Exhibit 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
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Earnings before taxes on income $240,471 $235,863 $1,005,563 $ 784,157
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Fixed charges
Interest expense:
Brokerage clients cash balances 283,564 177,579 788,010 494,307
Deposits from banking clients 39,750 30,087 112,789 83,818
Long-term debt 15,317 8,561 40,151 23,684
Stock-lending activities 9,558 7,465 34,018 23,155
Short-term borrowings 7,644 1,843 14,785 6,209
Other 1,727 1,463 4,382 5,173
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Total 357,560 226,998 994,135 636,346
Interest portion of rental expense 19,544 14,073 53,348 37,524
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Total fixed charges (A) 377,104 241,071 1,047,483 673,870
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Earnings before taxes on income and fixed charges (B) $617,575 $476,934 $2,053,046 $1,458,027
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Ratio of earnings to fixed charges (B) divided by (A)* 1.6 2.0 2.0 2.2
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Ratio of earnings to fixed charges
excluding brokerage client interest expense** 3.6 4.7 4.9 5.4
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All periods have been restated to reflect the merger of The Charles Schwab Corporation with U.S. Trust
Corporation.
* The ratio of earnings to fixed charges is calculated in accordance with SEC requirements. For such
purposes, "earnings" consist of earnings before taxes on income and fixed charges. "Fixed charges"
consist of interest expense as listed above, including one-third of rental expense, which is estimated to
be representative of the interest factor.
** Because interest expense incurred in connection with payable to brokerage clients 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
brokerage client interest expense reflects the elimination of such interest expense as a fixed charge.