EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
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Earnings before taxes on income $ 73,287 $ 53,219 $136,668 $116,763
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Fixed charges
Interest expense - customer 78,810 38,387 150,716 69,336
Interest expense - other 8,856 4,713 16,153 8,994
Interest portion of rental expense 5,735 4,194 10,408 8,225
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Total fixed charges (a) 93,401 47,294 177,277 86,555
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Earnings before taxes on income and fixed charges (b) $166,688 $100,513 $313,945 $203,318
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Ratio of earnings to fixed charges (b) divided by (a)* 1.8 2.1 1.8 2.3
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Ratio of earnings to fixed charges as adjusted** 6.0 7.0 6.1 7.8
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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 payables to customers, term debt and one-third of
rental expense, which is estimated to be representative of the interest factor.
** Because interest expense incurred in connection with payables 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 as adjusted reflects the
elimination of such interest expense as a fixed charge.