Charles Schwab 2011 Annual Report Download - page 28

THE CHARLES SCHWAB CORPORATION
Annual Report On Form 10-K
For Fiscal Year Ended December 31, 2011
TABLE OF CONTENTS
Part I
Item 1. Business ------------------------------------------------------------------------------------------------------------------------------- 1
General Corporate Overview ----------------------------------------------------------------------------------------------- 1
Acquisitions and Divestiture ------------------------------------------------------------------------------------------------ 1
Business Strategy and Competitive Environment ----------------------------------------------------------------------- 2
Products and Services ------------------------------------------------------------------------------------------------------- 3
Regulation --------------------------------------------------------------------------------------------------------------------- 5
Sources of Net Revenues ---------------------------------------------------------------------------------------------------- 6
Available Information ------------------------------------------------------------------------------------------------------- 6
Item 1A. Risk Factors -------------------------------------------------------------------------------------------------------------------------- 7
Item 1B. Unresolved Securities and Exchange Commission Staff Comments --------------------------------------------------------- 12
Item 2. Properties ----------------------------------------------------------------------------------------------------------------------------- 13
Item 3. Legal Proceedings ------------------------------------------------------------------------------------------------------------------- 13
Part II
Item 4. Mine Safety Disclosures -------------------------------------------------------------------------------------------------------------- 13
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities ---------------------------------------------------------------------------------------------------------- 13
Item 6. Selected Financial Data ------------------------------------------------------------------------------------------------------------- 16
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ------------------------------ 17
Overview ---------------------------------------------------------------------------------------------------------------------- 17
Current Market and Regulatory Environment ---------------------------------------------------------------------------- 20
Results of Operations -------------------------------------------------------------------------------------------------------- 21
Liquidity and Capital Resources ------------------------------------------------------------------------------------------- 29
Risk Management ------------------------------------------------------------------------------------------------------------ 35
Fair Value of Financial Instruments --------------------------------------------------------------------------------------- 41
Critical Accounting Estimates ---------------------------------------------------------------------------------------------- 41
Forward-Looking Statements ----------------------------------------------------------------------------------------------- 43
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ----------------------------------------------------------------- 45
Item 8. Financial Statements and Supplementary Data ---------------------------------------------------------------------------------- 47
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ----------------------------- 93
Item 9A. Controls and Procedures ------------------------------------------------------------------------------------------------------------ 93
Item 9B. Other Information -------------------------------------------------------------------------------------------------------------------- 93
Part III
Item 10. Directors, Executive Officers, and Corporate Governance -------------------------------------------------------------------- 93
Item 11. Executive Compensation ----------------------------------------------------------------------------------------------------------- 95
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ---------------- 95
Item 13. Certain Relationships and Related Transactions, and Director Independence ----------------------------------------------- 95
Item 14. Principal Accountant Fees and Services ------------------------------------------------------------------------------------------ 96
Part IV
Item 15. Exhibits and Financial Statement Schedule -------------------------------------------------------------------------------------- 96
Exhibit Index ------------------------------------------------------------------------------------------------------------------ 96
Signatures --------------------------------------------------------------------------------------------------------------------- 102
Index to Financial Statement Schedule ------------------------------------------------------------------------------------ F-1