Charles Schwab 2013 Annual Report Download - page 47

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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)
- 36 -
Company issued 59 million shares of the Company’s common stock valued at $710 million, based on the closing price of the
Company’s common stock on September 1, 2011. The Company also assumed optionsXpress’ stock-based compensation
awards valued at $4 million.
For more information on these acquisitions, see “Item 8 – Financial Statements and Supplementary Data – Notes to
Consolidated Financial Statements – 24. Business Acquisitions.”
Off-Balance Sheet Arrangements
The Company enters into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the
needs of its clients. These arrangements include firm commitments to extend credit. Additionally, the Company enters into
guarantees and other similar arrangements as part of transactions in the ordinary course of business. For information on each
of these arrangements, see “Item 8 – Financial Statements and Supplementary Data – Notes to Consolidated Financial
Statements – 14. Commitments and Contingencies. and “Item 8 – Financial Statements and Supplementary Data – Notes to
Consolidated Financial Statements – 15. Financial Instruments Subject to Off-Balance Sheet Credit Risk or Concentration
Risk.”
Contractual Obligations
The Company’s principal contractual obligations as of December 31, 2013, are shown in the following table. Management
believes that funds generated by its continuing operations, as well as cash provided by external financing, will continue to be
the primary funding sources in meeting these obligations. Excluded from this table are liabilities recorded on the consolidated
balance sheet that are generally short-term in nature (e.g., payables to brokers, dealers, and clearing organizations) or without
contractual payment terms (e.g., deposits from banking clients, payables to brokerage clients, and deferred compensation).
Less than 1-3 3-5 More than
1 Year Years Years 5 Years Total
Credit-related financial instruments (1)  $ 732 $ 1,054 $ 1,967 $ 2,269 $ 6,022
Long-term debt (2)  64 476 632 1,051 2,223
Leases (3)  100 156 113 158 527
Purchase obligations (4)  233 172 9 1 415
Total  $ 1,129 $ 1,858 $ 2,721 $ 3,479 $ 9,187
(1) Represents Schwab Bank’s commitments to extend credit to banking clients and purchase mortgage loans.
(2) Includes estimated future interest payments through 2017 for Medium-Term Notes and through 2022 for Senior Notes.
Amounts exclude maturities under a finance lease obligation and unamortized discounts and premiums.
(3) Represents minimum rental commitments, net of sublease commitments, and includes facilities under the Company’s
past restructuring initiatives and rental commitments under a finance lease obligation.
(4) Consists of purchase obligations for services such as advertising and marketing, telecommunications, professional
services, and hardware- and software-related agreements. Includes purchase obligations that can be canceled by the
Company without penalty.