EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in millions, unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
Earnings before taxes on earnings and extraordinary gain $ 135 $1,231 $1,099 $ 678 $ 531
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed charges
Interest expense:
Brokerage client cash balances 696 1,076 701 580 481
Deposits from banking clients 128 155 117 108 100
Long-term debt 55 55 33 30 25
Short-term borrowings 27 20 8 9 16
Stock-lending activities 17 40 32 37 37
Other 5 6 7 10 8
- ------------------------------------------------------------------------------------------------------------------------------------
Total 928 1,352 898 774 667
Interest portion of rental expense 93 75 54 41 36
- ------------------------------------------------------------------------------------------------------------------------------------
Total fixed charges (A) 1,021 1,427 952 815 703
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings before taxes on earnings and extraordinary gain
and fixed charges (B) $1,156 $2,658 $2,051 $1,493 $1,234
====================================================================================================================================
Ratio of earnings to fixed charges (B) divided by (A)(1) 1.1 1.9 2.2 1.8 1.8
====================================================================================================================================
Ratio of earnings to fixed charges excluding
brokerage client interest expense(2) 1.4 4.5 5.4 3.9 3.4
====================================================================================================================================
(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 extraordinary gain 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.
(2)Because interest expense incurred in connection with payables 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.