Charles Schwab 2008 Annual Report Download - page 89

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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)
- 75 -
Net revenues categorized by similar products and services are shown in the following table:
Year Ended December 31, 2008 2007 2006
Mutual fund service fees $ 1,917 $ 1,892 $ 1,563
Investment management and trust fees 340 378 310
Other asset management and administration fees 98 88 72
Interest revenue:
Cash and cash equivalents 129 223 125
Cash and investments segregated 280 511 602
Receivables from brokers, dealers and clearing organizations 8 27 25
Receivables from brokerage clients 612 859 837
Securities available for sale 517 399 319
Securities held to maturity 1 - -
Loans to banking clients 227 169 128
Other 134 82 77
Interest expense (243) (623) (679)
Commissions 915 755 703
Principal transactions 165 105 82
Other 50 129 145
Total net revenues $ 5,150 $ 4,994 $ 4,309
The carrying amount of goodwill is allocated to the Company’s reportable segments for purposes of testing goodwill for
impairment as presented in the following table:
December 31, 2008 2007
Investor Services $ 416 $ 416
Advisor Services 3 -
Corporate and Retirement Services 109 109
Total goodwill $ 528 $ 525
22. Capital Restructuring
In 2007, CSC completed a capital restructuring that returned approximately $3.3 billion in capital to stockholders to create a
more efficient and cost-effective capital structure. The capital restructuring included the following components:
CSC paid a special cash dividend of $1.00 per common share, which returned $1.2 billion to stockholders. The
special dividend was paid on August 24, 2007 to stockholders of record on July 24, 2007.
CSC repurchased 84 million shares of its common stock through a modified “Dutch Auction” tender offer in August
2007. The tender offer period closed on July 31, 2007 and CSC accepted for purchase 84 million shares of its
common stock, at a purchase price of $20.50 per share, for a total purchase price of $1.7 billion.
CSC executed a separate Stock Purchase Agreement with Chairman and former CEO Charles R. Schwab, CSC’s
largest stockholder, and with certain additional stockholders whose shares Mr. Schwab was deemed to beneficially
own. Under the Stock Purchase Agreement, Mr. Schwab and the other stockholders who are parties to the agreement
did not participate in the tender offer, but instead, sold, and CSC purchased, 18 million shares, at a purchase price
($20.50 per share), which is the same as was determined and paid in the tender offer, for a total purchase price of
$369 million. The number of shares repurchased resulted in Mr. Schwab maintaining the same beneficial ownership
percentage in CSC’s outstanding common stock that he had prior to the tender offer and sale of shares pursuant to
the Stock Purchase Agreement (approximately 18 percent, which does not take into consideration Mr. Schwab’s
outstanding options to acquire stock). The shares under this agreement were repurchased on August 15, 2007.