The Charles Schwab Corporation (SCHW) 10-Q 2011 Q3 Quarterly report

THE CHARLES SCHWAB CORPORATION

Exhibit 12.1

Computation of Ratio of Earnings to Fixed Charges

(Dollar amounts in millions)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Earnings before taxes on earnings	$	360	$	199	$	1,140	$	550
Fixed charges
Interest expense :
Deposits from banking clients		16		29		49		85
Payables to brokerage clients		1		1		2		2
Long-term debt		27		25		81		64
Other		—		—		2		—
Total		44		55		134		151
Interest portion of rental expense		16		14		46		42
Total fixed charges (A)		60		69		180		193
Earnings before taxes on earnings and fixed charges (B)	$	420	$	268	$	1,320	$	743
Ratio of earnings to fixed charges (B) ÷ (A)(1)		7.0		3.9		7.3		3.8
Ratio of earnings to fixed charges, excluding deposits from banking clients and payables to brokerage clients interest expense(2)		9.4		6.1		9.8		6.2

⁽¹⁾  The ratio of earnings to fixed charges is calculated in accordance with SEC requirements. For such purposes, “earnings” consist of earnings before taxes on earnings and fixed charges. “Fixed charges” consist of interest expense as listed above, and one-third of rental expense, which is estimated to be representative of the interest factor.

⁽²⁾  Because interest expense incurred in connection with both deposits from banking clients and payables to brokerage clients is completely offset by interest revenue on related investments and loans, the Company considers such interest to be an operating expense. Accordingly, the ratio of earnings to fixed charges, excluding deposits from banking clients and payables to brokerage clients interest expense, reflects the elimination of such interest expense as a fixed charge.