v2.4.0.6
Business Acquisitions (Tables)
 12 Months Ended
Dec. 31, 2012
Summary of Allocation of Purchase Price to Net Assets of optionsXpress

The following table summarizes the allocation of the purchase price to the net assets of optionsXpress:

 

Fair value of common stock issued

    $ 710   

Fair value of equity awards assumed

      4   
  

 

 

  

Total consideration paid (1)

    $ 714   
  

 

 

  

Fair value of net assets acquired

    $ 203   
  

 

 

  

Acquisition-related goodwill

    $     511   
  

 

 

  

 

(1) 

Represents a non-cash investing activity.
Summary of Fair Values of Assets Acquired and Liabilities Assumed as of Acquisition Date

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date:

 

     September 1,  
     2011  

Assets

   

Cash and cash equivalents

    $ 84   

Cash and investments segregated and on deposit for regulatory purposes

      1,074   

Receivables from brokers, dealers, and clearing organizations

      40   

Receivables from brokerage clients

      185   

Other securities owned - at fair value

      32   

Intangible assets

      285   

Other assets

      25   
  

 

 

  

Total assets acquired (1)

    $ 1,725   
  

 

 

  

Liabilities

   

Payables to brokerage clients

    $ 1,221   

Deferred tax liability

      95   

Long-term debt (2)

      110   

Accrued expenses and other liabilities

      96   
  

 

 

  

Total liabilities assumed (1)

    $ 1,522   
  

 

 

  

Net assets acquired

    $ 203   
  

 

 

  

 

(1) 

All assets and liabilities, except for cash and cash equivalents, represent non-cash investing activities.
(2) 

The Company paid off long-term debt acquired from optionsXpress subsequent to the date of acquisition in September 2011.
Summary of Estimated Fair Value and Useful Lives of Intangible Assets Related to Acquisition

The following table summarizes the estimated fair value and useful lives of the intangible assets.

 

September 1, 2011

    Estimated
Fair Value		      Estimated
Useful Life
(In Years)		  

Customer relationships

    $ 200         11   

Technology

      70         9   

Trade name

      15         9   
  

 

 

     

 

 

  

Total intangible assets

    $        285      
  

 

 

     
Pro Forma Results of Operations

The following table presents unaudited pro forma financial information as if optionsXpress had been acquired prior to January 1, 2010. Pro forma net income for the year ended December 31, 2011, was adjusted to exclude $16 million, after tax, of acquisition related costs incurred by the Company in 2011. Additionally, pro forma net income below excludes $15 million, before tax, of acquisition related costs because these costs were incurred by optionsXpress prior to the acquisition date. Pro forma net income also reflects the impact of amortizing purchase accounting adjustments relating to intangible assets, net of tax, of $20 million and $22 million, for the years ended December 31, 2011 and 2010, respectively.

 

Year Ended December 31,

    2011      2010  

Net revenues

    $     4,857       $     4,479   

Net income

    $ 896       $ 481   

Basic EPS

    $ .71       $ .39   

Diluted EPS

    $ .71       $ .38