The Charles Schwab Corporation Corporate Overview Data as of September 30, 2006

1
The Charles Schwab CorporationCorporate
OverviewData as of September 30, 2006
2
Forward-Looking Statements
This presentation contains forward-looking
statements within the meaning of section 27A of
the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 (the 34 Act).
Forward-looking statements include statements
that refer to expectations, projections or other
characterizations of future events or
circumstances, and are identified by words such
as believe, expect, plan, will, may,
aim, target and other similar expressions.
These forward-looking statements, which reflect
managements current goals, objectives and
expectations, are necessarily estimates based on
the best judgment of the Companys senior
management. These statements relate to, among
other things, elements needed to remain an
industry leader, managements vision for success,
competitive marketplace advantages, strategic
priorities and uses of cash flow. Achievement of
the expressed goals, expectations and objectives
is subject to risks and uncertainties that could
cause actual results to differ materially from
those goals, objectives or expectations.
Important factors that may cause such
differences are discussed in the Companys
filings with the Securities and Exchange
Commission, including our Annual Report on Form
10-K and Quarterly Reports on Form 10-Q. These
reports and our other filings pursuant to the 34
Act provide additional information about the
Company these documents can be viewed via the
Companys website at www.aboutschwab.com. The
information in this presentation speaks only as
of September 30, 2006. The Company makes no
commitment to update any of this information.
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The Charles Schwab CorporationCorporate
OverviewTable of Contents

• Page
• I. Description of Business 4
• A. Mission, Vision and Values 7
• B. Competitive Advantages 9
• C. Strategic Priorities 15
• D. Corporate Structure 18
• II. Financial Management 24
• III. Selected Financial and Operating Data 29
• IV. Earnings Release and SMART Report 40

4
Description of Business
5
Schwab is a distributor and manufacturer of
financial services focusing on a core client base
of individual investors and the investment
advisors who serve them. The Company believes it
has the
Description of Business

• vision and values,
• competitive advantages,
• strategic focus and
• corporate structure
• needed to remain an industry leader.

6
The financial services marketplace is
experiencing profound change.
Description of Business

• 75 million baby boomers are entering their
  prime saving and investing years.
• Social security may lack adequate funding.
• Company-sponsored retirement plans have largely
  shifted from defined benefit to defined
  contribution.
• Clients are willing to use the PC and telephone
  to take charge of their personal investing, but
  many need guidance.
• We believe we have a significant opportunity to
  increase our market share of the estimated 38
  million U.S. households with between 50,000 and
  1,000,000 to invest representing 8 trillion
  to 9 trillion in assets by providing them with
  the advice and service they want.

7
Our Mission
Description of Business
To provide the most useful and ethical financial
services in the world.
8
Our vision is supported by a strong set of values.
Description of Business
Vision To be recognized by our service quality,
investment insight and client relationships as
the most trusted firm in the financial services
business.
To be fair, empathetic, and responsive
in serving our clients.
To respect and reinforce our colleagues and
the spirit of teamwork.
To always earn and be worthyof our clients
trust.
To strive relentlessly to improve what we do
and how we do it.
9
Schwab believes it has a distinct set of
competitive advantages that make it capable of
winning in the marketplace.
Description of Business

• Broad product line at a superior value
• National brand names
• Ability to combine people and technology in
  unique ways
• Full-choice model for the individual investor

10
We offer clients access to a broad array of
products, including
Description of Business

• Stocks, Options and Futures
• Mutual Fund Marketplace
• OneSource, SchwabFunds - Money Market Funds,
  Stock Bond Funds, Index Funds, Fund of Funds.
• Excelsior Laudus.
• Bonds and Treasuries
• Corporate, Municipal, Mortgage-backed, Agencies,
  Bond funds.
• Preferred Stocks, Unit Investment Trusts (UITs).
• Banking
• Mortgage, HELOC, Savings, Checking and Credit
  Card products.
• Annuities and Term Life Insurance
• Managed Accounts

11
Our brands resonate well with the full spectrum
of investors.
Description of Business

• Since 1Q99, we have ranked first or second for
  new account consideration among affluent
  investors.
• Investors with more than 100,000 in investable
  assets were asked which major brokerage firm they
  would most likely consider when opening an
  account.
• U.S. Trust is a premier brand for the ultra high
  net worth investor, specializing in comprehensive
  wealth management, private banking and
  multi-generational relationships.
• We are recognized for the breadth of services
  offered to self-directed clients.
• WebExcellence (formerly Gomez) has named us the
  1 or 2 Online Broker since 1Q00 in recognition
  of our range of services, planning tools and
  research.

Source Schwab Brand Tracking Survey
12
Combining people and technology means
Description of Business

• Providing multiple-channel service delivery.
• Clients can visit one of our 337 offices or use
  telephonic, online and wireless channels.
• Schwab remains an online leader about 92 of
  our total trades are placed through online
  channels.
• Building scaleable product and service offerings
  while maintaining a competitive cost structure.
• Advice is offered through our branch network,
  call centers and online tools.
• Web-enabled tools, interactive web-based advice
  seminars, Marketplace internal Web site, Schwab
  Equity Ratings, solutions for investment
  advisors.
• Actively-trading investors have access to state
  of the art order entry, routing and management
  technology, as well as dedicated service teams
  through Schwab and CyberTrader.

13
Our ability to build a full-choice firm focused
on the individual investor has made us the
industry leader in gathering assets.
Description of Business
3Q06 1,332 billion
Client Assets ( in billions)
Relationships Advised Offers
Advice Research
ActiveTraderServices
OnlineInvesting
Strategic Heritage
IndependentInvestmentAdvisors
MutualFundInvesting
BranchNetwork 24 x 7Service
EquityTransactions
LowerCommissions
MarketAccess
MoreChoice
MoneyManagement
Investment Insight
LowerCommissions
Direct Access
Full Choice
14
Leveraging our competitive advantages to win in
the marketplace means gathering and retaining
client assets through long-term relationships.
Description of Business

• Our fundamental strength indicators include
• Net new client assets 20.9 billion in 3Q06,
  down 11 year-over-year.
• Total client assets 1.332 trillion as of
  September 30, 2006, up 14 year-over-year.
• New brokerage accounts 137,000 in 3Q06, up 6
  year-over-year.

15
Our strategic priorities currently include
Description of Business

• Enhance the client experience by combining people
  and technology to bring the right mix of value,
  performance and personalized service to all
  clients extend this focus via a company-wide
  commitment to measuring and building client
  loyalty.
• Build and maintain our differentiation as the
  firm that delivers the most ethical and useful
  services in the world, with a focus on
  independent investors and the advisors who serve
  them.
• Sustain a disciplined approach to enhancing the
  value delivered to clients, simplifying and
  streamlining the organization, and improving
  efficiency and productivity.

16
Recent strategic progress includes
Description of Business

• Year-to-date, weve exceeded all of our primary
  financial objectives, which include low
  double-digit percentage revenue growth, a pre-tax
  profit margin of at least 30, earnings per share
  of at least .70, and a return on equity of at
  least 20. For the first 9 months of 2006, our
  financial performance included 18 revenue growth
  with expense growth of just 9. We achieved a
  32.2 pre-tax profit margin and net income of
  760 million (up 41 from a year ago), and
  earnings per share of .59. ROE reached 22, the
  highest level since 2000.
• In 3Q06 we launched Schwab Managed Portfolios, a
  suite of mutual fund portfolios for individuals
  with as little as 50,000 to invest. Portfolio
  design, rebalancing and ongoing administration
  are handled by the Schwab Center for Investment
  Research and Charles Schwab Investment
  Management. Annual program fees start at 0.50
  and go down to 0.25, based on the portfolios
  value.

17
Recent strategic progress (contd)
Description of Business

• In 3Q05 we launched the Schwab Large-Cap Growth
  Fund, a fund that seeks long-term capital growth
  and will use Schwab Equity Ratings to help
  identify stocks with excellent performance
  potential.
• In 2Q05 we introduced Schwab Portfolios. These
  portfolios, which include mutual funds or stocks
  and exchange traded funds, are designed for
  investors who have between 10,000 and 200,000
  to invest and are looking for convenient,
  easy-to-implement investment advice, including
  access to ongoing guidance from a financial
  consultant.
• In 1Q05 we began providing every client who has
  about 250,000 or more in assets with a dedicated
  Schwab financial consultant who is focused on
  gaining a better understanding of their needs,
  and who has the ability to match those needs with
  Schwab solutions.

18
Schwab has three client-facing segments...
Description of Business
Services provided
Segments
Schwab Investor Services
Active Trading
International/Multi-cultural
Retirement Equity Plans
Serve individual investors directly and indirectly
Schwab Institutional
Back office solutions to RIAs (i.e., trade
execution, confirms, statements) and service
(i.e., regulatory updates, HR support).
U.S. Trust
Wide array of wealth management services for
affluent individuals and their families.
Develop product solutions for all investors
Fixed Income
Asset Management
Schwab Bank

• Administrative/Support Enterprises
• Schwab Technology
• Operations

• Finance Risk Mgmt.
• Marketing

• Human Resources
• Corporate Oversight

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that combine to form a full-choice financial
services firm designed to provide a broad range
of investing services to individual investors.
Description of Business
Active Trading
Independent Investing
Advised Investing
Schwab Advisor Network
Schwab Signature Trading
Product Solutions
Cyber Trader
U.S. Trust
Schwab Private Client
Tiered Service Levels
A La Carte Advice
Schwab Personal Financial Plan
Schwab Equity Compensation Consultation
Schwab Retirement Consultation
20
Provides individual investors access to the
following
Description of Business
Schwab Investor Services

• Research, analysis tools and educational material
  which aid in the development of investment plans.
• Help and advice through 304 domestic branch
  offices.
• 33 of new accounts are opened through our branch
  offices.
• Certain offices and automated telephone systems
  provide Chinese, Korean, Spanish and Vietnamese
  language services.
• Trade and account administration support through
  four telephone service centers.
• Electronic service channels such as the website,
  TeleBroker , Schwab by Phone and wireless
  channels.
• Clients who trade actively have access to
  schwab.com, StreetSmart Pro and CyberTrader
  platforms.

63 of revenues, 5.2 million active accounts
21
Corporate Retirement Services, a division
within Schwab Investor Services, serves
individuals through their workplace.
Description of Business
Schwab Investor Services (contd)

• Leverages the brand, breadth, distribution and
  values of Schwab for the benefit of corporations
  and their employees.
• Combines retirement plan and equity compensation
  plan sales provides a single point of contact
  and a seamless experience for plan participants.
• Offers 401(k) recordkeeping, advice and other
  retirement plan services directly through
  SchwabPlan and indirectly through alliances with
  third-party administrators.
• Assets in employer-sponsored retirement plans
  total 169 billion.
• Provides stock option plan administration to
  corporate clients and trade execution and
  education services to their employees.

22
Provides approximately 5,300 independent
fee-based investment advisory firms (IAs) with
business solutions.
Description of Business
Schwab Institutional

• Includes securities brokerage, record keeping and
  additional services, such as transition support,
  along with market and regulatory updates.
• Partners with IAs through the Advisor Network
  referral service.
• Promotes advisor growth by
• Allowing them to outsource technology - Advisor
  branded web services, portfolio accounting,
  reconciliation and reporting.
• Expanding the wealth management services and
  investment alternatives available to IAs and
  their clients.
• Working with U.S. Trust to develop trust and
  private banking services.
• Schwab IA assets custodied at U.S. Trust total
  3.5 billion.

18 of revenues, 1.5 million active
sub-accounts
23
Provides investment management, fiduciary and
private banking services to high net worth
individuals and institutional clients.
Description of Business
U.S. Trust

• Provides premier client service to our most
  affluent clients and their families.
• Receives referrals from Schwab investment
  consultants.
• Combines Schwabs high-tech capabilities with
  their traditional high-touch service to create a
  comprehensive set of wealth management services
  for affluent investors.
• Serves clients through 33 offices located in most
  major wealth centers in the U.S.

Note Announced pending sale of U.S. Trust to
Bank of America on November 20, 2006.
17 of revenues

24
Financial Management
25
For Schwab, financial success over the near-term
means building our profit margin and return on
equity.
Financial Management
Third Quarter 2006
Full Year 2005 Results
2006 Corporate Objectives

• Pre-tax Profit Margin 30 33.9
  26.5
• Return on Equity 20 23 16

Longer-term, well focus on superior revenue
growth, as well as consistent margins and returns
on equity.
26
In pursuing these financial objectives, each
client-facing business has assumed greater
accountability for reaching its profitability
targets.
Financial Management

• Performance is now measured using an enhanced
  cost allocation system that develops fully-loaded
  profit margins.
• Business leaders now have
• A clearer picture of their costs, including
  indirect costs from centralized functions like
  technology, finance and human resources.
• Greater flexibility in managing those costs.
• All product and functional support groups have
  been assigned specific, measurable operating
  goals to help limit their proportion of overall
  expenses.
• Targets for each client business reflect its
  unique circumstances, including growth rates,
  market share, recent performance and industry
  outlook.

27
Schwabs liquidity and capital management reflect
a straightforward balance sheet...
Financial Management

• Size is driven by liabilities.
• Over 90 of the balance sheet is client-related.
• Credit balances are used to fund client activity.
• One complication Cash and Equivalents does not
  equate
  
  
  
  to available Corporate resources.
• A substantial portion relates to ongoing
  operations
• Supporting margin loans or other lending
  activities.
• Day-to-day client-related cash flows (e.g., trade
  settlement).

28
that does not require significant external
funding.
Financial Management

• Substantial cash flow is used to support
• Common stock dividend that balances stockholder
  distributions with growth-oriented reinvestment.
• Opportunistic share repurchases,
• Lending-driven incremental capital requirements,
• Capital expenditures of about 2 - 3 of Net
  Revenues, and
• Our A2/A- Medium Term Note program is used to
  provide
  
  
  
  flexibility and manage our cost of
  capital.

29
Selected Financial and Operating Data
30
Selected Financial Operating Data
Components of Client Assets
12/31/93 9/30/06 95.8
Billion 1,332.1 Billion
Fixed Income Securities 177.9
Proprietary Money Market Funds Schwab One 20.1
Fixed Income Securities 10.0
OneSource 147.7
Other Mutual Fund Marketplace 160.2
OneSource 8.3
Proprietary Money Market Funds Schwab One Cash
168.5
Proprietary Stock Bond Funds 65.6
Other Mutual Fund Marketplace 16.6
Mutual Fund Clearing Services 72.7
Equities 539.5
Proprietary Stock Bond Funds 1.3
Equities 39.5
Excludes U.S. Trust Stocks Net of Margin
Loans
31
Client Assets
Selected Financial Operating Data
(billions)
(billions)
Note Includes inflows of 1.0 billion in 3Q06,
2.3 billion in 2Q06 and 3.0 billion in 3Q05 at
U.S. Trust related to Special Fiduciary business
clients. 4Q03 includes 12 billion related to
the acquisition of State Street Corporations
Private Asset Management group.
32
Client Brokerage Accounts
Selected Financial Operating Data
(millions)
(000s)
Note Periodically, the Company reviews its
active account base. The Company has identified
over 400,000 brokerage accounts that meet its
current definition of active, but had little or
no balances and no likelihood of further
activity. Effective March 31, 2006, the Company
has removed these accounts from its active
brokerage account total. Amounts for periods
prior to 2006 were not adjusted. While the
Company has adjusted its definition of an active
brokerage account to exclude certain zero and
minimal balance accounts, the basic definition
remains "accounts with balances or activity
within the preceding 8 months."
33
Trading Activity (000s)
Selected Financial Operating Data
20.6
17.8
201.2
14.5
128.1
8.2
7.8
Includes eligible trades placed by individual
investors enrolled in Schwab-branded advice
offers.
34
Offices and Employees (end of period)
Selected Financial Operating Data
Offices
Full-Time Equivalents (000s)
35
Components of Net Revenues
Selected Financial Operating Data
of Total Revenues 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05
1Q05 4Q04 3Q04
Asset Management Administration
Fees 50 49 48 50 51 51 52 51 52 Net
Interest Income 32 32 31 30 29 27 26 24 25 Other
5 3 3 3 4 5 2 4 5
Asset-based and other 87 84 82 83 84 83 80
79 82 Trading Revenue 13 16 18 17 16 17 20
21 18 Total
100 100 100 100 100 100
100 100 100
36
Expenses as a of Net Revenues
Selected Financial Operating Data
of Total Revenues 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05
1Q05 4Q04 3Q04
Compensation Benefits 40 40 42 43 42 42
43 42 46 Occupancy Equipment 6 6
6 7 7 7 8 8 10 Depreciation
Amortization 4 4 4 4 5 5 5 6
6 Communications 4 4 4 4 4 4 5
5 5 Professional Services 6 6 5 6
6 5 6 6 6 Advertising Market
Development 3 5 4 5 3 4 3 3
4 Restructuring 0 0 0 0 0 0 2
9 11 Other 4 4 4 4 4 5 5 5
5 Total 67 69 69 74 71 72 77 85
93
37

Selected Financial Operating Data
Revenues, Expenses and Profitability

Basis Points
33.9
40bps
7.2
40bps
38bps
26bps
38
Selected Cash Flow Data
Selected Financial Operating Data

• in Millions 2005 2004 2003 2002

Net Income 725 286 472 109 Loss from Disc.
Operations, net of tax 5 128 4 52
Depreciation/Amortization 208 226 277 309 Non-
cash Restructuring and Impairment Charges
6 16 17 74 Total 944 656 770 544 Capital
Expenditures (55) (115) (80) (83) Capitalized
Software Development Costs (45) (79) (67) (71) De
bit Capital (60) (130) (205) 295
Total (160) (324) (352) 141 Free Cash
Flow 784 332 418 685 Share Repurchases (697) (3
83) (32) (299) Dividends Paid (116) (101) (68) (6
0) Net Long-Term Borrowings (56) (179) (100) (114
)
39
Mutual Fund Market ShareBased on Direct-Marketed
Stock and Bond Funds
Selected Financial Operating Data
18.2
N/A
N/A
Source Strategic Insights / Schwab AMPS Finance
Note Share Values Include Schwab Only
40
Earnings Release and SMART Report