EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands, unaudited)
Year Ended December 31,
1999 1998 1997 1996 1995
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Earnings before taxes on income $ 971,239 $ 576,544 $ 447,247 $394,063 $277,104
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Fixed charges
Interest expense - customer 688,503 579,930 480,988 368,462 321,225
Interest expense - other 79,900 71,951 65,495 57,410 35,998
Interest portion of rental expense 43,417 32,326 26,045 23,051 20,810
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Total fixed charges (A) 811,820 684,207 572,528 448,923 378,033
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Earnings before taxes on income and fixed charges (B) $1,783,059 $1,260,751 $1,019,775 $842,986 $655,137
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Ratio of earnings to fixed charges (B) / (A)* 2.2 1.8 1.8 1.9 1.7
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Ratio of earnings to fixed charges excluding
customer interest expense** 8.9 6.5 5.9 5.9 5.9
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* The ratio of earnings to fixed charges is calculated in a manner
consistent with SEC requirements. For such purposes, "earnings"
consist of earnings before taxes on income and fixed charges. "Fixed
charges" consist of interest expense incurred on payable to customers,
borrowings and one-third of rental expense, which is estimated to be
representative of the interest factor.
** Because interest expense incurred in connection with payable to
customers is completely offset by interest revenue on related
investments and margin loans, the Company considers such interest to
be an operating expense. Accordingly, the ratio of earnings to fixed
charges excluding customer interest expense reflects the elimination
of such interest expense as a fixed charge.