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Dear Shareholders,
In every sense of the word, 2004 was a success at Ameritrade. We demonstrated our ability to operate effectively
and produce record results while delivering outstanding products and services to our clients. Illustrating
perhaps our greatest competitive advantage, we saw an agile, opportunistic and focused brokerage strategy
pay off despite another unpredictable environment.
A YEAR TO REMEMBER
Thanks to bold steps taken over the past few years to solidify our operating model and strategy, I’m pleased
to present a few examples of what we were able to accomplish in fiscal 2004:
- Our four quarters in 2004 were the best in the history of this company (see graph).
- Pre-tax margin of 50 percent once again led our publicly-traded peers.1
- We led the online brokerage industry in client retail equity trades.2
- Earnings per share doubled from last year, to $0.64, and we nearly doubled our return on shareholder
equity to 22 percent (see graph).
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We continued to pursue beneficial acquisition opportunities, acquiring Bidwell & Company and the
retail accounts of BrokerageAmerica and Investex. We also announced the acquisition of the retail
accounts of JB Oxford & Company, and have since completed this purchase.
- We continue to believe in the current and future value of our stock, investing about $324 million in
repurchasing almost 26 million shares, with resulting accretion of $0.04 per share.
NEW EXPERIENCES FOR GREATER AFFINITY
As thrilling as our 2004 performance was, we have every intention — and capability — to continue that
success in 2005 and beyond. A very competitive industry demands that we advance the needs of clients, and
this year Ameritrade was up to the challenge.
Through our brokerage subsidiary, Ameritrade, Inc., we launched a new Web site in 2004, as well as a
consummate package of innovative products that demonstrate Ameritrade’s technological edge.3 This platform
will serve as a foundation for launching future generations of client-focused tools and services. We also
introduced our Exchange Traded Funds (ETF) Center, a useful online resource that offers tools, education
and information related to these important investment alternatives.4
AMERIVEST, POWER FOR THE LONG-TERM INVESTOR
While we continued to expand our active trader position, we also began reaching out to what we consider
untapped potential — long-term investors. At last year’s annual meeting, I spent time discussing the importance
of share of wallet and Ameritrade obtaining a greater percentage of our clients’ investable assets. This
focus led us to launch Amerivest this past fall through our Amerivest Investment Management, LLC registered
investment advisor subsidiary.5 We believe Amerivest will not only be a catalyst for our future growth,
it will also redefine and simplify long-term investing. Amerivest is an online advisory service that allows
investors to manage their investment goals using a simple 5-step process and index-based securities. I invite
you to learn more by visiting www.amerivest.com.
A FOCUS ON INVESTORS
Ameritrade believes in a strong capital market structure that treats all investors fairly and provides for
increased competition. In 2004, we took our case to Capitol Hill, testifying before the Securities & Exchange
Commission and Senate Banking Committee in support of non-discriminatory access, transparency of
market data as well as the elimination of the trade-through rule.
More recently, we’ve set Ameritrade on a path towards becoming a truly client-centric organization, with
a focus on managing our business from the valuable perspective of individual investors. Our management
team has every intention of utilizing this “outside-in” approach as we extend our legacy of innovation to all
types of investors in the 21st century.
A PERSONAL NOTE
The four years I’ve spent at Ameritrade have been something of which I am very proud. In that time, we’ve
seen unpredictability, highs and lows, gains and losses. Yet through it all, our associates have remained steady
and focused, exemplifying the type of character that so often turns stumbling blocks into stepping-stones.
Along with Joe Ricketts and the rest of the management team, I feel secure with our strategy knowing the
absolute sense of mission this organization shares in delivering the future for individual investors.
2004 tested our conviction and we persevered by translating uncertainty into unparalleled performance.
And today, as we step into our 30th year, you can be assured that Ameritrade has the experience and confidence
to pursue any challenge that maximizes the benefits to our associates, clients and shareholders.
Sincerely,
Joe Moglia
CEO
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