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Ameritrade’s Approach to M&A Integration

Joe MogliaChief Executive Officer

November 2, 2005Ameritrade Holding Corporation

Ameritrade, Inc., member NASD/SIPC. Ameritrade, Inc. is a subsidiary of Ameritrade Holding Corporation. Ameritrade and Ameritrade logos are trademarks or registered trademarks of Ameritrade IP Company, Inc. ©2005 Ameritrade IP Company, Inc. All rights reserved. Used with permission.

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Safe Harbor Statement

This presentation contains forward-looking statements that involve risks and uncertainties. For example, statements related to projected earnings growth; realization of Ameritrade’s strategy; the service offerings of TD Ameritrade; the expected benefits to stockholders and customers; credit and interest rate risk; expected synergies of TD Ameritrade, including cost savings and revenue opportunities, and the timing of the synergy realization; the expected accretive nature of the transaction and the timing of the accretion; the expected financial and operational performance of TD Ameritrade, including increased net income and pre-tax margin; accelerated business growth; industry rankings and competitive position; execution of integration plans; management and organizational structure; the dividend to be paid to Ameritrade stockholders; timing of the closing; future consolidation and growth; and other statements that are not historical facts, are all forward-looking statements. These statements reflect only our current expectations and are not guarantees of future performance or results. Various factors could cause actual results to differ materially from those anticipated by the forward-looking statements. These factors include the possibility that the necessary stockholder and regulatory approvals are not obtained; that the transaction does not close when expected or at all, or that the companies may be required to modify aspects of the transaction to achieve regulatory approval; that the bank sweep agreement does not obtain regulatory approval; that financing will not be available to fund the dividend or, if available, will be at a higher interest rate than expected; that prior to the closing of the proposed transaction, the businesses of the companies suffer due to uncertainty; that TD Ameritrade is unable to transition customers, successfully execute its integration strategies, or achieve planned synergies, or that the occurrence of these events takes longer than expected; that management is unable to accurately forecast the anticipated financial results of Ameritrade or TD Ameritrade or the timing of when those results will be realized; that TD Ameritrade is unable to compete successfully in this highly competitive and rapidly changing marketplace; that the parties are unable to retain employees that are key to the operations of the combined business; and that TD Ameritrade is unable to identify and realize future consolidation and growth opportunities. These and other risks that could cause actual results to differ materially from those described in the forward-looking statements are detailed from time to time in the documents filed by Ameritrade with the Securities and Exchange Commission, including Ameritrade’s most recent form 10-K and 10-Q. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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Today’s Discussion

• Evolution to Acquisition

• Why is M&A so difficult?

• Why Ameritrade has been successful

• The perfect fit: TD Waterhouse USA

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Industry Consolidation

Industry Trends

1997 - - 1999 2000 2001 - - 2005

200+ Online Brokers* 100+

* Estimated based on AMTD management research.

Heavy Investment

in Technology

& Brand

Rapid Capacity

Expansion

Bubble Bursts

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IPO

Acquired NDB.com

Merged with Datek

3,001

1997

98 Acquired 6 Smaller

Brokerage Firms

1,794

3,1713,520

Announced TD Waterhouse

Deal

5,996(1)

Ameritrade Overview: Strategic GrowthTotal Accounts (000s)

1,233

Total accounts are all open client accounts (funded and unfunded), except clearing accounts.(1) As of September 30, 2005; pro forma for closing of TD Waterhouse acquisition.

2000 2001 - - - 20051999

560

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($0.60)

($0.40)

($0.20)

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06

Ameritrade EPS Performance

$1.02

$0.83

Orange dotted lines indicate Company’s earnings guidance. Earnings are per diluted share.

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Net Income Annualized Qtr ROE

$5.8M 6%

$96.5M 25.1%

1564% 318%

Market Cap

$1.0B

$8.7B

770%

ExpensesExcluding

Advertising(1)

$73.4M

$95.9M

31%

Average Client

Trades/Day

74K

146K

97%

Net Revenues

$100.3M

$274.3M

173%

(1) See attached reconciliation of financial measures.

June 2002 was prior to the merger with Datek.

QtrEnded

Jun 02

Sept 05

Change

Power of Operating Leverage and Scalability

Pre-TaxMargin

3%

58%

1833%

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Why is M&A so difficult?

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Most Mergers Fail from a Shareholder’s Perspective(1)

All Acquirors(2)

Created shareholder

value

Destroyed shareholder

value

61%

39%

Losers’ performance:

These 61% of acquirors underperformed their industry peers by 25%

(1) Source: Business Week, “The Merger Hangover: How Most Big Acquisitions Have Destroyed Shareholder Value”, October 14, 2002.

(2) Source: CFO, “Secrets of the M&A Masters; Revealing the Path to a Successful Deal”, September 2005.

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Reasons for M&A Failure

Source: Bain and Company Survey, Fall 2002. Actual category titles truncated.

% of Executives Who Cite Reason as “Major” or “Very Major”

26%

28%

34%

36%

41%

45%

50%

61%

66%

67%

Loss of clients

Core business

Bidding process

Doubts

Market conditions

Strategic fit

Failed due diligence / surprises

Cultural conflicts

I nability to realize synergies

Poor integration process

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Why Ameritrade has been so successful

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• Poor integration process

• Inability to realize

synergies

• Cultural conflicts

Ameritrade’s Viewpoint; Deal Challenges

• Plan in place / clear goals / accountability

• Continually enhance process

• Make the “tough” decisions, don’t delay

• Start integration planning early

• Drive towards common processes and

platforms

• Strong integration process

• Give authority / expect accountability

• Respect different ideas and new approaches

Concern How to Mitigate

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• People / employees

• Failed due diligence /

surprises

• Strategic Fit

• Market conditions

• Doubts

• No “Us & Them”; only “We”

• Learn from past deals

• Don’t rush process or force the deal

• Clearly define business goals

• Prioritize and align organization around

• In-depth industry knowledge

• “Always shopping”

• Ask the “silly” questions

Concern How to Mitigate

Ameritrade’s Viewpoint; Deal Challenges (cont’d)

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• Bidding Process

• Core Business

• Loss of Clients

• Best interests of Shareholders and Clients

• Business Goals, core competencies

• In-depth industry knowledge

• Understand why they are there (there is a reason)

• Understand their behavior

Concern How to Mitigate

Ameritrade’s Viewpoint; Deal Challenges (cont’d)

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Know What Shareholders Want

What They Want How We Deliver It

Return Growth in cash and earningsEPS accretion; do not

overpay

TimeHorizon for expected cash

flowsDeliver on communicated

timetable

Risk Acceptable level of risk Understand the risk

Transparency Method for measurement Clear communication

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Core

New Value Chain Steps

New Businesses

New Channels

New Geographies

New Products

New Customer Segments

Source: Chris Zook, “Beyond the Core”.

Decision Making Process

Forward IntegrationGlobal/Local

Internet New Models

Next GenerationMicro-

segmentation

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Goals of Integration

• Create state-of-the-art, low cost operations

• Preserve every client relationship

• Retain the best:

– People

– Processes

– Products and systems across both companies

• Treat every associate fairly and with respect

• Exceed transaction goals

– Synergies

– Timing

– EPS Accretion

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• Do not search for perfection (speed matters)

• Build a strong fact base early

• Momentum -- build off small “wins”

• Focus majority of efforts on the business, not the integration

• Measure service levels, productivity, business momentum and employee turnover frequently

Follow theMoney

Execute Decisions

Expeditiously

Track Progress

Run the BaseBusiness

Aggressively

• Create measures for success & targets

• Head count

• Vendors

• Equipment

• Capitalized costs

CommunicateCommunicate Communicate

Integration Planning

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Has it worked for Ameritrade?

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Datek Results

90% 94%

$145M $245M

12 months 9 months

Promised Delivered

Account Retention

Synergies from Operations

Integration Timeline

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*See attached reconciliation of financial measures.

Sept 04

Change

Jun 02

Qtr Ended

$4.8B

380%

$1.0B

Market Cap

$57.2M

886%

$5.8M

Net Income Before Taxes

$72.9M

-1%

$73.4M

Expenses* Excluding

Advertising

124K

86%68%

$100.3M74K

RevenuesAverage Client Trades/Day

$186.8M

Ameritrade closed the merger with Datek on September 9, 2002.

Datek Merger Impact on Power of Operating Leverage and Scalability

**Net Income before taxes from Ongoing Operations. See attached reconciliation of financial measures.

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“We believe these 2 deals (Datek and NDB.com) accelerated the maturity of the company (AMTD) by at least 8 years. In other words, the company is at the point now where the leverage of scale economies is delivering

45% pre-tax margins, a stage where we believe it would have taken the company 8 years to achieve through organic growth.”¹

¹Robert Sobhani, Smith Barney, October 16, 2003

Ameritrade has paid compensation for investment banking services to Citigroup within the past 12 months.Smith Barney is a division and service mark of Citigroup Global Markets Inc.

Deals: Datek Case StudyAccelerating Shareholder Value Through Merger

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TD Ameritrade: The Perfect Fit

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RIA

Long-termInvestors

Active Traders

AMTD TDW USA

Entrenched strong player

Leverage Leverage platform platform with larger with larger client baseclient base

AmerivestNew client base, suite of New client base, suite of

products, branch network, products, branch network, WICs, bank accessWICs, bank access

Entrenched strong playerEntrenched strong player

Adds accounts and trades

Adds assets and asset-based revenues

Adds advisors, assets and asset-based revenues

Strengthens core business, accelerates growth & expands earnings

TD Ameritrade – A Powerful Combination

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Combined Operating Metrics

Note: Data as of or for the quarter ended March, 2005. Ameritrade metrics adjusted for the sale of Ameritrade Canada

(1) Total accounts for Ameritrade are all open client accounts (funded and unfunded), except Clearing accounts.

(2) Total accounts for TD Waterhouse U.S.A. are all funded and unfunded client accounts.

TD Ameritrade (As Adjusted)

Average client trades per day

Qualified accounts

164,000

1,721,000

75,000

1,527,000

239,000

3,248,000

Total accounts3,652,000 2,279,000 5,931,000

Total client assets ($B) $75.6 $143.4 $219.0

RIA relationships 1,400 2,600 4,000

Branches 4 143 147

(1) (2)

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If it’s good for shareholders, clients, and associates, do it!

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Appendix

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$ % of Rev. $ % of Rev. $ % of Rev.

Expenses Excluding Advertising (1)Expenses excluding advertising 95,856$ 34.9% 72,886$ 39.0% 73,420$ 73.2%Plus: Advertising 20,005 7.3% 19,950 10.7% 16,781 16.7%Total expenses 115,861$ 42.2% 92,836$ 49.7% 90,201$ 90.0%

Note: The term "GAAP" in the following explanations refers to generally accepted accounting principles in the United States.

(1) Expenses excluding advertising is considered a Non-GAAP financial measure as defined by SEC Regulation G. Expenses excluding advertising consists of total expenses, adjusted to remove advertising expense. We consider expenses excluding advertising 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. Expenses excluding advertising should be considered in addition to, rather than as a substitute for, total expenses.

Sept. 26, 2003Quarter Ended

AMERITRADE HOLDING CORPORATION

June 28, 2002

RECONCILIATION OF FINANCIAL MEASURESIn thousands, except percentages(Unaudited)

Sept. 30, 2005

Reconciliation of Financial Measures

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