Charles Schwab 2008 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2008 Charles Schwab annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

2
LETTER FROM THE
CHIEF EXECUTIVE OFFICER
2008 FINANCIAL RESULTS
Based on these strong client metrics, The Charles
Schwab Corporation posted a second consecutive
year of record financial operating results. For the 2
months ending December 3,฀2008, results included
the following:
•฀ ฀Net฀revenues฀of฀$5.2 billion, up 3 percent versus
the prior year.
•฀ ฀Income฀from฀continuing฀operations฀of฀$.2 billion,
for a 0 percent year-over-year gain.
•฀ ฀Diluted฀earnings฀per฀share฀from฀continuing฀
operations of $.06, up 5 percent from 92 cents
per share the prior year.
•฀ ฀A฀record฀pre-tax฀prot฀margin฀of฀39.4 percent,
compared to 37. percent one year ago.
KEYS TO SUCCESS
So how did Schwab succeed when so many other
companies failed or faltered? Four factors contributed
to our success.
1. We started the year on a firm financial footing.
Schwab entered this shaky environment with pre-
tax margins approaching 40 percent, a strong balance
sheet, and limited exposure to the more “toxic” financial
instruments that brought down so many competitors.
We believe that’s the direct result of common-sense
financial strategies and conservative risk management,
which Chief Financial Officer Joe Martinetto describes in
more detail in his accompanying letter.
Because we came into this crisis as a strong, solid, and
secure firm, we were able to operate from a position
of strength. So when the deadline approached to apply
for funding from the federal Troubled Asset Relief
Program, we declined to participate.
2. We were there for people when they needed us most.
During these tough times, millions of people turned
to Schwab for help. Calls to our service representatives
increased 5 percent to more than 0.3 million, while our
automated systems handled an additional 6.8 million
calls. New online accounts grew by more than 30 percent
on schwab.com – nearly two-thirds from “new to firm”
clients. Traffic increased at our branches, too, where we
handled more than 5 million client interactions. In addition
to offering guidance through regular publications, we
invited more than .2 million households to a webcast or
local event with Schwab experts.
We seized other opportunities to build stronger client
relationships. When businesses failed or filed for
bankruptcy, we helped their employees determine
their options with their 40(k) investments. When
many financial advisors decided to leave Wall Street,
Schwab provided what they needed to start their
own independent firms, or we matched them with
an existing firm. And when extreme market volatility
spurred investors to move their money from equities
to federally insured products, we made it easy with
Schwab CD OneSource®, a virtual marketplace of
FDIC-insured CDs from banks across the country.
While serving clients remains our primary focus,
we know there are millions more who need help,
particularly with financial literacy and personal finance
skills. We continued our popular education and
scholarship program with Boys & Girls Clubs of
America, and we expanded the information available
Total Net Revenues = $5,150
Asset management and administration fees
Net interest revenue
Trading revenue
Other
2008 NET REVENUES
(in millions)
,
, ,
