Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACTS: Media (San Francisco) Glen Mathison (415) 636-5448
Investors/Analysts Rich Fowler (415) 636-9869
SCHWAB REPORTS QUARTERLY RESULTS
NET NEW ASSETS TOTAL $16.1 BILLION
SAN FRANCISCO, April 15, 2005 - The Charles Schwab Corporation announced
today that its net income for the quarter ended March 31, 2005 was $145 million.
In comparison, the Company reported net income of $53 million for the fourth
quarter of 2004 and net income of $161 million for the first quarter of 2004.
Excluding $19 million in after-tax charges relating to its ongoing cost
reduction effort and its exit from the capital markets business, the Company's
first quarter 2005 adjusted operating income was $164 million - the same as the
prior quarter, and up 3% from the year-ago quarter's $159 million. A table that
reconciles net income to adjusted operating income is attached.
Three Months Ended
--March 31,-- %
Financial Highlights 2005 2004 Change
- --------------------------------------------------------------------------------
Reported Results:
Revenues (in millions) $1,059 $1,108 (4)%
Net income (in millions) $145 $161 (10)%
Diluted earnings per share $.11 $.12 (8)%
Pre-tax profit margin(1) 23.2% 22.0%
After-tax profit margin 13.7% 14.5%
Return on stockholders' equity 13% 14%
Adjusted Operating Results(2):
Revenues (in millions) $1,059 $1,108 (4)%
Income (in millions) $164 $159 3%
Diluted earnings per share $.12 $.12 0%
Pre-tax profit margin 25.2% 22.0%
After-tax profit margin 15.5% 14.4%
1. From continuing operations.
2. Non-GAAP income measures which exclude gains or losses from discontinued
operations and restructuring charges.
- --------------------------------------------------------------------------------
In reviewing the first quarter, Chairman and CEO Charles Schwab commented,
"We remain intensely focused on delivering what Schwab stands for - value,
performance and service. In recent months, we've completed a series of price
reductions and enhanced our personal service capabilities by expanding our
relationship-based investment help. With these moves, I believe we have
dramatically improved our value proposition and created a new connection with
our clients. Our progress with investors is reflected in both our revenue
picture and client asset and account flows. Even as we have reduced the average
amount our clients pay for a trade by over 45%, revenues declined by just 4%
versus a year ago due to our continued success in building non-trading revenues.
Clients brought a total of $16.1 billion in net new assets to the Company in the
first quarter, with 65% of these net new assets going into accounts with an
ongoing advisory component. In addition, clients opened nearly 58,000 new
accounts in March, up 30% from February and our strongest showing since last
April. We ended the quarter with $1.077 trillion in client assets, up 8% from a
year ago."
CFO Christopher Dodds noted, "Even against a backdrop of rising interest
rates, continuing concerns about energy prices, and flat to down securities
markets, client activity picked up in the first quarter - daily average revenue
trades rose by 8% over fourth quarter levels to 191,000, the highest quarterly
level in four years. While our reduced commission rates resulted in a 5%
sequential drop in trading revenues, the higher rate environment and continued
strength in client inflows yielded our eighth consecutive quarterly increase in
non-trading revenues, which totaled a record $852 million in the first quarter,
up 1% from the prior quarter. Although our total revenues were essentially
unchanged from the fourth quarter, sharply lower levels of charges associated
with our ongoing cost reduction efforts and our exit from the capital markets
business enabled us to report net income of $145 million for the first quarter,
up from $53 million in the prior period. Our work on improving our margins
continues - on an adjusted operating basis, our 25.2% pre-tax profit margin for
the first quarter was up 70 basis points from the 24.5% level we achieved in the
fourth quarter. We are also continuing to carefully manage our capital base -
capital expenditures were just $23 million during the quarter, and we
repurchased $234 million of common stock in the first three months of 2005."
Mr. Dodds added, "Consistent with recent market volumes and the advent of
earnings season, client trading activity has slowed thus far in April - daily
average revenue trades for the first 9 trading days of the month totaled
171,000."
Business highlights for the first quarter (data as of quarter-end unless
otherwise noted):
Advised Investing
o For accounts at the Company with an ongoing advice component (includes
accounts enrolled in Schwab Private Client(TM) and Schwab Advised
Investing(TM), accounts managed by independent investment advisors (IAs),
and U.S. Trust(R) accounts):
o Net new client assets during the quarter = $11 billion.
o Total assets = a record $518 billion, up 14% year-over-year.
o Total number of accounts = 1.5 million.
Individual Investor Business
o Number of clients enrolled in Schwab Private Client and Schwab Advised
Investing = 48,500, up 12% from the prior quarter.
o Lowered online equity commissions to $12.95 per trade for domestic retail
investors with household assets between $50,000 and $1 million, or for
Active Traders that trade between 36 to 119 times a year.
o Announced reduced options pricing to $9.95 plus $0.95 per options contract
(previously $1.40 per contract) for clients who place 30 or more trades per
quarter, or with over $1 million in household assets at Schwab.
o Eliminated account service fees on brokerage, educational, custodial and
college saver accounts for clients with at least $25,000 in household
assets at Schwab. These fees are also waived for clients with $10,000 to
$24,999 in household assets who have either a mortgage or home equity loan
from Schwab Bank.
o Broadened our efforts to help clients achieve better investing outcomes by
offering Schwab Equity Ratings(R) (SER) to all retail clients; also
reinstated 24-by-7 customer service.
Schwab Institutional(R) Business
o Total client assets associated with Schwab Institutional = $352 billion, up
16% year-over-year.
o Client assets new to the Schwab Advisor Network(R) program during the
quarter = $1.7 billion, up 5% year-over-year.
o Client assets at Schwab associated with IA referral programs = $26 billion,
up 22% year-over-year.
o Announced Managed Account Affiliates(TM), a new bundled managed account
offering that provides IAs access to affiliated investment managers such as
U.S. Trust.
o Launched Business Consulting Services, a new program that combines Schwab
and third-party industry expertise to deliver a comprehensive suite of
consulting resources including industry best practices, benchmarks and
one-on-one consulting services.
Corporate Services Business
o Net new assets during the quarter = $1.7 billion.
o Total client assets in employer-sponsored retirement plans at Schwab = $129
billion, up 10% year-over-year.
o Introduced the Schwab Managed Retirement Trust Fund-Income, a fund designed
for 401(k) participants in or near retirement that offers stability and
income, along with a growth component. This is the fifth in a series of
targeted retirement funds developed specifically for 401(k) participants.
U.S. Trust Business
o Total referrals from Schwab to U.S. Trust were over 310, compared with over
280 in the prior quarter.
o Client assets at U.S. Trust associated with the referral program = $4.9
billion, up 40% year-over-year and up $147 million during the quarter.
o Total client assets at U.S. Trust = $139 billion, up 2% year-over-year.
Products
o Total client assets held in third-party Mutual Fund OneSource(R) funds =
$122 billion, up 6% year-over-year.
o Total client assets held in proprietary funds (Schwab Funds(R),
Excelsior(R) and other) = $158 billion, up 3%, year-over year.
o Total client assets held in fixed income securities = $142 billion, up 7%
year-over-year.
o For Charles Schwab Bank, N.A.:
o Balance sheet assets = $4.7 billion, up 7% from the prior
quarter.
o Outstanding mortgage and home equity loans = $1.4 billion.
o First mortgage originations during the quarter = $211 million.
o Launched the Schwab Premier Equity Fund(TM), a fund that invests in a
portfolio of higher-rated stocks chosen using SER. This was the most
successful new fund in Schwab Funds'(R) history, with $334 million in
assets raised during the subscription period.
o Debuted Investor Checking, an integrated, interest-earning checking account
with features such as overdraft protection, online check images, unlimited
check writing and real-time funds transfer.
o Introduced the dual-employee program, a new initiative that will enable
more than 1,500 client-facing brokerage employees to be able to educate and
offer clients information about the full suite of banking products offered
through Schwab Bank.
o Achieved first place for our SER-based model portfolio in Barron's annual
stock selection competition (3-year category).
o Awarded top honors by Corporate Insight for Schwab.com's research platform
and news tools.
The Charles Schwab Corporation (NYSE / Nasdaq: SCH), through its operating
subsidiaries, provides securities brokerage and financial services to individual
investors and the independent investment advisors who work with them. With over
7 million individual investor accounts and more than $1 trillion in client
assets, The Charles Schwab Corporation is one of the nation's largest financial
services firms. Its subsidiary Charles Schwab & Co., Inc. (member SIPC) provides
a complete range of investment services and products, including an extensive
selection of mutual funds; financial planning and investment advice; retirement
plans; referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent fee-based investment advisors.
Its subsidiary Charles Schwab Bank, N.A. (member FDIC) provides banking and
mortgage services and products. The corporation's other operating subsidiaries
include U.S. Trust Corporation (member FDIC) and CyberTrader(R), Inc. (member
SIPC). These companies' Web sites can be reached at www.schwab.com,
www.schwabbank.com, www.ustrust.com, and www.cybertrader.com.
###
THE CHARLES SCHWAB CORPORATION
Consolidated Statement of Income
(In millions, except per share amounts)
(Unaudited)
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Three Months
Ended
March 31,
2005 2004
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Revenues
Asset management and administration fees $ 547 $ 507
Trading revenue 207 361
Interest revenue 412 263
Interest expense (138) (54)
-------- --------
Net interest revenue 274 209
Other 31 31
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Total 1,059 1,108
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Expenses Excluding Interest
Compensation and benefits 454 482
Occupancy and equipment 82 102
Professional services 62 58
Depreciation and amortization 54 56
Communications 51 61
Advertising and market development 36 62
Commissions, clearance and floor brokerage 9 9
Restructuring charges 21 -
Other 44 34
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Total 813 864
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Income from continuing operations before taxes on income 246 244
Taxes on income (95) (85)
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Income from continuing operations 151 159
Gain (loss) from discontinued operations, net of tax (6) 2
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Net Income $ 145 $ 161
====================================================================================================================================
Weighted-Average Common Shares Outstanding - Diluted 1,326 1,375
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Earnings Per Share - Basic
Income from continuing operations $ .11 $ .12
Gain (loss) from discontinued operations, net of tax - -
Net income $ .11 $ .12
Earnings Per Share - Diluted
Income from continuing operations $ .11 $ .12
Gain (loss) from discontinued operations, net of tax - -
Net income $ .11 $ .12
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Dividends Declared Per Common Share $ .020 $ .014
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See Notes to Consolidated Statement of Income and Financial and Operating Highlights.
THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)
| 2005 | 2004 | 2003 |
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First Fourth Third Second First Fourth Third Second First
(In millions, except per share amounts and as noted) Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
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Revenues (1)
Asset management and administration fees $ 547 $ 544 $ 523 $ 517 $ 507 $ 487 $ 468 $ 448 $ 429
Trading revenue (2) 207 218 185 261 361 327 312 310 241
Interest revenue, net of interest expense 274 258 245 224 209 193 181 179 175
Other 31 40 47 32 31 55 36 34 21
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Total 1,059 1,060 1,000 1,034 1,108 1,062 997 971 866
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Expenses Excluding Interest (1)
Compensation and benefits 454 447 455 493 482 435 418 421 391
Occupancy and equipment 82 90 97 100 102 108 106 108 108
Professional services 62 64 62 61 58 52 44 43 36
Depreciation and amortization 54 59 58 53 56 65 69 69 74
Communications 51 53 53 56 61 59 59 54 56
Advertising and market development 36 33 43 46 62 39 31 22 47
Commissions, clearance and floor brokerage 9 10 9 11 9 11 10 11 8
Restructuring charges (3) 21 100 112 2 - 17 35 24 -
Impairment charges - - - - - - - - 5
Other 44 44 39 43 34 43 29 36 36
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Total 813 900 928 865 864 829 801 788 761
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Income from continuing operations before taxes on income 246 160 72 169 244 233 196 183 105
Taxes on income (1) (95) (58) (26) (62) (85) (87) (72) (57) (25)
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Income from continuing operations 151 102 46 107 159 146 124 126 80
Gain (loss) from discontinued operations, net of tax (6) (49) (87) 6 2 2 3 - (9)
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Net Income (Loss) $ 145 $ 53 $ (41) $ 113 $ 161 $ 148 $ 127 $ 126 $ 71
====================================================================================================================================
Basic earnings (loss) per share $ .11 $ .04 $ (.03) $ .08 $ .12 $ .11 $ .09 $ .10 $ .05
Diluted earnings (loss) per share $ .11 $ .04 $ (.03) $ .08 $ .12 $ .11 $ .09 $ .09 $ .05
Dividends declared per common share $ .020 $ .020 $ .020 $ .020 $ .014 $ .014 $ .014 $ .011 $ .011
Weighted-average common shares outstanding - diluted 1,326 1,348 1,364 1,373 1,375 1,371 1,366 1,360 1,357
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Performance Measures
Adjusted operating income (4) $ 164 $ 164 $ 107 $ 108 $ 159 $ 147 $ 144 $ 131 $ 69
Pre-tax profit margin from continuing operations 23.2% 15.1% 7.2% 16.3% 22.0% 21.9% 19.7% 18.8% 12.1%
Pre-tax profit margin - operating (4) 25.2% 24.5% 17.2% 16.5% 22.0% 22.3% 23.2% 21.3% 12.7%
After-tax profit margin - reported 13.7% 5.0% (4.1%) 10.9% 14.5% 13.9% 12.7% 13.0% 8.2%
After-tax profit margin - operating (4) 15.5% 15.5% 10.9% 10.4% 14.4% 14.1% 14.4% 13.5% 8.0%
Return on stockholders' equity (5) 13% 5% (3%) 10% 14% 13% 12% 12% 7%
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Financial Condition (at quarter end)
Cash and investments segregated (in billions) $ 18.5 $ 19.0 $ 19.6 $ 20.5 $ 20.8 $ 21.3 $ 22.4 $ 22.6 $ 22.3
Receivables from brokerage clients (in billions) $ 9.7 $ 9.8 $ 9.2 $ 9.3 $ 9.3 $ 8.6 $ 7.7 $ 7.0 $ 6.3
Total assets (in billions) $ 46.4 $ 47.1 $ 45.9 $ 47.3 $ 46.3 $ 45.9 $ 43.8 $ 41.8 $ 40.4
Payables to brokerage clients (in billions) $ 26.4 $ 27.2 $ 25.9 $ 26.9 $ 26.5 $ 27.2 $ 26.1 $ 26.2 $ 25.8
Long-term debt (in millions) $ 577 $ 585 $ 611 $ 645 $ 779 $ 772 $ 776 $ 811 $ 856
Stockholders' equity (in millions) $4,275 $4,386 $4,555 $4,732 $4,662 $4,461 $4,312 $4,179 $4,056
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Other (6)
Full-time equivalent employees (at quarter end,
in thousands) 13.9 14.2 14.8 16.3 16.5 16.0 15.7 15.7 16.1
Capital expenditures - cash purchases of
equipment, office facilities, property, and
internal-use software development costs, net
(in millions) $ 23 $ 43 $ 66 $ 51 $ 34 $ 50 $ 36 $ 31 $ 30
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Clients' Daily Average Trades (in thousands) (7)
Revenue trades (8) 191.3 177.7 128.1 142.2 178.0 161.7 145.1 141.0 114.6
Schwab Institutional(R) (9) 9.9 8.7 8.2 8.4 8.5 N/A N/A N/A N/A
Schwab Private Client(TM) (10) 10.0 9.4 7.8 6.8 5.6 N/A N/A N/A N/A
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Total 211.2 195.8 144.1 157.4 192.1 N/A N/A N/A N/A
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Active Trader Daily Average Revenue Trades
(in thousands) (8,11) 106.0 98.0 66.1 72.5 91.5 80.8 72.9 69.5 54.5
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Average Revenue Per Revenue Trade (6,8) $17.95 $19.32 $22.96 $30.06 $33.16 $32.60 $34.11 $35.12 $34.78
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(1) All amounts have been adjusted to summarize the impact of The Charles Schwab Corporation's (the Company's) sales of its capital
markets business, Schwab Soundview Capital Markets, and its United Kingdom (U.K.) brokerage subsidiary, Charles Schwab Europe,
in gain (loss) from discontinued operations.
(2) Trading revenue includes commission and principal transaction revenues.
(3) Restructuring charges include costs relating to workforce, facilities, systems hardware, software, and equipment reductions.
(4) Represents a non-GAAP income measure which excludes non-operating revenue, restructuring charges, impairment charges, and gain
(loss) from discontinued operations, net of taxes, as well as a non-recurring tax benefit. See attached reconciliation of net
income to adjusted operating income.
(5) Calculated based on annualized quarterly net income (loss) and average stockholders' equity for the quarter.
(6) All amounts have been adjusted to reflect the sale of Schwab Soundview Capital Markets.
(7) Schwab Institutional(R) and Schwab Private Client(TM) (SPC) trading information for periods prior to 2004 is not available.
(8) Revenue trades include all client trades (both individuals and institutions) that generate trading revenue (i.e., commission
revenue or revenue from fixed income securities trading); also known as DART.
(9) Includes trades placed by investment advisors enrolled in an asset-based pricing program. Trading activity is included in the
program fees.
(10) Includes eligible trades placed by individual investors enrolled in SPC. Specified levels of trading activity are included in
SPC fees.
(11) Active Trader includes all CyberTrader clients and Schwab clients enrolled in one of Schwab's Active Trader offers. Active
Trader DART is included in total DART above.
N/A Not available
See Notes to Consolidated Statement of Income and Financial and Operating Highlights.
THE CHARLES SCHWAB CORPORATION
Reconciliation of Net Income to Adjusted Operating Income
(Unaudited)
| 2005 | 2004 | 2003 |
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First Fourth Third Second First Fourth Third Second First
(In millions) Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
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Revenues $1,059 $1,060 $1,000 $1,034 $1,108 $1,062 $ 997 $ 971 $ 866
Non-operating revenue (1) - - (14) - - (17) - - -
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Operating revenues $1,059 $1,060 $ 986 $1,034 $1,108 $1,045 $ 997 $ 971 $ 866
====================================================================================================================================
Net income (loss) $ 145 $ 53 $ (41) $ 113 $ 161 $ 148 $ 127 $ 126 $ 71
Adjustments to reconcile net income (loss)
to adjusted operating income:
Other income (1) - - (14) - - (17) - - -
Restructuring charges (2,3) 21 100 112 2 - 17 35 24 -
Impairment charges (3) - - - - - - - - 5
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Total adjusted items 21 100 98 2 - - 35 24 5
Tax (benefit) expense (4) (8) (38) (37) (1) - 1 (15) (19) (16)
Loss (gain) from discontinued operations,
net of tax (5) 6 49 87 (6) (2) (2) (3) - 9
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Total adjusted items, net of tax 19 111 148 (5) (2) (1) 17 5 (2)
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Adjusted operating income, after tax (6) $ 164 $ 164 $ 107 $ 108 $ 159 $ 147 $ 144 $ 131 $ 69
====================================================================================================================================
(1) Primarily consists of pre-tax gains recorded on sales of investments.
(2) Restructuring charges reflect The Charles Schwab Corporation's (the Company's) 2004 cost reduction effort and previous
restructuring initiatives under the Company's plan to reduce operating expenses due to continued economic uncertainties and
difficult market conditions. These charges primarily include workforce, facilities, systems hardware, software, and equipment
reductions.
(3) Adjusted operating expenses equal total expenses excluding interest less total restructuring and impairment charges.
(4) In the second quarter of 2003, includes an $11 million non-recurring tax benefit. In the first quarter of 2003, includes a $16
million tax benefit associated with the Company's sale of its U.K. market-making operation.
(5) Represents the summarized impact of the Company's sales of its capital markets business and its U.K. brokerage subsidiary. In
the first quarter of 2005, includes a tax adjustment, severance costs for transitional employees, and facility exit costs
associated with the Company's sale of its capital markets business.
(6) In evaluating the Company's financial performance, management uses adjusted operating income, a non-GAAP income measure which
excludes items as detailed in the table above. Management believes that adjusted operating income is a useful indicator of its
ongoing financial performance, and a tool that can provide meaningful insight into financial performance without the effects of
certain material items that are not expected to be an ongoing part of operations.
The Charles Schwab Corporation
Notes to Consolidated Statement of Income and Financial and Operating Highlights
(Unaudited)
The Company
The consolidated statement of income and financial and operating highlights include The Charles Schwab Corporation and its
majority-owned subsidiaries (collectively referred to as the Company), including Charles Schwab & Co., Inc., U.S. Trust
Corporation, and CyberTrader, Inc. All periods have been adjusted to summarize the impact of the Company's sales of its capital
markets business, Schwab Soundview Capital Markets, and its U.K. brokerage subsidiary, Charles Schwab Europe, in gain (loss) from
discontinued operations. The consolidated statement of income and financial and operating highlights should be read in
conjunction with the consolidated financial statements and notes thereto included in the Company's 2004 Annual Report on Form
10-K for the year ended December 31, 2004. Certain prior periods' revenues and expenses have been reclassified to conform with
the current period presentation. All material intercompany balances and transactions have been eliminated.
**********
THE CHARLES SCHWAB CORPORATION
Growth in Client Assets and Accounts
(Unaudited)
| 2005 | 2004 | 2003 |
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First Fourth Third Second First Fourth Third Second First
(In billions, at quarter end, except as noted) Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
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Assets in client accounts
Schwab One(R), other cash equivalents and
deposits from banking clients $ 37.5 $ 37.2 $ 35.7 $ 36.5 $ 35.4 $ 34.2 $ 31.8 $ 30.2 $ 31.1
Proprietary funds (Schwab Funds(R),
Excelsior(R) and other):
Money market funds 112.0 111.8 114.0 115.0 116.3 119.2 124.4 126.8 132.4
Equity and bond funds 46.4 43.1 38.4 37.5 36.8 34.2 30.7 31.2 27.4
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Total proprietary funds 158.4 154.9 152.4 152.5 153.1 153.4 155.1 158.0 159.8
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Mutual Fund Marketplace(R) (1):
Mutual Fund OneSource(R) 122.2 127.8 114.5 115.2 115.1 101.5 90.1 85.0 71.8
Mutual fund clearing services 47.1 44.2 38.1 33.9 37.5 33.5 28.4 24.5 21.4
All other 120.3 114.4 103.6 101.7 100.5 98.4 88.3 84.6 71.6
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Total Mutual Fund Marketplace 289.6 286.4 256.2 250.8 253.1 233.4 206.8 194.1 164.8
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Total mutual fund assets 448.0 441.3 408.6 403.3 406.2 386.8 361.9 352.1 324.6
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Equity and other securities (1,2) 459.6 472.0 429.2 437.0 431.7 424.0 368.3 349.1 296.4
Fixed income securities (2) 141.7 140.5 136.5 130.6 132.1 130.2 122.2 120.2 116.7
Margin loans outstanding (9.6) (9.8) (9.1) (9.1) (9.1) (8.5) (7.5) (6.9) (6.2)
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Total client assets $1,077.2 $1,081.2 $1,000.9 $ 998.3 $ 996.3 $ 966.7 $ 876.7 $ 844.7 $ 762.6
====================================================================================================================================
Net growth in assets in client accounts
(for the quarter ended)
Net new client assets (3) $ 16.1 $ 16.8 $ 13.0 $ 6.7 $ 13.8 $ 24.9 $ 10.6 $ 6.5 $ 14.2
Net market gains (losses) (20.1) 63.5 (10.4) (4.7) 15.8 65.1 21.4 75.6 (16.4)
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Net growth (decline) $ (4.0)$ 80.3 $ 2.6 $ 2.0 $ 29.6 $ 90.0 $ 32.0 $ 82.1 $ (2.2)
====================================================================================================================================
U.S. Trust client assets (4) $ 138.8 $ 141.1 $ 137.3 $ 137.0 $ 135.8 $ 137.2 $ 116.1 $ 114.0 $ 106.7
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New client accounts
(in thousands, for the quarter ended) 150.6 133.6 114.2 139.1 159.8 145.5 123.9 151.9 171.0
Active client accounts (in millions) (5) 7.3 7.3 7.4 7.5 7.5 7.5 7.6 7.7 8.0
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(1) Excludes all proprietary money market, equity, and bond funds.
(2) All amounts have been adjusted to reclassify exchange-traded unit investment trusts from fixed income securities to equity and
other securities.
(3) Includes a one-time special dividend from Microsoft Corporation of $1.2 billion in the fourth quarter of 2004. Includes
individual inflows (outflows) of $2.1 billion and ($6.0) billion in the third and second quarters of 2004, respectively,
related to mutual fund clearing clients. Includes inflows of $12.1 billion in the fourth quarter of 2003 at U.S. Trust related
to the acquisition of State Street Corporation's Private Asset Management group.
(4) Included in total client assets above.
(5) Active client accounts are defined as accounts with balances or activity within the preceding eight months. Reflects the
removal of 192,000 accounts in the second quarter of 2003 related to the Company's withdrawal from the Employee Stock Purchase
Plan business and the transfer of those accounts to other providers.
The Charles Schwab Corporation Monthly Market Activity Report For March 2005
Investor activity for 7.3 million active client accounts(1)
Clients opened 57,700 new
accounts during March 2005.
2004 2005
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
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Change in Client Assets
(in billions of dollars)
Net New Assets (2) 4.6 2.1 4.4 .2 3.4 3.7 5.9 3.9 4.6 8.3 4.0
Net Market Gains (Losses) (9.0) (24.7) 6.8 13.2 (26.1) 3.2 12.5 10.3 32.0 21.2 (17.7)
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Total Client Assets
(at month end, in billions
of dollars) 996.3 973.7 984.9 998.3 975.6 982.5 1,000.9 1,015.1 1,051.7 1,081.2 1,067.5
====================================================================================================================================
Market Indices (at month end)
Dow Jones Industrial Average 10,358 10,226 10,189 10,436 10,140 10,174 10,080 10,028 10,428 10,783 10,490
Nasdaq Composite 1,994 1,920 1,987 2,048 1,887 1,838 1,897 1,975 2,097 2,175 2,062
Standard & Poor's 500 1,126 1,107 1,121 1,141 1,102 1,104 1,115 1,130 1,174 1,212 1,181
Schwab 1000 3,629 3,560 3,605 3,665 3,533 3,543 3,584 3,637 3,783 3,911 3,809
Clients' Daily Average Trades
(in thousands)
Revenue Trades (3) 155.0 164.6 135.1 126.6 133.7 118.6 132.5 153.7 192.1 187.3 185.9
Schwab Institutional(R) (4) 8.3 8.2 8.7 8.2 8.8 7.7 8.2 8.6 8.6 8.7 10.0
Schwab Private Client(TM) (5) 5.8 7.2 6.4 6.7 8.1 7.3 8.0 8.3 9.9 10.1 10.2
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Total 169.1 180.0 150.2 141.5 150.6 133.6 148.7 170.6 210.6 206.1 206.1
====================================================================================================================================
Daily Average Market Share Volume
(in millions)
NYSE 1,477 1,525 1,500 1,371 1,418 1,244 1,322 1,543 1,494 1,463 1,618
Nasdaq 1,881 1,951 1,664 1,623 1,735 1,431 1,511 1,731 1,828 2,042 2,172
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Total 3,358 3,476 3,164 2,994 3,153 2,675 2,833 3,274 3,322 3,505 3,790
====================================================================================================================================
Mutual Fund Net Buys (Sells) (6)
(in millions of dollars)
Large Capitalization Stock 221.0 456.5 123.2 364.8 (23.0) 4.7 202.3 189.3 465.7 75.6 137.4
Small / Mid Capitalization
Stock 347.8 596.5 (70.3) 664.3 154.1 (87.2) 336.8 434.1 719.9 454.7 46.8
International 672.8 569.4 109.7 481.9 242.5 226.2 445.8 441.0 884.2 893.8 946.4
Specialized 314.8 (151.4) (188.1) 3.0 82.2 74.4 147.9 (8.5) 77.9 (34.4) 67.7
Hybrid 423.5 372.3 169.0 237.5 97.2 159.8 256.4 243.8 227.5 228.1 250.4
Taxable Bond 1,077.0 (175.6) (332.1) 320.4 396.2 694.4 821.9 716.2 451.0 293.7 554.2
Tax-Free Bond 94.1 (184.7) (247.6) (188.0) (45.5) 16.8 30.5 22.2 (7.5) 300.4 249.3
Money Market Funds (1,153.7) (2,411.2) 2,203.6 (1,399.6) (138.7) 286.6 (1,249.9) (1,165.3) (1,322.2) (22.8) 1,122.0
% change
Feb Mar Mo. Yr.*
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Change in Client Assets
(in billions of dollars)
Net New Assets (2) 6.3 5.8 (8%) 26%
Net Market Gains (Losses) 15.0 (17.4)
- ----------------------------------------------------
Total Client Assets
(at month end, in billions
of dollars) 1,088.8 1,077.2 (1%) 8%
====================================================
Market Indices (at month end)
Dow Jones Industrial Average 10,766 10,504 (2%) 1%
Nasdaq Composite 2,052 1,999 (3%) --
Standard & Poor's 500 1,204 1,181 (2%) 5%
Schwab 1000 3,884 3,813 (2%) 5%
Clients' Daily Average Trades
(in thousands)
Revenue Trades (3) 190.9 196.6 3% 27%
Schwab Institutional(R) (4) 9.7 10.0 3% 20%
Schwab Private Client(TM) (5) 10.3 9.6 (7%) 66%
- ----------------------------------------------------
Total 210.9 216.2 3% 28%
====================================================
Daily Average Market Share Volume
(in millions)
NYSE 1,578 1,683 7% 14%
Nasdaq 1,950 1,849 (5%) (2%)
- ----------------------------------------------------
Total 3,528 3,532 -- 5%
====================================================
Mutual Fund Net Buys (Sells) (6)
(in millions of dollars)
Large Capitalization Stock 547.6 106.5
Small / Mid Capitalization
Stock 573.2 514.5
International 1,115.6 1,006.6
Specialized 250.2 334.4
Hybrid 359.0 276.3
Taxable Bond 859.1 410.1
Tax-Free Bond 215.3 114.9
Money Market Funds (1,575.9) 214.6
(1) Active client accounts are defined as accounts with balances or activity within the preceding eight months.
(2) December 2004 data includes a one-time special dividend from Microsoft Corporation of $1.2 billion. September 2004 and June
2004 data includes individual inflows (outflows) of $2.1 billion and ($6.0) billion, respectively, related to mutual fund
clearing clients. August 2004 and March 2004 data includes individual inflows (outflows) of $0.5 billion and ($0.8) billion,
respectively, at U.S. Trust related to Special Fiduciary business clients. Data excludes mutual fund capital gains
reinvestments, which were $3.7 billion in December 2004.
(3) Includes 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.
(4) Includes trades placed by investment advisors enrolled in an asset-based pricing program. Trading activity is included in the
program fees.
(5) Includes eligible trades placed by individual investors enrolled in Schwab Private Client(TM) (SPC). Specified levels of
trading activity are included in SPC fees.
(6) Represents the principal value of client mutual fund (no-load, low-load, load) transactions handled by Schwab and U.S. Trust,
including transactions in Schwab Funds(R), Excelsior(R) Funds and other proprietary funds. Includes institutional funds
available only to Investment Managers. Effective in March 2005, money market fund net buys (sells) include all Excelsior(R)
Fund transactions. Prior amounts have been adjusted to reflect this presentation.
* March 2005 vs. March 2004 The Charles Schwab Corporation