EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in millions, unaudited)
Year Ended December 31,
2003 2002 2001 2000 1999
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Earnings from continuing operations before taxes on
earnings and extraordinary gain $ 710 $ 227 $ 177 $1,262 $1,113
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Fixed charges
Interest expense:
Deposits from banking clients 96 94 128 155 117
Brokerage client cash balances 76 164 678 1,057 689
Long-term debt 35 46 55 55 33
Short-term borrowings 14 23 27 20 9
Other 20 7 22 45 38
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Total 241 334 910 1,332 886
Interest portion of rental expense 88 84 90 71 52
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Total fixed charges (A) 329 418 1,000 1,403 938
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Earnings from continuing operations before taxes on earnings,
extraordinary gain and fixed charges (B) $1,039 $ 645 $1,177 $2,665 $2,051
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Ratio of earnings to fixed charges (B) divided by (A) (1) 3.2 1.5 1.2 1.9 2.2
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Ratio of earnings to fixed charges excluding
brokerage client interest expense (2) 3.8 1.9 1.5 4.6 5.5
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(1) The ratio of earnings to fixed charges is calculated in accordance with SEC requirements. For such purposes, "earnings" consist
of earnings from continuing operations before taxes on earnings, 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.