2012 Annual Report

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DOING THE RIGHT THING SINCE 1952

About Our Company and ValuesLes Schwab is not your regular tire store and that

is a fact we take pride in. From literally running out to meet you to our free beef promotion, we do things a little differently. We have set a standard in the tire industry that sets is apart from every other tire dealer through our desire to be more than a faceless corporation. We would rather be that neighbor down the street that you know and trust.

We started as a small shop in Prineville, Oregon, back in 1952 and even though we have expanded to more than 400 stores, we have kept our small_town values. No matter how much we have grown, our customers happiness has always been our top priority.

So if you want to do business with people who take pride in their performance and honesty, why not drop by? We promise that you will be glad that you did.What We’ve Accomplished This Year

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First QuarterLenditate conem rerumen ecullacipsum

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ContentsAbout Our Company and Values 3

What We’ve Accomplished This Year 3

First Quarter 3

Second Quarter 3

Third Quarter 3

Last Quarter 3

Earnings 4

First Quarter 4

Second Quarter 4

Third Quarter 4

Last Quarter 4

Note 10: Intangible Assets 5

Expenses 6

First Half 6

Second Half 6

FOR THE YEAR 7

AT YEAR-END 7

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DOING THE RIGHT THING SINCE 1952

Note 10: Intangible AssetsDecember 31,

2010 2009

Gross Net Gross Net

carrying Accumulated carrying carrying Accumulated carrying

(in millions) value amortization value value amortization value

Amortized intangible assets:

MSRs (1) $ 2,131 (712) 1,419 1,606 (487) 1,119

Core deposit intangibles 15,133 (6,229) 8,904 15,140 (4,366) 10,774

Customer relationship and other intangibles 3,077 (1,230) 1,847 3,050 (896) 2,154

Total amortized intangible assets $ 20,341 (8,171) 12,170 19,796 (5,749) 14,047

MSRs (carried at fair value) (1) $ 14,467 14,467 16,004 16,004

Goodwill 24,770 24,770 24,812 24,812

Trademark 14 14 14 14

(1) See Note 9 for additional information on MSRs.

We based our projections of amortization expense shown below on existing asset balances at December

31, 2010. Future amortization

expense may vary from these projections.

The following table provides the current year and estimated future amortization expense for amortized

intangible assets.

Customer

Core relationship

Amortized deposit and other

(in millions) MSRs intangibles intangibles Total

Year ended December 31, 2010 (actual) $ 228 1,872 334 2,434

Estimate for year ended December 31,

2011 $ 247 1,593 286 2,126

2012 222 1,396 269 1,887

2013 189 1,241 249 1,679

2014 161 1,113 234 1,508

2015 139 1,022 212 1,373

159

EarningsIn nectaque solorum quiberibus, quam nusda

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First QuarterIt endis enda dolupti sitiatur aut laborem in con

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Second Quarter aerciur, odion comnimo temolore volorio nseque

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Third QuarterLiquae sam, sum quis nullabo rectemp eratus

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Last Quartermaxime sunt plignam imagnia nisseque reserov

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2008 $4,009,875

2009 $5,000,095

2010 $4,987,900

2011 $5,789,934

2012 $3,900,750

Earnings Per Year

4th$200,000

3rd$180,950

2nd$100,995

1st$100,000

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DOING THE RIGHT THING SINCE 1952

FOR THE YEARLes Schwab net income $ 12,362 12,275 1%

Les Schwab net income applicable to common stock 11,632 7,990 46

Diluted earnings per common share 2.21 1.75 26

Profitability ratios:

Les Schwab net income to average total assets (ROA) 1.01% 0.97 4

Les Schwab net income applicable to common stock to average

Les Schwab common stockholders’ equity (ROE) 10.33 9.88 5

Efficiency ratio 1 59.2 55.3 7

Total revenue $ 85,210 88,686 (4)

Pre-tax pre-provision profit 2 34,754 39,666 (12)

Dividends declared per common share 0.20 0.49 (59)

Average common shares outstanding 5,226.8 4,545.2 15

Diluted average common shares outstanding 5,263.1 4,562.7 15

Average assets 1,226,938 1,262,354 (3)

Net interest margin 4.26% 4.28 —AT YEAR-END

Securities available for sale $ 172,654 172,710 —

Goodwill 24,770 24,812 —

Assets 1,258,128 1,243,646 1

Les Schwab stockholders’ equity 126,408 111,786 13

Total equity 127,889 114,359 12

Tier 1 capital 5 109,353 93,795 17

Total capital 5 147,142 134,397 9

Capital ratios:

Total equity to assets 10.16% 9.20 10

Risk-based capital: 5

Tier 1 capital 11.16 9.25 21

Total capital 15.01 13.26 13

Tier 1 leverage 5 9.19 7.87 17

Tier 1 common equity 6 8.30 6.46 28

Team members 267,300 2

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First Halfma sapicte et autem nonsenda nus dicille

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Second Halfdolorio totaest plabore nos dit occae. Ut aut

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Other 15%

Stock 15%

Advertising 40%

Employee Salery 30%

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Our Vision:To sell more tires than anyother Northwestsealer, while having the highest customersatifaction rating in the region

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