The Company completed its acquisition of Ameritrade effective October 6, 2020 and integration work continued during the first three months of 2024. The Company expects to complete the remaining client transitions from Ameritrade to Schwab in a final transition group in May of 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 Ameritrade broker-dealers and related technology, and real estate-related exit cost variability.

Inclusive of costs recognized through March 31, 2024, Schwab currently expects to incur total exit and other related costs for the integration of Ameritrade ranging from $500 million to $600 million, consisting of employee compensation and benefits, facility exit costs, and certain other costs. During the three months ended March 31, 2024 and 2023, the Company recognized $3 million and $10 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 9 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, 2023 (1)	$	42	$	12	$	54


Costs paid or otherwise settled	(9)		(2)		(11)
Balance at March 31, 2024 (1)	$	33	$	10	$	43


	Investor Services						Advisor Services
Three Months Ended March 31,	Employee Compensation and Benefits		Facility Exit Costs (1)		Investor Services Total		Employee Compensation and Benefits		Facility Exit Costs (1)		Advisor Services Total		Total



Occupancy and equipment	$	—	$	1	$	1	$	—	$	—	$	—	$	1


Other	—		2		2		—		—		—		2
Total	$	—	$	3	$	3	$	—	$	—	$	—	$	3

(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 properties. Impairment charges are included in other expense, while accelerated amortization of ROU assets are included in occupancy and equipment on the condensed consolidated statements of income.

The following table summarizes the Ameritrade integration exit and other related costs recognized in expense for the three months ended March 31, 2023:


	Investor Services						Advisor Services
Three Months Ended March 31,	Employee Compensation and Benefits		Facility Exit Costs		Investor Services Total		Employee Compensation and Benefits		Facility Exit Costs		Advisor Services Total		Total

Compensation and benefits	$	8	$	—	$	8	$	2	$	—	$	2	$	10

Total	$	8	$	—	$	8	$	2	$	—	$	2	$	10


	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	—		41		41		—		9		9		50
Depreciation and amortization	—		2		2		—		1		1		3
Professional services	—		1		1		—		—		—		1
Other	—		22		22		—		7		7		29
Total	$	243	$	66	$	309	$	65	$	17	$	82	$	391

(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 are included in occupancy and equipment on the condensed consolidated statements of income.

With significant progress made in the integration of Ameritrade, the Company took incremental actions in 2023 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 exit and related costs, primarily related to employee compensation and benefits and facility exit costs, of approximately $500 million inclusive of costs recognized through March 31, 2024 as described below. 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, 2023 (1)	$	171	$	63	$	234

Amounts recognized in expense (2)	(23)		(8)		(31)
Costs paid or otherwise settled	(146)		(54)		(200)
Balance at March 31, 2024 (1)	$	2	$	1	$	3

(2) Amounts recognized in expense for severance pay and other termination benefits are included in compensation and benefits on the condensed consolidated statements of income. The three months ended March 31, 2024 includes a reduction of the liability resulting from changes in estimates of $25 million and $8 million in Investor Services and Advisor Services, respectively.


	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	$	(23)	$	—	$	(23)	$	(8)	$	—	$	(8)	$	(31)

Occupancy and equipment	—		1		1		—		1		1		2


Other	—		1		1		—		—		—		1
Total	$	(23)	$	2	$	(21)	$	(8)	$	1	$	(7)	$	(28)


	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	$	191	$	—	$	191	$	70	$	—	$	70	$	261

Occupancy and equipment	—		14		14		—		5		5		19

Professional services	—		4		4		—		1		1		5
Other	—		135		135		—		47		47		182
Total	$	191	$	153	$	344	$	70	$	53	$	123	$	467

(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 condensed consolidated statements of income.