EX-99 5 exh99_3.txt EXHIBIT 99.3
EXHIBIT 99.3 The Charles Schwab Corporation 11-Year Selected Financial and Operating Data (In Millions, Except Per Share Amounts, Ratios, Number of Domestic Offices, Average Revenue Per Revenue Trade, and as Noted) ------------------------------------------------------------------------------------------------------------------------------------ Growth Rates --------------------------------- Compounded Annual ---------- ------ 10-Year 5-Year 1-Year 1993-2003 1998-2003 2002-2003 2003 2002 2001 2000 ------------------------------------------------------------------------------------------------------------------------------------ Results of Operations Revenues (1) 12% 6% - $ 4,087 $ 4,091 $ 4,292 $ 5,695 Expenses excluding interest (1) 12% 7% (13%) $ 3,377 $ 3,864 $ 4,115 $ 4,433 Income from continuing operations before extraordinary items 11% 3% 250% $ 472 $ 135 $ 106 $ 738 Net income 11% 3% 333% $ 472 $ 109 $ 199 $ 718 Income from continuing operations per share - basic 10% 2% 250% $ .35 $ .10 $ .08 $ .54 Income from continuing operations per share - diluted 10% 2% 250% $ .35 $ .10 $ .08 $ .53 Basic earnings per share (2) 10% 2% 338% $ .35 $ .08 $ .14 $ .53 Diluted earnings per share (2) 11% 2% 338% $ .35 $ .08 $ .14 $ .51 Adjusted operating income (3) 11% 3% 20% $ 490 $ 409 $ 424 $ 869 Dividends declared per common share (4) 19% 7% 14% $ .050 $ .044 $ .044 $ .041 Weighted-average common shares outstanding - diluted 1,364 1,375 1,399 1,404 Non-trading revenues as a percentage of revenues (5) 66% 66% 63% 51% Trading revenues as a percentage of revenues (5) 34% 34% 37% 49% Effective income tax rate 33.5% 42.6% 44.1% 41.7% Capital expenditures - cash purchases of equipment, office facilities, property, and internal-use software development costs, net 4% (5%) (4%) $ 153 $ 160 $ 301 $ 705 Capital expenditures as a percentage of revenues 3.7% 3.9% 7.0% 12.4% ==================================================================================================================================== Performance Measures Revenue growth (decline) - (5%) (25%) 29% Pre-tax profit margin - reported 17.4% 4.6% 8.3% 21.6% After-tax profit margin - reported 11.5% 2.7% 4.6% 12.6% After-tax profit margin - operating (3) 12.0% 10.0% 9.9% 15.3% Return on stockholders' equity 11% 3% 5% 21% ==================================================================================================================================== Financial Condition (at year end) Total assets 16% 12% 16% $45,866 $39,705 $40,464 $38,154 Long-term debt 12% 13% 20% $ 772 $ 642 $ 730 $ 770 Stockholders' equity 22% 22% 11% $ 4,461 $ 4,011 $ 4,163 $ 4,230 Assets to stockholders' equity ratio 10 10 10 9 Long-term debt to total financial capital (long-term debt plus stockholders' equity) 15% 14% 15% 15% ==================================================================================================================================== Client Information (at year end) Active client accounts (6) 12% 6% (6%) 7.5 8.0 7.8 7.5 Client assets (in billions) 22% 10% 26% $ 966.7 $ 764.8 $ 845.9 $ 871.7 Total mutual fund assets (in billions) 24% 12% 19% $ 386.8 $ 323.8 $ 342.8 $ 330.3 Independent investment advisor client accounts (in thousands) (7) 19% 12% 5% 1,238.8 1,182.4 1,081.7 986.5 Independent investment advisor client assets (in billions) (7) 29% 14% 29% $ 287.1 $ 222.4 $ 235.0 $ 231.3 Number of domestic offices 6% 4% (11%) 376 422 429 415 ==================================================================================================================================== Employee Information Full-time equivalent employees (at year end, in thousands) 6% 2% (2%) 16.3 16.7 19.6 26.3 Revenues per average full-time equivalent employee (in thousands) 4% 3% 14% $ 251 $ 220 $ 192 $ 239 Compensation and benefits expense as a percentage of revenues 43.3% 45.1% 44.2% 42.2% ==================================================================================================================================== Clients' Daily Average Trading Volume (in thousands) (8) Daily average revenue trades (9) 17% 8% 5% 140.8 134.1 159.7 242.0 Mutual Fund OneSource and other asset-based trades 23% 8% 3% 57.9 56.1 54.0 58.1 ------------------------------------------------------------------------------------------------------------------------------------ Daily average trades 19% 8% 4% 198.7 190.2 213.7 300.1 ==================================================================================================================================== Average Revenue Per Revenue Trade (7%) (7%) (3%) $ 36.72 $ 37.78 $ 35.02 $ 37.38 ====================================================================================================================================
11-Year Selected Financial and Operating Data (In Millions, Except Per Share Amounts, Ratios, Number of Domestic Offices, Average Revenue Per Revenue Trade, and as Noted) ------------------------------------------------------------------------------------------------------------------------------------ 1999 1998 1997 1996 1995 1994 1993 ------------------------------------------------------------------------------------------------------------------------------------ Results of Operations Revenues (1) $ 4,405 $ 3,111 $ 2,619 $ 2,132 $ 1,789 $ 1,483 $ 1,353 Expenses excluding interest (1) $ 3,292 $ 2,428 $ 2,080 $ 1,658 $ 1,600 $ 1,225 $ 1,073 Income from continuing operations before extraordinary items $ 676 $ 413 $ 326 $ 282 $ 127 $ 156 $ 167 Net income $ 666 $ 410 $ 321 $ 275 $ 122 $ 156 $ 160 Income from continuing operations per share - basic $ .52 $ .32 $ .25 $ .22 $ .10 $ .13 $ .13 Income from continuing operations per share - diluted $ .49 $ .31 $ .24 $ .21 $ .10 $ .12 $ .13 Basic earnings per share (2) $ .51 $ .32 $ .25 $ .22 $ .10 $ .13 $ .13 Diluted earnings per share (2) $ .49 $ .31 $ .24 $ .21 $ .09 $ .12 $ .12 Adjusted operating income (3) $ 675 $ 413 $ 350 $ 283 $ 214 $ 184 $ 167 Dividends declared per common share (4) $ .037 $ .036 $ .031 $ .027 $ .021 $ .014 $ .009 Weighted-average common shares outstanding - diluted 1,373 1,343 1,338 1,320 1,304 1,285 1,306 Non-trading revenues as a percentage of revenues (5) 47% 50% 47% 44% 48% 52% 47% Trading revenues as a percentage of revenues (5) 53% 50% 53% 56% 52% 48% 53% Effective income tax rate 39.3% 39.5% 39.5% 40.6% 33.7% 39.6% 40.5% Capital expenditures - cash purchases of equipment, office facilities, property, and internal-use software development costs, $ 370 $ 199 $ 150 $ 173 $ 180 $ 48 $ 99 Capital expenditures as a percentage of revenues 8.4% 6.4% 5.7% 8.1% 10.1% 3.2% 7.3% ==================================================================================================================================== Performance Measures Revenue growth (decline) 42% 19% 23% 19% 21% 10% 23% Pre-tax profit margin - reported 24.9% 21.8% 20.3% 21.7% 10.3% 17.4% 19.9% After-tax profit margin - reported 15.1% 13.2% 12.3% 12.9% 6.8% 10.5% 11.8% After-tax profit margin - operating (3) 15.3% 13.3% 13.4% 13.3% 12.0% 12.4% 12.3% Return on stockholders' equity 31% 27% 26% 29% 16% 24% 30% ==================================================================================================================================== Financial Condition (at year end) Total assets $34,322 $26,407 $20,297 $17,256 $13,125 $11,141 $10,083 Long-term debt $ 518 $ 419 $ 433 $ 310 $ 275 $ 232 $ 250 Stockholders' equity $ 2,576 $ 1,673 $ 1,376 $ 1,069 $ 815 $ 690 $ 608 Assets to stockholders' equity ratio 13 16 15 16 16 16 17 Long-term debt to total financial capital (long-term debt plus stockholders' equity) 17% 20% 24% 22% 25% 25% 29% ==================================================================================================================================== Client Information (at year end) Active client accounts (6) 6.6 5.6 4.8 4.1 3.4 3.0 2.5 Client assets (in billions) $ 846.0 $ 594.3 $ 437.2 $ 324.1 $ 243.7 $ 163.7 $ 134.8 Total mutual fund assets (in billions) $ 294.0 $ 218.1 $ 166.3 $ 122.4 $ 85.4 $ 57.2 $ 43.9 Independent investment advisor client accounts (in thousands) (7) 848.3 689.9 547.2 442.2 390.6 301.1 216.4 Independent investment advisor client assets (in billions) (7) $ 213.1 $ 146.4 $ 105.8 $ 72.9 $ 50.6 $ 32.6 $ 22.9 Number of domestic offices 368 315 291 253 240 222 210 ==================================================================================================================================== Employee Information Full-time equivalent employees (at year end, in thousands) 20.1 15.1 14.3 11.9 10.7 9.4 9.3 Revenues per average full-time equivalent employee (in thousands) $ 249 $ 214 $ 204 $ 195 $ 182 $ 165 $ 166 Compensation and benefits expense as a percentage of revenues 37.0% 43.2% 42.4% 42.0% 43.5% 43.5% 43.0% ==================================================================================================================================== Clients' Daily Average Trading Volume (in thousands) (8) Daily average revenue trades (9) 163.1 97.2 71.8 54.0 40.8 29.5 28.1 Mutual Fund OneSource and other asset-based trades 45.6 40.3 34.2 27.2 17.8 14.3 7.4 ------------------------------------------------------------------------------------------------------------------------------------ Daily average trades 208.7 137.5 106.0 81.2 58.6 43.8 35.5 ==================================================================================================================================== Average Revenue Per Revenue Trade $ 45.55 $ 53.44 $ 64.27 $ 69.08 $ 73.11 $ 72.68 $ 76.75 ==================================================================================================================================== (1) Periods have been adjusted to summarize the impact of The Charles Schwab Corporation's sale of its U.K. brokerage subsidiary, Charles Schwab Europe, in loss from discontinued operations. (2) Both basic and diluted earnings per share include discontinued operations and extraordinary items. (3) Represents a non-GAAP income measure, which excludes non-operating revenue (which primarily consists of gains on sales of investments), restructuring charges, impairment charges, acquisition- and merger-related charges, other charges, discontinued operations, and extraordinary items. See reconciliation of net income to adjusted operating income at Exhibit 99.4 to this Current Report on Form 8-K. (4) Dividends declared per common share do not include dividends declared by USTC prior to the completion of the merger in 2000. (5) Non-trading revenues include asset management and administration fees, net interest revenue, and other revenues. Trading revenues include commission and principal transaction revenues. (6) Reflects the removal of 192,000 accounts in 2003 related to the Company's withdrawal from the Employee Stock Purchase Plan business and the transfer of those accounts to other providers. Effective in 1998, active accounts are defined as accounts with balances or activity within the preceding eight months instead of twelve months as previously defined. This change in definition had the effect of decreasing the number of active accounts in 1998 by approximately 200,000. Prior years have not been adjusted. (7) Represents amounts related to Schwab's Services for Investment Managers unit. (8) Effective in the third quarter of 2003, the Company considers reduced exchange trading sessions as half days in calculating daily average trades. (9) Effective in 1997, revenue trades have been adjusted for all years presented to include all client trades (both individuals and institutions) that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART. This data is reported on a trade date basis for 1995 to 2003, and settlement date basis prior to 1995.