EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands, unaudited)
Year Ended December 31,
1995 1994 1993 1992 1991
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Earnings before taxes on income
and extraordinary charge $277,104 $224,343 $206,272 $146,228 $ 88,097
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Fixed charges
Interest expense - customer 321,225 178,067 114,609 140,819 206,020
Interest expense - other 35,998 20,169 17,943 18,712 19,538
Interest portion of rental expense 20,810 17,102 15,428 13,314 10,531
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Total fixed charges (a) 378,033 215,338 147,980 172,845 236,089
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Earnings before taxes on income,
extraordinary charge and fixed charges (b) $655,137 $439,681 $354,252 $319,073 $324,186
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Ratio of earnings to fixed charges (b) divided
by (a)* 1.7 2.0 2.4 1.8 1.4
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Ratio of earnings to fixed charges as adjusted** 5.9 7.0 7.2 5.6 3.9
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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, extraordinary charge and fixed charges. "Fixed charges"
consist of interest expense incurred on payables to customers, subordinated
borrowings, term debt, capitalized interest 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.