Charles Schwab 2015 Annual Report Download - page 100

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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)
- 80 -
required under this facility was $8.9 billion (CSC’s stockholders’ equity, excluding accumulated other comprehensive
income, at December 31, 2015, was $13.5 billion). There were no borrowings outstanding under these facilities at
December 31, 2015 or 2014.
To manage short-term liquidity, Schwab maintains uncommitted, unsecured bank credit lines with several banks. There were
no borrowings outstanding under these lines at December 31, 2015 or 2014.
To partially satisfy the margin requirement of client option transactions with the Options Clearing Corporation, the broker-
dealer subsidiaries have unsecured standby LOCs with several banks in favor of the Options Clearing Corporation
aggregating $295 million at December 31, 2015. There were no funds drawn under any of these LOCs at December 31, 2015
or 2014. In connection with its securities lending activities, the Company is required to provide collateral to certain brokerage
clients. The collateral requirements were satisfied by providing cash as collateral.
15. Commitments and Contingencies
Operating leases: The Company has non-cancelable operating leases for office space and equipment. Future annual
minimum rental commitments under these leases, net of contractual subleases are as follows:
Operating
December 31, 2015 Leases Subleases Net
2016 $ 135 $ 34 $ 101
2017 122 28 94
2018 82 6 76
2019 53 2 51
2020 43 2 41
Thereafter 139 4 135
Total $ 574 $ 76 $ 498
Certain leases contain provisions for renewal options, purchase options, and rent escalations based on increases in certain
costs incurred by the lessor. Rent expense relating to operating leases was $116 million, $114 million, and $116 million in
2015, 2014, and 2013, respectively.
Purchase obligations: The Company has purchase obligations for services such as advertising and marketing,
telecommunications, professional services, and hardware- and software-related agreements. The Company has purchase
obligations as follows:
December 31, 2015
2016 $ 230
2017 114
2018 38
2019 19
2020 17
Thereafter 213
Total $ 631
Guarantees and indemnifications: The Company has clients that sell (i.e., write) listed option contracts that are cleared by the
Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. The Company
partially satisfies the margin requirements by arranging unsecured standby LOCs, in favor of the Options Clearing
Corporation and others, which are issued by multiple banks. At December 31, 2015, the aggregate face amount of these
LOCs totaled $304 million. There were no funds drawn under any of these LOCs at December 31, 2015. In connection with
its securities lending activities, the Company is required to provide collateral to certain brokerage clients. The Company
satisfies the collateral requirements by providing cash as collateral.