EX-12 2 d73744_ex12.htm COMPUTATION RATIOS

Exhibit 12

HSBC USA Inc.
Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock Dividends
(in millions, except ratios)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

2007

 

2006

 

2005

 

2004

 

2003

 

Ratios excluding interest on deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

138

 

$

1,036

 

$

976

 

$

1,258

 

$

941

 

Income tax expense

 

 

(1

)

 

530

 

 

566

 

 

718

 

 

570

 

Less: Undistributed equity earnings

 

 

—

 

 

34

 

 

73

 

 

21

 

 

6

 

Fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowed funds

 

 

357

 

 

300

 

 

270

 

 

132

 

 

91

 

Long-term debt

 

 

1,443

 

 

1,457

 

 

1,025

 

 

380

 

 

206

 

One third of rents, net of income from subleases

 

 

29

 

 

25

 

 

19

 

 

19

 

 

17

 

 

 

 

 

 

 

 

Total fixed charges, excluding interest on deposits

 

 

1,829

 

 

1,782

 

 

1,314

 

 

531

 

 

314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before taxes and fixed charges, net of undistributed equity earnings

 

$

1,966

 

$

3,314

 

$

2,783

 

$

2,486

 

$

1,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

 

1.07

 

 

1.86

 

 

2.12

 

 

4.68

 

 

5.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total preferred stock dividend factor (1)

 

$

99

 

$

133

 

$

71

 

$

36

 

$

36

 

 

 

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor

 

$

1,928

 

$

1,915

 

$

1,385

 

$

567

 

$

350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

1.02

 

 

1.73

 

 

2.01

 

 

4.38

 

 

5.20

 

 

 

 

 

 

 

 

 

Ratios including interest on deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed charges, excluding interest on deposits

 

$

1,829

 

$

1,782

 

$

1,314

 

$

531

 

$

314

 

Add: Interest on deposits

 

 

3,840

 

 

3,113

 

 

1,771

 

 

825

 

 

666

 

 

 

 

 

 

 

 

Total fixed charges, including interest on deposits

 

$

5,669

 

$

4,895

 

$

3,085

 

$

1,356

 

$

980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before taxes and fixed charges, net of undistributed equity earnings

 

$

1,966

 

$

3,314

 

$

2,783

 

$

2,486

 

$

1,819

 

Add: Interest on deposits

 

 

3,840

 

 

3,113

 

 

1,771

 

 

825

 

 

666

 

 

 

 

 

 

 

 

Total

 

$

5,806

 

$

6,427

 

$

4,554

 

$

3,311

 

$

2,485

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

 

1.02

 

 

1.31

 

 

1.48

 

 

2.44

 

 

2.54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor

 

$

1,928

 

$

1,915

 

$

1,385

 

$

567

 

$

350

 

Add: Interest on deposits

 

 

3,840

 

 

3,113

 

 

1,771

 

 

825

 

 

666

 

 

 

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor and interest on deposits

 

$

5,768

 

$

5,028

 

$

3,156

 

$

1,392

 

$

1,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

1.01

 

 

1.28

 

 

1.44

 

 

2.38

 

 

2.45

 

 

 

 

 

 

 

 

 

 

(1)

Preferred stock dividends grossed up to their pretax equivalents.

212