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 generally accepted
accounting principles. 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 and amendments thereto for the fiscal
year ended September 24, 1999.
Certain items in prior years condensed consolidated financial statements have
been reclassified to conform to the current quarter presentation.
2. NET CAPITAL
The Company's broker-dealer subsidiaries are subject to the Securities and
Exchange Commission Uniform Net Capital Rule (Rule 15c3-1 of the Securities
Exchange Act of 1934), which requires the maintenance of minimum net capital, as
defined. Net capital and the related net capital requirement may fluctuate on a
daily basis.
The Company's broker-dealer subsidiaries had net capital, in the aggregate, of
$172.0 million and $104.0 million as of June 30, 2000 and September 24, 1999,
respectively, which exceeded aggregate minimum net capital requirements by
$112.6 million and $70.0 million, respectively. Subsidiary net capital in the
amount of $59.4 million and $34.0 million as of June 30, 2000 and September 24,
1999, respectively, was not available for transfer to Ameritrade Holding
Corporation.
3. NOTES PAYABLE
As of June 30, 2000, the Company maintained a revolving credit agreement with a
bank group that was originally entered into in January 1998 and was amended and
restated in January 2000. The revolving credit agreement, as amended, permits
borrowings up to $75.0 million through December 31, 2001, subject to reduction
under certain circumstances specified in the credit agreement. The interest rate
on borrowings is determined on a monthly basis based on the greater of (i) the
prime rate minus 0.75 percent or (ii) 90-day LIBOR plus 1.50 percent. At June
30, 2000, the interest rate on this borrowing was 8.75 percent. The Company also
pays a maintenance fee of 0.25 percent of the unused borrowings through the
maturity date. The Company had outstanding indebtedness under the revolving
credit agreement of $35.0 million at June 30, 2000. At September 24, 1999, there
was no outstanding amount under the revolving credit agreement. The revolving
credit agreement contains certain covenants and restrictions, including a
minimum net worth requirement. As further security for its obligations under the
revolving credit agreement, the Company has pledged 1.65 million shares of its
Knight Trading Group, Inc. ("Knight") common stock (see Note 5) to the bank
group.
The Company also maintains a separate $75.0 million margin loan facility that is
supported by approximately 6.25 million shares of the Company's Knight stock not
pledged to the bank group. As of June 30, 2000, the Company had no borrowings
outstanding under the margin loan facility.
7
<PAGE> 8
4. CONVERTIBLE SUBORDINATED NOTES
In August 1999, the Company issued $200.0 million of 5.75 percent convertible
subordinated notes due August 1, 2004. The notes are convertible into 6,142,740
shares of Class A common stock. The holders of the notes may convert the notes
into shares of Class A common stock at any time prior to the close of business
on the maturity date of the notes, unless previously redeemed or repurchased, at
a conversion rate of 30.7137 shares per $1,000 principal amount of notes
(equivalent to an approximate conversion price of $32.56 per share), subject to
adjustment in certain circumstances. Interest on the notes is payable on
February 1 and August 1 of each year. The notes are not subject to redemption
prior to August 6, 2002, and the Company may, at its option, redeem the notes at
a premium on or after such date, in whole or in part, upon not less than 30 days
nor more than 60 days prior notice to each holder.
5. INVESTMENTS
The Company's investments consist primarily of ownership of approximately 7.9
million unregistered shares of Knight, representing an approximate six percent
ownership. Knight is a publicly held company that is a market maker in equity
securities. The Company derives certain revenues from Knight in exchange for
routing trade orders to it for execution.
As of June 30, 2000, the Company had pledged approximately 1.65 million shares
of its Knight common stock to support its obligations under the revolving credit
agreement and had also used approximately 6.25 million shares of its Knight
common stock to support borrowings under a margin loan facility (See Note 3).
6. COMMITMENTS AND CONTINGENCIES
Legal - On September 16, 1998, a putative class action complaint was filed in
the District Court, Douglas County, Nebraska, regarding the Company's alleged
inability to handle the volume of subscribers to its Internet brokerage
services. After initial proceedings and discovery, the complaint was amended
and, on September 10, 1999, a second amended complaint was filed. The amended
complaint seeks injunctive relief enjoining alleged deceptive, fraudulent and
misleading practices, equitable relief compelling the Company to increase
capacity, and unspecified compensatory damages. The Company believes that it has
viable defenses to the allegations raised in the amended complaint and intends
to assert them vigorously. However, because this proceeding is still at a
preliminary phase and the amount of damages sought has not been quantified, the
Company is not presently able to predict the ultimate outcome of this matter.
The Company and its operating units are parties to a number of other legal
matters arising in the ordinary course of its business. In management's opinion,
the Company has adequate legal defenses respecting each of these actions and
does not believe that any such matters, either individually or in the aggregate,
will materially affect the Company's results of operations or its financial
position.
Letter of Credit - Advanced Clearing, Inc. ("Advanced Clearing"), a wholly owned
subsidiary of the Company, has various secured credit facilities with financial
institutions. These credit facilities are utilized in Advanced Clearing's
securities clearing operations. These facilities provide for the issuance of
letters of credit by the financial institutions on behalf of, and cash advances
to, Advanced Clearing. Advanced Clearing has pledged customer securities as
collateral for the related credit, and its obligations under these facilities
and the related collateral requirements fluctuate from time to time. As of June
30, 2000 and September 24, 1999, the financial institutions had authorized
letters of credit in the aggregate amount of $187.0 million and $100.0 million,
respectively. As of June 30, 2000 and September 24, 1999, no amounts were
outstanding under the letters of credit. Advanced Clearing pays a maintenance
fee of 0.5 percent of the committed amount for the letters of credit.
General Contingencies - In the ordinary course of business, there are various
contingencies that are not reflected in the condensed consolidated financial
statements. These include Advanced Clearing's customer activities involving the
execution, settlement and financing of various customer securities transactions.
These activities may expose the Company to off-balance-sheet credit risk in the
event the customers are unable to fulfill their contracted obligations.
Advanced Clearing's customer securities activities are transacted on either a
cash or margin basis. In margin transactions, Advanced Clearing extends credit
to the customer to purchase securities, subject to various regulatory and
internal margin requirements, collateralized by cash and securities in the
customer's account. In addition, Advanced Clearing also executes and clears
customer transactions involving the sale of securities not yet purchased (short
sales). In both types of transactions, the Company may be exposed to
off-balance-sheet risk in the event margin requirements are not sufficient to
fully cover losses which customers may incur. In the event the customer fails to
satisfy its obligations, Advanced Clearing may be required to purchase or sell
financial instruments at prevailing market prices in order to fulfill the
customer's obligations.
8
<PAGE> 9
Advanced Clearing seeks to control the risks associated with its customer
activities by requiring customers to maintain margin collateral in compliance
with various regulatory and internal guidelines. Advanced Clearing monitors
required margin levels daily and, pursuant to such guidelines, requires
customers to deposit additional collateral, or to reduce positions, when
necessary.
Customer transactions executed through Advanced Clearing settle on the
settlement date, which is generally three business days after the date on which
the trade is placed by the customer. Since Advanced Clearing is obligated to
settle these transactions with brokers and other financial institutions whether
or not its customers meet their obligations to Advanced Clearing, Advanced
Clearing may incur losses in cases where a customer fails to honor its
obligations.
Advanced Clearing borrows securities both to cover short sales and to complete
customer transactions in the event that a customer fails to deliver securities
by the required date. Such borrowings are collateralized by depositing cash or
pledging securities with lending institutions and are "marked to market" on a
daily basis. Failure to maintain levels of cash deposits or pledged securities
at all times at least equal to the value of the related securities can subject
Advanced Clearing to risk of loss. Advanced Clearing seeks to control the risk
of loss by monitoring the market value of securities pledged and requiring
adjustments of collateral levels where necessary.
7. SEGMENT INFORMATION
Commencing in fiscal 2000, OnMoney Financial Services Corporation ("OnMoney"),
the Company's personal financial management subsidiary, was a reportable
business segment. Financial information for the Company's reportable segments is
presented in the table below, and the totals are equal to the Company's
consolidated amounts as reported in the condensed consolidated financial
statements.
<TABLE>
<CAPTION>
Three Months Ended June 30, 2000 Three Months Ended June 25, 1999
------------------------------------- --------------------------------------
Brokerage Brokerage
operations OnMoney Total operations OnMoney Total
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Interest - net of interest expense $ 41,739 $ -- $ 41,739 $ 19,163 $ -- $ 19,163
Non-interest revenue 107,347 -- 107,347 58,931 -- 58,931
---------- ---------- ---------- ---------- ---------- ----------
Net revenues $ 149,086 $ -- $ 149,086 $ 78,094 $ -- $ 78,094
========== ========== ========== ========== ========== ==========
Pre-tax income (loss) $ 23,835 $ (16,242) $ 7,593 $ 15,501 $ (1,611) $ 13,890
Identifiable assets at period end $3,766,427 $ 6,086 $3,772,513 $2,646,934 $ 4,850 $2,651,784
Nine Months Ended June 30, 2000 Nine Months Ended June 25, 1999
------------------------------------- --------------------------------------
Brokerage Brokerage
operations OnMoney Total operations OnMoney Total
---------- ---------- ---------- ---------- ---------- -----------
Interest - net of interest expense $ 109,054 $ -- $ 109,054 $ 46,761 $ -- $ 46,761
Non-interest revenue 21,188 -- 321,188 147,112 -- 147,112
---------- ---------- ---------- ---------- ---------- -----------
Net revenues $ 430,242 $ -- $ 430,242 $ 193,873 $ -- $ 193,873
========== ========== ========== ========== ========== ===========
Pre-tax income (loss) $ 34,187 $ (54,737) $ (20,550) $ 36,114 $ (3,703) $ 32,411
Identifiable assets at period end $3,766,427 $ 6,086 $3,772,513 $2,646,934 $ 4,850 $ 2,651,784
</TABLE>
OnMoney losses are comprised primarily of advertising expense, professional
services expense and employee compensation and benefits expense. Total
advertising expense for the Company, including OnMoney, for the quarters ended
June 30, 2000 and June 25, 1999 was $44.7 million and $12.1 million,
respectively. Total advertising expense for the Company, including OnMoney, for
the nine months ended June 30, 2000 and June 25, 1999 was $175.7 million and
$34.9 million, respectively.
9
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8. COMPREHENSIVE INCOME
Comprehensive income is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- ----------------------
June 30, June 25, June 30, June 25,
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Income (Loss) $ 4,598 $ 8,917 $ (13,912) $ 20,737
Other Comprehensive Income
Net unrealized holding gains on investment securities
available-for-sale arising during the period (167,557) 205,868 6,405 378,802
Adjustment for deferred income taxes 65,347 (80,288) (2,498) (147,733)
--------- --------- --------- ---------
Total Other Comprehensive Income (Loss), net of tax (102,210) 125,580 3,907 231,069
--------- --------- --------- ---------
Comprehensive Income (Loss) $ (97,612) $ 134,497 $ (10,005) $ 251,806
========= ========= ========= =========
</TABLE>
9. ACQUISITION
On May 25, 2000, the Company issued 267,000 shares of its Class A Common Stock
to the shareholders of Ten Bagger, Inc. ("Ten Bagger"), the corporation that
developed the stock analysis tool, the BigEasy Investor(TM), in connection with
the acquisition by the Company of all of the issued and outstanding shares of
common stock of Ten Bagger. Under the purchase agreement, the Company may issue
additional shares of its Class A Common Stock worth a maximum of $13.3 million
to the former shareholders of Ten Bagger depending upon the achievement of
certain performance targets, the satisfaction of certain indemnification
obligations and the market price of the Company's Class A Common Stock at the
time of issuance. The transaction was accounted for as a purchase. The following
unaudited pro forma financial information sets forth the results of operations
of Ameritrade Holding Corporation as if the acquisition of Ten Bagger, Inc. had
occurred on September 26, 1998.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------- ----------------------
June 30, June 25, June 30, June 25,
2000 1999 2000 1999
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
Net revenues................................. $ 149,096 $ 78,094 $ 430,307 $ 193,873
Net income (loss)............................ $ 3,957 $ 8,373 $ (15,799) $ 19,105
Basic earnings (loss) per share.............. $ 0.02 $ 0.05 $ (0.09) $ 0.11
</TABLE>
10. SUBSEQUENT EVENT
On July 21, 2000, the Company acquired Financial Passport, Inc. ("Financial
Passport"), a Delaware corporation. The acquisition of Financial Passport, which
is an Internet-based provider of financial planning services and an online
marketplace for a wide range of financial products and services, will allow the
Company's OnMoney subsidiary to expand the range of products and services that
it offers its customers. Under the terms of the merger agreement, the Company
has agreed to issue 1,482,548 shares of its Class A Common Stock (and will pay
cash of $470,000 in lieu of small shareholdings and fractional shares) in
exchange for the outstanding shares of Financial Passport common stock. The
transaction will be accounted for as a purchase.
On August 7, 2000, Thomas Lewis, Chief Executive Officer of Ameritrade Holding
Corporation, announced his resignation from the Company.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the Selected Financial Data and
the Consolidated Financial Statements and Notes thereto included in the
Company's annual report on Form 10-K and amendments thereto for the fiscal year
ended September 24, 1999. This discussion contains forward-looking statements
that involve risks and uncertainties that could cause actual results to differ
materially from those anticipated in such forward-looking statements. Factors
that may cause such differences include, but are not limited to: the effect of
customer trading patterns on Company revenues and earnings; computer system
failures; the effects of competitors' pricing, product and service decisions and
intensified competition; evolving regulation and changing industry customs and
practices
10
<PAGE> 11
adversely affecting the Company; adverse results of litigation; changes in
revenues and profit margin due to cyclical securities markets and interest
rates; and a significant downturn in the securities markets over a short period
of time or a sustained decline in securities prices and trading volumes.
The terms "we" and "us" as used in this document refer to Ameritrade Holding
Corporation ("Holding") and its operating subsidiaries Ameritrade (Inc.)
("Ameritrade"), Accutrade, Inc., Advanced Clearing, Inc. ("Advanced Clearing"),
AmeriVest, Inc., FreeTrade.com, Inc., OnMoney Financial Services Corporation
("OnMoney") and Ten Bagger, Inc., collectively.
RESULTS OF OPERATIONS
THREE MONTH PERIODS ENDED JUNE 30, 2000 AND JUNE 25, 1999
NET REVENUES. Commissions and clearing fees increased 81 percent to $101.8
million in the third quarter of fiscal 2000 from $56.1 million in the third
quarter of fiscal 1999. This increase was primarily attributable to an increase
in the number of securities transactions processed, as average trades per day
increased 107 percent to 124,000 in the third quarter of fiscal 2000 from 60,000
in the third quarter of fiscal 1999. The increase in transaction processing
volume was primarily a result of a significant increase in customer accounts
resulting from the substantial advertising expenditures made by us during fiscal
1998, fiscal 1999 and the first three quarters of fiscal 2000. Customer accounts
increased to approximately 1,164,000 at June 30, 2000 from approximately 505,000
at June 25, 1999. Offsetting the growth in trades per day was a decrease in
commissions and clearing fees per trade by 20 percent to $12 in the third
quarter of fiscal 2000 from $15 in the third quarter of fiscal 1999. We expect
average commission and clearing fees per trade to continue to decrease due to
the growth in the number of lower revenue Internet equity trades. However, we
believe the rate of decline in average commission will be lower than the rate of
decline experienced over the past two years.
We have arrangements with several execution agents to receive cash payments in
exchange for routing trade orders to these firms for execution (payment for
order flow). The revenues generated by us under these arrangements totaled $14.2
million, or 10 percent of net revenues, for the third quarter of fiscal 2000 and
$6.1 million, or 8 percent of net revenues, for the third quarter of fiscal
1999. Payment for order flow is a component of the commission and clearing fees
revenue line. Payment for order flow increased 7 percent on a per trade basis
from $1.62 in the third quarter of fiscal 1999 to $1.74 in the third quarter of
fiscal 2000. We expect payment for order flow to decrease on a per trade basis
as a result of competitive forces and regulatory changes. A portion of these
revenues were received from execution agents owned by Knight Trading Group, Inc.
("Knight"), a market maker in equity securities. As of June 30, 2000, we owned
approximately six percent of the outstanding common stock of Knight.
Net interest revenue (interest revenue less interest expense) increased 117
percent to $41.7 million in the third quarter of fiscal 2000 from $19.2 million
in the third quarter of fiscal 1999. This increase was due primarily to an
increase of 89 percent in customer and correspondent broker-dealer receivables
partially offset by a 7 percent decrease in cash and investments segregated in
compliance with federal regulations and an increase of 42 percent in amounts
payable to customers and correspondent broker-dealers in the third quarter of
fiscal 2000 from the third quarter of fiscal 1999. We generally expect net
interest revenue to grow as our account base grows.
Other revenues increased 90 percent to $5.5 million in the third quarter of
fiscal 2000 from $2.9 million in the third quarter of fiscal 1999 due primarily
to an increase in marketing and service fees paid to us by mutual funds as a
result of holding more customer mutual fund assets. The increase was also due to
the fact that we earned revenues during the third quarter of fiscal 2000 by
participating as an underwriter or selling group member in a number of
underwritten securities offerings while we did not earn any such revenues during
the third quarter of fiscal 1999. We expect to continue to participate in
securities offerings in the future, principally as a selling group member,
through our relationship with Epoch Partners, a newly licensed investment bank
in which we are an investor and with which we maintain a distribution agreement.
EXPENSES EXCLUDING INTEREST. Employee compensation and benefits expense
increased 74 percent to $34.8 million in the third quarter of fiscal 2000 from
$20.0 million in the third quarter of fiscal 1999, due primarily to an increase
in employees. Full-time equivalent employees rose 35 percent to 2,513 at the end
of June 2000 from 1,867 at the end of June 1999. The increase in employees was
necessary to accommodate the growth in trading volume following our advertising
campaigns. We expect employment expense to continue to increase to support the
expected increase in customer accounts, customer assets and trades.
Commissions and clearance costs decreased 55 percent to $0.9 million in the
third quarter of fiscal 2000 from $2.0 million in the third quarter of fiscal
1999. This decrease reflects our efforts to reduce execution, clearance,
settlement and depository costs with outside entities and the realization of
economies of scale associated with these activities and occurred despite a 107
percent increase in transaction volume.
Communications expense increased 80 percent to $9.2 million in the third quarter
of fiscal 2000 from $5.1 million in the third quarter of fiscal 1999, primarily
as a result of telephone, quote and market information costs related to the
increase in
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transaction processing volume. Communication expenses are expected to continue
to increase at a slower rate than transactions processed, as the lower-cost
Internet continues to be the predominant communication channel with our
customers.
Occupancy and equipment costs increased 168 percent to $15.3 million in the
third quarter of fiscal 2000 from $5.7 million in the third quarter of fiscal
1999. This increase was due primarily to the lease of equipment and additional
office space. In fiscal 1999 and the first three quarters of fiscal 2000, we
added approximately 425,000 square feet of additional space in Omaha, Nebraska,
Baltimore, Maryland, Ft. Worth, Texas, and Kansas City, Missouri. We also have
leased additional equipment over the past fiscal year to accommodate our
continued growth.
Advertising expenses for our brokerage operations increased 240 percent to $41.2
million in the third quarter of fiscal 2000 from $12.1 million in the third
quarter of fiscal 1999. The increase in advertising expenditures was principally
related to our efforts to build awareness of the Ameritrade brand and was
primarily responsible for the significant increase in the number of customer
accounts realized by us during the quarter. We plan to continue to expand our
customer base through significant advertising efforts and have budgeted
approximately $200 million for advertising in fiscal 2000.
Professional services expense increased to $13.6 million in the third quarter of
fiscal 2000 from $10.9 million in the third quarter of fiscal 1999. This 25
percent increase was primarily due to marketing and technology consulting
services to assist us in operational effectiveness and market research.
OnMoney development costs increased 913 percent to $16.2 million in the third
quarter of fiscal 2000 from $1.6 million in the third quarter of fiscal 1999.
During the third quarter of fiscal 2000, OnMoney development was comprised
primarily of professional services expense, employee compensation and benefits
expense and advertising expense. For the third quarter of fiscal 1999, OnMoney
development was comprised primarily of employee compensation and benefits
expense and professional services expense. OnMoney is a personal finance portal
providing users with access to information, tools and products that help them
better manage their personal finances. OnMoney.com is a personalized and
interactive financial services website that features a wide variety of personal
finance products and services, including account consolidation, bill payment and
presentment, mortgages, insurance, financial planning tools and educational
materials. On July 25, 2000, we acquired Financial Passport, Inc. ("Financial
Passport"), an internet-based provider of online financial planning services and
an online marketplace for a wide range of financial products and services, to
expand the range of products and services that OnMoney offers its customers. We
anticipate that the acquisition of Financial Passport will result in an increase
in expenditures for OnMoney development in future quarters until OnMoney becomes
self-funding. We are currently attempting to obtain external financing for
OnMoney.
Other operating expenses increased 49 percent to $10.1 million in the third
quarter of fiscal 2000 from $6.8 million in the third quarter of fiscal 1999,
primarily as a result of confirmation and statement processing costs for the
significantly higher number of transactions.
Income tax expense was $7.6 million in the third quarter of fiscal 2000 compared
to a tax benefit of $6.6 million in the third quarter of fiscal 1999. The
effective tax rate in the third quarter of fiscal 2000 was 39 percent compared
to an effective tax rate in the third quarter of fiscal 1999 of 36 percent. As
the Company has expanded into multiple states, it has increased its effective
tax rate.
NINE MONTH PERIODS ENDED JUNE 30, 2000 AND JUNE 25, 1999
NET REVENUES. Commissions and clearing fees increased 119 percent to $305.4
million in the first nine months of fiscal 2000 from $139.6 million in the first
nine months of fiscal 1999. This increase was primarily attributable to an
increase in the number of securities transactions processed, as average trades
per day increased 144 percent to 117,000 in the first nine months of fiscal 2000
from 48,000 in the first nine months of fiscal 1999. The increase in transaction
processing volume was primarily a result of a significant increase in customer
accounts resulting from the substantial advertising expenditures made by us
during fiscal 1998, fiscal 1999 and the first nine months of fiscal 2000.
Customer accounts increased to approximately 1,164,000 at June 30, 2000 from
approximately 505,000 at June 25, 1999. Offsetting the growth in trades per day
is the decrease in commissions and clearing fees per trade by 13 percent to an
average of $13 in the first nine months of fiscal 2000 from an average of $15 in
the first nine months of fiscal 1999. We expect average commission and clearing
fees per trade to continue to decrease due to the growth in the number of lower
revenue Internet equity trades. However, we believe the rate of decline in
average commission will be lower than the rate of decline experienced over the
past two years.
We have arrangements with several execution agents to receive cash payments in
exchange for routing trade orders to these firms for execution (payment for
order flow). The revenues generated by us under these arrangements totaled $40.1
million, or 9 percent of net revenues, for the first nine months of fiscal 2000
and $16.4 million, or 8 percent of net revenues, for the first nine months of
fiscal 1999. Payment for order flow is a component of the commission and
clearing fees revenue line. Payment for order flow decreased 5 percent on a per
trade basis from $1.82 in the first nine months of fiscal 1999 to $1.74 in the
first
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nine months of fiscal 2000. We expect payment for order flow to continue to
decrease on a per trade basis as a result of competitive forces and regulatory
changes. A portion of these revenues were received from execution agents owned
by Knight. As of June 30, 2000, we owned approximately six percent of the
outstanding common stock of Knight.
Net interest revenue (interest revenue less interest expense) increased 133
percent to $109.1 million in the first nine months of fiscal 2000 from $46.8
million in the first nine months of fiscal 1999. This increase was due primarily
to an increase of 89 percent in customer and correspondent broker-dealer
receivables partially offset by a 7 percent decrease in cash and investments
segregated in compliance with federal regulations and an increase of 42 percent
in amounts payable to customers and correspondent broker-dealers in the third
quarter of fiscal 2000 from the third quarter of fiscal 1999. We generally
expect net interest revenue to grow as our account base grows.
Other revenues increased 111 percent to $15.8 million in the first nine months
of fiscal 2000 from $7.5 million in the first nine months of fiscal 1999 due
primarily to an increase in marketing and service fees paid to us by mutual
funds as a result of holding more customer mutual fund assets. The increase was
also due to the fact that we earned revenues during the third quarter of fiscal
2000 by participating as an underwriter or selling group member in a number of
underwritten securities offerings while we did not earn any such revenues during
the third quarter of fiscal 1999. We expect to continue to participate in
securities offerings in the future, principally as a selling group member,
through our relationship with Epoch Partners, a newly licensed investment bank
in which we are an investor and with which we maintain a distribution agreement.
EXPENSES EXCLUDING INTEREST. Employee compensation and benefits expense
increased 119 percent to $102.8 million in the first nine months of fiscal 2000
from $47.0 million in the first nine months of fiscal 1999, due primarily to an
increase in employees. Full-time equivalent employees rose 35 percent to 2,513
at the end of June 2000 from 1,867 at the end of June 1999. The increase in
employees was necessary to accommodate the growth in trading volume following
our advertising campaigns. We expect employment expense to continue to increase
to support the expected increase in customer accounts, customer assets and
trades.
Commissions and clearance costs decreased 20 percent to $4.8 million in the
first nine months of fiscal 2000 from $6.0 million in the first nine months of
fiscal 1999. This decrease reflects our efforts to reduce execution, clearance,
settlement, and depository costs with outside entities and the realization of
economies of scale associated with these activities and occurred despite a 144
percent increase in transaction volume.
Communications expense increased 102 percent to $26.3 million in the first nine
months of fiscal 2000 from $13.0 million in the first nine months of fiscal
1999, primarily as a result of telephone, quote and market information costs
related to the increase in transaction processing volume. Communication expenses
are expected to continue to increase at a slower rate than transactions
processed, as the lower-cost Internet continues to be the predominant
communication channel with our customers.
Occupancy and equipment costs increased 195 percent to $42.2 million in the
first nine months of fiscal 2000 from $14.3 million in the first nine months of
fiscal 1999. This increase was due primarily to the lease of equipment and
additional office space. In fiscal 1999 and the first three quarters of fiscal
2000, we added approximately 425,000 square feet of additional space in Omaha,
Nebraska, Baltimore, Maryland, Ft. Worth, Texas, and Kansas City, Missouri. We
also have leased additional equipment over the past fiscal year to accommodate
our continued growth.
Advertising expenses for our brokerage operations increased 343 percent to
$154.7 million in the first nine months of fiscal 2000 from $34.9 million in the
first nine months of fiscal 1999. The increase in advertising expenditures was
principally related to our efforts to build awareness of the Ameritrade brand
and was primarily responsible for the significant increase in the number of
customer accounts realized by us during the period. We plan to continue to
expand our customer base through significant advertising efforts and have
budgeted approximately $200 million for advertising in fiscal 2000.
Professional services expense increased to $39.4 million in the first nine
months of fiscal 2000 from $22.9 million in the first nine months of fiscal
1999. This 72 percent increase was primarily due to marketing and technology
consulting services to assist us in operational effectiveness and market
research.
OnMoney development costs increased 1,378 percent to $54.7 million in the first
nine months of fiscal 2000 from $3.7 million in the first nine months of fiscal
1999. During the first nine months of fiscal 2000, OnMoney development was
comprised primarily of advertising expense, professional services expense and
employee compensation and benefits expense. For the first nine months of fiscal
1999, OnMoney development was comprised primarily of employee compensation and
benefits expense and professional services expense. On July 25, 2000, we
acquired Financial Passport, Inc. ("Financial Passport"), an internet-based
provider of online financial planning services and an online marketplace for a
wide range of financial products and services, to expand the range of products
and services that OnMoney offers its customers. We anticipate that the
acquisition of Financial Passport will result in an increase in expenditures for
OnMoney development in future quarters until OnMoney becomes self-funding. We
are currently attempting to obtain external financing for OnMoney.
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Other operating expenses increased 32 percent to $25.8 million in the first nine
months of fiscal 2000 from $19.6 million in the first nine months of fiscal
1999, primarily as a result of confirmation and statement processing costs for
the significantly higher number of transactions.
Income tax benefit was $6.6 million for the first nine months of fiscal 2000,
compared with income tax expense of $11.7 million for the first nine months of
fiscal 2000.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed our growth and our investment in OnMoney primarily
through the use of funds generated from operations and from borrowings under our
credit agreement. Our growth during the first quarter of fiscal 2000 was
financed primarily through funds generated from operations, borrowings under our
credit agreement and the remaining proceeds from the convertible subordinated
notes that were issued in August 1999 (see "Convertible Subordinated Notes").
During the second and third quarters of fiscal 2000, our growth was financed
primarily through funds generated from operations, borrowings under our credit
agreement and other borrowings, including the mortgaging of our Kansas City,
Missouri data center for $7.5 million. We anticipate continued significant
capital and liquidity needs during the remainder of fiscal 2000 and into fiscal
2001 as a result of our current advertising campaign and expected growth in
customer accounts resulting from this campaign and our continued investment in
OnMoney. We plan to finance our capital and liquidity needs from our operating
cash flows and borrowings under our revolving credit facility. In addition, we
maintain a $75.0 million margin loan facility that is supported by approximately
6.25 million shares of our Knight stock and would be available to meet
additional capital and liquidity needs. We are also considering selling some or
all of our interest in Knight.
Dividends from subsidiaries are another source of liquidity. Some of our
subsidiaries are subject to requirements of the Securities and Exchange
Commission and the National Association of Securities Dealers relating to
liquidity, capital standards, and the use of customer funds and securities,
which limit funds available for the payment of dividends to Holding.
CASH FLOW
Cash used in operating activities was $26.2 million in the first nine months of
fiscal 2000, compared to cash provided by operating activities of $90.1 million
in the first nine months of fiscal 1999. The increase in cash during the first
nine months of fiscal 2000 was attributable to the substantial increase in
customer receivables and a net loss versus net income for the same period of
fiscal 1999.
Cash used in investing activities was $37.7 million in the first nine months of
fiscal 2000, compared to $20.4 million in the first nine months of fiscal 1999.
Uses of cash in both periods is primarily related to purchases of property and
equipment.
Cash provided by financing activities was $35.7 million in the first nine months
of fiscal 2000, compared to $47.6 million in the first nine months of fiscal
1999. The cash provided by financing activities for both periods consisted of
net proceeds from our revolving credit agreement with a bank group (see "Bank
Loan Agreements").
LOAN AGREEMENTS
As of June 30, 2000, we maintained a revolving credit agreement with a bank
group that was originally entered into in January 1998 and was amended and
restated in January 2000. The revolving credit agreement, as amended, permits
borrowings up to $75.0 million through December 31, 2001, subject to reduction
under certain circumstances specified in the credit agreement. The interest rate
on borrowings is determined on a monthly basis based on the greater of (i) the
prime rate minus 0.75 percent or (ii) 90-day LIBOR plus 1.50 percent. At June
30, 2000, the interest rate on this borrowing was 8.75 percent. We also pay a
maintenance fee of 0.25 percent of the unused borrowings through the maturity
date. We had outstanding indebtedness under the revolving credit agreement of
$35.0 million at June 30, 2000. At September 24, 1999, there was no outstanding
amount under the revolving credit agreement. The revolving credit agreement
contains certain covenants and restrictions, including a minimum net worth
requirement. As further security for its obligations under the revolving credit
agreement, we have pledged 1.65 million shares of our Knight common stock (see
Note 5) to the bank group.
We also maintain a separate $75.0 million margin loan facility that is supported
by approximately 6.25 million shares of our Knight stock not pledged to the bank
group. As of June 30, 2000, we had no borrowings outstanding under the margin
loan facility.
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CONVERTIBLE SUBORDINATED NOTES
In August 1999, we issued $200.0 million of 5.75 percent convertible
subordinated notes due August 1, 2004. The notes are convertible into 6,142,740
shares of Class A common stock. The holders of the notes may convert the notes
into shares of Class A common stock at any time prior to the close of business
on the maturity date of the notes, unless previously redeemed or repurchased, at
a conversion rate of 30.7137 shares per $1,000 principal amount of notes
(equivalent to an approximate conversion price of $32.56 per share), subject to
adjustment in certain circumstances. Interest on the notes is payable on
February 1 and August 1 of each year. The notes are not subject to redemption
prior to August 6, 2002, and we may, at our option, redeem the notes at a
premium on or after such date, in whole or in part, upon notice to each holder
not less than 30 days nor more than 60 days prior to the redemption date.
ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk generally represents the risk of loss that may result from the
potential change in the value of a financial instrument as a result of
fluctuations in interest rates and market prices. We have established policies,
procedures and internal processes governing our management of market risks in
the normal course of our business operations.
As a fundamental part of our brokerage business, we hold short-term interest
earning assets, mainly funds required to be segregated in compliance with
federal regulations for customers. Such funds totaled $448.5 million at June 30,
2000 and $942.4 million at September 24, 1999. We invest such funds primarily in
short-term fixed-rate U.S. Treasury Bills and repurchase agreements. Our
interest earning assets are financed by short-term interest bearing liabilities
totaling $2,590.0 million at June 30, 2000 and $2,057.3 million at September 24,
1999 in the form of customer cash balances. At June 30, 2000, we had an
additional $235.0 million of interest bearing indebtedness outstanding,
consisting of the $200.0 million convertible subordinated notes (see
"Convertible Subordinated Notes"), which bear interest at a fixed rate of
interest of 5.75 percent, and $35.0 million under our revolving credit
agreement, which bears interest at a floating rate (as described under "Loan
Agreements"). At September 24, 1999, we had $200.0 million of other interest
bearing indebtedness outstanding, consisting of the convertible subordinated
notes. We earn a net interest spread on the difference between amounts earned on
customer margin loans and amounts paid on customer credit balances.
At June 30, 2000, we held a marketable equity security, which is recorded at
fair value of $235.7 million ($144.1 million net of tax) and had exposure to
market price risk. The same security was recorded at fair value of $229.3
million ($139.4 million net of tax) at September 24, 1999. This risk is
estimated as the potential loss in fair value resulting from a hypothetical 10
percent adverse change in prices quoted by the stock exchanges and was
approximately $23.6 million at June 30, 2000. Actual results may differ.
Our revenues and financial instruments are denominated in U.S. dollars, and we
generally do not invest in derivative financial instruments or derivative
commodity instruments.
PART II - OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS
On September 16, 1998, a putative class action complaint was filed in the
District Court, Douglas County, Nebraska, regarding the Company's alleged
inability to handle the volume of subscribers to its Internet brokerage
services. After initial proceedings and discovery, the complaint was amended
and, on September 10, 1999, a second amended complaint was filed. The amended
complaint seeks injunctive relief enjoining alleged deceptive, fraudulent and
misleading practices, equitable relief compelling the Company to increase
capacity, and unspecified compensatory damages. The Company believes that it has
viable defenses to the allegations raised in the amended complaint and intends
to assert them vigorously. However, because this proceeding is still at a
preliminary phase and the amount of damages sought has not been quantified, the
Company is not presently able to predict the ultimate outcome of this matter.
The Company and its operating units are parties to a number of other legal
matters arising in the ordinary course of its business. In management's opinion,
the Company has adequate legal defenses respecting each of these actions and
does not believe that any such matters, either individually or in the aggregate,
will materially affect the Company's results of operations or its financial
position.
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ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
On May 25, 2000, we issued 267,000 shares of our Class A Common Stock to the
shareholders of Ten Bagger, Inc. ("Ten Bagger"), a Nevada corporation, in
connection with our acquisition of all of the issued and outstanding shares of
common stock of Ten Bagger pursuant to the terms of a Stock Purchase Agreement,
dated as of May 25, 2000, by and among Ameritrade Holding Corporation, Ten
Bagger, and the shareholders of Ten Bagger. The issuance of such shares was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended, and Rule 506 of Regulation D. Such shares were issued to the 19
shareholders of Ten Bagger, 17 of whom were accredited investors and 2 of whom
were not accredited investors but were represented by a purchaser representative
as defined under Rule 501 of Regulation D.
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
3.1 Restated Certificate of Incorporation of Ameritrade Holding
Corporation dated July 1, 1999 (incorporated by reference to
Exhibit 3.6 of the Company's quarterly report on Form 10-Q
filed on August 9, 1999)
3.2 Bylaws (incorporated by reference to Exhibit 3.2 of the
Company's Registration Statement on Form S-1 (Registration No.
333-17495) filed on February 7, 1997)
4.1 Form of Certificate for Class A Stock (incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-1 (Registration No. 333-17495) filed on
February 7, 1997)
4.2 Form of Note for the Company's 5.75 percent Convertible
Subordinated Notes due August 1, 2004 (incorporated by
reference to the Company's annual report on Form 10-K filed on
December 23, 1999)
4.3 Indenture dated August 4, 1999, between Ameritrade Holding
Corporation and The Bank of New York, as trustee (incorporated
by reference to the Company's Registration Statement on Form
S-3, File No. 333-87999, filed on September 28, 1999)
4.4 First Supplemental Indenture dated August 4, 1999, between
Ameritrade Holding Corporation and The Bank of New York, as
trustee (incorporated by reference to the Company's
Registration Statement on Form S-3, File No. 333-87999, filed
on September 28, 1999)
4.5 Registration Rights Agreement dated August 4, 1999, between
Ameritrade Holding Corporation and Goldman, Sachs & Co. and
relating to the Company's 5.75 percent Convertible
Subordinated Notes due August 1, 2004 (incorporated by
reference to the Company's Registration Statement on Form S-3,
File No. 333-87999, filed on September 28, 1999)
10.1 First Amendment to Amended and Restated Revolving Credit
Agreement dated April 28, 2000
15 Independent accountants' awareness letter
27.1 Financial Data Schedule (EDGAR filing only)
(B) REPORTS ON FORM 8-K:
No reports on Form 8-K were filed during the three-month period ended
June 30, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 10, 2000
Ameritrade Holding Corporation
(Registrant)
by: /s/ J. Joe Ricketts
-------------------
J. Joe Ricketts
Chairman and Chief Executive Officer
(Principal Executive Officer)
by: /s/ John R. MacDonald
---------------------
John R. MacDonald
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
17
