Charles Schwab 2010 Annual Report Download - page 102

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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)
Financial information for the Company’s reportable segments is presented in the following table:
Fees received from Schwab’s proprietary mutual funds represented approximately 14%, 23%, and 24% of the Company’s net
revenues in 2010, 2009, and 2008, respectively. Except for Schwab’s proprietary mutual funds, which are considered a single client
for purposes of this computation, no single client accounted for more than 10% of the Company’s net revenues in 2010, 2009, or
2008. Substantially all of the Company’s revenues and assets are generated or located in the U.S. The percentage of Schwab’s total
client accounts located in California was approximately 24% at December 31, 2010, 2009, and 2008.
The carrying amount of goodwill, as allocated to the Company’s reportable segments for purposes of testing goodwill for impairment,
is presented in the following table:
Investor Services Institutional Services Unallocated Total
Year Ended December 31, 2010 2009 2008 2010 2009 2008 2010 2009 2008 2010 2009 2008
Net Revenues:
Asset management and
administration fees
$ 976 $ 968 $ 1,293 $ 846 $ 907 $ 1,062 $ — $ — $ — $ 1,822 $ 1,875 $ 2,355
Net interest revenue
1,297 1,058 1,398 227 187 283 — — 1 1,524 1,245 1,682
Tradin
g
revenue
557 679 725 273 317 355
—
—
—
830 996 1,080
Other
70 93 24 65 82 60 — — 10 135 175 94
Provision for loan losses
(23) (34) (15) (4) (4) (2) — — — (27) (38) (17)
Net impairment losses on
securities
(32) (54) (40) (4) (6) (4) — — — (36) (60) (44)
Total net revenues
2,845 2,710 3,385 1,403 1,483 1,754 — — 11 4,248 4,193 5,150
Expenses Excluding
Interest 2,065 1,906 2,107 960 929 1,001 444 82 14 3,469 2,917 3,122
Income from continuing
operations before taxes
on income
$ 780 $ 804 $ 1,278 $ 443 $ 554 $ 753 $ (444) $ (82) $ (3) $ 779 $ 1,276 $ 2,028
Taxes on income
(325) (489) (798)
Income from continuing
o
p
erations
454 787 1,230
Loss from discontinued
operations, net of tax
— — (18)
Net Income
$ 454 $ 787 $ 1,212
Capital expenditures
$ 91 $ 95 $ 125 $ 36 $ 44 $ 70 $ — $ — $ 1 $ 127 $ 139 $ 196
Depreciation and
amortization
$ 93 $ 100 $ 100 $ 52 $ 59 $ 52 $ 1 $ — $ — $ 146 $ 159 $ 152
Unallocated amount primarily includes class action litigation and regulatory reserves of $320 million and money market mutual fund charges of $132 million in 2010, and
facilities and severance charges relating to the Company’s cost reduction measures in 2009.
December 31, 2010 2009
Investor Services
$ 446
$ 416
Institutional Services
185
112
Total
g
oodwill
$ 631
$ 528
25. Discontinued Operations
In July 2007, the Company sold all of the outstanding common stock of U.S. Trust. In connection with the determination of the final
income tax gain on the sale of U.S. Trust, the Company recorded additional tax expense of $18 million in 2008, which is included in
loss from discontinued operations.
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