Charles Schwab 2008 Annual Report Download - page 52

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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)
- 38 -
adjusted as more information becomes available or when an event occurs requiring a change. Significant judgment is required
in making these estimates, and the actual cost of resolving a matter may ultimately differ materially from the amount reserved.
The Company’s management has discussed the development and selection of these critical accounting estimates with the
Audit Committee. Additionally, management has reviewed with the Audit Committee the Company’s significant estimates
discussed in this 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,”
“aim,” “target,” 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
necessarily estimates based on the best judgment of the Company’s senior management. These statements relate to, among
other things:
the Company’s ability to pursue its business strategy (see “Item 1 – Business – Business Strategy and Competitive
Environment”);
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 –13. Commitments and
Contingent Liabilities – Legal Contingencies”);
the impact of current market conditions on the Company’s results of operations (see “Current Market Environment”);
target capital ratios (see “Liquidity and Capital Resources”);
sources of liquidity, capital, and level of dividends (see “Liquidity and Capital Resources and Contractual
Obligations”);
capital expenditures (see “Liquidity and Capital Resources – Capital Resources”);
the impact of changes in management’s estimates on the Company’s results of operations (see “Critical Accounting
Estimates”);
the impact on the Company’s results of operations of recording stock option expense (see “Item 8 – Financial
Statements and Supplementary Data – Notes to Consolidated Financial Statements – 17. Employee Incentive,
Deferred Compensation, and Retirement Plans”);
the impact of changes in estimated costs related to past restructuring initiatives on the Company’s results of
operations (see “Item 8 – Financial Statements and Supplementary Data – Notes to Consolidated Financial
Statements – 25. Restructuring Reserve); and
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 – 13. Commitments and Contingent Liabilities”).
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:
changes in general economic and financial market conditions;
changes in revenues and profit margin due to changes in interest rates;
unanticipated adverse developments in litigation or regulatory matters;
fluctuations in client asset values due to changes in equity valuations;
the performance of securities available for sale;