Obligation Charles Schwab & Co. 7% ( US808513AE59 ) en USD

Société émettrice Charles Schwab & Co.
Prix sur le marché 100 %  ▼ 
Pays  Etas-Unis
Code ISIN  US808513AE59 ( en USD )
Coupon 7% par an ( paiement semestriel )
Echéance Perpétuelle - Obligation échue



Prospectus brochure de l'obligation Charles Schwab US808513AE59 en USD 7%, échue


Montant Minimal 1 000 USD
Montant de l'émission 400 000 000 USD
Cusip 808513AE5
Notation Standard & Poor's ( S&P ) BBB ( Qualité moyenne inférieure )
Notation Moody's N/A
Description détaillée Charles Schwab est une société de services financiers américaine offrant une gamme de services de courtage, de gestion de placements et de banque aux particuliers et aux investisseurs institutionnels.

L'obligation perpétuelle de Charles Schwab (US808513AE59, CUSIP 808513AE5), émise aux États-Unis pour un montant total de 400 000 000 USD, avec un coupon de 7% payable deux fois par an et une taille minimale d'achat de 1 000 USD, notée BBB par Standard & Poor's, a atteint sa maturité et a été intégralement remboursée à 100% de sa valeur nominale en USD.







Filed Pursuant to Rule 424(b)(5)
424B5 1 d282653d424b5.htm FILED PURSUANT TO RULE 424(B)(5)
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-178525
CALCULATION OF REGISTRATION FEE



Maximum
Aggregate
Amount of
Class of Securities Offered

Offering Price

Registration Fee(1)
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A

$400,000,000

$45,840.00



(1)
The filing fee of $45,840 is calculated in accordance with Rule 457(r) of the Securities Act of 1933, as amended.
Table of Contents

PROSPECTUS SUPPLEMENT
(To Prospectus dated December 15, 2011)
$400,000,000
The Charles Schwab Corporation
Shares of Fixed-to-Floating Rate Non-Cumulative
Perpetual Preferred Stock, Series A
We are offering 400,000 shares of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, $0.01 par
value, with a liquidation preference of $1,000 per share (the "Preferred Stock").
We will pay dividends on the Preferred Stock, when, as, and if declared by our board of directors or a duly authorized
committee of our board of directors. Dividends will accrue on a non-cumulative basis and be payable from the date of issuance to,
but excluding, February 1, 2022 at a rate of 7.000% per annum, payable semi-annually, in arrears, on February 1 and August 1 of
each year, beginning on August 1, 2012 and ending on February 1, 2022. Dividends will accrue on a non-cumulative basis and be
payable from and including February 1, 2022, at a floating rate equal to three-month LIBOR plus a spread of 4.820% per annum,
payable quarterly, in arrears, on February 1, May 1, August 1 and November 1 of each year, beginning on May 1, 2022.
Dividends on the Preferred Stock will not be cumulative. If our board of directors or a duly authorized committee of our board of
directors does not declare a dividend on the Preferred Stock in respect of a dividend period, then no dividend shall be deemed to
have accrued for such dividend period, be payable on the applicable dividend payment date, or be cumulative, and we will have no
obligation to pay any dividend for that dividend period, whether or not our board of directors or a duly authorized committee of our
board of directors declares a dividend on the Preferred Stock for any future dividend period.
We may redeem the Preferred Stock at our option:

· in whole or in part, from time to time, on any dividend payment date on or after February 1, 2022 at a redemption price equal

to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends; or

· in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined herein), at a

redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared
dividends.
The Preferred Stock will not have any voting rights, except as set forth under "Description of Preferred Stock--Voting Rights"
on page S-22.
The Preferred Stock will not be insured by the Federal Deposit Insurance Corporation or any other governmental agency or
instrumentality. Shares of the Preferred Stock will not be savings accounts, deposits or other obligations of any bank.
We do not intend to apply for listing of the Preferred Stock on any securities exchange or for inclusion of the Preferred Stock in
any automated dealer quotation system. Currently, there is no public market for the Preferred Stock.
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Filed Pursuant to Rule 424(b)(5)
Investing in the Preferred Stock involves risks. See "Risk Factors" beginning on page S-12.
Neither the Securities and Exchange Commission ("SEC") nor any state securities commission has approved or
disapproved of the Preferred Stock or passed upon the adequacy or accuracy of this prospectus supplement or the
accompanying prospectus. Any representation to the contrary is a criminal offense.

Per Share
Total





Public offering price(1)


$1,000.00

$400,000,000
Underwriting discounts and commissions


$ 12.50

$ 5,000,000
Proceeds, before expenses(1)


$ 987.50

$395,000,000

(1) The public offering price does not include dividends, if any, that may be declared. Dividends, if declared, will accrue from the
date of original issuance, which is expected to be January 26, 2012.
The underwriters expect to deliver the Preferred Stock to purchasers in book-entry form through the facilities of The Depository
Trust Company ("DTC") and its direct participants, including Euroclear Bank S.A./N.V., as operator of the Euroclear System
("Euroclear") and Clearstream Banking, a societe anonyme ("Clearstream") on or about January 26, 2012.
Joint Book-Running Managers

Credit Suisse
J.P. Morgan

Sole Structuring Advisor
Co-Managers

Citigroup

Goldman, Sachs & Co.

UBS Investment Bank

Wells Fargo Securities
January 23, 2012
Table of Contents
TABLE OF CONTENTS



Page
PROSPECTUS SUPPLEMENT

ABOUT THIS PROSPECTUS SUPPLEMENT
S-iii
WHERE YOU CAN FIND MORE INFORMATION
S-iv
FORWARD-LOOKING STATEMENTS
S-v
SUMMARY
S-1
RISK FACTORS
S-12
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
S-15
USE OF PROCEEDS
S-16
CAPITALIZATION
S-17
DESCRIPTION OF PREFERRED STOCK
S-18
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
S-26
CERTAIN ERISA CONSIDERATIONS
S-33
UNDERWRITING
S-35
NOTICE TO INVESTORS
S-37
NOTICE TO CANADIAN RESIDENTS
S-38
LEGAL MATTERS
S-40
EXPERTS
S-40
PROSPECTUS

ABOUT THIS PROSPECTUS

1
FORWARD-LOOKING STATEMENTS

1
WHERE YOU CAN FIND MORE INFORMATION

2
THE CHARLES SCHWAB CORPORATION

4
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

5
USE OF PROCEEDS

5
DESCRIPTION OF DEBT SECURITIES

6
DESCRIPTION OF PREFERRED STOCK

14
DESCRIPTION OF DEPOSITARY SHARES

17
DESCRIPTION OF COMMON STOCK

19
DESCRIPTION OF PURCHASE CONTRACTS

21
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Filed Pursuant to Rule 424(b)(5)
DESCRIPTION OF WARRANTS

22
DESCRIPTION OF UNITS

24
GLOBAL SECURITIES

25
PLAN OF DISTRIBUTION

29
VALIDITY OF SECURITIES

31
EXPERTS

31

S-i
Table of Contents
In making your investment decision, you should rely only on the information contained in or incorporated by reference in this prospectus
supplement, the accompanying prospectus, any "free writing prospectus" we authorized to be delivered to you, or any other offering material filed
or provided by us. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it.
We are not, and the underwriters are not, offering to sell the Preferred Stock, and are not seeking offers to buy the Preferred Stock, in any
jurisdiction where offers and sales are not permitted. The distribution of this prospectus supplement and the accompanying prospectus and the
offering of the Preferred Stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this
prospectus supplement and the accompanying prospectus must inform themselves about and observe any restrictions relating to the offering of the
Preferred Stock and the distribution of this prospectus supplement and the accompanying prospectus outside the United States. This prospectus
supplement and the accompanying prospectus do not constitute, and may not be used in connection with, an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or solicitation.

S-ii
Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the Securities and
Exchange Commission, or SEC, utilizing a "shelf" registration process. In this prospectus supplement, we provide you with specific information
about the Preferred Stock that we are selling in this offering and about the offering itself. Both this prospectus supplement and the accompanying
prospectus include or incorporate by reference important information about us, our Preferred Stock and other information you should know before
investing in our Preferred Stock. This prospectus supplement also adds, updates and changes information contained or incorporated by reference in
the accompanying prospectus. To the extent that any statement that we make in this prospectus supplement is inconsistent with the statements made
in the accompanying prospectus, the statements made in the accompanying prospectus are deemed modified or superseded by the statements made
in this prospectus supplement. You should read both this prospectus supplement and the accompanying prospectus as well as additional information
described in "Where you can find more information" before investing in our Preferred Stock.
References in this prospectus supplement to "we," "us," "our" and "CSC" mean The Charles Schwab Corporation. References in this
prospectus supplement to the "Company" means CSC and its majority-owned subsidiaries.
Currency amounts in this prospectus supplement and the accompanying prospectus are stated in U.S. dollars.
The representations, warranties and covenants made by CSC in any agreement that is filed as an exhibit to any document that is incorporated
by reference in this prospectus supplement and the accompanying prospectus were made solely for the benefit of the parties to such agreement,
including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of CSC's affairs. You should
assume that the information contained or incorporated by reference in this prospectus supplement and any document incorporated by reference
herein and in the accompanying prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations and
prospects may have changed since those dates.

S-iii
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Filed Pursuant to Rule 424(b)(5)
Table of Contents
WHERE YOU CAN FIND MORE INFORMATION
CSC files annual, quarterly and current reports, proxy statements and other information with the SEC. CSC's SEC filings are available to the
public over the Internet at the SEC's website at http://www.sec.gov. Copies of certain information filed by CSC with the SEC are also available on
CSC's corporate website at http://www.aboutschwab.com. The website addresses of the SEC and CSC are included as inactive textual references
only, and the information contained on those websites is not a part of this prospectus supplement or the accompanying prospectus. You may also
read and copy any document that CSC files at the SEC's Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC allows CSC to "incorporate by reference" information CSC has filed with the SEC, which means that CSC can disclose important
information to you by referring you to other documents. The information incorporated by reference is considered to be a part of this prospectus
supplement.
This prospectus supplement incorporates by reference the documents listed below:


· Annual Report on Form 10-K for the fiscal year ended December 31, 2010;


· Quarterly Report on Form 10-Q for the quarter ended March 31, 2011;


· Quarterly Report on Form 10-Q for the quarter ended June 30, 2011;


· Quarterly Report on Form 10-Q for the quarter ended September 30, 2011; and

· Current Reports on Form 8-K filed on January 18, 2011 (dated January 11, 2011), March 21, 2011 (two filings), May 9, 2011, May 23,

2011 and September 1, 2011.
Any statement contained in a document incorporated by reference, or deemed to be incorporated by reference, in this prospectus supplement
or the accompanying prospectus shall be deemed to be modified or superseded for purposes of this prospectus supplement or the accompanying
prospectus to the extent that a statement contained in this prospectus supplement or the accompanying prospectus or in any other subsequently filed
document which also is incorporated by reference in this prospectus supplement or the accompanying prospectus modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this
prospectus supplement or the accompanying prospectus.
Statements contained in this prospectus supplement or the accompanying prospectus as to the contents of any contract or other document
referred to in this prospectus supplement or the accompanying prospectus do not purport to be complete, and where reference is made to the
particular provisions of such contract or other document, such provisions are qualified in all respects by reference to all of the provisions of such
contract or other document. In reviewing any agreements incorporated by reference, please remember they are included to provide you with
information regarding the terms of such agreements and are not intended to provide any other factual or disclosure information about CSC. The
agreements may contain representations and warranties by CSC or other parties, which should not in all instances be treated as categorical
statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate. The representations and
warranties were made only as of the date of the relevant agreement or such other date or dates as may be specified in such agreement and are
subject to more recent developments. Accordingly, these representations and warranties alone may not describe the actual state of affairs as of the
date they were made or at any other time.
You may request a copy of these filings at no cost, by writing, telephoning or sending an email to the following address:
The Charles Schwab Corporation
211 Main Street
San Francisco, California 94105
Attention: Corporate Secretary
Telephone: (415) 667-1959
Email: [email protected]

S-iv
Table of Contents
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus, including the documents incorporated by reference, contain not only historical
information but also "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities
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Filed Pursuant to Rule 424(b)(5)
Exchange Act of 1934. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will,"
"may," "estimate," "aim," "target," "appear", "could" and other similar expressions. These statements, which may be expressed in a variety of
ways, including the use of future or present tense language, refer to future events. In addition, any statements that refer to expectations, projections,
or other characterizations of future events or circumstances are forward-looking statements.
These forward-looking statements, which reflect management's beliefs, objectives and expectations as of the date hereof, or in the case of any
documents incorporated by reference, as of the date of those documents, are necessarily estimates based on the best judgment of CSC's senior
management. These statements relate to, among other things:


· the use of proceeds from this offering;


· the ratings for the Preferred Stock;


· a trading market for the Preferred Stock;


· the impact of current market conditions on the Company's results of operations;


· the impact of changes in the likelihood of indemnification and guarantee payment obligations on the Company's results of operations;


· the impact of legal proceedings and regulatory matters;


· target capital ratios;


· sources of liquidity, capital and level of dividends;


· capital expenditures;


· the Company's ability to pursue its business strategy;


· the impact of changes in management's estimates on the Company's results of operations;


· the impact on the Company's results of operations of recording stock option expense; and


· the other risks and uncertainties described in this prospectus supplement.
Achievement of the expressed beliefs, objectives and expectations described in these statements is subject to certain risks and uncertainties
that could cause actual results to differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this prospectus supplement or, in the case of documents incorporated by reference, as of the date of those documents.
Important factors that may cause actual results to differ include, but are not limited to:


· changes in general economic and financial market conditions;


· changes in revenues and profit margin due to changes in interest rates;


· the Company's ability to attract and retain clients and to grow client assets and relationships;


· the Company's ability to develop and launch new products, services and capabilities in a timely and successful manner;


· fluctuations in client asset values due to changes in equity valuations;


· the performance or valuation of securities available for sale and securities held to maturity;


· the level of interest rates, including yields available on money market mutual fund eligible instruments;

S-v
Table of Contents

· potential breaches of contractual terms for which the Company has indemnification and guarantee obligations;


· adverse developments in litigation or regulatory matters;


· amounts recovered on insurance policies;


· the extent of any charges associated with litigation and regulatory matters;


· the adverse impact of financial reform legislation and related regulations;


· the amount of loans to the Company's brokerage and banking clients;


· the level of the Company's stock repurchase activity;


· capital needs;


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Filed Pursuant to Rule 424(b)(5)

· the integration of optionsXpress;


· the level of brokerage client cash balances and deposits from banking clients;


· the availability and terms of external financing;

· the timing and impact of changes in the Company's level of investments in software, technology, furniture, equipment, and leasehold

improvements; and


· CSC's ability to maintain favorable ratings from ratings agencies.
You should refer to the "Risk Factors" section of this prospectus supplement and to CSC's periodic and current reports filed with the SEC for
specific risks which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. In
particular, certain of these factors, as well as general risk factors affecting CSC and its subsidiaries, are discussed in greater detail in "Item 1A--
Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference into this
prospectus supplement and accompanying prospectus.

S-vi
Table of Contents
SUMMARY
The following summary contains basic information about this offering. It may not contain all of the information that is important to you
and it is qualified in its entirety by the more detailed information included or incorporated by reference in this prospectus supplement and the
accompanying prospectus. You should carefully consider the information contained in and incorporated by reference in this prospectus
supplement and the accompanying prospectus, including the information set forth under the heading "Risk Factors" in this prospectus
supplement and the accompanying prospectus. In addition, certain statements include forward-looking information that involves risks and
uncertainties. See "Forward-Looking Statements."
The Charles Schwab Corporation
CSC, headquartered in San Francisco, California, was incorporated in 1986 and engages, through its subsidiaries (primarily located in
San Francisco except as indicated), in securities brokerage, banking, asset management and related financial services. At September 30, 2011,
CSC had $1.58 trillion in client assets, 8.5 million active brokerage accounts, 1.46 million corporate retirement plan participants and 769,000
banking accounts.
Significant business subsidiaries of CSC include:

· Charles Schwab & Co., Inc. ("Schwab"), which was incorporated in 1971, is a securities broker-dealer with more than 300 domestic

branch offices in 45 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, U.K., and serves clients in
Hong Kong through one of CSC's subsidiaries;

· Charles Schwab Bank ("Schwab Bank"), which commenced operations in 2003, is a federal savings bank located in Reno, Nevada;

and

· Charles Schwab Investment Management, Inc. is the investment advisor for Schwab's proprietary mutual funds, which are referred to

as the Schwab Funds® and Schwab's exchange-traded funds, which are referred to as the Schwab ETFsTM.
The Company offers a broad range of products to address individuals' varying investment and financial needs. Examples of these product
offerings include:

· Brokerage--an array of brokerage accounts including some with check-writing features, debit card, and billpay; individual retirement

accounts; retirement plans for small to large businesses; 529 college savings accounts; designated brokerage accounts; equity
incentive plan accounts; and margin loans, as well as access to fixed income securities, and equity and debt offerings;

· Banking--checking accounts linked to brokerage accounts, savings accounts, certificates of deposit, demand deposit accounts, first

mortgages, home equity lines of credit (HELOCs), and pledged asset loans;


· Trust--trust custody services, personal trust reporting services, and administrative trustee services;

· Advice--separately managed accounts, customized personal advice for tailored portfolios, and specialized planning and full-time

portfolio management;

· Mutual funds--third-party mutual funds through Mutual Fund Marketplace®, including no-load mutual funds through the Mutual

Fund OneSource® service, proprietary mutual funds from two fund families--Schwab Funds® and Laudus Funds®, other third-party
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Filed Pursuant to Rule 424(b)(5)
mutual funds, and mutual fund trading and clearing services to broker-dealers; and


· Exchange-traded funds (ETFs)--third-party and proprietary ETFs, as well as separately managed portfolios of ETFs.


S-1
Table of Contents
These products, and the Company's full array of investing services, are made available through its two reportable segments--Investor
Services and Institutional Services.
Investor Services
Through the Investor Services segment, the Company provides retail brokerage and banking services to individual investors.
The Company offers research, analytic tools, performance reports, market analysis, and educational material to all clients. Clients
looking for more guidance have access to online portfolio planning tools, professional advice from Schwab's portfolio consultants who can
help develop an investment strategy and carry out investment and portfolio management decisions, as well as a range of fully delegated
managed solutions that provide ongoing portfolio management.
Institutional Services
Through the Institutional Services segment, Schwab provides custodial, trading, technology, practice management, trust asset, and other
support services to independent investment advisors. To attract and serve independent investment advisors, Institutional Services has a
dedicated sales force and service teams assigned to meet their needs.
The Institutional Services segment also provides retirement plan recordkeeping and related services, retirement plan trust and custody
services, stock plan services, and mutual fund clearing services, and supports the availability of Schwab proprietary investment funds on third-
party platforms. The Company serves a range of employer sponsored plans: equity compensation plans, defined contribution plans, defined
benefit plans, nonqualified deferred compensation plans and other employee benefit plans.


CSC's common stock is listed and traded on The New York Stock Exchange under the symbol "SCHW".
CSC's principal executive office is located at 211 Main Street, San Francisco, California 94105 and CSC's telephone number is
(415) 667-7000. CSC's corporate Internet website is www.aboutschwab.com. CSC's website address is included as an inactive textual
reference only, and the information contained on CSC's website is not a part of this prospectus supplement or the accompanying prospectus.


S-2
Table of Contents
Recent Developments
In accordance with our normal schedule, we are currently performing, and have not yet completed, the closing procedures in connection
with the preparation and filing of our audited financial statements which will be included in our Annual Report on Form 10-K for the year
ended December 31, 2011. Accordingly, while we currently estimate our financial results for the quarter and year ended December 31, 2011
as set forth in the tables below and other fourth quarter and year-end information as described in the narrative below, this information is, by
necessity, preliminary in nature and based only upon preliminary information available to us as of the date of this prospectus supplement. We
cannot assure you that this information will not change.
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)

Three Months
Twelve Months
Ended
Ended
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Filed Pursuant to Rule 424(b)(5)


December 31,

December 31,



2011

2010

2011

2010

Net Revenues




Asset management and administration fees

$ 458
$ 497
$1,928
$1,822
Interest revenue


436

462
1,900
1,723
Interest expense


(41)

(48)
(175)
(199)
















Net interest revenue


395

414
1,725
1,524
Trading revenue


233

206

927

830
Other


41

36

160

135
Provision for loan losses


(5)

(9)

(18)

(27)
Net impairment losses on securities(1)


(9)

(17)

(31)

(36)
















Total net revenues

1,113
1,127
4,691
4,248
















Expenses Excluding Interest




Compensation and benefits


442

397
1,732
1,573
Professional services


99

92

387

341
Occupancy and equipment


79

70

301

272
Advertising and market development


69

57

228

196
Communications


54

53

220

207
Depreciation and amortization


48

38

155

146
Class action litigation and regulatory reserve


--

124

7

320
Money market mutual fund charges


--

--

--

132
Other


70

67

269

282
















Total expenses excluding interest


861

898
3,299
3,469
















Income before taxes on income


252

229
1,392

779
Taxes on income


(89)
(110)
(528)
(325)
















Net Income

$ 163
$ 119
$ 864
$ 454
















Weighted-Average Common Shares Outstanding--Diluted

1,271
1,200
1,229
1,194
















Earnings Per Share--Basic

$
.13
$
.10
$
.70
$
.38
Earnings Per Share--Diluted

$
.13
$
.10
$
.70
$
.38

(1)
Net impairment losses on securities include total other-than-temporary impairment losses of $5 million and $0 million, net of $(4)
million and $(17) million recognized in other comprehensive income, for the three months ended December 31, 2011 and 2010,
respectively, and total other-than-temporary impairment losses of $18 million and $41 million, net of $(13) million and $5 million
recognized in other comprehensive income, for the twelve months ended December 31, 2011 and 2010, respectively.


S-3
Table of Contents
Financial and Operating Highlights
(Unaudited)

Q4-11 %


change


2011


2010

vs.
vs.
Fourth
Third
Second
First
Fourth
(In millions, except per share amounts and as noted)
Q4-10
Q3-11
Quarter
Quarter
Quarter
Quarter
Quarter
Net Revenues







Asset management and administration fees

(8%)
(2%) $ 458 $ 466 $ 502 $ 502 $ 497
Net interest revenue

(5%) (11%)
395
443
451
436
414
Trading revenue

13%
(6%)
233
248
205
241
206
Other

14%
(9%)
41
45
35
39
36
Provision for loan losses
(44%) (38%)
(5)
(8)
(1)
(4)
(9)
Net impairment losses on securities
(47%) (31%)
(9)
(13)
(2)
(7)
(17)






















Total net revenues

(1%)
(6%) 1,113 1,181 1,190 1,207 1,127






















Expenses Excluding Interest







Compensation and benefits

11%
4%
442
423
430
437
397
Professional services

8%
(5%)
99
104
92
92
92
Occupancy and equipment

13%
1%
79
78
73
71
70
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Filed Pursuant to Rule 424(b)(5)
Advertising and market development

21% 44%
69
48
51
60
57
Communications

2%
(4%)
54
56
54
56
53
Depreciation and amortization

26% 23%
48
39
33
35
38
Class action litigation and regulatory reserve(1)
N/M
--

--
--
7
--
124
Other

4%
(4%)
70
73
64
62
67






















Total expenses excluding interest

(4%)
5%
861
821
804
813
898






















Income before taxes on income

10% (30%)
252
360
386
394
229
Taxes on income
(19%) (36%)
(89) (140) (148) (151) (110)






















Net Income

37% (26%) $ 163 $ 220 $ 238 $ 243 $ 119






















Basic earnings per share

30% (28%) $
.13 $
.18 $
.20 $
.20 $
.10
Diluted earnings per share

30% (28%) $
.13 $
.18 $
.20 $
.20 $
.10
Dividends declared per common share


$
.06 $
.06 $
.06 $
.06 $
.06
Weighted-average common shares outstanding--diluted

6%
3% 1,271 1,229 1,210 1,207 1,200
Performance Measures







Pre-tax profit margin



22.6% 30.5% 32.4% 32.6% 20.3%
Return on stockholders' equity (annualized)



8%
12%
14%
15%
8%
Financial Condition (at quarter end, in billions)







Cash and investments segregated

15%
(4%) $ 26.0 $ 27.0 $ 23.8 $ 23.1 $ 22.7
Receivables from brokerage clients

(1%) --
$ 11.1 $ 11.1 $ 11.6 $ 11.3 $ 11.2
Loans to banking clients

13%
1% $
9.8 $
9.7 $
9.5 $
9.1 $
8.7
Total assets(2)

17%
6% $108.6 $102.9 $ 97.6 $ 94.9 $ 92.6
Deposits from banking clients

20% 13% $ 60.9 $ 54.1 $ 52.3 $ 51.3 $ 50.6
Payables to brokerage clients

15%
(3%) $ 35.5 $ 36.6 $ 33.9 $ 32.1 $ 30.9
Long-term debt
--
--
$
2.0 $
2.0 $
2.0 $
2.0 $
2.0
Stockholders' equity

24% --
$
7.7 $
7.7 $
6.7 $
6.5 $
6.2
Other







Full-time equivalent employees (at quarter end, in
thousands)

10%
1% 14.1 13.9 13.2 13.1 12.8
Annualized net revenues per average full-time equivalent
employee (in thousands)
(11%) (10%) $
316 $ 350 $ 361 $ 371 $ 355
Capital expenditures--cash purchases of equipment,
office facilities, and property, net (in millions)

8%
2% $
55 $
54 $
44 $
37 $
51
Clients' Daily Average Trades (in thousands)







Revenue trades(3)

13%
(5%) 307.4 323.1 264.9 319.9 271.6
Asset-based trades(4)

17%
(9%) 45.9 50.6 43.6 48.8 39.3
Other trades(5)

26%
5% 106.3 101.7 88.6 103.8 84.6






















Total

16%
(3%) 459.6 475.4 397.1 472.5 395.5






















Average Revenue Per Revenue Trade(3)

1%
1% $12.21 $12.04 $12.23 $12.12 $12.07






















(Footnotes appear on next page)


S-4
Table of Contents

(1) Includes a regulatory reserve relating to the Schwab YieldPlus Fund®.
(2) Total assets as of December 31, and September 30, 2011, reflect preliminary purchase accounting for the assignment of fair values to
optionsXpress Holdings, Inc.'s assets and liabilities acquired. Amounts are subject to refinement as information relative to the closing
date fair values becomes available.
(3) Includes all client trades that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as
DART.
(4) Includes eligible trades executed by clients who participate in one or more of the Company's asset-based pricing relationships.
(5) Includes all commission free trades, including Schwab Mutual Fund OneSource® funds and ETFs, and other proprietary products.
N/MNot meaningful.
http://www.sec.gov/Archives/edgar/data/316709/000119312512021933/d282653d424b5.htm#supptoc282653_9[1/25/2012 9:46:57 AM]


Filed Pursuant to Rule 424(b)(5)
Capital Ratios
As a savings and loan holding company, CSC is not subject to specific statutory capital requirements. However, CSC is required to
maintain capital that is sufficient to support the holding company and its subsidiaries' business activities, and the risks inherent in those
activities. To manage capital adequacy, CSC currently utilizes a target Tier 1 Leverage Ratio, as defined by the Board of Governors of the
Federal Reserve System (the "Federal Reserve"), of at least 6%. The Tier 1 Leverage Ratio declined slightly in the fourth quarter of 2011 due
to strong balance sheet growth, but remained above the 6% target.
Similarly, although CSC is not subject to the Tier 1 Capital Ratio of at least 6% required by the Federal Reserve for well-capitalized
bank holding companies, we monitor that ratio as part of our capital management. The Tier 1 Capital Ratio remained well above 6% during
2011.
Additionally, we track the Tangible Common Equity Ratio, which declined moderately during 2011 due to strong balance sheet growth.
The Tangible Common Equity Ratio remained at or above 6% throughout the first three quarters of 2011, declining to just below 6% in the
fourth quarter.
Interest Rate Environment
The difficult market conditions in 2011 continue to constrain growth in the Company's net revenues.
While the Company generally earns asset management and administration fees based upon daily balances of certain client assets, these
fees are currently being affected by the current low interest rate environment as well. The overall yields on certain Schwab-sponsored money
market mutual funds have remained at levels at or below the management fees on those funds. The Company continues to waive a portion of
its management fees, which it began in the first quarter of 2009, so that the funds can continue providing a positive return to clients. These
and other money market mutual funds may not be able to replace maturing securities with securities of equal or higher yields. As a result, the
yields on such funds may remain around their current levels, and therefore below the management fees on those funds, or the yields may
decline further. Money market fund fee waivers in the fourth quarter of 2011 increased slightly to $168 million, up from $160 million in the
third quarter, due to higher average fund balances.
Given the low interest rate environment, the Company's revenue from interest-earning assets, such as securities held and loans to clients,
has been declining more than the interest that the Company pays on funding sources, such as client deposits. The Company's ability to reduce
the interest paid on funding sources has been limited as short-term rates have remained near zero. To the extent rates remain at the current low
levels, the Company's net interest revenue will continue to be constrained, even as growth in average balances helps increase such revenue.
The Company's net interest margin declined to 1.57% in the fourth quarter of 2011 due to lower long-term interest rates and related
acceleration of prepayments in our mortgage-backed securities portfolio.


S-5
Table of Contents
European Holdings
The Company monitors the European holdings of Schwab Bank and of the Schwab-sponsored money market funds. As of December 31,
2011, neither Schwab Bank nor the Schwab-sponsored money market funds held any European sovereign debt. In addition, as of such date, the
Schwab-sponsored money market funds had no direct holdings issued by financial institutions in Greece, Spain, Italy, Ireland or Portugal, but
held securities issued by financial institutions in other European countries that represent 16.0% of taxable funds, with the significant majority
of such European investments being outside the Euro currency zone.


S-6
Table of Contents
THE OFFERING
The following description contains basic information about the Preferred Stock and this offering. This description is not complete and
does not contain all of the information that you should consider before investing in the Preferred Stock. For a more complete understanding of
http://www.sec.gov/Archives/edgar/data/316709/000119312512021933/d282653d424b5.htm#supptoc282653_9[1/25/2012 9:46:57 AM]


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