Charles Schwab 2015 Annual Report Download - page 41

THE CHARLES SCHWAB CORPORATION
Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Millions, Except Ratios, or as Noted)
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Annual Report on Form 10-K contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” “estimate,”
“appear,” “aim,” “target,” “could,” “would,” “continue,” and other similar expressions. In addition, any statements that refer
to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.
These forward-looking statements, which reflect management’s beliefs, objectives, and expectations as of the date hereof, are
estimates based on the best judgment of the Company’s senior management. These statements relate to, among other things:
x the Company’s aim to maximize the Company’s value and returns over time; the Company’s ability to pursue its
business strategy and maintain its market leadership position; and the Company’s belief that offering more value and
a better investing experience will translate into more client assets which drives revenue (see “Item 1. – Business –
Business Strategy and Competitive Environment”);
x the impact of legal proceedings and regulatory matters (see “Item 3. – Legal Proceedings” and “Item 8. – Financial
Statements and Supplementary Data – Notes to Consolidated Financial Statements –15. Commitments and
Contingencies – Legal contingencies”);
x the impact of current market conditions and interest rates on the Company’s results of operations (see “Item 7. –
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview” and “–
Results of Operations – Net Interest Revenue”);
x 2016 capital expenditures (see “Item 7. – Management’s Discussion and Analysis of Financial Condition and
Results of Operations – Results of Operations – Expenses Excluding Compensation and Benefits”);
x sources of liquidity, capital, and level of dividends (see “Item 7. – Management’s Discussion and Analysis of
Financial Condition and Results of Operations – Liquidity – Additional Funding Sources,” “– Contractual
Obligations,” and “– Capital Management – Dividends”);
x target capital ratios (see “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of
Operations – Capital Management – Regulatory Capital Requirements”);
x the impact of changes in management’s estimates on the Company’s results of operations (see “Item 7. –
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting
Estimates”);
x the expected impact of new accounting standards not yet adopted (see “Item 8. – Financial Statements and
Supplementary Data – Notes to Consolidated Financial Statements – 2. Summary of Significant Accounting Policies
– New Accounting Standards – New Accounting Standards Not Yet Adopted”); and
x the impact of changes in the likelihood of indemnification and guarantee payment obligations on the Company’s
results of operations (see “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated
Financial Statements – 15. Commitments and Contingencies – Guarantees and indemnifications”).
Achievement of the expressed beliefs, objectives and expectations described in these statements is subject to certain risks and
uncertainties that could cause actual results to differ materially from the expressed beliefs, objectives, and expectations.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of
this Annual Report on Form 10-K or, in the case of documents incorporated by reference, as of the date of those documents.
Important factors that may cause actual results to differ include, but are not limited to:
x changes in general economic and financial market conditions;
x changes in revenues and profit margin due to changes in interest rates;
x adverse developments in litigation or regulatory matters;
x the extent of any charges associated with litigation and regulatory matters;
x amounts recovered on insurance policies;
x the Company’s ability to attract and retain clients and grow client assets and relationships;