Ameritrade Eliminates $152 Million Debt to Add $72 Million of Shareholder Value While Producing a 23% Operating Margin During Second Quarter of FY 2001.

Business Editors

OMAHA, Neb.--(BUSINESS WIRE)--April 24, 2001

Tops off Results with Third Best Quarter for New Accounts

and Trading Activity; Client Experience and Annualized Savings of $22

Million Underlie Positive Outlook for Profitability

Ameritrade Holding Corporation (Nasdaq:AMTD) produced a 23 percent operating margin, despite a dramatic pull-back of market activity during the Company's second fiscal quarter ended March 30, 2001.

While the Nasdaq had a 50% decline in the last six months, Ameritrade increased new accounts at an annualized rate of 44%.

Ameritrade demonstrated consistent financial leverage. Ameritrade reported:

Second Quarter Highlights

-- $26.9 million or 23% operating margin, excluding advertising, OnMoney
development and bond conversion expenses;

-- 138,000 new accounts opened, third best quarter ever achieved;

-- Eliminated $152.4 million of convertible debt, which added $71.7 million of
shareholders' value;

-- Reported net loss of ($0.30) per share, and, excluding the one-time debt
conversion expenses of ($0.21), met ($0.09) consensus estimates;

-- Executed an average of 113,000 trades per day; and

-- Acquired TradeCast Inc. for active and semi-professional trader segments.

"A true testament of Ameritrade's long-term value is how we manage operations during difficult periods," said Randy MacDonald, chief financial officer of Ameritrade Holding Corporation. "In the coming quarters Ameritrade will demonstrate that we made the right decisions during a tough quarter - reducing expenses, building our brand, and leveraging our technology."

Cost Management

Ameritrade continued to occupy the market position as the low-cost producer among the largest publicly traded online brokerages. The Company cited the management of operating costs as the catalyst to delivering meaningful client value and financial performance. Ameritrade's cost cutting measures taken during the first six months of FY 2001 have laid the foundation for a breakeven next quarter and anticipated profitability going forward, assuming trading activity, margin loans and other revenue sources are in-line with current levels. Ameritrade reported:

-- 39% sequential decrease in OnMoney development expenses; and

-- Approximately $22 million in annualized savings during the

first six months.

"A key competitive strength for our business is the low-cost of our operations," said MacDonald. "Our low-cost model allows us to be incredibly nimble and adjust to any market condition. We managed our operations during our second quarter to begin posting profitable quarters in the very near-term."

Leveraging the Brand

Ameritrade opened 138,000 new accounts during the second fiscal quarter of 2001, reestablishing the second quarter as the third best quarter in its history. The Company invested $45.6 million during the quarter to aggressively build its brand as part of its long-term strategy. Ameritrade reported:

-- 138,000 new accounts during the second quarter of FY 2001

compared to 134,000 new accounts in the previous quarter;

-- 49% increase to 1,478,000 total accounts vs. 992,000 accounts

at the same time last year; and

-- $330 cost per new account during the second quarter.

"Considering the adverse market, our account acquisition this quarter was exceptional," said MacDonald. "When you look at the net present value of these accounts, you see compelling evidence of the long-term quality relationships we are establishing with clients for a relatively low marketing spend. We continue to attract quality accounts each quarter proving the competitive advantage built into our brand. Given the adverse market conditions and a historically slow market for new accounts during the Summer we've trimmed the advertising budget accordingly," said MacDonald.

Client Experience

Ameritrade announced several enhancements to the client experience:

-- Electronic confirmations and statements - streamlining and

simplifying the accounting process for clients and the

Company;

-- Personal Finance Center - delivering the value of OnMoney's

account aggregation and financial planning tools to Ameritrade

clients;

-- Mutual Fund Center - providing clients customizable analysis

tools designed to help navigate the more than 10,000 mutual

funds available to Ameritrade clients; and

-- Express Account Opening for IRAs - allowing new IRA clients to

open and fund accounts entirely electronically.

Ameritrade continued to demonstrate quantifiable value to clients in the form of speed, reliability and execution. Ameritrade reported:

-- Fastest loading consumer home page(a) for a record 57 weeks;

-- 5.5 seconds average transaction time(a) during Ameritrade's

second quarter;

-- Over $14 million in savings to clients during the second

quarter by obtaining prices better than the National Best Bid

or Offer (NBBO) for their trades.

(a) as rated by Keynote.com, a leading independent assessor of online performance

"The client experience is everything in our business," said MacDonald. "Over the long-term, our focus on the client will return tremendous value to our shareholders."

Strategy

Ameritrade is pursuing a number of strategic initiatives to diversify revenue while enhancing the client experience.

Business-to-Consumer: Services Tailored to Needs

This quarter Ameritrade introduced a client segmentation strategy to deliver products and services across four segments. This strategy will allow Ameritrade to completely cover the needs of all types of self-directed investors. The four segments are as follows:

-- Ameritrade Pro(TM) - geared for the highly active professional

and semi-professional traders by incorporating the advanced

functionality added with Ameritrade's acquisition of

TradeCast;

-- Ameritrade Plus(TM)- personalized investing experience to

clients who want a higher level of service;

-- Ameritrade(R)- familiar $8, value-oriented approach to

self-directed investing; and

-- FreeTrade(R) - virtual, commission-free transaction platform.

The initial part of the four segments will be launched during the Summer of 2001.

"We segmented our client base according to the needs of investors," said MacDonald. "We can now reach every type of retail investor with services tailored to match their investing behavior."

Business-to-Business: Expanding the Distribution Channels

On the business-to-business side, Ameritrade is expanding the distribution of its platform to capture greater market share. During the second quarter, the Company continued to partner with best-of-breed companies to diversify revenue beyond the retail side of Ameritrade's platform.

-- The Principal Financial Group(R) - enabling 1.4 million

retirement plan members of The Principal(R) to self-direct and

manage their 401(k) investments

-- Persumma Financial LLC - partnering with a member of the

MassMutual Financial Group to provide self-directed retirement

accounts

-- Macquarie Bank - securing a foothold in rapidly growing

Australian market; and

-- SK Securities - enabling SK Securities to be the first South

Korean brokerage firm to support the trading of U.S.

securities.

"Diversification of revenue is a big issue in our industry. However, I think a lot of people see the ideas of diversified revenue and diversified businesses as one and the same," said MacDonald. "While some of our competitors are diversifying by changing the focus of their business, Ameritrade can increase sources of revenue by continuing to do what we do best - leveraging our technology and trading engine to provide an excellent client experience. Our diversification strategy is to extend our trading platform into B2B spaces and realize the potential already built into our business model. We have built the pipe. Now we are tapping new sources for additional flow through this pipe."

Trading Activity

Ameritrade moved toward its goal of becoming the largest retail agency brokerage in the world. Ameritrade handled more trades per day on average than last quarter. Ameritrade clients averaged approximately 5 trades per account during the second quarter. Ameritrade reported:

-- Growth in trading activity, averaging 113,000 trades per day

in the second quarter compared to 111,000 trades per day

during the previous quarter.

Strengthening the Balance Sheet

During the quarter, the Company retired $152.4 million of its convertible debt. The redemption of 75% of the convertible subordinated notes resulted in $71.7 million of additional shareholders' equity.

Last week, the Company paid down an additional $16 million of debt. Since the beginning of this fiscal year, Ameritrade has reduced over 60% of its debt.

"Ameritrade is demonstrating its financial clout now to promote the long-term health of the Company moving forward," said MacDonald.

OnMoney Investment

Ameritrade invested $10.1 million during the second quarter in its separately managed subsidiary, OnMoney. The investment represents a 39% reduction in operating expenses from the previous quarter.

"The development costs of OnMoney are essentially paid," said MacDonald. "We've significantly reduced the ongoing operating expenses and are positioned both financially and strategically to obtain a return on our investment."

OnMoney offers Ameritrade a broad channel into the business-to-business and business-to-employer spaces. For businesses such as banks and financial institutions, OnMoney is an application service provider (ASP). OnMoney can build functionality such as account consolidation and financial planning tools into a company's Website and/or manage the entire site. For employers, OnMoney provides a unique employee benefit destination to help employees manage their finances and retirements.

"The winners in online financial services will need to open new doors for clients to help simplify their financial lives," said MacDonald. "OnMoney provides a channel for us to reach more clients and business partners with an entire suite of solutions to meet their needs. Now with the launch of Ameritrade's Personal Finance Center, powered by OnMoney(R), our clients can view and develop detailed plans for their entire financial life in a single location."

Nonrecurring Expense

In February 2001, the Company repurchased $152.4 million of its convertible subordinated notes for approximately 4.7 million shares of Class A common stock and $58.7 million of cash. This repurchase resulted in nonrecurring debt conversion expense of approximately $62.1 million, or $0.21 per share.

Outlook

Ameritrade has updated its current projections for the Company's main business drivers for fiscal year 2001 in the Investor Relations "Outlook" section of its corporate website located at www.amtd.com.

About Ameritrade

Ameritrade Holding Corporation (www.amtd.com) is a pioneer in the online brokerage industry with a 25-year history of providing clients a self-directed approach to brokerage services. The award-winning Company, through its broker/dealer subsidiaries, provides brokerage and clearing services to self-directed individual consumer investors and to financial institutions.

This document contains forward-looking statements regarding future events or the future performance of the company. Various factors could cause actual results to differ materially from those anticipated. Readers of this document are advised to check the documents filed by the company with the Securities & Exchange Commission, including Form 10-K and 10-Q for descriptions of risks and uncertainties related to forward-looking statements.

Ameritrade Pro and Ameritrade Plus are trademarks of Ameritrade Holding Corporation. Ameritrade and FreeTrade are registered trademarks of Ameritrade Holding Corporation. "The Principal" is a registered trademark referring to Principal Life Insurance Company, a member of the Principal Financial Group. OnMoney is the registered trademark of OnMoney Financial Service Corporation.

                    AMERITRADE HOLDING CORPORATION
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                  In thousands, except per share data

                                Quarter ended     Six months ended
                           --------------------- ---------------------
                            Mar. 30,  Mar. 31,   Mar. 30,    Mar. 31,
                               2001     2000      2001         2000
                           ---------- ---------- ---------- ----------
Revenues:
 Commissions and clearing
  fees                     $  76,378  $ 125,968  $ 158,459  $ 203,560
 Interest revenue             52,264     62,486    113,634    111,427
 Other                         5,164      5,632     10,159     10,336
                           ---------- ---------- ---------- ----------
    Total revenues           133,806    194,086    282,252    325,323

 Customer interest expense    14,819     19,460     32,344     36,280
                           ---------- ---------- ---------- ----------

Net revenues                 118,987    174,626    249,908    289,043
                           ---------- ---------- ---------- ----------

Operating expense:
 Employee compensation and
  benefits                    37,718     34,570     73,811     67,989
 Communications                9,955      9,851     18,386     17,082
 Occupancy and equipment
  costs                       20,655     14,059     42,317     26,930
 Professional services        11,576     10,688     24,524     25,799
 Interest on borrowings        2,856      4,266      7,537      7,831
 Other                         9,309     11,047     19,516     19,569
                           ---------- ---------- ---------- ----------
Total operating expenses      92,069     84,481    186,091    165,200
                           ---------- ---------- ---------- ----------

Operating margin              26,918     90,145     63,817    123,843

Advertising                   45,606     54,774    103,084    113,436
OnMoney development           10,050     29,818     26,633     38,549
Debt conversion expense       62,082          0     62,082          0
                           ---------- ---------- ---------- ----------

Income (loss) before income
 taxes                       (90,820)     5,553   (127,982)   (28,142)

Provision (benefit) for
 income taxes                (36,629)     2,351    (50,759)    (9,633)
                           ---------- ---------- ---------- ----------

Net income (loss)          $ (54,191) $   3,202  $ (77,223) $ (18,509)
                           ========== ========== ========== ==========


Basic earnings (loss) per
 share                     $   (0.30) $    0.02  $   (0.43) $   (0.11)
Diluted earnings (loss) per
 share                     $   (0.30) $    0.02  $   (0.43) $   (0.11)

Weighted average shares
 outstanding - basic         179,462    174,621    178,049    174,581
Weighted average shares
 outstanding - diluted       179,462    176,099    178,049    174,581



                    AMERITRADE HOLDING CORPORATION
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                             In thousands

                                                Mar. 30,    Sept. 29,
                                                  2001         2000
                                              ------------ -----------
Assets:
   Cash and cash equivalents                   $   26,806   $  122,351
   Segregated cash and investments              1,662,034      215,956
   Customer receivables                         1,378,384    2,926,981
   Other                                          575,531      532,948
                                              ------------ -----------
      Total assets                             $3,642,755   $3,798,236
                                              ============ ===========

Liabilities and Stockholders' Equity

Liabilities:
   Customer payables                           $2,751,829   $2,618,157
   Notes payable                                  122,545      275,000
   Other                                          570,686      640,911
                                              ------------ -----------
      Total liabilities                         3,445,060    3,534,068

Stockholders' equity                              197,695      264,168
                                              ------------ -----------

      Total liabilities and stockholders'
       equity                                 $ 3,642,755   $3,798,236
                                              ============ ===========


                    AMERITRADE HOLDING CORPORATION
                        SELECTED OPERATING DATA


                                                 Quarter ended
                                         -----------------------------
                                          Mar. 30,  Dec. 31, Sept. 29,
                                            2001     2000       2000
                                         --------- --------- ---------

Trading days                                    62        63        63
Average customer trades per day            113,164   110,734   105,540
Assets in customer accounts (in billions)    $23.5     $27.9     $36.0

Core discount brokerage open accounts(b) 1,478,000 1,356,000 1,233,000


      (b) This relates to the core discount brokerage account base only.
Total customer base including core accounts and non-core accounts
(primarily clearing accounts and bank referral accounts) total
1,647,000 at 3/30/01.