Charles Schwab 2011 Annual Report Download - page 85

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THE CHARLES SCHWAB CORPORATION
Notes to Consolidated Financial Statements
(Tabular Amounts in Millions, Except Per Share Data, Option Price Amounts, Ratios, or as Noted)
- 57 -
The following table summarizes the preliminary allocation of the purchase price to the net assets of optionsXpress as of
September 1, 2011:
Fair value of common stock issued $ 710
Fair value of equity awards assumed 4
Total consideration paid (1) $ 714
Fair value of net assets acquired $ 207
Preliminary goodwill $ 507
(1) Represents a non-cash investing activity.
The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition
date. The allocation of the purchase price is preliminary and subject to further adjustment as information relative to closing
date fair values and related tax balances are finalized.
September 1,
2011
Assets
Cash and cash equivalents $ 84
Cash and investments segregated and on deposit for regulatory purposes 1,074
Receivables from brokers, dealers, and clearing organizations 40
Receivables from brokerage clients 185
Other securities owned - at fair value 32
Intangible assets 285
Other assets 24
Total assets acquired (1) $ 1,724
Liabilities
Payables to brokerage clients $ 1,221
Deferred tax liability 95
Long-term debt (2) 110
Accrued expenses and other liabilities 91
Total liabilities assumed (1) $ 1,517
Net assets acquired $ 207
(1) All assets and liabilities, except for cash and cash equivalents, represent non-cash investing activities.
(2) The Company paid off long-term debt acquired from optionsXpress subsequent to the date of acquisition in
September 2011.
Preliminary goodwill of $507 million was assigned to the Investor Services segment and will not be deductible for tax
purposes.
The Company recorded preliminary intangible assets of $285 million, which are subject to amortization and will be amortized
over their estimated useful lives. The following table summarizes the preliminary estimated fair value and useful lives of the
intangible assets.
Estimated
Estimated Useful Life
September 1, 2011 Fair Value (In Years)
Customer relationships $ 200 11
Technology 70 9
Trade name 15 9
Total intangible assets $ 285