We cannot tell you how incredibly proud we are of our sixth consecutive record year. We achieved historic trading levels and made significant progress in our asset-gathering strategy. Every decision made over the past two years was geared to deliver on these priorities in 2008. Despite ongoing challenges in the financial markets, we have delivered. Additionally, TD Ameritrade enters 2009 with a strong balance sheet, a solid capital base, good liquidity and healthy cash flows.

THREE REASONS FOR A RECORD 2008

Increased Retail Investor Engagement

First, retail traders remained active throughout 2008. Trades per day were up 23 percent over last year, expanding our leadership position over our closest competitor.

Long-term investor engagement also remained strong, with clients rebalancing or diversifying their portfolios to better reflect the changing economic climate. In any environment, but particularly this one, having a clear strategy, and staying disciplined, is essential. We believe that by providing the tools and services to help investors better manage their portfolios, we will attract new clients and further enhance retail engagement. Research studies continue to show good long-term growth in trading, and we will focus on further extending our leadership position.

Improved Asset Retention and Traction in Asset Gathering

Second, we significantly improved asset retention and delivered legitimate traction in asset gathering. As we began the year, we put in place a number of initiatives to improve and extend our client relationships and the services we provide to them. We invested in service capabilities, expanding our offerings to better help clients meet their financial goals. We made investments in our sales team, adding more people and improving their productivity. We shifted our call center focus from purely service to service and sales, increasing referrals to the branches from 20 per day to over 500 per day. We also developed a new client segmentation model,which allows us to better serve all clients. And finally, we implemented a multi-channel strategy focused on providing a consistent TD Ameritrade client experience across all touch points.

As a result, net new assets for 2008 grew to $23 billion, nearly double the amount we generated in fiscal 2007, putting our rate of growth on par with today's premier asset gatherers.

Strong Financials

Third, we've consistently made prudent, strategic decisions in managing our balance sheet. We believe TD Ameritrade's record growth and strong returns stand as a testament to this approach. 2008 was no exception, as we achieved:

• Record net income of $804 million, or $1.33 per diluted share, up 24 percent from a year ago, in a year when the vast majority of financial services companies were significantly down;

• Record net revenues of $2.5 billion, 59 percent of which were asset based;

• Record EBITDA of $1.4 billion, or 57 percent of net revenues*;

• Record pre-tax income of $1.3 billion and 50 percent pre-tax margin;

• Client assets of approximately $278 billion, including $52 billion in client cash and money market funds;

• Record net new assets of approximately $23 billion, an increase of 84 percent year over year; and

• Return on average stockholders' equity of 31 percent.

MANAGING THROUGH THE CYCLE

We are in unprecedented times, resulting in historic actions by the U.S. Federal Reserve, and by governments and bankers worldwide. Although we have a strong cash position, we will continue to build our cash reserves so that we can take advantage of strategic acquisitions that increase market share or provide additional operational or technological benefits. It is in times like these that strong companies, such as TD Ameritrade, are able to become even stronger by capitalizing on the opportunities in front of them to improve their competitive advantage and better position themselves for the future. It is our plan to do just that.

In light of the uncertain environment, we will reprioritize select initiatives to better focus on efficiencies, and we will pare back on discretionary expenses. We will also continue to thoughtfully invest in areas that take market share, drive incremental trades and capture net new assets. We've been smart in our investments to date – they have worked for us – and we will conservatively continue with that same philosophy in 2009. We expect the end result to be a Company that is better positioned relative to the competition as we come out of this challenging market cycle.

PROVIDING A SUPERIOR RETAIL INVESTOR EXPERIENCE

The retail investor's approach is simple: some are traders focused on the short-term opportunities in the market; others are independent investors concerned about long-term financial goals; and still others rely on an advisor. We serve them all.

We have a multi-channel distribution network that allows our clients to choose how they interact with us: through the Web, by speaking with one of our 1,200 service representatives at our call centers, or by visiting any of our more than 100 branches staffed by 800 investment consultants. For those who prefer an advice-driven experience, a network of more than 4,500 independent Registered Investment Advisors is available to them.

Excellent service, combined with value-added products, is essential. TD Ameritrade's platform provides outstanding trading tools and a very competitive (and growing) suite of investment solutions, including planning tools, cash management and packaged products with embedded advice. We will continue to make significant enhancements to our value proposition and to allocate resources to deliver a superior client experience.

COMMITMENT TO DOING WHAT'S RIGHT

Our management team and board of directors are resolved to do what we believe is best for the Company, our associates, clients and shareholders. We delivered on that promise when The Reserve Primary Fund broke the buck. TD Ameritrade was the first company to step up and help protect clients by committing up to $50 million toward clients' positions held in The Primary Fund, a money market mutual fund managed by The Reserve, an independent mutual fund company. We are a trusted advocate for the retail investor, and we believe this was the right thing to do.

WELL POSITIONED FOR THE FUTURE

Lastly, our mission is to be the investment firm of choice for the typical family, as well as being one of the best-run companies in the world. Responsible management will be measured by creating value for our clients, our associates and our shareholders.

The TD Ameritrade management team and associates remain focused on achieving our mission and delivering value to our stakeholders. This is what drives us as a firm and guides us in our day-to-day actions.

Sincerely,

* See reconciliation of non-GAAP financial measures on page 84.
TD Ameritrade and The Reserve are separate, unaffiliated companies.