The Company completed its acquisition of TD Ameritrade effective October 6, 2020 and integration work continued during the year ended December 31, 2023, including the completion of four client transition groups. The Company expects to complete the remaining client transitions from TD Ameritrade to Schwab in a final transition group in May 2024.

The Company expects to continue to incur significant acquisition and integration-related costs and integration-related capital expenditures throughout the remaining integration process. Such costs have included, and are expected to continue to include, professional fees, such as legal, advisory, and accounting fees, compensation and benefits expenses for employees and contractors involved in the integration work, and costs for technology enhancements. The Company has also incurred exit and other related costs to attain anticipated synergies, which are primarily comprised of employee compensation and benefits such as severance pay, other termination benefits, and retention costs, as well as costs related to facility closures, such as accelerated amortization and depreciation or impairments of assets in those locations. Exit and other related costs are a component of the Company’s overall acquisition and integration-related spending, and support the Company’s ability to achieve integration objectives including expected synergies.

Our estimates of the nature, amounts, and timing of recognition of acquisition and integration-related costs remain subject to change based on certain factors, including the duration and complexity of the remaining integration process and the continued uncertainty of the economic environment. More specifically, factors that could cause variability in our expected acquisition and integration-related costs as we prepare for the last transition group and remaining integration work include the level of employee attrition, the complexity to wind-down the operations of the TD Ameritrade broker-dealers and related technology, and real estate-related exit cost variability.

Inclusive of costs recognized through December 31, 2023, Schwab currently expects to incur total exit and other related costs for the integration of TD Ameritrade ranging from $500 million to $600 million, consisting of employee compensation and benefits, facility exit costs, and certain other costs. During each of the years ended December 31, 2023, 2022, and 2021, the Company recognized $60 million, $34 million, and $108 million of acquisition-related exit costs, respectively. The Company expects that remaining exit and other related costs will be incurred and charged to expense over the next 12 months, with some costs expected to be incurred after client transition to decommission duplicative platforms and complete integration work. In addition to ASC 420 Exit or Disposal Cost Obligations (ASC 420), certain of the costs associated with these activities are accounted for in accordance with ASC 360 Property, Plant and Equipment (ASC 360), ASC 712 Compensation – Nonretirement Post Employment Benefits (ASC 712), ASC 718 Compensation – Stock Compensation (ASC 718), and ASC 842 Leases (ASC 842).



	Investor Services Employee Compensation and Benefits		Advisor Services Employee Compensation and Benefits		Total
Balance at December 31, 2021 (1)	$	28	$	7	$	35

Amounts recognized in expense (2)	19		6		25
Costs paid or otherwise settled	(11)		(3)		(14)
Balance at December 31, 2022 (1)	$	36	$	10	$	46

Amounts recognized in expense (2)	20		4		24
Costs paid or otherwise settled	(14)		(2)		(16)
Balance at December 31, 2023 (1)	$	42	$	12	$	54

The following table summarizes the TD Ameritrade integration exit and other related costs recognized in expense for the year ended December 31, 2023:


	Investor Services				Advisor Services
	Employee Compensation and Benefits		Facility Exit Costs (1)		Investor Services Total		Employee Compensation and Benefits		Facility Exit Costs (1)		Advisor Services Total		Total
Compensation and benefits	$	20	$	—	$	20	$	4	$	—	$	4	$	24
Occupancy and equipment	—		9		9		—		2		2		11



Other	—		18		18		—		7		7		25
Total	$	20	$	27	$	47	$	4	$	9	$	13	$	60

(1) Costs related to facility closures. These costs, which are primarily comprised of impairment and accelerated amortization of ROU assets, relate to the impact of abandoning leased and other properties. Impairment charges are included in other expense, while accelerated amortization of ROU assets are included in occupancy and equipment on the consolidated statements of income.

The following table summarizes the TD Ameritrade integration exit and other related costs recognized in expense for the year ended December 31, 2022:


	Investor Services				Advisor Services
	Employee Compensation and Benefits		Facility Exit Costs (1)		Investor Services Total		Employee Compensation and Benefits		Facility Exit Cost (1)		Advisor Services Total		Total
Compensation and benefits	$	19	$	—	$	19	$	6	$	—	$	6	$	25
Occupancy and equipment	—		7		7		—		2		2		9




Total	$	19	$	7	$	26	$	6	$	2	$	8	$	34

(1) Costs related to facility closures. These costs, which are primarily comprised of accelerated amortization of ROU assets, relate to the impact of abandoning leased and other properties. Accelerated amortization of ROU assets are included in occupancy and equipment on the consolidated statements of income.

The following table summarizes the TD Ameritrade integration exit and other related costs recognized in expense for the year ended December 31, 2021:


	Investor Services				Advisor Services
	Employee Compensation and Benefits		Facility Exit Cost (1)		Investor Services Total		Employee Compensation and Benefits		Facility Exit Cost (1)		Advisor Services Total		Total
Compensation and benefits	$	66	$	—	$	66	$	17	$	—	$	17	$	83
Occupancy and equipment	—		18		18		—		4		4		22
Professional services	—		1		1		—		—		—		1


Other	—		2		2		—		—		—		2
Total	$	66	$	21	$	87	$	17	$	4	$	21	$	108


	Investor Services				Advisor Services
	Employee Compensation and Benefits		Facility Exit Costs (1)		Investor Services Total		Employee Compensation and Benefits		Facility Exit Costs (1)		Advisor Services Total		Total
Compensation and benefits	$	243	$	—	$	243	$	65	$	—	$	65	$	308

Occupancy and equipment	—		40		40		—		9		9		49
Depreciation and amortization	—		2		2		—		1		1		3
Professional services	—		1		1		—		—		—		1
Other	—		20		20		—		7		7		27
Total	$	243	$	63	$	306	$	65	$	17	$	82	$	388

(1) Costs related to facility closures. These costs, which are primarily comprised of impairment and accelerated amortization of ROU assets and accelerated depreciation of fixed assets, relate to the impact of abandoning leased and other properties. Impairment charges are included in other expense, while accelerated amortization of ROU assets and accelerated depreciation of fixed assets are included in occupancy and equipment and depreciation expense, respectively, on the consolidated statements of income.

With significant progress now made in the integration of TD Ameritrade, the Company has begun to take incremental actions to streamline its operations to prepare for post-integration, including through position eliminations and decreasing its real estate footprint. In order to achieve anticipated cost savings through these actions, the Company expects to incur total exit and related costs, primarily related to employee compensation and benefits and facility exit costs, of approximately $500 million inclusive of costs recognized through December 31, 2023 of $495 million. The Company anticipates the remaining costs, primarily related to real estate, will be incurred during 2024. In addition to ASC 420, certain of the costs associated with these activities are accounted for in accordance with ASC 360, ASC 712, ASC 718, and ASC 842.



	Investor Services Employee Compensation and Benefits		Advisor Services Employee Compensation and Benefits		Total












Balance at December 31, 2022 (1)	$	—	$	—	$	—

Amounts recognized in expense (2)	214		78		292
Costs paid or otherwise settled	(43)		(15)		(58)
Balance at December 31, 2023 (1)	$	171	$	63	$	234


	Investor Services						Advisor Services
	Employee Compensation and Benefits		Facility Exit Costs (1)		Investor Services Total		Employee Compensation and Benefits		Facility Exit Costs (1)		Advisor Services Total		Total
Compensation and benefits	$	214	$	—	$	214	$	78	$	—	$	78	$	292

Occupancy and equipment	—		13		13		—		4		4		17

Professional services	—		4		4		—		1		1		5
Other	—		134		134		—		47		47		181
Total	$	214	$	151	$	365	$	78	$	52	$	130	$	495

(1) Costs related to facility closures. These costs, which are primarily comprised of impairment and accelerated amortization of ROU assets and impairment of fixed assets, relate to the impact of abandoning leased and other properties. Impairment charges are included in other expense, while accelerated amortization of ROU assets are included in occupancy and equipment on the consolidated statements of income.