SCHWAB CHARLES CORP - FORM 10-Q - EX-12.1 - EXHIBIT 12.1 - May 8, 2017

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EX-32.2 - EXHIBIT 32.2 - SCHWAB CHARLES CORPschw-03312017xex322.htm
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10-Q - 10-Q - SCHWAB CHARLES CORPschw-03312017x10q.htm


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 and Other
(Dollar Amounts in Millions)
(Unaudited)



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months
 
 
 
 
 
 
 
 
 
 
 
Ended
 
 
 
 
 
 
 
 
 
 
 
March 31, 2017
 
2016
 
2015
 
2014
 
2013
 
2012
Earnings before taxes on earnings
 
$
843

 
 
$
2,993

 
$
2,279

 
$
2,115

 
$
1,705

 
$
1,450

Fixed charges
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Bank deposits
 
19

 
 
37

 
29

 
30

 
31

 
42

Payables to brokerage clients
 
2

 
 
3

 
2

 
2

 
3

 
3

Short-term borrowings
 
2

 
 
9

 
-

 
-

 
-

 
-

Long-term debt
 
28

 
 
104

 
92

 
73

 
69

 
103

Other
 
4

 
 
18

 
9

 
(3)

 
2

 
2

Total
 
55

 
 
171

 
132

 
102

 
105

 
150

Interest portion of rental expense
 
24

 
 
88

 
77

 
71

 
69

 
68

Total fixed charges (A)
 
79

 
 
259

 
209

 
173

 
174

 
218

Earnings before taxes on earnings and fixed charges (B)
 
$
922

 
 
$
3,252

 
$
2,488

 
$
2,288

 
$
1,879

 
$
1,668

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges (B) ÷ (A) (1)
 
11.7

 
 
12.6

 
11.9

 
13.2

 
10.8

 
7.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges, excluding
 
 
 
 
 
 
 
 
 
 
 
 
 
bank deposits and payables to brokerage
 
 
 
 
 
 
 
 
 
 
 
 
 
clients interest expense (2)
 
15.5

 
 
14.7

 
13.8

 
16.0

 
13.2

 
9.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges
 
$
79

 
 
$
259

 
$
209

 
$
173

 
$
174

 
$
218

Preferred stock dividends and other (3)
 
58

 
 
227

 
131

 
96

 
97

 
70

Total fixed charges and preferred stock dividends and other (C)
 
$
137

 
 
$
486

 
$
340

 
$
269

 
$
271

 
$
288

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preferred
 
 
 
 
 
 
 
 
 
 
 
 
 
stock dividends and other (B) ÷ (C) (1)
 
6.7

 
 
6.7

 
7.3

 
8.5

 
6.9

 
5.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preferred stock
 
 
 
 
 
 
 
 
 
 
 
 
 
dividends and other, excluding bank deposits and
 
 
 
 
 
 
 
 
 
 
 
 
 
payables to brokerage clients interest expense (2)
 
7.8

 
 
7.2

 
8.0

 
9.5

 
7.8

 
6.7




(1) 
The ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends and other 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 property, equipment and software 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 and other, 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 and other amounts represent the pre-tax earnings that would be required to pay the dividends on outstanding preferred stock and undistributed earnings and dividends allocated to non-vested restricted stock units.

SCHWAB CHARLES CORP Reports