Broker Dealer Marketing Slides 3_30_2015

Discount Brokers
Teach-in
March 26, 2015
EQUITY I RESEARCH
RBC Capital Markets, LLC
Bulent Ozcan, CFA (Analyst) (212) 863-4818 bulent.ozcan@rbccm.com
This report is priced as of market close March 25, 2014 EST.
All values in U.S. dollars unless otherwise noted.
For Required Conflicts Disclosures, please see page 26.

RBC Capital Markets2
Table of Contents
I. Our Recommendations
II. Key Industry Drivers
III. Company Tear Sheets
IV. Appendix - Comp Sheets and Models

Our Recommendations
Name Ticker Rating
Price
Target Price
Implied
Return Key Message
Charles Schwab SCHW Outperform $38 $29.79 27.6%
Strongest franchise among peers with favorable secular tailwinds;
best positioned for higher interest rates
E*TRADE Financial ETFC Outperform $35 $27.59 26.9%
A special situations story. Expect significant increase in excess
capital
TD Ameritrade AMTD Sector Perform $43 $37.25 15.4%
Great company that has a unique "regulation light" business model,
but shares have the least upside in the group

Key Industry Themes
Higher interest rates
 We expect rising interest rates to significantly lift earnings for discount brokers
 Discount brokers tend to have low duration investment portfolios
Do-it-yourself investing
 Large numbers of investors leaving their financial advisors, question their value
 Discount brokers, with their focus on technology and low cost, are able to appeal to these investors
Growth in independent RIAs
 Wirehouses pushing their advisors to focus on wealthier clients leads to departures. We expect this trend to
accelerate in 2015 with more advisors becoming independent RIAs. Discount brokers could benefit from this as they
serve as custodians
Increase in popularity of ETFs
 While a threat to active managers, increase in popularity of ETFs is a positive development for discount brokers
 Discount brokers charge ETF providers for shelf-space, their clients trading commissions, RIAs asset based fees for
ETFs sold commission free on their platform and Schwab offers proprietary ETFs
Trading volumes
 Trading volumes continue to be a meaningful revenue driver
 Volumes are low relative to levels seen prior to the financial crisis and our in-depth analysis does not point to
structural changes; but we stay away from making recommendations based on hopes of increasing volumes

Key Industry Drivers – Why Mass Affluent Investors Choose DIY Approach
• Mass affluent investors are continuing to question the value of using an advisor. This should bode well for discount
brokers
• A Deloitte survey revealed that the percentage of mass affluent individuals using advisors has declined from 42
percent prior to the financial crisis to 33 percent after the crisis
• The chart below shows the reasons why fewer mass affluent investors are using financial advisors
• We do not expect the pendulum to swing back with more mass affluent going from DIY investing to using an
advisor
Source: Deloitte; RBC Capital Markets
6%
7%
8%
10%
15%
19%
20%
23%
27%
27%
0% 5% 10% 15% 20% 25% 30%
I thought my financial advisor was not competent
I found another advisor who I thoughtwas better for me
Transitioned to a more conservative portfolio and didn't need advice anymore
My financial advisor did not offer metheright investment options
The quality of advice received was poor/below my expectations
Had moretime to manageinvestments on my own
Realized I enjoy managing investments on my own
Felt doing it on my own would yield better outcomes
Felt the cost of financial advicewas no longer worth it
Didn't trust my advisor anymore, felt they were putting own interests ahead of mine

$27.1
$35.7
$62.6
$58.7
$55.9
$64.3
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$10
$20
$30
$40
$50
$60
$70
$80
2010 2011 2012 2013 2014 2015E
Amount of Total AUM Leaving Wirehouses As % of Total AUM Moving
Key Industry Drivers – Independent RIA Opportunity
Top Custodians to RIAs by # of Accounts
Wirehouse Departures ($B)
• We expect wirehouse departures to accelerate, with more
advisors choosing to become independent RIAs
• Wirehouses are pushing their advisors to drop smaller
accounts in order to improve profitability
• We believe that discount brokers can benefit from this as
they are custodians to independent RIAs
Source: InvestmentNews; RBC Capital Markets estimates
($ in billion)
# of RIA
clients
RIA Assets
in Custody
Schwab Advisor Services 7,000 $1,081.0
TD Ameritrade Institutional 4,500 $300.0
Fidelity Institutional Wealth Services 2,948 n/a
Trade-PMR Inc. 1,525 n/a
Interactive Brokers 1,388 $150.0
Shareholders Service Group 1,255 n/a
Scottrade Advisor Services 1,100 n/a
Pershing Advisors Solutions 562 $106.4
Folio Institutional 325 n/a
Raymond James Investment Advisors Division 285 $100.0
LPL Financial LLC 282 $78.0
Source: InvestmentNews; RBC Capital Markets
Client Assets Under Management ($mm)
$2,498
$2,025
$672
$290
$2,464
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14
Bank of America Merrill Lynch Morgan Stanley
Ameritrade E*Trade
Charles Schwab
Source: InvestmentNews; RBC Capital Markets

$(800)
$(600)
$(400)
$(200)
$-
$200
$400
$600
$800
$1,000
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Index domestic equity mutual funds
Domestic equity ETFs
Actively managed domestic equity mutual funds
Key Industry Drivers – Popularity of ETFs
ETF AUM
Flows into Passive Funds
• Our analysis indicates that actively managed funds
continue to underperform
• ETF AUM in the US has grown at a 22.7% CAGR since
2005
• Worldwide, ETF AUM is expected to double from $2.4
trillion to over $5 trillion
• Discount brokers stand to benefit from this trend
Source: Morningstar; RBC Capital Markets
Source: ICI; RBC Capital Markets
Passively Managed, Long-term ETF AUM
276
382
547
465
686
886
934
1,201
1,474
1,735
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
AUM($B)

Key Industry Drivers – Rate Sensitivity
Federal Funds Rate
Interest Rate Sensitivity
32.6%
21.4%
8.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
SCHW ETFC AMTD
• This chart shows the impact on 2014 earnings per share
for a 50 basis point increase in interest rates
• Charles Schwab’s earnings appear to be the most
sensitive to rising interest rates
• TD Ameritrade is the least sensitive as a majority of
revenues are from trading commissions
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
• Federal Funds rate is at record low levels
• Tom Porcelli, our Chief US Economist, expects the 3-
month rate to rise to 90 bps by end of 2015
• Little risk from sudden move in rates. Michael Cloherty, our
Head of US Rate Strategy, expects a gradual increase in
rates
Source: Board of Governors of the Federal Reserve System; RBC Capital Markets
Source: RBC Capital Markets estimates

Key Industry Drivers – Trading Volumes
TD Ameritrade (AMTD)
E*TRADE Financial (ETFC)
Source: FactSet; Company Filings; RBC Capital Markets
Charles Schwab (SCHW)
• While trading volume used to be an important value
driver, it does not appear to be the case more recently
• The scatter graphs show percentage change in share
price and monthly trading volume since January 2009.
There seems to be little correlation between change in
the share price and trading volume at the companies
y = 0.077x + 0.0179
R² = 0.014
(20.0%)
(15.0%)
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
(40.0%) (30.0%) (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0%
y = 0.0307x + 0.0138
R² = 0.0016
(20.0%)
(15.0%)
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
(40.0%) (30.0%) (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0%
y = 0.2883x + 0.0178
R² = 0.0698
(40.0%)
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
(40.0%) (30.0%) (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0%

How Do Discount Brokers Make Money?
• The chart to the right shows the revenue
breakdown for Charles Schwab
• Today, fee-based revenues (asset management)
and spread-based revenues (interest revenues)
make up the largest portion of revenues at
Schwab
39% 40%
15%
49%
21%
38%
7%
27% 42%
12%
6%4%
0%
20%
40%
60%
80%
100%
120%
1990 2000 2014
Commission revenues Interest revenues Asset management Other
15%
43%
25%
38%
19% 60%
42%
36%
10%
6% 5%2%
0%
20%
40%
60%
80%
100%
120%
SCHW AMTD ETFC
Commission revenues Spread revenues Fee revenues Other
• Schwab has focused early on asset management
and is the largest custodian to RIAs
• TD Ameritrade is still transaction oriented, but
has been diversifying into fee based products
• E*TRADE is transaction oriented, but generates
a large portion of revenues by investing its
clients’ money
Source: Company reports
Source: Company reports

Product Offering of Public Discount Brokers
AMTD SCHW ETFC
Brokerage
Full range of investment products   
Third-party research   
In-house research   
Mutual funds
Proprietary funds   
Third-party funds   
Exchange Traded Funds
Proprietary funds   
Third-party funds   
Advice - In-House
Investment advice   
Tailored portfolio construction   
Portfolio management   
Separately managed accounts   
Financial consultants ~700 1,200 300
RIA relationships ~5,000 7,000 
Number of branches 105 300+ 30
Corporate services
Retirement plans (401k)   
Equity compensation plans   
Banking services
Full service bank   
Trust services
Custody services   
Administrative trustee services   
Average retail client assets -estimate $100,000 $250,000 $65,000
Average age of retail client Mid 40s Mid 50s Mid 40s
• Charles Schwab has transformed itself into a full-
service brokerage house
• TD Ameritrade, similar to Charles Schwab, has
become an asset gatherer
• E*TRADE, on the other hand, has returned to its
roots and relies on a transaction oriented
business model
Source: RBC Capital Markets

$20
$22
$24
$26
$28
$30
$32
03/20/2014 08/12/2014 01/05/2015
The Charles Schwab Corporation (Outperform rating; PT: $38)
Investment Thesis Valuation
Model
Holding Style
Our View: Charles Schwab stands out as having the strongest
franchise amongst peers. We believe that its diversified
business model will allow the firm to capitalize on numerous
secular tailwinds to generate asset growth. Furthermore, the
firm is the most asset sensitive and should benefit
disproportionately from higher rates. We expect EPS to grow at
a CAGR of over 25% over the next three years
Potential Catalysts:
• Growth in independent RIAs
• Opportunity to grow advice-based revenues
• Increase in popularity of ETFs
• Robo-advisor opportunity
• Higher interest rates
• Expense saves
Differentiated Work: We have done an in-depth study of
industry dynamics and extensive analysis around the
company’s interest rate sensitivity
RBC vs. Consensus: We are meaningfully above consensus
price target. While we do not differ significantly from the street
view on earnings, we believe that Charles Schwab’s business
model and ability to capitalize on secular trends warrants a
premium P/E multiple. We expect Schwab to generate the most
significant margin expansion over the next three years relative
to its peers
0% 20% 40% 60%
GARP
Index
Growth
Yield
($MM) 2012A 2013A 2014A 2015E 2016E 2017E
Revenues $4,883 $5,435 $6,058 $6,555 $7,801 $8,542
Op. Inc. 1,450 1,705 2,115 2,446 3,489 4,052
EPS $0.69 $0.78 $0.95 $1.10 $1.58 $1.82
Margins 29.7% 31.4% 34.9% 37.3% 44.7% 47.4%
NIM 163bps 152bps 164bps 166bps 175bps 182bps
Source: FactSet; RBC Capital Markets estimates
Price Chart (+2.7%)
RBC Price Target Market Valuation
CY 2016 EPS $1.58 Market Cap ($m) $39,056
P/EMultiple 26.0x Current Price $29.79
Valuation $41 Consensus PT $32
Price target $38 LTMP/E 24.5x
Ke 10.7% 2015 P/E 26.9x
Implied Upside 27.2% 2016 P/E 18.9x

E*TRADE Financial Corporation (Outperform rating; PT: $35)
Model
Our View: E*TRADE Financial is a special situations story with
significant upside. Having realigned its legal entities, we expect
excess capital at the parent company to grow from $310 million
today to $1.4 billion over the next two years. We expect
balance sheet growth to accelerate, as we view the $50B size
limitation as a temporary constraint
• Realignment of legal entity structure
• Growth in excess capital
• Higher interest rates
• Balance sheet growth
Differentiated Work: Detailed analysis on excess capital
position and a deep dive into the firm’s interest rate sensitivity
RBC vs. Consensus: We believe that the market
underestimates the firm’s earnings power. Our EPS and PT are
above consensus. We don’t believe that the street has modeled
a reduction in safety buffer to cross the $50b mark in 2015. We
are also assigning a value to the firm’s deferred tax assets
($MM) 2012A 2013A 2014A 2015E 2016E 2017E
Revenues $1,899 $1,724 $1,814 $1,915 $2,129 $2,348
Op. Inc. 383 305 633 662 772 1,003
EPS ($0.39) $0.29 $1.00 $1.29 $1.55 $2.09
Margins 20.2% 17.7% 34.9% 34.6% 36.3% 42.7%
Holding Style Price Chart (+8.4%)
0% 20% 40% 60%
GARP
Index
Growth
Yield
$15
$17
$19
$21
$23
$25
$27
$29
03/20/2014 08/12/2014 01/05/2015
Valuation $36 Implied Upside 27.6%
Valuation -PV $33 Consensus PT $28
Value of DTA $2 LTMP/E 22.5x
Price target $35 2015 P/E 24.1x
Ke 11.0% 2016 P/E 18.3x

TD Ameritrade Holding Corporation (Sector Perform rating; PT: $43)
Model
Our View: There is a lot to like about TD Ameritrade. It is
running a "regulation light" model, which we view as a unique,
competitive advantage. We would describe the management
team as extremely shareholder-friendly and view the firm as a
likely takeover target. However, we are seeing more upside in
other names in the sector
• TD Ameritrade is a capital return story.
• "Regulation light" model provides the firm a competitive
advantage
• Favorable secular trends
• An attractive takeover target
Differentiated Work:
We have taken an in-depth look at secular trends, including the
wealth transfer opportunity
RBC vs. Consensus: Our earnings estimates are below
consensus figures as we do not have high conviction on trading
volumes rising meaningfully. While most see ETFC as a
takeover target, we believe TD Bank could be a natural buyer of
AMTD
($MM) 2012A 2013A 2014A 2015E 2016E 2017E
Revenues $2,641 $2,764 $3,122 $3,352 $3,759 $4,109
Op. Inc. 934 1,055 1,284 1,378 1,649 1,848
EPS $1.06 $1.22 $1.42 $1.53 $1.85 $2.10
Margins 35.4% 38.2% 41.1% 41.1% 43.9% 45.0%
Holding Style Price Chart (+4.3%)
0% 10% 20% 30% 40%
GARP
Growth
Index
Yield
$25
$30
$35
$40
03/20/2014 08/12/2014 01/05/2015
Valuation $46 Consensus PT $39
Price target $43 LTMP/E 20.8x
Ke 8.9% 2015 P/E 23.4x
Implied Upside 15.6% 2016 P/E 18.6x

Comp Sheet
`
Market Current Price 52-week Div. Enterprise Implied
Company Ticker Rating Cap ($m) Price Target High Low Yield Value ($m) 2014A 2015E 2016E 2014A 2015E 2016E 2014A 2015E 2016E Total Upside
Discount Brokers
Charles Schwab Corp SCHW Outperform $39,056 $29.79 $38 $31.73 $23.35 0.81% $19,224 $0.95 $1.10 $1.58 $0.95 $1.09 $1.54 24.5x 26.9x 18.9x 28.4%
TD Ameritrade Holding Corp AMTD Sector Perform 20,247 37.25 43 38.74 28.34 1.61% 16,285 1.46 1.61 1.92 1.46 1.67 2.09 20.8x 23.4x 18.6x 17.0%
E*Trade Financial Corp ETFC Outperform 7,996 27.59 35 28.65 18.20 0.00% 11,954 1.12 1.29 1.55 1.12 1.12 1.47 22.5x 24.1x 18.3x 26.9%
Interactive Brokers Group, Inc IBKR -- 1,978 33.83 -- 34.56 20.35 1.18% (10,777) -- -- -- 0.51 1.24 1.45 25.6x 26.6x 22.7x --
Mean -- -- -- -- -- 0.81% -- -- -- -- -- -- -- 23.4x 25.3x 19.7x 24.1%
Median -- -- -- -- -- 0.81% -- -- -- -- -- -- -- 23.5x 25.4x 18.8x 26.9%
Min -- -- -- -- -- 0.00% -- -- -- -- -- -- -- 20.8x 23.4x 18.3x 17.05%
Max -- -- -- -- -- 1.61% -- -- -- -- -- -- -- 25.6x 26.9x 22.7x 28.4%
S&P 500 $18,512,397 $2,091.50 $2,119.59 $1,814.36 2.01% na na na na na na na na na na na
S&P 500 / Asset Mgmt & Custody Banks 239,328 $224.32 229.79 188.92 1.81% na na na na na na na na na na na
S&P Comp. 1500 / Asset Mgmt & Custody Banks 263,626 $242.91 247.39 205.51 1.84% na na na na na na na na na na na
S&P Mid Cap 400 / Asset Mgmt & Custody Banks 20,718 $433.34 439.45 352.88 2.26% na na na na na na na na na na na
S&P 500 / Financials 3,000,214 $328.61 337.84 286.83 1.81% na na na na na na na na na na na
P/EConsensus CY EPSCY EPS Estimates
Discount Brokers Coverage
Source: FactSet; RCB Capital Markets estimates
Priced as of 03/25/2015
YTD YTD
Company Ticker 2014A 2015E 2016E 2014A 2015E 2016E 2014A 2015E 2016E 2014A 2015E 2016E 2014A 2015E 2016E 2014A 2015E 2016E 2014A 2015E 2016E Price Perf. Total Return
Discount Brokers
Charles Schwab Corp SCHW 8.3x 7.2x 5.2x 8.1x 7.2x 5.5x 3.3x 3.1x 2.8x 3.8x 3.5x 3.0x 30.0x 28.4x 21.2x 3.2x 2.9x 2.4x 14.4x 15.2x 9.1x (3.2%) (3.0%)
TD Ameritrade Holding Corp AMTD 11.0x 10.4x 8.8x 11.0x 9.9x 8.2x 4.1x 4.1x 4.2x 12.8x 11.2x 9.5x 22.3x 19.7x 16.8x 5.1x 4.8x 4.2x 17.7x 17.3x 14.6x 2.91% 3.38%
E*Trade Financial Corp ETFC 18.0x 15.6x 13.6x 16.3x 17.0x 14.2x 1.5x 1.3x 1.2x 2.2x 2.0x 1.8x 16.6x 16.4x 12.7x 6.6x 6.5x 5.9x na na na 11.52% 11.52%
Interactive Brokers Group, Inc IBKR -- -- -- -18.5x -12.2x -10.0x na na na na na na na na na -10.3x -7.9x -7.0x na na na 13.2% 13.5%
Mean 12.4x 11.1x 9.2x 11.8x 11.3x 9.3x 3.0x 2.8x 2.7x 6.3x 5.6x 4.8x 22.9x 21.5x 16.9x 5.0x 4.7x 4.2x 16.0x 16.2x 11.9x 3.73% 3.95%
Median 11.0x 10.4x 8.8x 11.0x 9.9x 8.2x 3.3x 3.1x 2.8x 3.8x 3.5x 3.0x 22.3x 19.7x 16.8x 5.1x 4.8x 4.2x 16.0x 16.2x 11.9x 2.91% 3.38%
Min 8.3x 7.2x 5.2x 8.1x 7.2x 5.5x 1.5x 1.3x 1.2x 2.2x 2.0x 1.8x 16.6x 16.4x 12.7x 3.2x 2.9x 2.4x 14.4x 15.2x 9.1x -3.25% -3.04%
Max 18.0x 15.6x 13.6x 16.3x 17.0x 14.2x 4.1x 4.1x 4.2x 12.8x 11.2x 9.5x 30.0x 28.4x 21.2x 6.6x 6.5x 5.9x 17.7x 17.3x 14.6x 11.52% 11.52%
EV/EBITDA Estimates EV/EBITDA Consensus P/BV Consensus P/TBV Consensus P/CF EV/Sales EV/FCF

Valuation – LTM P/E Multiples
0.0x
10.0x
20.0x
30.0x
40.0x
50.0x
60.0x
04/21/2003
11/13/2003
06/15/2004
01/10/2005
08/08/2005
03/07/2006
10/02/2006
05/02/2007
11/27/2007
06/25/2008
01/22/2009
08/19/2009
03/18/2010
10/13/2010
05/11/2011
12/06/2011
07/05/2012
02/04/2013
08/30/2013
03/31/2014
10/24/2014
P/EMultiple
0.0x
20.0x
40.0x
60.0x
80.0x
100.0x
120.0x
140.0x
04/21/2003
11/17/2003
06/21/2004
01/19/2005
08/18/2005
03/21/2006
10/18/2006
05/22/2007
12/19/2007
07/22/2008
02/20/2009
09/21/2009
04/22/2010
11/18/2010
06/21/2011
01/20/2012
08/20/2012
03/25/2013
10/22/2013
05/23/2014
12/22/2014
P/EMultiple
TD Ameritrade (AMTD)
0.0x
10.0x
20.0x
30.0x
40.0x
50.0x
60.0x
70.0x
80.0x
90.0x
04/21/2003
11/12/2003
06/10/2004
01/05/2005
08/02/2005
02/28/2006
09/22/2006
04/23/2007
11/14/2007
06/12/2008
01/07/2009
08/04/2009
03/02/2010
09/24/2010
04/20/2011
11/14/2011
06/12/2012
01/09/2013
08/06/2013
03/04/2014
09/26/2014
P/EMultiple
E*TRADE Financial (ETFC)
Source: FactSet; RBC Capital Markets
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
04/21/2003
11/13/2003
06/15/2004
01/10/2005
08/08/2005
03/07/2006
10/02/2006
05/02/2007
11/27/2007
06/25/2008
01/22/2009
08/19/2009
03/18/2010
10/13/2010
05/11/2011
12/06/2011
07/05/2012
02/04/2013
08/30/2013
03/31/2014
10/24/2014
P/EMultiple
S&P 500
Charles Schwab (SCHW)

SCHW Model
Source: Company filings; RBC Capital Markets estimates
($ in million) Fiscal Year
1QA 2QA 3QA 4QA 1QE 2QE 3QE 4QE 2013A 2014A 2015E 2016E 2017E
Income Statement Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
Net revenues
Asset management and administration fees $611 $632 $649 $641 $645 $684 $697 $705 $2,315 $2,533 $2,731 $3,524 $3,789
Interest revenue 579 588 600 607 614 637 672 687 $2,085 $2,374 $2,610 $2,976 $3,362
Interest expense (26) (26) (27) (23) (26) (26) (27) (24) (105) (102) (103) (106) (109)
Net interest revenue $553 $562 $573 $584 $588 $611 $645 $663 $1,980 $2,272 $2,507 $2,871 $3,253
Trading revenue 247 212 209 239 243 217 213 256 $913 $907 $929 $969 $1,009
Other revenues 68 65 120 90 93 95 98 101 236 343 388 436 491
Provision for loan losses (1) 7 1 (3) - - - - 1 4 - - -
Net Impairment losses on securities - - (1) - - - - - (10) (1) - - -
Total net revenue $1,478 $1,478 $1,551 $1,551 $1,569 $1,608 $1,653 $1,725 $5,435 $6,058 $6,555 $7,801 $8,542
Expenses excluding interest
Compensation and benefits 528 520 593 543 554 546 593 570 $2,027 $2,184 $2,264 $2,331 $2,401
Professional services 106 112 117 122 114 121 121 126 415 457 482 520 557
Occupancy and equipment 80 80 82 82 82 82 84 84 309 324 334 340 347
Advertising and market development 63 65 59 58 65 67 61 60 257 245 252 260 268
Communications 56 57 55 55 56 57 55 55 220 223 224 225 226
Depreciation and amortization 48 48 49 54 54 54 55 56 202 199 219 236 256
Other 75 75 78 83 80 82 84 88 300 311 334 398 436
Total expenses excluding interest $956 $957 $1,033 $997 $1,006 $1,010 $1,053 $1,039 $3,730 $3,943 $4,109 $4,311 $4,491
Income before taxes on income $522 $521 $518 $554 $563 $598 $600 $686 $1,705 $2,115 $2,446 $3,489 $4,052
Taxes on net income 196 197 197 204 213 226 227 259 634 794 925 1,319 1,532
Net income $326 $324 $321 $350 $350 $372 $373 $426 $1,071 $1,321 $1,522 $2,170 $2,520
Preferred stock dividends 8 22 9 21 8 22 9 21 61 60 60 60 60
Net income available to common stockholders $318 $302 $312 $329 $342 $350 $364 $405 $1,010 $1,261 $1,462 $2,110 $2,460
EBITDA $570 $569 $567 $608 $617 $652 $655 $742 $1,907 $2,314 $2,665 $3,726 $4,308
Earnings per share - basic $0.24 $0.23 $0.24 $0.25 $0.26 $0.27 $0.28 $0.31 $0.78 $0.96 $1.11 $1.59 $1.840 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $ $
Earnings per share - diluted $0.24 $0.23 $0.24 $0.25 $0.26 $0.26 $0.27 $0.30 $0.78 $0.95 $1.10 $1.58 $1.82
Dividends declared per share - diluted $0.06 $0.06 $0.06 $0.06 $0.06 $0.06 $0.06 $0.06 $0.24 $0.24 $0.24 $0.33 $0.40
Dividend pay-out ratio 24.5% 25.9% 25.1% 23.9% 23.0% 22.5% 21.7% 19.5% 30.9% 25.1% 21.6% 20.7% 21.8%
Weighted average share count - basic (million) 1,299 1,302 1,304 1,308 1,311 1,313 1,316 1,318 1,285 1,303 1,315 1,326 1,338
Dilution (million) 12 11 12 12 12 12 12 12 8 12 12 12 12
Weighted average share count - diluted (million) 1,311 1,313 1,316 1,320 1,323 1,325 1,328 1,330 1,293 1,315 1,327 1,338 1,350
Profitability metrics
Pre-tax operating margin 35.3% 35.3% 33.4% 35.7% 35.9% 37.2% 36.3% 39.7% 31.4% 34.9% 37.3% 44.7% 47.4%
Net interest margin (basis points) 164bps 165bps 164bps 163bps 163bps 164bps 168bps 170bps 152bps 164bps 166bps 175bps 182bps
Return on average stockholders' equity (annualized) 13.3% 12.0% 11.8% 12.2% 12.4% 12.0% 12.0% 12.9% 11.1% 12.4% 12.4% 15.1% 14.7%
ROTE 12.1% 10.9% 10.8% 11.1% 11.4% 11.0% 11.1% 12.0% 10.0% 11.3% 11.5% 14.1% 13.9%
EBITDA as a percentage of revenues 38.6% 38.5% 36.6% 39.2% 39.3% 40.6% 39.6% 43.0% 35.1% 38.2% 40.7% 47.8% 50.4%
FY 2015FY 2014

ETFC Model
1QA 2QA 3QA 4QA 1QE 2QE 3QE 4QE 2013A 2014A 2015E 2016E 2017E
Income Statement Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
Net operating interest income
Operating interest income $322 $322 $319 $330 $315 $336 $358 $365 $1,220 $1,293 $1,375 $1,573 $1,765
Operating interest expense (56) (52) (50) (47) (46) (46) (46) (46) (238) (205) (186) (192) (196)
Net operating interest income $266 $270 $269 $283 $268 $290 $312 $319 $982 $1,088 $1,189 $1,381 $1,569
Total non-interest income
Commissions $128 $105 $108 $115 $121 $112 $114 $125 $420 $456 $472 $487 $511
Fees and service charges 47 46 45 48 48 48 49 49 155 186 195 201 207
Principal transactions 10 - - - - - - - 73 10 - - -
Gains on loans and securities, net 15 7 8 6 6 6 6 6 61 36 24 24 24
Net Impairment - - - - - - - - (2) - - - -
Other revenues 9 10 10 9 9 9 9 9 36 38 36 36 36
Total non-interest income $209 $168 $171 $178 $184 $176 $178 $189 $742 $726 $726 $748 $778
Total net revenue $475 $438 $440 $461 $452 $466 $489 $507 $1,724 $1,814 $1,915 $2,129 $2,348
Provision for loan losses 4 12 10 10 15 15 15 15 144 36 60 100 20
Operating expense:
Compensation and benefits 98 99 108 $107 $100 $101 $110 $109 $363 $412 $420 $429 $437
Advertising and market development 34 33 21 32 35 34 22 33 109 120 125 130 135
Clearing and servicing 28 23 21 22 24 22 23 25 124 94 94 97 102
FDIC insurance premiums 24 19 18 18 20 21 22 23 103 79 87 100 113
Occupancy and amortization 18 19 22 20 19 21 24 22 73 79 85 92 100
Communications 18 18 17 18 19 19 18 19 69 71 77 83 89
Amortization of other intangibles 5 6 5 6 6 6 6 6 23 22 24 24 24
Impairment of goodwill - - - - - - - - 142 - - - -
Facility restructuring and other exit activities 3 1 2 2 2 2 2 2 28 8 8 8 8
Other operating expenses 17 18 17 18 18 19 20 20 66 70 77 85 94
Total operating expense $290 $284 $277 $294 $290 $294 $294 $314 $1,275 $1,145 $1,193 $1,257 $1,325
Income before other inc. (exp.) and inc. tax exp. $181 $142 $153 $157 $147 $156 $180 $179 $305 $633 $662 $772 $1,003
Other income (expense)
Total other income (expense) ($37) ($30) ($28) ($86) ($15) ($13) ($13) ($13) ($111) ($181) ($53) ($50) ($50)
Income before income tax expense $144 $112 $125 $71 $132 $144 $167 $166 $195 $452 $610 $722 $952
Income tax expense 47 43 39 30 50 55 64 63 109 159 232 274 362
Net income $97 $69 $86 $41 $82 $89 $104 $103 $86 $293 $378 $447 $591
EBITDA $198 $167 $178 $122 $173 $182 $206 $205 $423 $665 $766 $880 $1,115
Earnings per share - basic $0.34 $0.24 $0.30 $0.14 $0.28 $0.31 $0.36 $0.36 $0.30 $1.02 $1.31 $1.58 $2.130 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Weighted average share count - basic ('000) $288,051 $288,705 $288,843 289,209 288,824 288,447 288,078 287,715 286,991 288,705 288,266 283,360 276,791
Dilution ('000) 5,768 5,121 5,276 5,155 5,155 5,155 5,155 5,155 5,598 5,398 5,155 5,155 5,155
Weighted average share count - diluted ('000) $293,819 $293,826 $294,119 294,364 293,979 293,602 293,233 292,870 292,589 294,103 293,421 288,515 281,946
Operating margin 38.1% 32.4% 34.8% 34.1% 32.5% 33.6% 36.8% 35.2% 17.7% 34.9% 34.6% 36.3% 42.7%
Enterprise net interest spread (basis points) 247bps 255bps 254bps 269bps 257bps 256bps 269bps 270bps 233bps 255bps 263bps 283bps 299bps
Pre-tax margin 30.3% 25.6% 28.4% 15.4% 29.2% 30.9% 34.2% 32.8% 11.3% 24.9% 31.8% 33.9% 40.6%
Return on average stockholders' equity 7.8% 5.4% 6.5% 3.1% 6.1% 6.5% 7.4% 7.2% 1.8% 5.7% 6.8% 7.5% 9.3%
ROTE 5.9% 4.1% 5.0% 2.4% 4.7% 5.0% 5.7% 5.6% 1.3% 4.4% 5.3% 5.9% 7.4%
FY 2015FY 2014

AMTD Model
1QA 2QA 3QA 4QA 1QA 2QE 3QE 4QE 2013A 2014A 2015E 2016E 2017E
Income Statement Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17
Transaction-based revenues:
Commissions and transaction fees $328 $374 $317 $332 $359 $378 $335 $339 1,171 1,351 1,411 1,497 1,595
Asset-based revenues:
Interest revenue $128 $148 $150 $161 $163 $160 $165 $169 476 587 658 728 791
Brokerage interest expense (1) (2) (1) (2) (2) (2) (2) (2) (7) (6) (8) (8) (8)
Net interest revenue $127 $146 $149 $159 $161 $158 $163 $167 $469 $581 $650 $720 $783
Insured deposit account fees $208 $202 $202 $208 $207 $220 $231 $243 805 820 901 1,049 1,092
Investment product fees 72 75 79 83 83 86 90 95 250 309 353 452 595
Total asset-based revenues $407 $423 $430 $450 $451 $464 $484 $505 $1,524 $1,710 $1,903 $2,221 $2,470
Other revenues 17 15 16 13 9 9 9 10 69 61 37 40 43
Net revenues $752 $812 $763 $795 $819 $851 $828 $853 $2,764 $3,122 $3,352 $3,759 $4,109
Operating expenses:
Employee compensation and benefits $183 $193 $189 $195 $199 $208 $204 $211 692 760 822 880 950
Clearing and execution costs 30 34 35 36 35 43 38 38 110 135 155 173 186
Communications 28 28 29 31 31 32 32 33 112 116 128 138 150
Occupancy and equipment costs 37 40 39 41 41 42 43 44 161 157 169 183 198
Amortization of acquired intangbile assets 23 22 22 23 23 24 24 24 91 90 95 100 104
Advertising 63 94 48 45 64 98 50 47 239 250 258 266 276
Other 19 17 19 25 22 18 21 27 75 80 88 95 103
Total operating expenses $445 $489 $447 $457 $475 $529 $481 $488 $1,709 $1,838 $1,973 $2,110 $2,261
Operating income $307 $323 $316 $338 $344 $322 $347 $365 $1,055 $1,284 $1,378 $1,649 $1,848
Other expense (income) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest on borrowings $6 $6 $6 $6 $9 $8 $8 $8 24 24 33 32 32
Gain/loss on investments, net & Other - - - (10) 1 - - - (57) (10) 1 - -
Total other expense (income) $6 $6 $6 ($4) $10 $8 $8 $8 ($33) $14 $34 $32 $32
Pre-tax income $301 $317 $310 $342 $334 $314 $339 $357 $1,088 $1,270 $1,344 $1,617 $1,816
Provision for income taxes 109 123 120 131 123 119 129 136 413 483 507 614 690
Net income $192 $194 $190 $211 $211 $195 $210 $221 $675 $787 $837 $1,002 $1,126
EBITDA $354 $369 $362 $394 $389 $370 $395 $413 $1,288 $1,479 $1,567 $1,849 $2,056
Earnings per share - basic $0.35 $0.35 $0.34 $0.39 $0.39 $0.36 $0.39 $0.41 $1.23 $1.43 $1.54 $1.86 $2.12$ $ $ $ $ $ $ $ $ $ $ $ $
Dividend pay-out ratio 177.9% 34.1% 34.8% 38.9% 38.7% 41.8% 38.6% 36.7% 70.6% 71.1% 39.1% 47.5% 49.5%
Weighted average share count - basic (million shares) 551 551 551 547 544 543 542 541 549 550 542 538 532
Dilution (million shares) 4 5 4 4 4 4 4 4 5 4 4 4 4
Weighted average share count - diluted (million shares) 555 556 555 551 548 547 546 545 554 554 546 542 536
Operating margin 40.8% 39.8% 41.4% 42.5% 42.0% 37.9% 41.9% 42.8% 38.2% 41.1% 41.1% 43.9% 45.0%
Net interest margin (basis points) 145bps 152bps 152bps 155bps 153bps 155bps 154bps 153bps 152bps 153bps 154bps 162bps 164bps
Pre-tax margin 40.0% 39.0% 40.6% 43.0% 40.8% 36.9% 41.0% 41.8% 39.4% 40.7% 40.1% 43.0% 44.2%
Return on average stockholders' equity (annualized) 16.6% 17.1% 16.3% 17.7% 17.6% 16.4% 17.1% 17.3% 14.8% 16.7% 16.9% 18.5% 18.9%
ROTE 58.3% 59.4% 53.3% 56.0% 53.5% 48.7% 48.4% 46.7% 56.4% 54.3% 48.2% 45.3% 40.7%
FY 2014 FY 2015

E*Trade Valuation and Price Target Impediments
Valuation
Our 12-month price target for E*TRADE is $35. We arrive at our price target using a price-to-earnings multiple of 23.0x on our 2016 calendar year earnings
estimate of $1.55 per diluted weighted average share, in line with its longer term, historical average. We then discount the resulting valuation using a cost of
equity of 11.0%. The discount rate is based on a beta of 1.9x, a risk free rate of 4% and a market premium of 4%. The discount period is 0.8 years. This
results in a valuation of $33.
Furthermore, we discount the $951 million of deferred tax assets (DTA) assuming that these will be realized over a four-year period. We discount the DTA
using a cost of equity of 11.0%. Furthermore, we take a 10% haircut to compensate for a margin of error in respect to the timing. We estimate that the DTA
could be worth approximately $2. This leads us to our price target of $35.
Price target impediments
Drop in consumer confidence and commissions: A decline in trading volume and commission rates could negatively impact commission revenues and
earnings. Trading volume is to a high degree dependent on market volatility. E*TRADE could be forced to reduce commission rates for its most active
customers. Furthermore, margin borrowing/lending could decline significantly, leading to earnings shortfall.
Prolonged period of low interest rates: A prolonged low interest rate environment could compress net interest margins. We are assuming a gradual
increase in interest rates over the coming years. A sharp increase in short term interest rates could lead to net interest margin compression and earnings
below our estimate.
Unforeseen regulatory constraints could impact valuation: E*TRADE is a highly regulated entity. The holding company depends on dividend payments
from its subsidiaries to pay for its debt obligations. Any regulatory action that could limit the company’s ability to “dividend-up” capital to the holding company
could negatively impact the firm’s financial condition and have a direct impact on the firm’s ability to buy back shares or pay dividends. While the firm does
not pay dividends at this time, we are assuming that the firm will commence paying dividends in 2016.
Balance sheet growth below our expectation could lead to an earnings miss: Changes in average balances, especially client margin, impact operating
results. Revenues could fall short of our expectation were balance sheet growth to slow significantly or decline.
The company has significant exposure to mortgage loans which could result in losses: Performance of the loan portfolio can vary and the provisions
for loan losses might not be adequate. Deteriorating performance could impact customer retention, earnings, book value and valuations of the company’s
common shares.
Sharp decline in securities markets and deterioration in credit markets/housing: A sharp decline in securities markets could lead to losses as the
value of collateral held in connection with margin receivables would decline. This could create collection issues with the margin receivable accounts.
Likewise, the company continues to have a sizeable exposure to the housing market via its loan portfolios.
Deferred tax assets might not be realized: The firm has about $1.2 billion of deferred tax assets. E*TRADE might have to establish a valuation allowance
against these reserves if it determines that not all of these assets will be realized. This could negatively impact earnings and valuation.
.

TD Ameritrade Holding Corporation Valuation and Price Target Impediments
Valuation
We value TD Ameritrade Holding Corporation using a forward-looking P/E multiple approach. We understand that there are biases embedded in this
approach as P/E multiples can be overly high during bull markets and depressed during bear markets. We are trying to compensate for this by taking an
average P/E multiple over an extended period.
Our 12-month price target for TD Ameritrade is $43. We arrive at our price target using a price-to-earnings multiple of 24.0x on our 2016 calendar year
earnings estimate of $1.92 per diluted weighted average share. We believe a 24x P/E multiple is justified given historical valuation. We then discount the
resulting valuation using a cost of equity of 8.9%. The discount rate is based on a beta of 1.24x, a risk-free rate of 4%, and a market premium of 4%. The
discount period is 0.8 years. This leads us to our price target of $43 per share.
Drop in consumer confidence and commissions could lead to earnings shortfall: A decline in trading volume and commission rates could negatively
affect commission revenues and earnings. Trading volume is to a high degree dependent on market volatility. Usually, higher volatility would contribute to
higher trading volume. However, a prolonged period of market volatility in declining markets could lead to a decrease in consumer confidence and thus
trading activity.
Prolonged period of low interest rates could lead to NIM compression: A prolonged low interest rate environment could compress net interest spreads
and reduce spread-based revenues. We assume an increase in interest rates over the coming years. A sharp increase in short-term interest rates could be
detrimental to the firm's assets that have a longer duration than its liabilities. This could lead to a net interest margin compression and earnings below our
estimate.
Unforeseen regulatory changes could affect profitability: TD Ameritrade is “lightly” regulated compared to its peers, as it outsources its banking activities
to TD Bank. However, TD Ameritrade is considered a non-bank subsidiary of TD Bank under the Bank Holding Company Act of 1956. Should the firm be
subject to tighter regulation, we would expect it to change its stated capital return policy of 40 percent to 60 percent of its earnings to investors. This would
result in a decline in dividends and share buybacks, negatively affecting valuation.
Balance sheet growth below our expectation could lead to an earnings miss: Changes in average balances, especially client margin, credit, insured
deposit account, and mutual fund balances, affect operating results. Revenues could fall short of our expectation were balance sheet growth to decline or
reverse.
There are certain benefits that the firm derives from its relationship with TD Bank. Earnings could decline below our estimates should TD Bank
terminate and/or modify its relationship with TD Ameritrade.TD Ameritrade has entered an insured deposit account agreement with TD Bank, which
allows the firm to generate revenues without having to hold a significant amount of capital against deposits. Net revenues related to this agreement
contributed 26% of total revenues in 2014. TD Ameritrade would have to hold a significant amount of capital should the relationship be terminated.
Revenues would decline, as TD Ameritrade would have to move the cash into segregated cash accounts.

The Charles Schwab Corporation Valuation and Price Target Impediments
Valuation
We value The Charles Schwab Corporation using a forward-looking P/E multiple approach. We understand that there are biases to this approach as P/E
multiples can be overly high during bull markets and depressed during bear markets. We are trying to compensate for this by taking an average P/E multiple
over an extended period.
Our 12-month price target for The Charles Schwab Corporation is $38. We arrive at our price target using a price-to-earnings multiple of 26.0x on our 2016
calendar year earnings estimate of $1.58 per diluted weighted average share. We then discount the resulting valuation using a cost of equity of 10.7%. The
discount rate is based on a beta of 1.68x, a risk free rate of 4% and a market premium of 4%. The discount period is 0.8 years. This leads us to our price
target of $38.
Our assumptions for 2016 are as follows: Net interest margins of 175 basis points by 2016; interest earnings assets of $162.9 billion; total funding sources of
$158.3 billion; daily average revenue trades of 319,000; average revenue per revenue trade of $12.05; and a pre-tax margin of 44.7%. We believe a 26x P/E
multiple is justified given historical valuation.
Prolonged period of low interest rates: Our price target assumes that interest rates will rise. The company is the most asset sensitive among its peers in
our view. Consequently, we would have to adjust our price target and our earnings estimates should interest rates remain low for a prolonged period. This
could lead to a decline in net interest margins.
Unforeseen regulatory changes could impact profitability: The Dodd-Frank Act had a tremendous impact on the financial services industry. With the
elimination of the Office of Thrift Supervision, The Charles Schwab Corporation came under the supervision of the Federal Reserve and the OCC became
the primary regulator of Schwab Bank. As the company points out, there are multiple studies mandated by the new legislation that could result in additional
legislative or regulatory action.
Balance sheet growth could fall below our expectation, leading to earnings shortfall: The discount brokerage business is characterized by intense
competition. Peers to attempt to gain market share by reducing trade commissions, offering higher crediting rates on deposits and require lower interest
rates on loans, or reduce the fees they are charging for services. The firm also faces competition from wirehouses and traditional banks. Increased
competition could lead to lower asset growth and a decline in profitability.
Losses from credit exposure could negatively impact shares: The company is subject to counterparty risk. Its exposure results from margin lending;
clients’ options trading; securities lending; and mortgage lending. The firm has exposure to credit risk through its investments in US agency and non-agency
mortgage-backed securities, corporate debt securities and commercial papers among others. Loans to clients are in the form of mortgages and home equity
line of credit. A deterioration of the credit portfolio could result in increased loan provisions, charge-offs and negatively impact the company’s share price.
Drop in consumer confidence: A decline in trading volume could negatively impact commission revenues and earnings. Trading volume is to a high
degree dependent on market volatility. However, a prolonged period of market volatility in declining markets could lead to a decrease in consumer
confidence and thus trading activity.
Sharp decline in equity markets: The firm earns asset management related revenues based on assets under management in its proprietary funds and
through custody fees on RIA assets. A sharp decline in markets could lead to lower asset management related earnings.

Required Disclosures
Conflicts Disclosures
The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, including total revenues of the member
companies of RBC Capital Markets and its affiliates, a portion of which are or have been generated by investment banking activities of the member companies of
RBC Capital Markets and its affiliates.
Please note that current conflicts disclosures may differ from those as of the publication date on, and as set forth in, this report. To access current conflicts
disclosures, clients should refer to https://www.rbccm.com/GLDisclosure/PublicWeb/DisclosureLookup.aspx?entityId=1 or send a request to RBC CM Research
Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7.
Royal Bank of Canada, together with its affiliates, beneficially owns 1 percent or more of a class of common equity securities of The Charles Schwab Corporation.
RBC Capital Markets has provided The Charles Schwab Corporation with non-investment banking securities-related services in the past 12 months.
RBC Capital Markets has provided The Charles Schwab Corporation with non-securities services in the past 12 months.
RBC Capital Markets, LLC makes a market in the securities of The Charles Schwab Corporation.
A member company of RBC Capital Markets or one of its affiliates received compensation for products or services other than investment banking services from The
Charles Schwab Corporation during the past 12 months. During this time, a member company of RBC Capital Markets or one of its affiliates provided non-investment
banking securities-related services to The Charles Schwab Corporation.
A member company of RBC Capital Markets or one of its affiliates received compensation for products or services other than investment banking services from The
Charles Schwab Corporation during the past 12 months. During this time, a member company of RBC Capital Markets or one of its affiliates provided non-securities
services to The Charles Schwab Corporation.
RBC Capital Markets, LLC makes a market in the securities of E*TRADE Financial Corporation.
RBC Capital Markets has provided TD Ameritrade Holding Corporation with non-securities services in the past 12 months.
RBC Capital Markets, LLC makes a market in the securities of TD Ameritrade Holding Corporation.
A member company of RBC Capital Markets or one of its affiliates received compensation for products or services other than investment banking services from TD
Ameritrade Holding Corporation during the past 12 months. During this time, a member company of RBC Capital Markets or one of its affiliates provided non-
securities services to TD Ameritrade Holding Corporation.

Required Disclosures (con’t)
Explanation of RBC Capital Markets Equity Rating System
An analyst's "sector" is the universe of companies for which the analyst provides research coverage. Accordingly, the rating assigned to a particular stock represents
solely the analyst's view of how that stock will perform over the next 12 months relative to the analyst's sector average.
Ratings
Top Pick (TP): Represents analyst's best idea in the sector; expected to provide significant absolute total return over 12 months with a favorable risk-reward ratio.
Outperform (O): Expected to materially outperform sector average over 12 months.
Sector Perform (SP): Returns expected to be in line with sector average over 12 months.
Underperform (U): Returns expected to be materially below sector average over 12 months.
Risk Rating: As of March 31, 2013, RBC Capital Markets suspends its Average and Above Average risk ratings. The Speculative risk rating reflects a security's
lower level of financial or operating predictability, illiquid share trading volumes, high balance sheet leverage, or limited operating history that result in a higher
expectation of financial and/or stock price volatility.

Distribution of Ratings
For the purpose of ratings distributions, regulatory rules require member firms to assign ratings to one of three rating categories - Buy, Hold/Neutral, or Sell -
regardless of a firm's own rating categories. Although RBC Capital Markets' ratings of Top Pick/Outperform, Sector Perform and Underperform most closely
correspond to Buy, Hold/Neutral and Sell, respectively, the meanings are not the same because our ratings are determined on a relative basis (as described above).
Distribution of ratings
RBC Capital Markets, Equity Research
As of 31-Dec-2014
Investment Banking
Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY [Top Pick & Outperform] 897 52.92 290 32.33
HOLD [Sector Perform] 686 40.47 137 19.97
SELL [Underperform] 112 6.61 6 5.36

References to a Recommended List in the recommendation history chart may include one or more recommended lists or model portfolios maintained by
RBC Wealth Management or one of its affiliates. RBC Wealth Management recommended lists include the Guided Portfolio: Prime Income (RL 6), the
Guided Portfolio: Large Cap (RL 7), the Guided Portfolio: Dividend Growth (RL 8), the Guided Portfolio: Midcap 111 (RL 9), the Guided Portfolio: ADR (RL
10), and the Guided Portfolio: Global Equity (U.S.) (RL 11). RBC Capital Markets recommended lists include the Strategy Focus List and the Fundamental
Equity Weightings (FEW) portfolios. The abbreviation 'RL On' means the date a security was placed on a Recommended List. The abbreviation 'RL Off'
means the date a security was removed from a Recommended List.

Equity Valuation and Risks
For valuation methods used to determine, and risks that may impede achievement of, price targets for covered companies, please see the most recent company-
specific research report at www.rbcinsight.com or send a request to RBC Capital Markets Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th
Floor, South Tower, Toronto, Ontario M5J 2W7.
Conflicts Policy
RBC Capital Markets Policy for Managing Conflicts of Interest in Relation to Investment Research is available from us on request. To access our current policy,
clients should refer to https://www.rbccm.com/global/file-414164.pdf or send a request to RBC CM Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank
Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7. We reserve the right to amend or supplement this policy at any time.
Dissemination of Research and Short-term Trade Ideas
RBC Capital Markets endeavors to make all reasonable efforts to provide research simultaneously to all eligible clients, having regard to local time zones in overseas
jurisdictions. RBC Capital Markets' equity research is posted to our proprietary website to ensure eligible clients receive coverage initiations and changes in ratings,
targets and opinions in a timely manner. Additional distribution may be done by the sales personnel via email, fax, or other electronic means, or regular mail. Clients
may also receive our research via third party vendors. RBC Capital Markets also provides eligible clients with access to SPARC on the Firm’s proprietary INSIGHT
website, via email and via third-party vendors. SPARC contains market color and commentary regarding subject companies on which the Firm currently provides
equity research coverage. Research Analysts may, from time to time, include short-term trade ideas in research reports and / or in SPARC. A short-term trade idea
offers a short-term view on how a security may trade, based on market and trading events, and the resulting trading opportunity that may be available. A short-term
trade idea may differ from the price targets and recommendations in our published research reports reflecting the research analyst's views of the longer-term (one
year) prospects of the subject company, as a result of the differing time horizons, methodologies and/or other factors. Thus, it is possible that a subject company's
common equity that is considered a long-term 'Sector Perform' or even an 'Underperform' might present a short-term buying opportunity as a result of temporary
selling pressure in the market; conversely, a subject company's common equity rated a long-term 'Outperform' could be considered susceptible to a short-term
downward price correction. Short-term trade ideas are not ratings, nor are they part of any ratings system, and the firm generally does not intend, nor undertakes any
obligation, to maintain or update short-term trade ideas. Short-term trade ideas may not be suitable for all investors and have not been tailored to individual investor
circumstances and objectives, and investors should make their own independent decisions regarding any securities or strategies discussed herein. Please contact
your investment advisor or institutional salesperson for more information regarding RBC Capital Markets' research.
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All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of the subject securities or issuers. No
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the responsible analyst(s) in this report.
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s Financial Services LLC (“S&P”) and is licensed for use by RBC.
Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to
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classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect,
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Disclaimer
RBC Capital Markets is the business name used by certain branches and subsidiaries of the Royal Bank of Canada, including RBC Dominion Securities Inc., RBC Capital Markets, LLC, RBC Europe
Limited, RBC Capital Markets (Hong Kong) Limited, Royal Bank of Canada, Hong Kong Branch and Royal Bank of Canada, Sydney Branch. The information contained in this report has been compiled by
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as to its accuracy, completeness or correctness. All opinions and estimates contained in this report constitute RBC Capital Markets' judgement as of the date of this report, are subject to change without
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may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. This report is not an offer to
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research analyst compensation is based in part on the overall profitability of RBC Capital Markets, which includes profits attributable to investment banking revenues. Every province in Canada, state in the
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To U.S. Residents: This publication has been approved by RBC Capital Markets, LLC (member FINRA, NYSE, SIPC), which is a U.S. registered broker-dealer and which accepts responsibility for this
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To Canadian Residents: This publication has been approved by RBC Dominion Securities Inc.(member IIROC). Any Canadian recipient of this report that is not a Designated Institution in Ontario, an
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this report and its dissemination in Canada.
To U.K. Residents: This publication has been approved by RBC Europe Limited ('RBCEL') which is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority
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To Persons Receiving This Advice in Australia: This material has been distributed in Australia by Royal Bank of Canada - Sydney Branch (ABN 86 076 940 880, AFSL No. 246521). This material has
been prepared for general circulation and does not take into account the objectives, financial situation or needs of any recipient. Accordingly, any recipient should, before acting on this material, consider
the appropriateness of this material having regard to their objectives, financial situation and needs. If this material relates to the acquisition or possible acquisition of a particular financial product, a recipient
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To Hong Kong Residents: This publication is distributed in Hong Kong by RBC Capital Markets (Hong Kong) Limited and Royal Bank of Canada, Hong Kong Branch (both entities which are regulated by
the Hong Kong Monetary Authority (‘HKMA’) and the Securities and Futures Commission ('SFC')). Financial Services provided to Australia: Financial services may be provided in Australia in accordance
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To Singapore Residents: This publication is distributed in Singapore by the Royal Bank of Canada, Singapore Branch, a registered entity granted offshore bank licence by the Monetary Authority of
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To Japanese Residents: Unless otherwise exempted by Japanese law, this publication is distributed in Japan by or through RBC Capital Markets (Japan) Ltd., a registered type one financial instruments
firm and/or Royal Bank of Canada, Tokyo Branch, a licensed foreign bank.
® Registered trademark of Royal Bank of Canada. RBC Capital Markets is a trademark of Royal Bank of Canada. Used under license.
Copyright © RBC Capital Markets, LLC 2015 - Member SIPC
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