EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands, unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
1996 1995 1996 1995
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Earnings before taxes on income $118,699 $ 73,287 $198,369 $136,668
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Fixed charges
Interest expense - customer 86,815 78,810 173,206 150,716
Interest expense - other 14,337 8,856 26,955 16,153
Interest portion of rental expense 5,834 5,735 11,261 10,408
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Total fixed charges (a) 106,986 93,401 211,422 177,277
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Earnings before taxes on income and fixed charges (b) $225,685 $166,688 $409,791 $313,945
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Ratio of earnings to fixed charges (b) divided by (a) (1) 2.1 1.8 1.9 1.8
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Ratio of earnings to fixed charges as adjusted (2) 6.9 6.0 6.2 6.1
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(1) 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, long-term debt (including current maturities) and
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 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.