Charles Schwab 2009 Annual Report Download - page 13

22 GROWTH IN CLIENT ASSETS AND ACCOUNTS
(In Millions, Except Per Share Amounts and as Noted) 2008-09 2009 2008 2007
GROWTH RATE
1-YEAR
Net revenues (19%) $ 4,193 $ 5,150 $ 4,994
Expenses excluding interest (7%) $ 2,917 $ 3,122 $ 3,141
Net income (35%) $ 787 $ 1,212 $ 2,407
Income from continuing
operations per share — basic (36%) $ .68 $ 1.07 $ .93
Income from continuing
operations per share — diluted (36%) $ .68 $ 1.06 $ .92
Basic earnings per share (36%) $ .68 $ 1.06 $ 1.98
Diluted earnings per share (35%) $ .68 $ 1.05 $ 1.96
Dividends declared per common share 9% $ .24 $ .22 $ .20
Special dividend declared per common share – $ – $ – $ 1.00
Weighted-average common shares
outstanding — diluted – 1,160 1,157 1,222
Closing market price per share (at year end) 16% $ 18.82 $ 16.17 $ 25.55
Book value per common share (at year end) 25% $ 4.37 $ 3.51 $ 3.22
Net revenue (decline) growth (19%) 3% 16%
Pre-tax profit margin from continuing operations 30.4% 39.4% 37.1%
Return on stockholders’ equity 17% 31% 55%
Full-time equivalent employees
(at year end, in thousands) (7%) 12.4 13.4 13.3
Net revenues per average
full-time equivalent employee (in thousands) (12%) $ 338 $ 383 $ 387
(In Billions, at Year End, Except as Noted) 2005-09 2008-09 2009 2008 2007 2006 2005
Assets in client accounts
Schwab One®, other cash equivalents
and deposits from banking clients 20% 47% $ 65.1 $ 44.4 $ 35.9 $ 31.0 $ 31.3
Proprietary funds (Schwab Funds®,
and Laudus Funds®):
Money market funds 12% (18%) 171.2 209.7 183.1 135.0 110.6
Equity and bond funds 1% 23% 41.6 33.9 58.7 56.2 39.2
Total proprietary funds 9% (13%) 212.8 243.6 241.8 191.2 149.8
Mutual Fund Marketplace® (1):
Mutual Fund OneSource® (2) 6% 58% 175.0 110.6 180.9 163.2 137.8
Mutual fund clearing services 8% 51% 81.8 54.2 81.8 62.1 60.2
Other third-party mutual funds 14% 44% 243.8 169.1 225.7 173.1 142.7
Total Mutual Fund Marketplace 10% 50% 500.6 333.9 488.4 398.4 340.7
Total mutual fund assets 10% 24% 713.4 577.5 730.2 589.6 490.5
Equity and other securities (1) 4% 36% 485.0 357.2 545.2 487.0 422.4
Fixed income securities 9% 2% 167.0 164.1 145.8 142.0 119.7
Margin loans outstanding (7%) 27% (7.9) (6.2) (11.6) (10.4) (10.4)
Total client assets 8% 25% $ 1,422.6 $ 1,137.0 $ 1,445.5 $ 1,239.2 $ 1,053.5
Client assets by business
Investor Services 4% 21% $ 583.2 $ 482.6 $ 625.3 $ 567.5 $ 507.8
Advisor Services 10% 24% 590.4 477.2 583.5 502.5 407.0
Corporate & Retirement Services 16% 41% 249.0 177.2 236.7 169.2 138.7
Total client assets
by business 8% 25% $1,422.6 $1,137.0 $1,445.5 $ 1,239.2 $1,053.5
Net growth in assets in client accounts
(for the year ended)
Net new assets
Investor Services (2%) (56%) $ 15.3 $ 35.1 $ 38.6 $ 26.7 $ 16.3
Advisor Services – (31%) 41.3 60.2 65.6 51.4 42.1
Corporate & Retirement Services 10% 70% 30.7 18.1 56.0 5.2 21.2
Total net new assets 2% (23%) $ 87.3 $ 113.4 $ 160.2 $ 83.3 $ 79.6
Net market gains (losses) 198.3 (421.9) 46.1 102.4 31.9
Net growth (decline) $ 285.6 $ (308.5) $ 206.3 $ 185.7 $ 111.5
New brokerage accounts
(in thousands, for the year ended) 8% (11%) 787 889 809 655 568
Clients (in thousands)(5)
Active brokerage accounts 2% 4% 7,701 7,401 7,049 6,737 7,049
Banking accounts N/A 62% 722 447 262 147 N/A
Corporate retirement
plan participants N/A 4% 1,465 1,407 1,205 542 N/A
Note: All amounts are presented on a continuing operations basis to exclude the impact of the sale of U.S. Trust Corporation, which was completed on July 1, 2007.
(1) Excludes all proprietary money market, equity, and bond funds.
(2) Certain client assets at December 31, 2009, have been reclassified from Mutual Fund OneSource® to other third-party mutual funds.
(3) Includes inflows of $17.8 billion in 2007 related to the acquisition of The 401(k) Company. Includes inflows of $3.3 billion and $3.6 billion in 2007 and 2006,
respectively, related to a mutual fund clearing services client. Includes an outflow of $19.5 billion in 2006 related to a mutual fund clearing services client who
completed the transfer of these assets to an internal platform. Effective 2007, amount includes balances covered by 401(k) record keeping-only ser vices, which totaled
$5.2 billion at May 31, 2007, related to the March 2007 acquisition of The 401(k) Company.
(4) Effective 2007, amounts include the Company’s mutual fund clearing services business’ daily net settlements, with a corresponding change in net market gains (losses).
All prior period amounts have been recast to reflect this change.
(5) Periodically, the Company reviews its active account base. The Company identified over 400,000 brokerage accounts that met its current definition of active, but had
little or no balances and no likelihood of further activity. Effective March 31, 2006, the Company removed these accounts from its active brokerage account total.
Amounts for periods prior to 2006 were not adjusted. While the Company adjusted its definition of an active brokerage account to exclude certain zero and minimal
balance accounts, the basic definition remains “accounts with balances or activity within the preceding 8 months.”
(6) 2007 includes increases of 398,000 related to the acquisition of The 401(k) Company and 100,000 related to Schwab Personal Choice Retirement Account®
participants at Schwab.
GROWTH RATES
ANNUAL
1-YEAR
COMPOUNDED
4-YEAR
FINANCIAL HIGHLIGHTS
(3,4)
(4)
(6)
(2)