EX-12.1 2 schw-20150331xex121.htm EX-12.1 Exhibit 121

THE CHARLES SCHWAB CORPORATION

 

 

 

 

 

EXHIBIT 12.1

 

Computation of Ratio of Earnings to Fixed Charges and

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(Dollar Amounts in Millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2015

 

2014

Earnings before taxes on earnings

 

$
484 

 

$
522 

Fixed charges

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

Bank deposits

 

 
8 

 

 
7 

Payables to brokerage clients

 

 
1 

 

 
1 

Long-term debt

 

 
19 

 

 
18 

Other

 

 
1 

 

 

 -

Total

 

 
29 

 

 
26 

Interest portion of rental expense

 

 
18 

 

 
18 

Total fixed charges (A)

 

 
47 

 

 
44 

Earnings before taxes on earnings and fixed charges (B)

 

$
531 

 

$
566 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges (B) ÷ (A) (1)

 

 
11.3 

 

 
12.9 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges, excluding bank deposits and payables

 

 

 

 

 

 

to brokerage clients interest expense (2)

 

 
13.7 

 

 
15.5 

 

 

 

 

 

 

 

Total fixed charges

 

$
47 

 

$
44 

Preferred stock dividends (3)

 

 
13 

 

 
13 

Total fixed charges and preferred stock dividends (C)

 

$
60 

 

$
57 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges and preferred stock dividends (B) ÷ (C) (1)

 

 
8.9 

 

 
9.9 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges and preferred stock dividends, excluding

 

 

 

 

 

 

bank deposits and payables to brokerage clients interest expense (2)

 

 
10.2 

 

 
11.4 

 

(1)

The ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends are calculated in accordance with SEC requirements. For such purposes, “earnings” consist of earnings before taxes on earnings and fixed charges. “Fixed charges” consist of interest expense as listed above, and one-third of rental expense, which is estimated to be representative of the interest factor.

(2)

Because interest expense incurred in connection with both bank deposits and payables to brokerage clients is completely offset by interest revenue on related investments and loans, the Company considers such interest to be an operating expense. Accordingly, the ratio of earnings to fixed charges, excluding bank deposits and payables to brokerage clients interest expense, and the ratio of earnings to fixed charges and preferred stock dividends, excluding bank deposits and payables to brokerage clients interest expense, reflect the elimination of such interest expense as a fixed charge.

(3)

The preferred stock dividend amounts represent the pre-tax earnings that would be required to pay the dividends on outstanding preferred stock.