The Charles Schwab Corporation and Subsidiaries - Page 37

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          assigned to the intangibles, including the customer accounts that           
          were acquired from Rose:                                                    
          Respondent’s     Life       Petitioner’s   Life                             
          Account       Expert’s Value    Years     Expert’s Value  Years             
                                                                                     
          Cash      $610,000      5.0       $4,014,000      4                         
          Cash management     830,000   10.3            1                 1           
          Margin              500,000   4.3        6,522,000      6                   
          Pension             410,000        2    2,051,000     15                    
          Vendor agreements   50,000    5.0          575,000      5                   
          Marketing           250,000   3.0          671,000      3                   
          agreements                                                                  
          Exchange seats      750,000        2    661,000      2                      
          Trademark           600,000        2             3          3               
          Software            775,000   5.0           3         3                     
          Total          4,775,000      14,494,000                                    
               1 Respondent’s expert separated the cash accounts into cash            
          and cash management accounts to comport with Rose’s business                
          approach.  However, petitioner’s expert retained petitioner’s               
          classifications, which had no separate breakout for “Cash                   
          management” accounts.                                                       
               2 Respondent’s expert opined that the useful lives of these            
          intangible assets could not be determined.                                  
               3 Petitioner’s expert did not value or assign lives to these           
          intangibles on the premise that they had no value and, as                   
          evidenced in the record, petitioner discarded or abandoned them.            
               Respondent’s expert valued Rose’s tangible and intangible              
          assets (other than goodwill) at $146,280,000 on March 31, 1989,             
          whereas petitioner’s expert’s value was $181,837,000.                       
          Petitioner’s fair market value was close to the $181,376,869                
          MADSP that petitioner allocated to its acquired assets, leaving             
          no residual amount of “goodwill”.  Respondent’s expert’s value of           




               17(...continued)                                                       
          goodwill.  For purposes of comparison, this chart reflects the              
          spread between the parties’ and their experts’ positions.                   





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Last modified: May 25, 2011